Markets

Overview

Our investment strategists absorb our teams’ political and economic views and forecasts. Then, using a market lens, they provide our clients with advice on asset allocation, investment positioning and portfolio risk management.

At TS Lombard, we are in the advantageous position of having a wealth of global economic and political analysis at our disposal. Through the judicious interpretation of this knowledge, and rigorous market analysis, we provide clients with high-conviction advice on the best course of action to take in order to capitalise on opportunities and avoid risks.

We provide actionable asset allocation advice (3-6 month horizon) expressed in absolute terms and relative tems in model portfolios. We also provide tactical trade ideas (6-8 week horizon).

Our Method

Timing is key, and our focus is to determine the optimal moment to increase or reduce exposure to a specific asset class or make a tactical trade. We take pride in presenting our clients with resolute ideas based on their specific needs, giving them an opportunity to make adjustments to their portfolios with greater confidence. In many cases, we act as a ‘sounding board’ or a ‘second opinion’ to help you see how interdependencies and interconnections will have an impact on your decision-making.

 

Our proprietary strategy models can help you identify where the value is in the market with a greater degree of certainty. And our agnostic approach to asset classes allows us to give you the best value recommendations – whether that’s cross-asset, multi-asset or within asset classes.

Using detailed economic and political risk analysis as the building blocks of our forecasting, our team of expert strategists assess market positioning and technical signals and then formulate asset and investment recommendations based on the most likely outcomes.

Markets Research

Markets
16 Aug 2017

The case for a stronger dollar

  • US data starting to improve and Fed officials talking up another rate hike 
  • Market positioned for further USD falls despite short-term positives 
  • We add a long USD/CHF position and take profit on our EUR/SEK put spread
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Markets
09 Aug 2017

Playing with fire (and fury)

  • Trump ‘fire and fury’ comments unleash vicious risk-off phase: will it last? 
  • Macro and corporate fundamentals remain good, as Q2 earnings show 
  • Absent an actual military escalation, the cycle should not be derailed 
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Markets
02 Aug 2017

Forget US sanctions: Russia is a buy

  • Weak USD helping EM assets, stocks buoyed by more balanced Chinese growth 
  • We add long Russian equity and rouble exposures via RTSI$ futures 
  • We trail the stop on EUR/CHF further to 1.13, extend target to 1.17 
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Markets
01 Aug 2017

EM Strategy Monthly - August 2017

More balanced growth in China is a major positive for global EMs

  • Asset class – We raise equities to strong positive.
  • Russia – Bad news is priced in; we raise equities to positive.
  • India – We cut equities to moderate positive on high valuations.
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Track Record

Markets
15 Apr 2016

2016: Long EM bonds

We said:

Appealing valuations, brightening prospects for global carry strategies, a large yield pick-up core markets and a general fear-fatigue make EM bonds attractive, as the Fed pushes back rate hikes and China stabilises. (LSR Asset Allocation 15th April 2016)

Outcome:

EM bonds outperform driven by the search for yield as investors moved out of negative or zero rate bond markets.

Markets
07 Apr 2016

2016: Protracted exit for Dilma favors local debt

We said:

Despite the risk of a weaker economy and of heightened volatility in equity markets, the protracted exit for Dilma favours local debt. We expect Banco Central to continue to intervene in response to excessive currency appreciation; but improved investor sentiment thanks to the perceived prospect of a new government should ensure that the Real does not collapse and that inflation continues to decline, opening the way for lower interest rates. We add a positive view of Brazilian local debt to our list of high-conviction absolute market views. (EM Macro Strategy 7th April 2016).

Outcome:

Trade generates 220bps of profit which we take on 7th September 2016.

Markets
30 Mar 2016

2016: Add carry to your portfolio

Consensus said:

Policy divergence dominates as a theme for investors.

We said:

The Fed is helping carry strategies perform. But not all carry is equal. We need the propulsion of a good domestic story. We recommend going long INR vs. GBP and long IDR vs. USD. (LSR Macro Strategy 30th March 2016)

Outcome:

5%+ pure carry performance on the Indian rupee.

Markets
10 Nov 2016

2016: Long South African local debt

We said:

International investors have reduced their exposure to local debt amid the latest escalation of political turmoil but have not yet returned to the market; this leaves potential for them to rebuild positions if, as we expect, the country enters a period of relative political calm. A stable currency will also ensure that inflation expectations remain well anchore, which will support the case for the SARB to the monetary tightening cycle, and benefit local bond markets. (EM Market Views 10 November 2016)

Outcome:

Trade makes 19bps (9.7%) before we take profit on 3rd February 2017.

Markets
12 Oct 2016

2016: Bottom in sterling post Brexit

Consensus said:

Investors panicked by sterling and gilt sell-offs following Brexit vote and announcement of Article 50 timing.

We said:

EM parallels after joint sell-off in Gilts and sterling look misplaced. Sustainability may look poor on current account but not on net foreign asset position. We recommend playing near-time sterling topside using options and suggest selling a 0.90-0.95 3-month EUR/GBP call spread. (LSR Macro Strategy 12th October 2016)

Outcome:

GBP gained 6% vs. the euro from the top around 0.90.

Markets
31 Aug 2016

2016: Gilts to under-perform

We said:

On the whole the Brexit-induced slowdown may turn out to be shallower than the spread between Gilt yields and US Treasuries is pricing in. This will especially be the case if core inflation picks up in the UK but declines in the US. We recommend a new relative-value trade: long UST 10y/short Gilt 10y entered at or close to current market levels (96bp at the time of writing) with a target of 65bp and a stop loss at 105bp. (LSR Macro Strategy 31st August 2016)

Outcome:

Target move of 31bps achieved.

Our Team

Markets

Andrea Cicione

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Markets

Ollie Brennan

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Markets

Jon Harrison

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Markets

Eugenio Montersino

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Markets

Martin Shenfield

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ECONOMICS

Through our analysis of the forces that drive economics at the global, regional and country level, we have a joined-up picture of the world economy and a deeper understanding of the countries that investors care about. This gives us a unique perspective that allows us to present courageous, fresh, long-term thinking and forecasting with high conviction.

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POLITICS

With political drivers and government policy playing an increasingly significant role in determining economic and market outcomes, our world-wide team of political analysts are able to provide critical, timely insights into political shocks and policy developments that will influence investment performance – both regionally and globally.

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