Documents & Resources

May 2, 2016

As the credit cycle ages, following years of record-setting bond issuance, there are growing concerns about signs of stress in corporate balance sheets—notably in the high-yield sector and in many emerging markets. In the high-yield sector, rising default rates pose a particular challenge in a slow-growth environment. For emerging markets borrowers, the growing debt burden will weigh on corporate creditworthiness and EM growth going forward.

April 28, 2016

* What next for the rally?
* Japan—BoJ holds back
* Fed—tip-toeing in the face of soft data
* Brazil—no easy task ahead
* Saudi Arabia—a new vision to transform the economy

April 27, 2016

The Chinese bond market has grown quickly and the recent opening of the markets to foreign investors is a game changer. However, the regulatory environment has yet to be simplified and significant obstacles remain. Additional spread widening cannot be ruled out, but risks of widespread defaults are low.

April 25, 2016

Risk assets, particularly emerging markets, have put in a strong performance year to date. Our latest Chartbook looks at some of the factors behind the risk rally, and whether it is likely to hold up.

April 25, 2016

China has seen a dramatic swing from net capital inflows to large net outflows in recent years. Much of this downshift is due to a sharp reduction in non-resident capital inflows, driven by a shift in investor expectations about the path of the RMB and concerns about China's economic outlook. While flows have stabilized in recent months there remain risks that outflows could accelerate again if concerns about RMB depreciation intensify again.

April 21, 2016

* Ebullient oil and commodities continue to boost EMs
* ECB’s focus shifts from words to action
* Oil—market shrugs off OPEC impasse
* China—growth stabilizing, but challenges remain
* China—capital outflows eased in Q1
* Korea—ruling party loses majority amid sluggish economy

April 21, 2016

Policies look set to ease further, largely guided by output concerns rather than the need to contain inflation, but will probably need to tighten later in the year as U.S. policy rates begin to be raised. A key near-term risk is the security situation and its potential adverse impact.

April 20, 2016

After refocusing on credit easing in their March meeting, Draghi and the Council are not expected to make any major policy changes when they meet on Thursday, but will instead wheel out some “verbal QE” rhetoric aimed in part at weakening the trade-weighted euro (now back to levels last seen in early 2015).

April 14, 2016

*Sober policymakers, buoyant equities
*What next for China’s RMB? Still many questions
*Russia—government confident the worst is over
*Ukraine—tentative political resolution
*Turkey—new Governor coming and more rate cuts look likely
*Europe’s political quagmire

April 7, 2016

Since our January report, emerging markets have staged a striking turnaround as asset prices have bounced back and inflows revived. We continue to project substantial net outflows from EMs of about $500 billion in 2016, down from around $750 billion in 2015.