Our Research

Please view our research examples below. If you are unable to but would like access to any of the reports please Contact Us or email sales@tslombard.com


13 Dec 2018

Macro Picture: Growth Scare

Global growth has slowed materially in 2018, contrary to consensus forecasts 12 months earlier. Three forces are to blame: (i) deteriorating financial conditions; (ii) Chinese policy tightening, and (iii) trade-war uncertainty. EMs have suffered most. While a global recession is unlikely, weak growth provides a choppy environment for markets in 2019.

10 Dec 2018

Daily Note: India: Hit to central bank credibility

  • Governor’s exit signals irreconcilable differences with the government
  • Government will push to use RBI reserves and ease financial norms 
  • Credible replacement needed to restore RBI’s institutional autonomy
28 Nov 2018

Daily Note: Tensions over technology at G20

  • White House opens up a new front in the trade war, dashing hopes of de-escalation at weekend Xi-Trump meeting
  • Administration takes three key moves to block development of China’s high-technology industry
  • Xi will fail to convince Trump China is opening up to foreigners
22 Nov 2018

Global Leading Indicators: Glass half-empty

  • World economy lacks impetus as DMs lose momentum
  • US economy set to slow in 2019
  • Germany under pressure as growth tailwinds recede
  • China on the back foot despite easier policy
  • Japan, Korea stuck in low gear
  • India on the mend but macro risks still elevated
  • Stagnant real wages complicate Australia's macro outlook
  • Brazil/Mexico looking for direction
02 Nov 2018

China Watch: Dont get too excited about stimulus

  • Beijing is not simply repeating an old-style credit easing to prop up the economy
  • The positive spill-over effect of China stimulus on the global economy will be offset by further yuan devaluation
  • Growth will decelerate further until a stronger policy response in H1/19
29 Oct 2018

Daily Note: Schrodinger’s Brexit

  • We expect BINO to be the final outcome of the Brexit negotiations; until then the currency market discounts all risks
  • GBP currently mid-range; we examine the bull and bear cases
  • UK financials likely to respond temporarily to GBP repricing, but fundamentals matter more for index investors
22 Oct 2018

Daily Note: When the tide goes out

  • End of QE is a major regime change with significant consequences
  • Rising USD demand for year-end could trigger more liquidity tightening
11 Oct 2018

China Watch: Record Bond Defaults

  • Value of bond defaults reaches record high
  • Defaults reflect continued focus on deleveraging and moral hazard
  • Neutral monetary policy favours government-linked bonds
10 Oct 2018

Macro Strategy: Decompression sickness

  • Term premium decompression has further to run
  • Curves to bear-steepen: stocks historically benefit, but a different cause this time means a different consequence
  • We raise stops on MSCI DM/EM and Gilt-Bund spread trades
10 Oct 2018

Daily Note: The 20/20 recession

  • Most of the sellside is talking about a global recession in 2020
  • Usually they blame the Fed, which apparently can’t see the ‘obvious’
  • Trade wars are a threat but the long expansion could continue
07 Oct 2018

US Watch: Real growth, real yields, real politik

Economy: Real growth for now, but this isn’t 1969
Markets: Real yields have limited impact on stocks
Politics: Realpolitik in the South China Sea

05 Oct 2018

Daily Note: Who killed the synchronized boom?

  • The ‘synchronized global growth’ theme disappeared in 2018
  • Instead, ‘US outperformance’ has been the main macro narrative
  • Trade wars & oil are the main threats to an already soggier outlook
03 Oct 2018

EM Strategy Monthly: Short-term relief but no medium-term let-up

  • Risk: We raise our call on overall risk to moderate negative from strong negative.
  • Brazil: We raise our call on equities to positive as we expect a hope rally following the election this month.
  • China: Growth has been little affected by Trump’s trade war; we move to a positive call on equities after the recent downturn.
  • Russia: With its large current account and fiscal surpluses, Russia is in a strong position to outperform; we maintain our positive call on equities.
03 Oct 2018

Macro Strategy: Dollar demand danger

  • Wider basis swaps a reminder that offshore dollars are still scarce
  • Last year’s combination of factors unlikely to be repeated, but new risks mean liquidity squeeze remains possible
  • Fixed income undergoing regime change, exacerbating risks in a fragile environment
28 Sep 2018

October 2018 Chartbook

  • Macro Drivers. Trade war becoming material, EM headwinds unlikely to fade
  • Multi Asset. US equities tend to outperform when the dollar strengthens – but will it?
  • Fixed Income. The importance of global QE as a factor driving fixed income markets is already fading
  • Currencies. USD picture against DMs mixed; EUR supported by changing EA balance of payments 
  • Equities. US capex continues to accelerate, and the outlook remains rosy
  • Commodities. Both technicals and fundamentals suggest the Brent-WTI spread should narrow
21 Sep 2018

LSR View: From trade wars to trading blocs

  • The US-China economic conflict will be long and ugly with little chance of a deal anytime soon
  • Further US escalation to 25% tariffs on the bulk of Chinese exports is likely
  • Markets will drive a re-globalisation of China trade and spur the creation of an Asian trading bloc centred on the PRC
  • China’s trading partners in East and Southeast Asia will reap positive benefits over the medium term
  • Trump’s goal of reshoring manufacturing jobs to the US will not be realised
  • The degeneration of a globalised trading world into regional blocs will in the long run reduce CAPE and thus equity valuations
  • A bear market is a major risk over the next two to three years
11 Sep 2018

Daily Note: Is Brazil the next Argentina?

  • Fiscal solvency requires both a reform-minded president and Congress
  • The leading presidential candidate supports needed reforms but has not demonstrated the political skills to get them through Congress
  • Candidates on the left are proposing a return to populist policies
09 Sep 2018

US Watch: Trump Tariffs Set to Trip Growth

Economy: Tariffs nipping at growth?
Markets: Tighter liquidity starting to bite
Politics: Democrats lock onto Trump, little else

05 Sep 2018

Daily Note: EM contagion: Crisis upon crisis

  • Argentina, Turkey could be manageable, Brazil less so, China not at all
  • EM crises, tighter liquidity and Trade War lead to correlated markets
  • Negative feedback to DM will be via trade and China
04 Sep 2018

Daily Note: China ready for grim trade fight

  • Current US-China tensions are not comparable to 1980s trade tensions
  • China believes its economic system is under attack, and will fight back
  • Major further yuan devaluation is likely if recent US threats are for real
  • Damage to Japan, Korea and numerous EMs could hurt all risk assets
23 Aug 2018

Macro Picture: Nineties Tunes

Fed tightening, EM crises, tech “bubbles”, a long expansion, potential yield curve inversion – there are striking similarities between the current macro environment and the late 1990s. But the nineties also produced a productivity boom. Toxic politics and poor technological diffusion could prevent a similar revival today.

09 Aug 2018

Macro Picture: Inversion Fear

Investors are worried about central banks overtightening, particularly with the flattening US yield curve. While the curve remains a useful signal, there is a huge difference between ‘flat’ and ‘inverted’.  US officials have a long tradition of ignoring inversion but it would take an unduly brave Fed to force the issue today. 

07 Aug 2018

Daily Note: Trade war morphing into FX war

  • China seems highly likely to retaliate vigorously to fresh US import tariffs 
  • The dollar, up 7% in real terms, and yuan down 8%, could move much more 
  • China will need to devalue fast to get ahead of and dampen capital outflows 
  • An FX war would certainly be damaging for stocks, perhaps bonds too 
20 Jul 2018

LSR View: Rough trade to batter markets

  • Settlement of US-China trade disputes unlikely before US Mid-term elections 
  • Any deal would be unlikely to promise a big rise in US manufacturing jobs 
  • Extending the trade war to attack European surpluses could generate such jobs 
  • Continental European trade surpluses are the chief counterpart of US deficits 
  • Euro-Japanese savings gluts have caused consistent US$ overvaluation 
  • Uncertainties over trade wars could cause short-term stock market slump 
  • Voter response to trade wars unlikely to be fully clear before 2020 elections 
  • Breakdown from globalisation into regional trading blocs a long-term risk 
16 Jul 2018

Global Financial Trends: Emerging crisis (in charts)

  • Emerging markets (EMs) are in the firing line on multiple fronts 
  • Cumulative monthly purchases of G4 central banks likely to cease by the end of next year 
  • Large $-borrowing makes EMs particularly vulnerable to higher Eurodollar funding costs 
  • Trade wars intensify uncertainty at a time when volatility and risk premia are rising 
  • Higher energy prices are an added worry for oil importers with large external funding needs 
  • Yet, EM FX drop against the dollar has been more severe than in 2013 taper tantrum 
  • But gains in overall EM competitiveness are relatively modest  
  • The starting point is relatively better for most EMs than half a decade ago… 
  • …but headwinds are more significant this time around 
  • We create a heat map to assess risks and opportunities among EMs 


08 Jun 2018

LSR View: Unstable equilibrium is global

  • Our central forecast remains ‘steady as she goes’
  • But the risks have increased – notably the threat of trade war
  • Yet that could mean a continued cheap euro, helping EA growth …
  • ​… and plenty of money flowing into the US, holding down rates there
  • Meanwhile the techies are still innovating, and capex is picking up
  • Even Italy’s troubles have their bright side – fiscal stimulus could help
  • And China remains in the background, with 6% growth and contained debt
07 Jun 2018

Global Financial Trends: Italy is systemic (in charts)

  • Euro break-up fears surged last week on political uncertainty in Italy
  • Re-denomination and contagion risks have eased since then
  • But Italy remains the biggest threat to EMU stability
  • Foreign claims on Italy dwarf the combined liabilities of Greece, Ireland, Portugal and Spain before the crisis
  • Italy poses a systemic threat to the European banking system
  • The elaborate inter-linkages among European banks mean huge indirect exposure to Italy
05 Jun 2018

Daily Note: EM conflict crises and contagion

  • Unilateral US action threatens global trading order
  • Brazil is following Turkey into economic crisis
  • Contagion fear as investors look for next casualty
31 May 2018

Macro Picture: USD-Ominoes

US monetary tightening is widening global risk premiums, affecting a wide range of asset prices – tech stocks, EM borrowing costs and even European periphery bonds. The US dollar has also strengthened recently, a move which – if it went further – could have important implications for global financial markets.

17 Apr 2018

Trade War What To Watch For

  • A NAFTA deal will confirm US commitment to negotiation
  • China has red lines but will compromise on the deficit
  • Volatility is high, but Trade War risk premium will decline
17 Apr 2018

The Cycle That Keeps Giving

  • Welcome to the second longest economic expansion in modern history
  • Talk of ‘high pressure’ monetary policy echoes the late 1960s
  • But allowing the economy to ‘run hot’ is relatively low risk today
17 Apr 2018

Is The Next Lehman Japanese

  • European banks played a decisive role in the subprime crisis 
  • Japanese banks may have taken over as the main systemic vulnerability
  • Japanese lenders have huge dollar funding needs, like European banks in 2007
  • This leaves them exposed to renewed Eurodollar strains
  • Risk-taking has certainly increased at Japanese banks 
  • But their foreign asset quality is better with still large UST holdings
  • Poor profitability will worsen with UST losses and a dollar rebound
  • But risks of asset fire sales are limited at this point
16 Apr 2018

S&P Not Heavily Overvalued

  • As a measure of over/under valuation, a ratio must revert to mean, long term
  • The 1914-91 'short 20th century' distorted CAPE and price/book ratios down
  • The S&P real value index has 6.6% pa real total return and reverts  to mean
  • The RVI, now 16% overvalued, could get more so before it falls back
16 Jan 2018

The End of Secular Stagnation

  • Consensus is raising its GDP forecasts, real rates are rising 
  • Still plenty of bears worrying about sustainability of this revival 
  • Too soon to declare end of ‘secular stagnation’ but recovery looks sound  
11 Jan 2018

Debt Crisis on The Cards

  • The nature of China’s debt makes a systemic crisis unlikely 
  • The crux of the debt burden issue lies in the Party-State balance sheet  
  • The debt-to-GDP ratio will increase but no Minsky Moment triggers are currently in sight  
  • Closing the gap between credit growth and nominal GDP and deleveraging by stealth are the keys to long-term stabilization of the debt 
  • Defaults have been more widespread than generally thought 
  • The real threat is posed by the housing market, policy missteps and deflation 
11 Jan 2018

Is The Consensus Wrong?

The consensus expects a dull 2018, with solid global growth, a modest pickup in inflation and gradual monetary tightening. We look for risks. China is the clearest threat to the global cycle, though a G7 inflation surprise is likelier. Market-based risks (yields, USD shortage) seem more imminent than macroeconomic dangers. 



11 Dec 2018

EMEA: Junta incorporated

  • Post-Arab Spring, military power is growing across the MENA region – economically as well as politically.
  • In Egypt 10-20% of GDP has fallen under military control, making the military the country’s largest “company”.
  • Other countries in the region are heading down the same road – most importantly, Saudi Arabia.
04 Dec 2018

Brazil: GDP data highlights long road to recovery

  • The Brazilian economy continued to underperform in Q3/18, expanding by just 0.8% qoq/sa
  • But the outlook for 2019 has brightened, as the end of election-related uncertainty has helped to boost key indicators
  • Strong October tax collection data confirms that the 2018 primary deficit will be smaller than the yearend target, but the longer-term fiscal outlook remains bleak 
  • President-elect Bolsonaro will meet with key party leaders this week but faces potential bad news if up to 15 parties form a united front, isolating his PSL party
  • Brazilian farmers are vigilantly monitoring the US-China trade talks as they prepare to harvest Brazil’s largest soy crop in history
29 Nov 2018

India: On the road: Polls signal swing against Modi BJP

  • The risk of a big BJP defeat in key state polls now under way has increased.
  • The opposition will gain momentum to form a united front against the BJP.
  • Such a result will spook investors counting on Modi’s re-election next year.
09 Nov 2018

Global Political Drivers: US vs China shifts to simmer

  • This week’s US election points to continued trade war with China
  • Trump’s random trade-war walk will come out on a more gentle pace of tariff escalation
  • Political and economic incentives for slower motion are reinforced by the interplay of parallel US agendas
  • Less RMB depreciation may now be needed
09 Nov 2018

Global Political Drivers:US vs China shifts to simmer

  • This week’s US election points to continued trade war with China
  • Trump’s random trade-war walk will come out on a more gentle pace of tariff escalation
  • Political and economic incentives for slower motion are reinforced by the interplay of parallel US agendas
  • Less RMB depreciation may now be needed
29 Oct 2018

Daily Note: Brazil: Election opens door for further reform

  • Far-right candidate Jair Bolsonaro wins runoff by a solid margin 
  • Bolsonaro must push an ambitious reform agenda – notably pension and tax reforms, plus privatizations – to put the economy back on track
  • He is likely to benefit from stronger growth and revenues in 2019
26 Oct 2018

Global Political Drivers: Italy and the French white knight

  • The Italy threat is back: the ‘global’ and ‘political’ components of the threat are alive and well
  • Next up: a game of chicken between Italy and the EA establishment
  • Macron’s ride to the rescue has run into German political sands
  • He might have better luck installing his man at the ECB
  • Draghi is set to tee up an Italy-focused TLTRO for his successor
25 Oct 2018

Russia: Supply-side drive

  • Russian economic policy is strongly biased to the supply side at the expense of domestic consumption
  • This cardinal feature applies across the board and in all time horizons
  • Two key policies exemplify this: pension investment plans and the champion fiscal rule innovation on the exchange rate (‘FXFR’)
  • Political risks to this agenda stem from already visible public disenchantment
  • These policy settings, while they last, are good news for the domestic DCM as well as all tradable and infrastructure-related sectors
10 Oct 2018

LatAm: Did Mexico lose or win with the new trilateral deal?

  • The new trilateral deal set to replace NAFTA does not significantly address the core issues for which the deal was renegotiated: the erosion of US manufacturing jobs and the US trade deficit with Mexico.
  • At the micro level, the new guidelines reduce the competitiveness of the automotive industry but provide safeguards against potential trade tariffs in this sector.
  • At the macro level, the end of a forced renegotiation reduces trade uncertainty, improves business sentiment and lifts the country’s outlook.
  • The next challenge is to have the new deal approved by the Canadian parliament and the US Congress – the Mexican Senate has already expressed its willingness to ratify it.
  • Overall, the final deal makes Mexico and North America somewhat more protectionist and fulfils the aspirations of some stakeholders to “turn this hemisphere into a manufacturing powerhouse”.
08 Oct 2018

Brazil: Bolsonaro wave reshapes electoral map

  • Following Sunday’s ballot, far-right frontrunner Jair Bolsonaro will have the upper hand against leftist Fernando Haddad (PT) in a runoff round
  • Bolsonaro’s once-tiny PSL party also saw big advances in the Congress, aided by a surge in anti-PT sentiment
  • But a highly fragmented Congress after historic legislative election results will make passing structural reforms challenging
  • Key losses for the PT will likely force Haddad to the centre, but he still faces an uphill battle, boosting investor sentiment
04 Oct 2018

India: Higher oil, tighter norms to exacerbate credit crunch

  • The government’s extraordinary takeover on 1 October of the Infrastructure Leasing & Financial Services (IL&FS) board stems the risk of contagion as it will ensure the lender has adequate liquidity to avert further defaults.
  • But liquidity will remain tight due to rising interest rates, a weakening rupee and growing investor risk aversion, resulting in funding challenges for non-banking finance companies (NBFCs).
  • The rupee’s fall to fresh lows, as we expected, will keep markets jittery about the impact of high oil prices on India’s twin deficits and inflation; the government today cut fuel taxes, as we had predicted, and this will result in fiscal slippage.
  • The Reserve Bank of India (RBI) will feel compelled to tighten monetary policy; we expect a 25 bp rate hike tomorrow.
  • The oil price impact and IL&FS’s troubles are a one-two punch for India’s already battered financial sector.
  • No major lender will be allowed to fail, but regulations will be tightened further to tackle deep-set structural faults in the sector.
  • This will delay India’s investment revival and ultimately impinge on consumption demand as well.
27 Sep 2018

Global Political Drivers: Peak Brexit panic timelines

  • The UK will not ‘crash out’ of the EU next March despite much turbulence in the meantime
  • This outlook points to attractive event trading opportunities in sterling and gilts
  • On the timing-is-everything principle, we scrutinize the key event calendar
  • Volatility will surge in the run-up to two main winter milestones, followed by relief rallies
  • The same goes for the full-blown UK political crisis scenario
  • We recommend expressing these views through the EUR/GBP cross, with prompt profit taking
14 Sep 2018

Brazil: Tackling the ticking fiscal time bomb: Candidate plans

  • Investors are likely to have little patience with Brazil at a time of rising global risk
  • Yet the next leader will have to tackle not one but three looming fiscal challenges in 2019
  • If the next President does not signal a strong reform agenda up front, more market volatility is likely to ensue
  • Near-term fiscal erosion is likely to increase as the inevitable price of legislative horse-trading
  • We map the key fiscal proposals of core presidential candidates in this note, as well as Brazil’s short political timeline for reforms in the next government
13 Sep 2018

Russia: Economic effects of sanctions

  • Our model of the ruble-oil price correlation indicates that sanctions pressure – with help from wider EM risk-off – has caused a 27% deviation from the ‘natural’ level for USDRUR.
  • This effect – reflected in an all-time high ruble oil price and reinforced by the imminent VAT hike – is boosting external demand, while domestic demand growth will flag.
  • The strategic policy framework makes domestic investment demand a potential exception to this rule; but this effect will not be felt before H2/19.
  • While not boosting domestic demand, fiscal and monetary policy will avoid weakening it further: specifically, the CBR will leave its policy rate unchanged tomorrow.
  • The surging current account and budget surpluses will cushion the effect of outflows from the local debt market, while in equities, materials (metals & mining and chemicals) should catch up with outperforming oil stocks in this sanctions-driven economic environment.
24 Aug 2018

India: Political competition adds to economic risk

  • Two national opinion polls held in May and July 2018, respectively, show a narrowing of the vote gap between the Bharatiya Janata Party (BJP)-led coalition and the Indian National Congress (INC)-led alliance; voters’ economic concerns are eating into Modi’s lead.
  • Both surveys show that an expanded opposition alliance that includes more regional parties could produce a hung parliament, which would be negative for market sentiment because of the subsequent uncertainty.
  • Political competition is contributing to increased populism in an increasingly inflationary environment, making a hard landing for the economy after the elections more likely.
  • The BJP has an advantage in resources, messaging and organization, which in our central case should push it over the finish line in a close election; but economic factors are increasingly weighing against it.
17 Aug 2018

Global Political Drivers: Trade war: radical invisibility

  • Trade wars – now China-focused – are a random US political walk
  • Looking beyond the mid-terms, this is far from a one-way bet
  • Structural constraints on Trump – from voters, official and Congress – are minimal
  • His reticence on the decisive geopolitical agenda accentuates uncertainty
  • The newsflow is a poor source of clues about Trump’s on-off switch
08 Aug 2018

EMEA: Turkey crash landing

US sanctions have come just as Turkey’s overheating situation reaches a crunch point. Here we assess the outlook for what could be Turkey’s worst economic crisis since 2001.

  • New sanctions are not likely in the short-term.
  • However going into mid-Q4 there is a real risk of US banking sanctions if the Turkish government does not back down.
  • With or without new sanctions though, Turkey is heading into crisis.
  • Talk of capital controls and IMF intervention is going too far, but a very hard landing is now unavoidable.
  • ​We maintain a negative outlook on all Turkish asset classes.
07 Aug 2018

Brazil: The electoral chessboard, unveiled

  • With the end of the party conventions, the full list of candidates – and VP running mates – for the wide-open October presidential race has finally firmed up
  • Notwithstanding ardent voter hopes of change, the biggest winners of the convention talks were Brazil’s two dominant parties of yore: the PSDB and the PT
  • Former President Lula’s PT has inched closer to the runoff round after enacting Phase 1 of its Plan B and isolating leftist rival Ciro Gomes as a result
  • Market-friendly Geraldo Alckmin (PSDB) has selected a female, conservative senator as his VP pick, in a tactical move to win back the south and rural voters
  • After forming last-minute alliances, both former Environment Minister Marina Silva and Paraná Senator Álvaro Dias have managed to keep their bids alive
  • Unable to branch out, far-right Jair Bolsonaro picked a right-wing general as his VP choice, limiting his ability to woo undecided voters but firing up his core base
  • Industrial production recovered in June but unemployment remains a concern
02 Aug 2018

China Watch: Why China will not surrender

  • The trade war is not the top priority for Beijing 
  • The reaction to tariffs will be asymmetrical 
  • Beijing will defend the domestic power structure while pursuing global aims 
05 Jul 2018

Global Political Drivers: Brexit rough passage to safety

  • Amid the Brexit noise crescendo, we stick to our sanguine view: ‘crash-out’ risk is negligible
  • Recent action has usefully demonstrated the ‘parliamentary arithmetic’ underpinning this call
  • The UK government’s manoeuvrings also provide useful pointers for stress testing our view
  • Noise is not just inevitable but intrinsic to the Brexit process, since brinkmanship is a political self-preservation strategy
  • ​Lean into likely EURGBP surges as this season heads to its winter finale
08 Jun 2018

Brazil: Bolsonaro surfs the anti-establishment tidal wave

  • In a new investor survey by XP Investimentos, nearly half of those polled now see Bolsonaro winning the ballot, casting doubt on Brazil’s economic future.
  • The recent use of WhatsApp as a powerful tool to mobilize truckers points to its huge potential to influence voter behaviour; it may also mitigate Bolsonaro’s lack of TV/radio ad time.
  • Market-friendly, former São Paulo Governor Alckmin not only trails in fourth place in a new presidential poll but is tied with an alternate candidate from Lula’s Workers’ Party, underscoring his ongoing woes.
  • Alckmin is also tied with his former protégé-turned-rival, former São Paulo Mayor João Doria, who is now unlikely to replace him on the ballot.
  • The truckers’ strike – the latest manifestation of the widespread popular outrage that has been evident since 2013 – highlights the deepening crisis of governability in Brasilia today.
  • That crisis is unlikely to be fully resolved by the October election, adding to the fiscal headaches for the next President.
07 Jun 2018

Global Political Driver: Trump trade wars friendly fire

  • Trade disputes between transatlantic friends may seem less scary than with rising rival China
  • Such appearances are deceptive: historic geopolitical alignment paradoxically reinforces the attractions of Europe as a Trump trade war target
  • Those attractions range from domestic US politics to the ‘German cars’ question, with the geopolitical kicker being to prolong the row
  • This protracted prospect in turn aggravates the negative economic and financial market effects of inhibited capex and dollar strength
31 May 2018

India: Rural revival at a fiscal cost

One of the first steps that the Bharatiya Janata Party took after assuming office in the southern state of Karnataka earlier in May was to waive farm loans up to Rs100,000 (US$1,500) each. The state government that introduced this measure lasted only two days, but its successor is under pressure to continue with the estimated Rs530 billion write-off. All parties are wooing the rural voter in the run-up to India’s 2019 general elections. Below we examine how India’s troubled rural economy will shape the economics and politics of the country in the next 12 months.

03 May 2018

Saudi Arabia: The Kingdom to come

Over the last 12 months we have closely followed Muhammad bin Salman’s relaunch of his Kingdom. In this note we join up the findings of the past year of research to answer the question: what will the new Saudi Arabia look like?

17 Apr 2018

Winning the Trade War

  • Global: EM gain on limited US trade choices 
  • China: Fiscal policy will be contractionary 
  • Brazil: Presidential door open for a novice 
  • India: Tax compliance push will boost GST 
  • Russia: Tax change to reverse capital flight 
  • Mexico: NAFTA will survive despite Trump 
  • Philippines: BSP will allow peso to weaken 
13 Apr 2018

Brazil: More Light on The Presidential Race

At the six-month mark to the October general election, important parameters have been set on what is still shaping up to be Brazil’s most unpredictable presidential race in three decades. In the wake of the high-profile imprisonment of former President Lula – the country’s current presidential frontrunner – fragmentation remains the rule of the game: myriad dark horse candidates across the political spectrum have entered the race in the absence of strong consensus centrist candidates. Another trend is the growing anti-establishment movement, with new players eager to surf the wave of rising popular anger. Over the next three months, political parties will begin to forge electoral alliances with an eye to aggregating more free, mandatory TV/radio electoral ad time for their candidates; such alliances will be key to monitor.

10 Apr 2018

Russia: Smooth Growth, Tripwire Hazard

  • But for the ‘minor detail’ of geopolitics, Russian growth is on course to speed up to 2% this year
  • Recent softer data are misleading
  • Exemplary macroeconomic policies are supporting all growth components
  • Homebuilding and consumer durable are likely sweet spots
  • This healthy baseline outlook will either be ruined or re-assert itself depending on how the latest spiral of Russia-West geopolitical confrontation plays out
25 Jan 2018

Growth Recovery at Expense of Macroeconomic Stability

Widening twin deficits and rising inflation are fast emerging as risks to India’s macroeconomic stability that will threaten the nascent growth revival.  

25 Jan 2018

Lula Thwarted: Electoral Implications

  • The unanimous appeals ruling against Lula means that the market’s top electoral concern has been allayed, favouring bulls despite reform gridlock. 
  • The ruling does not bar Lula from registering for the presidential race, but it does significantly raise the odds that he will be found ineligible to run. 
  • Lula’s expected removal from the race will help less-polarizing candidates; the biggest risk to monitor ahead is the fragmentation of the centrist vote. 
  • Public reaction to the verdict was relatively muted, underscoring the former leader’s fall from grace in the wake of the corruption investigations and despite his current presidential frontrunner status. 
24 Jan 2018

Xi's Global Gauntlet

  • Xi Jinping feels confident of being able to confront the Trump administration in seeking global influence 
  • Beijing will do all it can to promote its political and economic model as an alternative to “failing” democratic capitalism 
  • The outlook is for heightened China-US tension as the Trump administration sharpens policy towards the PRC 
18 Jan 2018

US Versus China and Russia

  • America’s new National Security Strategy published last month – and echoed by this week’s National Defence Strategy from the Pentagon – crystallizes the global geopolitical backdrop of structural great power tension.  
  • Any isolationism implied by Trump’s ‘America First’ stance is sifted out by the stern realism of the military men at the top of  his administration and the result is an agenda of continuous, comprehensive and – above all – zero sum competition against China and Russia.  
  • Another contrast with the Cold War is, however, negative: confrontation with the economically isolated Soviet Union spelled none of the day-to-day risks to the global economy and trade posed by the prospect of periodically rising US-China tensions. 
16 Jan 2018

Saudi and Iran: The 'Hot War' Case

  • Rivalry between Saudi Arabia and Iran is going to intensify in 2018. The war in Yemen presents a particular risk.
  • This rivalry will give a tailwind to oil prices, but does not have real capacity to constrict supply.
  • It could instead bring about the end of the OPEC+ consensus and the return of global supply glut.


12 Dec 2018

Macro Strategy: Ghost of rallies past

  • The drag from this year’s dollar rise is no match for 2015, but equity earnings still at risk and lagged impact of strength still to feed through
  • Fed’s hint at tightening pause has likely halted the currency’s rise in the short term, but now this is all in the price
  • The key to whether USD falls next year is held by China
05 Dec 2018

Macro Strategy: Santa rally for retail

  • Fed pause, trade war pause; sell-off pause
  • Downside risks to trade growth delayed again
  • Emerging market stocks have room to recover: we buy MSCI EM and close long USD/CNH
04 Dec 2018

EM Strategy Monthly: Shorter, more volatile swings to characterize EM markets next year

  • Risk: We raise our call on overall risk to moderate positive.
  • Brazil: We cut our call on equities from strong to moderate positive.
  • China: We raise our call to moderate positive following Trump’s de-escalation of the US-China trade war.
  • Turkey: We raise our call to moderate positive as we expect further recovery from oversold levels.
16 Nov 2018

Asset Allocation: Pause for thought

  • Fed likely to pause after March hike as rates reach neutral
  • A slower escalation of the trade war means CNY depreciation to decelerate
  • More stable yuan, Fed pause to ease upward pressure on dollar
  • This should support US equities as strong USD becoming a headwind
  • Stocks’ recovery should continue, though volatility likely to persist a bit longer
  • Slower earnings growth and tighter liquidity to cause further de-rating of equities
  • Yields stable near term, but end of QE, heavy issuance to push up US yields later
  • We keep a bullish bias on USD against EM FX, but upgrade CAD, AUD
14 Nov 2018

Macro Strategy: King dollar China

  • USD the highest-yielding DM currency, but rate-FX correlations falling
  • USD/CNY yield correlation relatively high and feeding through to other FX via CNY
  • MXN, ZAR and INR are most exposed to higher US yields and lower CNY


07 Nov 2018

Macro Strategy: Let's twist again

  • Treasury issuance and term premium to raise long-term yields
  • Slowing US growth momentum calls hiking cycle into question
  • Yield curve set to untwist: we buy a 2s10s steepener
05 Nov 2018

November 2018 Chartbook

  • Macro Drivers. Growth momentum is slowing, even in the US
  • Multi Asset. Volatility has picked up in 2018, but it remains well below average
  • Fixed Income. The QE era is over, real yields set to adjust higher
  • Currencies. USD tends to rally in November; GBP upside risks and CNY downside risks
  • Equities. Selloff triggered by sector rebalancing, exacerbated by disappointing forward guidance
  • Commodities. Supply dominance causes crude price to retreat as sanction fear fades
01 Nov 2018

EM Strategy Monthly: Trade war is already past 'peak Trump' for EMs

  • Risk: We maintain our moderate negative call on overall risk.
  • Brazil: We hike our call on equities to strong positive following the recent elections.
  • Mexico: We cut our call on equities to negative following the cancellation of Mexico City’s new airport project.
  • Russia: Large current account and fiscal surpluses put Russia in a strong position in the event of renewed sanctions. We maintain our positive call on equities.
24 Oct 2018

Macro Strategy: November to remember

  • November is usually a good month for USD
  • And mid-term elections tend to be bullish for US stocks
  • We buy USD vs JPY and INR to trade on November seasonality, and take profit on BRL/MXN
05 Oct 2018

Macro Strategy: FX report another trade war weapon

  • China not officially a “currency manipulator”, and it doesn’t matter anyway
  • Germany’s egregious surplus safe for now, but will be tackled eventually
  • Thailand may debut in next month’s report. It satisfies the criteria
03 Oct 2018

EM Strategy Monthly: EM Market Outlook: Short-term relief but no medium-term let-up

  • Risk: We raise our call on overall risk to moderate negative from strong negative.
  • Brazil: We raise our call on equities to positive as we expect a hope rally following the election this month.
  • China: Growth has been little affected by Trump’s trade war; we move to a positive call on equities after the recent downturn.
  • Russia: With its large current account and fiscal surpluses, Russia is in a strong position to outperform; we maintain our positive call on equities.
28 Sep 2018

October 2018 Chartbook

  • Macro Drivers. Trade war becoming material, EM headwinds unlikely to fade
  • Multi Asset. US equities tend to outperform when the dollar strengthens – but will it?
  • Fixed Income. The importance of global QE as a factor driving fixed income markets is already fading
  • Currencies. USD picture against DMs mixed; EUR supported by changing EA balance of payments 
  • Equities. US capex continues to accelerate, and the outlook remains rosy
  • Commodities. Both technicals and fundamentals suggest the Brent-WTI spread should narrow
12 Sep 2018

Macro Strategy: The end of QE

  • As the pace of QE slows, so does its dominance in fixed income markets
  • Bunds are cornered, but fixed income volatility set to rise in rest of euro area
  • Gilt outflow suggests rebalancing out of the UK: we sell Gilts vs Bunds
04 Sep 2018

September 2018 Chartbook

  • Macro Drivers. Late-cycle signs in the US, and Chinese credit growth to pick up
  • Multi Asset. Liquidity tightening is starting to bite, just as EMs face a perfect storm
  • Fixed Income. Curve flattening risks inversion, especially as 10y yield has been unchanged for 6 months
  • Currencies. If trade wars escalate, CNY could fall a lot further
  • Equities. EMs cheap enough to rebound – but this is unlikely while globalisation is going into reverse
  • Commodities. Oil demand outlook clouded by trade war, market likely to stay range-bound this year
04 Sep 2018

EM Strategy Monthly: Why we are facing a perfect storm in EMs

  • Risk: We maintain our strong negative call on overall risk.
  • Russia: With sanctions risk mostly priced in, we maintain our positive call on equities.
  • China: We maintain our strong negative call on the yuan.
  • Mexico: With the tentative deal on NAFTA, we maintain our positive call on equities.
20 Aug 2018

EM Watch: One crisis too many

Turkey: Brunson on US-Turkey vs Turkey on EM
Turkey: Investor call reveals blind spot
Global: Rising inflation raises macro risks
China: Weak data to accelerate stimulus
Brazil: Polls to dictate market sentiment 
India: Weaker rupee: worsening fundamentals
Russia: Tax: Sechin vs Siluanov
Mexico: Direct exposure to Turkey via BBVA
Indonesia: Two more hikes to come

17 Aug 2018

Asset Allocation: The currency arms race

  • Trade war morphing into currency war as China weaponises the yuan
  • Much more CNY weakness likely if US ratchets up tariffs: we go -2
  • Flat yield curve, tighter liquidity, Tech woes all extra risks for global equities
  • US stocks’ safe-haven status also threatened by strong dollar, rich valuations
  • Last month’s risk reduction paid off; our asset allocation is broadly unchanged
  • But we add some EM equity risk (Mexico, India) and reduce DMs (Japan, France)
  • Risk aversion limiting rise in global yields: we stay o/w government bonds
15 Aug 2018

Macro Strategy: Weaponising FX

  • Policymakers talk down the USD but the only way is up in this trade war
  • China FX weakness has offset some tariff costs; more to come
  • We buy USD/CNH upside via a digital call and sell CNH/JPY
13 Aug 2018

EM Watch: Do fear the rebound

Turkey: Limited contagion no comfort for EM
Global: Could US tariffs be bullish for EM?
China: The road to 15% RMB depreciation
Brazil: Electoral volatility positioned to rise
India: Easing regulation still has further to go
Russia: Sanctions and new tax threats
Mexico: Great expectations risk disappointment
Philippines: Growth number hit by net exports
August EM slide deck: EM in charts: Trade War to Currency War

01 Aug 2018

EM Strategy Monthly: China is winning the trade war - what are Trump's next moves?

  • Risk: We maintain our strong negative call on overall risk.
  • Russia: We think valuations are attractive and sanctions risks low.
  • China:  We maintain our negative call as we expect trade tensions to persist.
  • Mexico: Improving prospects for a NAFTA deal are positive for equities.
01 Jun 2018

EM Strategy Monthly: Why exit from QE is proving traumatic for some EMs

Risk: We maintain our negative call on overall risk.
Russia: We move to a positive call on equities following an easing of sanctions risk.
Brazil: We move to strong negative on faltering recovery and rising political risk

29 May 2018

EM Watch: Asia to win from trade war fallout

  • Global: EM Asia set to win from trade war fallout
  • China: Policy tightening accelerates defaults
  • Brazil: Truckers’ strike highlights rising risks
  • India: Monsoon to keep lid on inflation
  • Russia: Dividends and orthodox policies
  • Mexico: The hard road to a light NAFTA 2.0
  • Thailand: High growth unlikely to continue
23 May 2018

Macro Strategy: Liquidity roadmap bodes ill for EM

  • Turkey and Argentina could lead EMs lower still
  • Liquidity conditions likely to improve briefly before deteriorating in H2
  • Risk premium to rise: we take off USD/ZAR short and tighten stops
18 May 2018

Asset Allocation: Unsynchronised growth

  • Global growth has become less synchronised, with EA and China slowing
  • But, with the US still going strong, the end of the global cycle is not imminent
  • Cheaper valuations in all asset classes fairly reflect heightened risks
  • DM equities still the better choice; EMs under pressure from higher USD, yields
  • 10y yields roiled by QT, but breakout scope limited by short positioning
  • Risks rising for credit but too early to be short – we stay close to benchmark
  • Dollar strength likely to be transient – we remain bullish EUR
28 Mar 2018

Trading Trade Trouble

  • US has a framework to discourage trade manipulation; next report due in April
  • We sell CNY/KRW as Korean FX intervention likely to diminish
  • Tariff tit-for-tat retaliation good for BRL as soybean exports grab market share
27 Mar 2018

April 2018 Chartbook

  • Macro Drivers. Fiscal stimulus is stoking an overheating US economy, trade wars may be a drag
  • Multi Asset. S&P ERP in line with long-term average, making stocks fair value vs bonds
  • Fixed Income. Market underestimates pace of Fed hikes; ECB underestimates impact of unwinding QE
  • Currencies. Change in Fed reaction function means USD no longer the worst currency in the world
  • Equities. The RoE gap between EA/Japan and the US is narrowing, supporting higher valuations
  • Commodities. Oil demand to continue outstripping supply in the absence of trade wars
19 Mar 2018

Trade War, IP: China in The Firing Line

  • Global: Shoot first style will hit markets
  • China: US-China tensions set to escalate
  • Brazil: Short-term fiscal outlook improves
  • India: Bypoll losses pile pressure on Modi
  • Russia: Putin’s victory signals are positive
  • Mexico: NAFTA runs into election season
  • Turkey: The lira is teetering on the brink
  • Indonesia: Politics raises stability risks
  • Strategy: EM political risks in 2018
16 Mar 2018

This is What Normal Looks Like

  • VIX higher than it recently was doesn’t mean we’re in a vol ‘new normal’
  • 2017 was a freak year for volatility – this is what ‘normal’ looks like
  • The cycle is maturing but overheating is not imminent
  • Trade war risk is back but still fairly remote – we don’t position for it
  • Higher EA and Japan RoE should narrow the valuation gap with the US
  • Bonds to continue consolidation; Fed meeting to set tone for next move
  • Dollar no longer the weakest currency in the world
19 Jan 2018

It is Rational to Be Irrational

  •  2018 is likely to see the beginning of the equity market melt-up 
  •  During the late stages of a rally, expensive stocks get more expensive 
  •  Also, high-beta equities tend to outperform low-beta 
  •  Rational to be irrational: dumb beta likely to beat smart alpha, again 
  •  We go 16% overweight on stocks after US, China upgrade to +2 
  •  We continue to see upside to yields; we cut IG, HY, EM debt by 6%  
  •  Euro on the front foot: growth and positioning warrant upgrade to +2 
  •  Dollar likely to stay on the back foot: we raise GBP and AUD to 0 from -1 
10 Jan 2018

Neither Growth Nor Flows Support The Dollar

  • Global growth strong but US data likely to enter a soft patch 
  • Short-USD positioning is clean, and cleaner than it looks in EUR 
  • Add short-USD exposure by selling USD/RUB, close Gilt-UST trade on China news 
09 Jan 2018

Why A 'Putting Money To Work' Rally Will Prove Positive For Emerging Markets

  • Risk: We raise our rating on overall risk for EM assets to strong positive.
  • China: We hike our call on China equities to strong positive.
  • Russia: We maintain our positive equity call amid improving economic fundamentals


View our summary videos on fast trending topics. To listen to a recording of our Conference Calls, please get in touch with zdl@tslombard.com


Track Record

We have a 29 year track record of successful calls. Many of these calls combined economic, political and market analysis.



To request an interview with a member of our team, please get in touch zdl@tslombard.com .



Client Login

Don't have an account? CREATE YOUR ACCOUNT