interest rate hikes

Emerging markets debt yields at levels that rival forward expectations for equities in 2019

SINGAPORE (Jan 10): Yields on USD emerging market debts are reaching 7% for major indices, and as emerging markets enter 2019, it is expected to recover from the negative effects of a stronger USD and outsized US growth, according to a Schroders TalkingPoint report for January.

These effects shifted liquidity away from the asset class, similar to the 2014-2016 period when the Fed first began ending quantitative easing and raising interest rates. Also much like that period, currencies have been the adjustment mechanism of choice for stressed countries.

Goldman Sachs sees five more Fed rate hikes through end of 2019

(Oct 19): Goldman Sachs economists on Thursday said the firm remained “comfortable” with its call for five more interest rate hikes — two more than priced in financial markets — through the end of 2019.

In a note to clients, Goldman said it feels the Federal Reserve needs to generate a significant tightening in financial conditions to slow the economy to its potential growth pace sooner rather than later, and “that this will require delivering significantly more hikes than priced in the curve.”

It's Asia's turn as worst hit emerging markets set to hike rates

(Sept 26): For the most hawkish central banks in Asia, Thursday’s choice is less about whether to raise interest rates than by how much.

After Turkey and Russia surprised with strong policy action this month, the focus shifts to Indonesia and the Philippines this week as emerging markets struggle to contain a rout in their currencies. Pressure is building with the US Federal Reserve expected to tighten monetary policy again on Wednesday, adding to risks of capital outflows.

Global economic growth is expected to rise, but it might not bode well for investors

SINGAPORE (Apr 4): Schroders is raising its global growth forecasts for the next two years on the back of buoyant economic activity, but warns of uncertainty for investors amid a corresponding rise in interest rates.

“Donald Trump’s plan to boost the US government’s spending by $300 billion has added fuel to a US and global economy already firing on all cylinders,” says Keith Wade, Schroders’ chief economist and strategist in an April note.

However, Wade believes global economic growth will be spurred by more than just the US’s spending plans.

Will office property rents bottom in 2017?

SINGAPORE (March 24): The prospect of interest rate hikes by the Fed used to spark panic among investors. This was due to the widely-held view that a receding tide of liquidity would spark a selloff in Asian assets that had been pumped up by years of ultra-loose monetary policy in developed economies.

Now, it seems that growth is not only recovering in the US but across much of the world. And, higher US interest rates are not likely to be a catalyst for a disorderly rout in Asian markets but a natural complement to accelerating growth and inflation.

Yellen sees more rate hikes ahead if economy stays on course

(Feb 14): Federal Reserve Chair Janet Yellen said more interest-rate increases will be appropriate if the US economy meets the central bank’s outlook of gradually rising inflation and tightening labor markets.

“At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” she told the Senate Banking Committee in prepared remarks Tuesday.

Banking on banks as the Trump card?

SINGAPORE (Jan 20): Daiwa Capital Markets says banking on Singapore banks could be investors’ best play amid global market jitters as Donald Trump begins his presidency on Jan 20.

“Donald Trump’s trade and economic policies are the key external factor that could drive the direction of the Singapore stock market over the coming year,” says Daiwa lead analyst Ramakrishna Maruvada in a Singapore strategy report on Thursday.

“We think being long the banks is the best way to play the early phase of Trump’s presidency,” he adds.

One REIT to benefit from a rebounding US economy

Manulife

SINGAPORE (Nov 23): RHB Singapore is initiating coverage on Manulife US REIT with a "buy” recommendation with a target price of 96 US cents ($1.37).

As the first and only listed US office REIT in Asia, Manulife US REIT’s portfolio comprises three US freehold office properties with a total value of about US$813.2 million.

“We believe Manulife US REIT offers a compelling value proposition for yield-hungry cum growth-oriented investors,” comments analyst Vijay Natarajan in a Wednesday report.

Fed minutes suggest rate hikes on hold until Brexit impact clearer

WASHINGTON (July 7): Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Britain's vote on EU membership, according to the minutes of the Fed's June policy meeting released on Wednesday.

The minutes of the June 14-15 meeting, which took place ahead of the June 23 referendum in which Britons voted to leave the European Union, showed widespread unease over the so-called "Brexit" vote, including among voting members on the rate-setting Federal Open Market Committee.

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