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Global Financial Markets

Major changes ahead for the markets

Thursday, 15 January 2026, written by Edward Markus

Markets are pricing in a benign outcome, but three key uncertainties threaten that consensus. Geopolitical escalation, political interference in monetary policy, and disappointing productivity growth could rapidly change the outlook. This report examines how these risks could reshape markets.

This report is published: Bi-weekly

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Previous reports

The canary in the coal mine

Thursday, 18 December 2025

The markets expect further rate cuts by the Fed, partly due to increasing political pressure. We do not expect this to happen because the US economy may perform better than expected next year, with much depending on the interaction between the labour market and economic growth and the US Supreme Court's ruling on import tariffs. The ten-year US interest rate is the canary in the coal mine and determines how far the Fed can go with interest rate cuts.

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What could possibly go wrong?

Thursday, 04 December 2025

The outlook for shares and economic growth is fairly positive for 2026. But what if things go wrong? We see three potential spoilers.
 

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Will AI remain positive for equities and the economy?

Thursday, 20 November 2025

Global markets are approaching an inflection point. AI is still powering growth, but inflation, swollen deficits and geopolitical uncertainty are quietly reshaping the outlook. This report explains why the “near-perfect future” priced in by investors is becoming increasingly unlikely.
 

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Eddy's Weekly Market Insight

Friday, 23 January 2026

Eddy's Weekly Market Insight

Trump’s Achilles’ Heel: First, some background. For many years, the United States has run large deficits on both its current account and its public finances. These deficits must be financed by substantial inflows of foreign capital. If this inflow proves insufficient, two effects occur: the US dollar depreciates and US interest rates rise. Under normal circumstances, financing these so-called “twin deficits” does not pose a major problem for the United States. This is because the dollar serves as the world’s reserve currency and the US economy generally grows faster than most others. As a result, relatively high returns can be achieved in the US. This explains why the United States has been able for many years to sustain large current-account and fiscal deficits without significant difficulty. The next step is...
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— Edward Markus, Founder & Chief Economist