Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Next-generation tech supercharges frontier and emerging markets
John J. Hardy
Chief Macro Strategist
Summary: Investors flock to new frontiers as new-age tech spurs productivity boom.
In 2021, economists discover that the growth rates in many frontiers and emerging markets have been woefully underestimated in recent years, especially when delving into the private sector and entrepreneurial developments. Closer analysis reveals that key technologies may lie at the root of an acceleration in private sector productivity growth far beyond anything seen in the developed markets in recent decades. From the growing speed and lower costs of internet provisioning to an explosion of the use of mobile-based payment systems, growth of the private sector and an entrepreneurial spirit are clearly behind a revolution in the quality as well as the quantity of growth.
2021 proves to be a Eureka moment for investors on the anticipation that three areas of technology are set to deliver an enormous further boost to frontier and emerging market growth in the coming years. The first is the arrival of satellite-based internet delivery systems, which are set to crush the price of internet provisioning, both increasing uptime and coverage area, but more importantly delivering an order of magnitude increase in download speeds. SpaceX’s Starlink will be the first on the scene there, with as many as 1,500 operational by the end of 2021. In emerging and frontier markets, education and business productivity will reap the benefits. Second is the ongoing revolution in fintech payment and banking systems which have already given billions of people access to the digital economy via their mobile devices.
Finally, just as reliable mobile telephony suddenly replaced creaky, unreliable landline telephone systems in emerging and frontier markets over the last few decades, drone technology is set to revolutionise delivery systems and reduce the disadvantages and costs of living away from the largest cities and towns. Drone technology combined with automation also has applications in agriculture, where practices in many under-developed rural areas across the world stand to gain the most from productivity upgrades.
Trade: long emerging market currencies on superior growth outlook.
See next 2021 prediction:
Amazon "buys" Cyprus
Quarterly Outlook
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Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
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Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
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