All Reports

 

April 2018

Asian Equity Monthly Outlook

Volatility across global markets has picked up in recent months following an abnormally long period of stability and strong returns across asset classes.

Asian Fixed Income Monthly Outlook

In the near-term, we foresee US Treasury moves influencing the direction of regional bonds.

Japan Equity Monthly Review

The Japanese equity market fell in March, with both the TOPIX (w/dividends) and the Nikkei 225 (w/dividends) dropping 2.04% on-month.


March 2018

Global Fixed Income & Credit Outlook

A broad-based synchronized recovery continues to gain traction. Following the strongest year of global growth since 2010 (estimated at 3%) the consensus forecast for the current year looks to be even rosier.

Asian Equity Monthly Outlook

Despite recent volatility, we see the rally in Asian equity markets being well supported by both positive structural reform and increasing economic activity across the region.

Asian Fixed Income Monthly Outlook

In the near-term, we foresee flows into Indonesian bonds to be supported by the inclusion of IDR-denominated bonds into the Bloomberg Barclays Global Aggregate Index.

Japan Equity Monthly Review

Japanese stocks were not spared the global selloff in early February. While we would not be surprised to see volatility persist as market conditions normalise, we continue to expect healthy returns for risk assets such as equities.


February 2018

Global Fixed Income & Credit Outlook

A broad-based synchronized recovery continues to gain traction. Following the strongest year of global growth since 2010 (estimated at 3%) the consensus forecast for the current year looks to be even rosier.

Japan Equity Monthly Review

The Bank of Japan (BOJ) has been trimming its bond purchases lately, fuelling speculation that the central bank may wind back its monetary stimulus this year.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan Index returned 7.6% in USD terms in January, amid optimism about solid economic growth and corporate earnings. China's solid stock market gain was underpinned by the financials, energy and real estate sectors.

Asian Fixed Income Monthly Outlook

There was a sharp rise in US Treasury yields in January on the back of positive macro news, steady rise in oil prices and speculation that central banks in developed markets will start winding back on stimulus measures.


January 2018

Global Fixed Income & Credit Monthly Outlook

A broad-based synchronised recovery continues to gain traction. Following the strongest year of global growth since 2010 (estimated at 3%) the consensus forecast for the current year looks to be even rosier.

Asian Fixed Income Monthly Outlook

As widely expected, the US Federal Reserve (Fed) raised interest rates by 25bps in December, its third rate hike this year. It also raised its GDP forecast for 2018.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index returned 2.7% in USD terms in December.

2018 Global Credit Outlook

We see the key investment themes to drive performance in Global Credit in 2018 to be similar to last year. Using the output of our initial market assessment, we have developed our investment themes: Long US High Yield, Long Chinese Tier1 SOEs, Long European Hybrids, Long European Financials, Long Rising Stars.

2018 Developed Markets Outlook

For 2018 and beyond, we see a story of central bank policy normalization and foresee the global economy growing in a similar fashion to how it did in 2017: low growth coupled with comparatively low inflation data.


December 2017

2018 Asian Credit Outlook

We expect the economic backdrop for Asian credits to remain constructive in 2018, but remain cognizant of several risks including rising interest rates, robust supply, unexpected weakness in China, geopolitical developments and cross-asset volatility.

2018 Asian Rates and FX Outlook

The global recovery is expected to continue, albeit at a more moderate pace. Meanwhile, we see policy normalisation and an acceleration of inflation in Asia. Political action will move to South Asia in the wake of upcoming elections there.

From the Asian Equity Desk - Market Outlook 2018

Going forward, a robust global economy and well telegraphed withdrawal of monetary stimulus in advanced economies provides a good back-drop for export-oriented Asian economies.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields declined during the month. The nomination of Jerome Powell as the next US Federal Reserve (Fed) chairman overshadowed stronger US economic data, but was subsequently offset by increased geopolitical risks in the Middle East and a setback to US tax reform.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index returned 0.6% in USD terms in November.


November 2017

Japan Equity Monthly Review

The Japanese equity market rose in October, with the TOPIX (w/dividends) climbing 5.45% and the Nikkei 225 (w/dividends) rising 8.16%.

Asian Fixed Income Monthly Outlook

US Treasuries (USTs) fell in October, as prospects of higher growth and inflation increased after the US Senate approved the Republican-backed budget for 2018.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index returned 4.7% in USD terms in October, outperforming the MSCI World Index which returned 1.9%.


October 2017

Japan Equity Monthly Review

The Japanese equity market moved upwards in September, with the TOPIX (w/dividends) climbing 4.34% on-month and the Nikkei 225 (w/dividends) rising 4.28%.

Asian Fixed Income Monthly Outlook

US Treasuries declined in September, prompted by the possibility of a rate hike by the Federal Reserve in December and Trump's tax reform bill being passed by Congress.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index fell by 0.1% in US dollar (USD) terms, underperforming the MSCI AC World Index which returned 2.2%. Profit-taking and currency weakness relative to the USD pressured returns in September.


September 2017

Asian Fixed Income Monthly Outlook

The US Treasury (UST) market grinded higher in August. Rising tensions in the Korean peninsula and a lack of direction from the US Federal Reserve and the European Central Bank on the outlook for monetary policy put pressure on US Treasury yields.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan (AxJ) Index rose by 1.3% in US dollar (USD) terms, outperforming the MSCI AC World Index and bringing year-to-date returns to 31.1%. This was the eighth straight month of positive returns.


August 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields ended largely unchanged in July following soft US inflation print, dovish comments from the Federal Reserve and expectations of an autumn policy shift from the European Central Bank. Overall, 10-year UST yields ended the month at 2.30%, about 0.9 basis points (bps) lower compared to the previous month.

Asian Equity Monthly Outlook

The MSCI AC Asia ex Japan Index rose by 5.3% in US dollar terms, outperforming the MSCI AC World index and bringing year-to-date returns to 29.4%. This was the seventh straight month of positive returns.


July 2017

Japan Equity Outlook

In a survey conducted by the Nikkei in March 2017, 80% of respondent companies indicated that they were either planning or considering the implementation of productivity enhancing investments. Furthermore, more than 70% of respondent companies indicated that they would invest in productivity enhancing technology to address excessively long employee working hours.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields were range-bound for the most part of June, before surging in the last few days of the month. The US Federal Reserve (Fed) raised interest rates by 25 basis points (bps), despite soft inflation data. Overall, 10-year UST yields ended the month at 2.30%, about 10 bps higher compared to the previous month.

Asian Equity Monthly Outlook

The MSCI Asia ex Japan (AxJ) Index rose by 1.6% in US dollar (USD) terms. Year-to-date (YTD), the index returned 22.8%, outperforming MSCI World by over 12%.


June 2017

Japan Equity Outlook

In the Japanese equities market, high dividend strategies have significantly outperformed other strategies. We believe that – in a low growth, low interest rate environment where investors yearn for yield – these strategies will continue to outperform.

China A-Shares: A New Milestone

Following four years of intense consultation and three failed attempts, MSCI has just added China A-Shares into its international indices. We view this as expected and in some ways, long overdue. Although the initial size of the inclusion is symbolic in nature, the implications are far reaching.

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) gained 4.7% in USD terms, outperforming the MSCI AC World and MSCI Emerging Markets Indices. The results of the French presidential elections buoyed sentiment and outweighed patchy economic growth data.

Asian Fixed Income Monthly Outlook

Better-than-expected US non-farm payroll figures and a more favourable FOMC statement were offset by political uncertainties in Washington. FBI director James Comey's firing and investigations into possible ties between Trump's election campaign and Russia increased concerns of a set-back in the president's economic agenda. 10-year UST yields ended the month at 2.20%, about 8 basis points (bps) lower compared to end-April levels.

Global Fixed Income & Credit Monthly Outlook

The European Central Bank (ECB) has taken its first step towards reducing its stimulus programme by omitting the mention of "lower levels" for interest rates in its forward guidance, even as ECB President Mario Draghi denied that there was any discussion of tapering in the latest policy session.

Asia High Grade Credit

Asia Credit is significant enough as an asset class to be considered separately, and its high grade segment could be a relative safe haven if EMD flows reverse.


May 2017

Japan Equity Outlook

We believe inflation will pick up gradually in the second half of 2017, in which case the rational expectations of Japanese consumers are likely to shift towards anticipation of even higher inflation. Higher inflation expectations are precisely what BOJ Governor Kuroda has been seeking to achieve. Therefore such a development would be positive for the Japanese equity market.

Asian Fixed Income Note: Indonesia's Investment Grade rating upgrade by S&P

On 19 May 2017, S&P upgraded Indonesia’ sovereign rating to BBB- with a stable outlook from BB+ with a positive outlook. In the longer term, the market is expecting that this rating upgrade will result in inflows of as much as USD 5bn into the bond market, particularly from Japanese investors who require a full investment grade rating from the three rating agencies.

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) was up another 2.2% in USD terms, outperforming the MSCI AC World. All AxJ markets ended higher in April. Robust economic data from China offset concerns over President's Trump's ability to pass through sweeping corporate tax cuts in the US.

Asian Fixed Income Monthly Outlook

10-year US Treasury (UST) yields ended the month at 2.28%, about 11 basis points (bps) lower compared to end-March levels. Mixed economic data and rising geopolitical tensions drove sentiment over the month. Towards the month-end, market sentiment improved after pro-euro French presidential candidate Emmanuel Macron secured the most number of votes in the first round of elections.


April 2017

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) was up 3.3% in USD terms, outperforming MSCI AC World. All Asian markets rose over the month, with gains led by India and Korea. The Indian Rupee was also the best-performing currency in March. The US Federal Reserve raised interest rates by 25 basis points (bps), as widely expected.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields rose in the first half of the month buoyed by hawkish comments from the Federal Reserve (Fed), a solid US jobs report and possible scale back of quantitative easing (QE) by the European Central Bank (ECB). While the Fed raised short-term interest rates, as expected, the absence of a more hawkish tone from the central bank triggered a drop in UST yields.


March 2017

Emerging Markets Quarterly - Recovery broadens but with policy risk still on the horizon

The Trump reflation trade may have lost some of its shine during the quarter, but any disappointment was more than overshadowed by strong global data as exports and production continued to gather pace. In fact, fading enthusiasm for Trump’s ability to execute has arguably served as a tailwind for Emerging Market (EM) assets in the form of a weaker dollar and moderating long term rates.

Asian Equity Monthly Outlook

MSCI Asia ex Japan (AxJ) was up 3.4% in USD terms, marginally outperforming MSCI AC World. Absolute returns were positive for all AxJ markets except the Philippines. The Taiwan Dollar (TWD) was the best performing currency in AxJ followed by the Korean Won and Indian Rupee. Buoyed by the partial unwind of the post-election Trump-trade, gold was the best performing commodity.

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields traded in a tight range in February. Risk assets rallied and UST yields rose in the first half of the month, on the back of the prospect of tax cuts and a Dodd-Frank overhaul in the US. Subsequently, yields were pressured lower by concerns about a possible victory by Marine Le Pen in France’s presidential elections. Overall, the 2-year and 10-year points on the UST curve ended the month about 6 basis points (bps) higher and 6bps lower respectively.


February 2017

Global Fixed Income & Credit Monthly Outlook

With President Trump announcing that he will be releasing his tax plans in the coming weeks, we have shifted to a more cautious position on US duration. The risk is that President Trump announces a sizeable stimulus package, with the backing of the broad Republican base. This would raise fears that the US Federal Reserve would need to act more quickly than expected, and with markets only pricing in two or three rate hikes in 2017, we believe that markets are under-pricing the risks of this announcement.