Insights

As focus shifts from the collapse of Silicon Valley Bank last week to the solvency Credit Suisse, central bank interventions have soothed fears of the contagion spreading. In this strategy blog our team analyses why our overall risk appetite remains unchanged.

Idiosyncratic headwinds compounded by losses on its treasury and mortgage-backed security portfolio lead to the collapse of Silicon Valley Bank. Are there signs of contagion? In this Strategy blog, we analyse the situation around the collapse and consider further risks.

Lower commodity prices, including energy prices, are trickling down to consumers, affecting both sides of the Atlantic slightly differently. In this strategy blog, we examine how the energy crisis has abated a year after the outbreak of war in Ukraine and its impact.

Capital markets experienced a difficult February, as renewed interest rate risk from further monetary tightening moved into focus. Both global equites and government bonds fell last month.

As incoming data shows inflation rolling over—despite low unemployment—the good news may not last. But what happens next? In this Strategy Blog, we discuss the state of inflation and why interest rates look more like plateaus than peaks, leaving us at odds with the money markets.

Falling real income, rising inflation, and monetary tightening have led to a sense of economic fatalism. However, throughout Europe, the UK, and the US, signs are suggesting a (hopeful) turn of events, making for a better outlook for the year ahead.

Currently, Private Debt investors benefit from attractive yields of 7% to 10% per annum. We compare the characteristics of Private Debt to other fixed income segments and equities, highlight its advantages and examine the risks in case of an economic stress scenario.

Economists continue to cast a pall of gloom over economic forecasts, questioning future output and growth. In this Strategy Blog, we discuss the supposed gloomy outlook and put into perspective the new opportunities and incentives for useful economic activity.

A war in Europe, an energy crisis, shades of the 1970’s – inflation and industrial unrest – and sharply rising interest rates. Just to name a few themes that dominated the economic and investment world in 2022. But what about 2023?

2022 was a tumultuous year: war, an energy crisis, and rising interest rates to name just a few main factors leading to a gloomy market sentiment. As a new year begins, Victor Balfour reflects back on the mood of 2022.

December was a challenging month for capital markets as risk appetite abated despite a better-than-expected US inflation print: global equites fell, and global government bonds also declined.

This year has come to a close, but the effects of world events on the market persist. Looking to 2023, we pose two main questions to help determine from an investment perspective whether to put liquidity back to work.

With geopolitical risk still present and impossible for markets to ignore (though tensions may not necessarily increase further), we are left facing the cyclical question of whether inflation can subside without an economic slump.

This year, industrial action has been on the rise as demands for higher pay to compensate for real wage growth and inflation levels reaching multi-decade highs, causing some to create parallels to the 1970s. In this Strategy Blog, we discuss why we think these parallels are exaggerated.

In November, risk appetite improved following a weaker-than-anticipated US inflation print, buoying expectations than the US Federal Reserve might slow its tightening cycle: global equities and global government bonds rallied.

The UK Autumn Statement reflected a near-term loosening of fiscal stance, perhaps a surprise given the general talk of 'Austerity II' beforehand. In this Strategy Blog, we share our thoughts on the statement.

In October, expectations of a slower pace of interest rate hikes and a better-than-expected earnings season boosted sentiment: global equities rose significantly, while global government bonds were unchanged.

The UK is set to have another new Prime Minister, after the recent incumbent’s short tenure. In this Strategy Blog, we observe the latest developments in the UK.

In September, concerns of a global recession and monetary tightening hit capital markets hard: both global equities and global government bonds declined as the Fed and the ECB continued their tightening cycle.

At different paces, and with varying displays of conviction and credibility, western central banks are continuing to raise interest rates, closing the stable door ever more firmly as the inflation horse canters merrily on the horizon. As we write, the rates priced into the money markets suggest that US, eurozone and UK policy rates will peak at 4.6%, 2.9% and 4.9% respectively, and will do so during 2023. Swiss rates are expected to peak at 2.2%, during 2024.

The sticky nature of today’s inflation remains the key risk to the global growth outlook. In this Market Perspective, we explore the macro and market backdrop – including a deep dive into the global inflation trajectory – along with the upcoming political calendar.

A volatile month saw capital markets reverse their initial gains in August: both global equities and global government bonds came under pressure after the Fed signalled that US interest rates will rise further and stay higher for longer.

UK inflation, already at uncomfortable levels, is set to grind higher, peaking at 13% by year-end – according to the Bank of England – followed by only a gradual descent to perhaps 6% by the end of 2023.

Will another bad UK CPI hit growth? Real pay fell sharply in the last year after rising unexpectedly over the pandemic. Did consumers get used to that higher level of pay? If not, wiggle room now may be higher.