Invesco Canada blog

Insights, commentary and investing expertise

What currency pressures in Turkey and other countries may mean for investors


August 14, 2018
Subject | Institutional | Invesco | Macro views

Activity in currency markets has more than tripled in the last two decades. Between 2001 and 2016, global turnover in currency markets rose from $1.2 trillion to $5.1 trillion,1 and the geopolitical disruption of the last two years has increased currency activity even further. Last week brought several significant examples of this trend in the U.K., China, Iran and – most dramatically – Turkey. Is this a sign of more disruption to come?

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Is it time to worry about a liquidity crisis?


July 31, 2018
Subject | Invesco | Macro views

One of the key risks to markets that I’ve been discussing for more than a year is balance sheet normalization. I have argued — and continue to argue — that quantitative easing was a big experiment, and so unwinding it is an experiment in and of itself. Now that balance sheet normalization has been in force for more than half a year, we are seeing its effects. And one key effect is on liquidity.

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Trade wars: A worldwide web of worry


July 24, 2018
Subject | Invesco | Macro views

Global stocks have been in positive territory thus far in July with even emerging markets stocks eking out a tiny gain.1 With positive returns and relatively low volatility in July, it appears that the stock market is not worried about the burgeoning trade war. Admittedly, it’s easy to ignore since investors don’t have a frame of reference for the impact of a major trade war – and so far, earnings season has been very good. But other markets may be telling us that we should be worried.

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Tariffs, earnings and politics: What’s moving markets this week?


July 17, 2018
Subject | Macro views

There is no shortage of events to watch this week: The European Union and China will meet to discuss foreign investment, Russian President Vladimir Putin and U.S. President Donald Trump are meeting in Finland, and U.S. Federal Reserve Chair Jay Powell gives his semi-annual testimony to Congress. But can any of these events direct the market’s attention away from the strong second-quarter earnings season?

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Six issues driving global markets


July 10, 2018
Subject | Institutional | Invesco

As I write this, early on July 9, global stocks have hit a two-week high1 and the price of copper is rallying. Markets are clearly focusing on positive data at the moment, which is a welcome change. Below, I highlight six important things that happened last week – both positive and negative – and several upcoming issues to watch.

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Six ways the trade situation deteriorated in the past week


July 3, 2018
Subject | Invesco | Macro views

I keep promising myself that I will stop writing about trade and protectionism in my weekly commentaries. And then virtually every week, something happens that forces me to address the topic once again. This past week, unfortunately, was no exception. In my mid-year outlook, I mentioned that my outlook is predicated on the trade situation not worsening materially – so it’s important that we closely follow trade developments. Last week, there were six trade developments that are helping to place downward pressure on stocks:

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Central banks take centre stage


June 19, 2018
Subject | Invesco | Macro views

Central banks took centre stage last week, with a trifecta of major central bank meetings. The clear theme was that most major banks are at least taking small steps toward monetary policy normalization. However, the central banks that are tightening may be caught by surprise if the trade situation worsens – which I believe is a strong possibility.

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Protectionism rears its ugly head again


June 5, 2018
Subject | Invesco | Macro views

The global trade environment seriously worsened last week as the U.S. applied aluminum and steel tariffs to Canada, Mexico and the European Union (EU). Just a few days before, U.S. President Donald Trump announced he is exploring tariffs of up to 25% on imported cars. In my view, this is a very negative development that has implications for the global economy for several different reasons:

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Is Italy headed for an EU exit?


May 30, 2018
Subject | Invesco | Macro views

We have devoted much time in this weekly blog to geopolitical risks. However, I have tried to stress that geopolitical risk, while disruptive, tends not to impact fundamentals – although it can certainly create a lot of turmoil in capital markets in the shorter term. A case in point is the current political situation in Italy, which has worsened over the last few days and thrown into question the country’s future with the European Union (EU).

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What do higher oil prices mean for the stock market?


May 23, 2018
Subject | Commodities | Invesco | Macro views

In the past few weeks, the price of a barrel of oil has risen to its highest level in the last several years, and I believe it is poised to move higher. Lately, I’ve been asked quite a bit about what this means for the stock market. While high oil prices may have an effect on certain sectors and industries, I believe the far greater impact would be indirect – and could happen in several different ways.

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Is the ‘synchronized’ global expansion really in sync?


May 8, 2018
Subject | Institutional | Invesco | Macro views

“Getting long in the tooth” is an interesting way to describe something that is getting old and presumably nearing its end – it refers to the long-time practice of estimating a horse’s age by looking at its mouth. I’ve found myself using this expression a lot these days, as the U.S. experiences its second-longest economic expansion in the last 100 years. But investors should remember that – even as market-watchers talk about “synchronized global growth” – other economies are in much earlier stages of expansion.

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Five takeaways from April and five things to watch in May


May 2, 2018
Subject | Macro views

As April came to a close, we learned some key lessons this month about the likely path forward for central banks, the growing concerns about protectionism, and the market’s sensitivity to any changes in key indicators. Below, I highlight five key takeaways from April, and preview five things to watch in May.

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Yield signs: Deconstructing a key market indicator


April 24, 2018
Subject | Invesco | Macro views

The biggest news of last week was not a tweet, but a Treasury yield – specifically the 10-year U.S. Treasury yield, which rose significantly last week, to 2.95%.1 As of this writing on Monday, the 10-year Treasury was yielding 2.98%, very close to the key 3% level it has not seen in more than four years.1 But what is this key market indicator telling us? And why do people care?

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As U.S.-China trade drama continues, is a risk-off stance warranted?


April 10, 2018
Subject | Invesco | Macro views

Last week saw an acceleration of the protectionist rhetoric between the U.S. and China. The week ended on a down note, with U.S. President Donald Trump tweeting a proposal for another $100 billion in tariffs, swiftly followed by China, despite its important holiday, promising to match the most recent round of tariffs and fight the U.S. “at any cost.” Following China’s threat, Trump admitted that the U.S. may feel some “pain,” while U.S. Treasury Secretary Steven Mnuchin conceded that, though unlikely, “there is the potential of a trade war.”

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