PMIs, bond yields & the euro

The latest flash PMIs reinforce our view that the economy will continue to grow at a faster pace in the US than in the euro-zone in the next few years. This feeds into our forecast that long-dated yields will rise more rapidly in the former than in the latter and that the euro will fall back against the US dollar.
Simona Gambarini Markets Economist
Continue reading

More from Capital Daily

Capital Daily

How the new coronavirus variant is shaking up markets

It’s impossible to say with certainty how much of a threat the new coronavirus variant emerging in southern Africa poses, but a few aspects of the market reaction so far may shed some light on what to expect over the next few weeks if the news is bad.

26 November 2021

Capital Daily

We think E-Z peripheral spreads will widen further, eventually

While the accounts of the ECB’s October meeting and recent comments by some ECB officials suggest to us that there might not be much scope for euro-zone “peripheral” spreads to increase further in the near term, we still expect them to widen slightly in the next year or two as the ECB gradually normalises monetary policy.

25 November 2021

Capital Daily

Steeper NZ yield curve may be sign of things to come elsewhere

We think developed market yield curves will generally steepen in the near term, as central banks don’t deliver as many rate hikes as appear to be discounted in markets.

24 November 2021

More from Simona Gambarini

Global Markets Update

We expect gradual increases in 10-year DM bond yields

We think most developed market (DM) central banks will look through temporary rises in inflation and leave rates unchanged until at least early 2023. Even so, we expect the yields of 10-year DM government bonds to rise in the next couple of years, although generally by more in the US than elsewhere.

3 June 2021

EM Markets Chart Book

We think EM equities will rise, not shine

We forecast that emerging market (EM) equities will make further gains between now and end-2022 as the global economy recovers further. However, they have lost a bit of ground to developed market (DM) equities recently and we doubt they will perform much better than them in the coming year and a half.

27 May 2021

Capital Daily

We think 10-year yields will rise gradually in most cases

While the RBNZ is gearing up to hiking rates next year, we think that most developed market (DM) central banks will look through temporary rises in inflation and leave rates unchanged until early 2023 at the earliest. This feeds into our forecast that the yields of 10-year DM government bonds will rise only gradually, in most cases, over the next couple of years.

26 May 2021
↑ Back to top