Monitoring economic and financial developments in more than 40 countries helps us to develop rich narratives around the outlook for global and regional activity, employment and inflation. We release our research publications when we have something to say, not because it is the third Friday of the month. We aim to be provocative and insightful in our research, unafraid to challenge the mainstream view where we think it is lacking.
Our most recent publications are summarised below. To access our full publications or to browse through our publication catalogue, please contact us by email@example.com
Global Credit Perspective
When will bond investors recognise the inflationary threat? (September 2020)
A decade ago, Reinhart and Rogoff warned that elevated public debts would diminish the prospects for economic growth. A re-examination of this issue in the context of even greater public indebtedness turns the spotlight on inflation rather than growth. The debt vigilantes have become irrelevant in a world where government bonds are regulatory assets.Free Trial
Global Inflation Perspective
Who is really hedged against a sudden rise in inflation? (June 2020)
Disagreements over inflation expectations are running high. Even though the probability that global economies experience a period of deflation in the short term is very close to one, investors seem to downplay the chances of a multi-year inflationary backlash.
Nov-December 2020 - Red-hot poker!
Reportedly, US billionaires have added over a trillion Dollars to their paper wealth since the arrival of Covid-19! There’s nothing quite like a high-stakes poker game when your adversary doesn’t know how to bluff! Fed supremo Jerome Powell has taken the central bank put option to a whole new level, widening the horizons of moral hazard beyond our wildest dreams. Why drive an SUV when you can drive an SPV – a special purpose vehicle? The recent collapse of high yield credit spreads is but the latest ignominy for those who regard economic fundamentals as the plumb line. While the emergence of some promising vaccines raises hope of a permanent restoration of civil liberties next year, we fear that the damage to the handshake economy will be long-lasting.Free Trial
Recovery will be a long-haul flight
Nominal GDP rebounded strongly in Q3, as expected, but is little more than halfway to recovering the momentum of late 2019. China is the striking exception to this pattern. While real growth was responsible for most of the nominal gain, implied inflation rose from 1.1 per cent to 1.6 percent in Q3. Only in Europe did disinflation prevail.
Global Inflation Heat Maps
December 2020/January 2021
Chinese inflation abates
Following the re-imposition of restrictions on travel and public gatherings in many countries, consumption opportunities have been curtailed and pricing power weakened. China is an inflation outlier: longstanding food supply issues have eased and prices have slumped, dragging CPI inflation negative.
Global Credit Update December 2020
“Neither a borrower nor a lender be, for loan oft loses itself and friend …(Hamlet Act 1, Scene 3)”
Crisis-inspired policy responses have energised global credit growth, steepened yield curves and flattened credit spreads. For now, risk tolerance is high and all systems are go. A powerful nominal recovery is required to keep loans whole. Meanwhile, bondholders look anxiously over their shoulders, rightly fearing a resurgence of inflation.Free Trial