Our insights

Sales and earnings growth for Q1 2022 in both the US and Europe exceeded expectations, led by strong energy sector results. The percentage of companies beating forecasts is above the long-term trend, but the margin of surprise is lower than recent quarters.

In the mid-1990s, British Prime Minister John Major reportedly asked Russian President Boris Yeltsin to describe the Russian economy in one word. He replied “good”. Surprised by this assessment, Major asked Yeltsin if he could describe it in two words.

Following a poor start to 2022, Asia high yield (HY) bonds have staged a notable recovery since mid-March. We have been holding a tactical overweight position against USD investment grade (IG) bonds. What are the main features of the Asia HY market and our outlook for the asset class?

Some segments of the Treasury curve are now inverted. While investors see this as a warning signal, the reality is more nuanced. We explore what it means for the probability of US recession, and for equity and other asset class returns.

We believe the war in Ukraine – which is first and foremost a humanitarian tragedy – will spur some countries and businesses to reduce long-term risks that have emerged from that conflict.

On 10 and 24 April, France will elect its new president at a crucial time – a war raging on the fringes of Europe. Emmanuel Macron looks set to be re-elected for a second term. We explore the key implications for the economy and markets.

In The Economic Consequences of the Peace, published in 1919, John Maynard Keynes predicted that stiff war reparations would lead Germany to financial instability, with economic and political repercussions across Europe and the whole world.

While geopolitical uncertainty could keep them low for longer, bond yields are on the rise as central banks normalise policy. We expect them to move higher but, over the medium term, see lower rates than in past cycles.

It’s tempting to attribute the ongoing risk-off move to Russia’s invasion of Ukraine. That’s part of the story but, like Russian dolls, there’s a scenario inside a bigger one, which is inside an even bigger scenario, and so on.

Gold can be recycled with no degradation in quality. It can contribute to a circular economy and is an attractive proposition for sustainable investors.

As the post-pandemic recovery matures, corporate earnings are surprising by less but still exceeding forecasts. We are seeing a divergence in performance within sectors, but must be careful not to extrapolate short-term trends.