My subscription
...
Filters
My Subscription All Publications

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.
Thomas Mathews Markets Economist
Continue reading

More from Capital Daily

Capital Daily

Rising real yields may end US equity outperformance

US equities have rallied over recent weeks and outperformed stocks elsewhere, a trend which kicked up a gear after the US CPI data yesterday. But we expect equities in general to fall over the rest of 2022 and suspect that stocks in the US may slightly underperform those in the rest of the world as US real yields rise.

11 August 2022

Capital Daily

Falling (headline) inflation doesn’t preclude renewed rises in yields

Despite dropping on the signs of a softening in some inflationary pressures, we suspect the yield of 10-year US Treasuries might climb again this year.

10 August 2022

Capital Daily

Surging unit labour costs are a danger to the US stock market

Today’s news that unit labour costs in the US nonfarm business sector grew at a near double-digit annual pace in Q2 2022, as soaring wages interacted with negative productivity growth, hasn’t ruffled the stock market much. That may be because of question marks about its accuracy in light of wedges between data on expenditure, income and employment, and because investors are fixated instead on what tomorrow’s timelier consumer price report for July will reveal about inflation. Nonetheless, when unit labour costs last grew so rapidly, in the 1970s, it was a bad time for equities partly because they squeezed profits. That is a risk today.

9 August 2022

More from Thomas Mathews

Capital Daily

Low relative valuation of euro-zone equities may not last

We think the recent fall in the valuation of euro-zone equities relative to those in the US may partly unwind, and expect the former to outperform the latter over the next few years.

19 November 2021

Capital Daily

Two points on US corporate earnings and the stock market

We think the earnings picture looks better for some sectors of the stock market than others, but overall it is likely to support only limited gains in equities over the next couple of years.

3 November 2021

Capital Daily

Monetary policy, the yield curve, and bond market conundrums

While rises in short-term bond yields haven’t always coincided with higher long-term yields, we are sticking with our view that 10-year bond yields will rise in most major economies over the next couple of years as central banks tighten monetary policy.

29 October 2021
↑ Back to top