Capital Daily Cyclically higher for shorter; structurally higher for longer We think equilibrium real policy rates in advanced economies will continue to rise over the next decade or so. That has profound implications for government bond yields and risky asset valuations. 17th October 2023 · 5 mins read
Capital Daily What to make of the risks around the Hamas-Israel conflict Market jitters around the war between Hamas and Israel appear to have stabilised today. But given that the uncertainty on that front is unlikely to fade entirely any time soon, it is worth taking... 16th October 2023 · 4 mins read
Capital Daily Could earnings give the S&P 500 a lift? We don’t expect a rise in earnings expectations to give the S&P 500 much of a near-term boost, but think the picture is more positive further ahead. 13th October 2023 · 5 mins read
Capital Daily Falling inflation may (eventually) weigh on UST yields We still think the Fed and investors are too pessimistic about inflation in the US returning to target. We expect a continued fall in both core and headline inflation to push down US Treasury yields... 12th October 2023 · 4 mins read
Capital Daily Rally in Treasuries may not keep “riskier” assets rising The fall in Treasury yields since last Friday has pushed corporate bond yields down and equities up in the US. But while we think that Treasuries will keep rallying, we suspect that corporate bonds... 11th October 2023 · 4 mins read
Capital Daily “Higher for longer” Fed funds rate or term premia? We expect a continued paring back of US interest rate expectations to keep pushing long-dated Treasury yields down in coming quarters. But higher term premia may limit those falls in yields. 10th October 2023 · 4 mins read
Capital Daily War in Israel & Gaza adds to market uncertainty The latest war between Hamas and Israel comes at a tricky juncture for global markets, and could easily increase volatility further. At this point, we think there are three key considerations around... 9th October 2023 · 5 mins read
Capital Daily Equity relief rally may not last long The US stock market has rallied so far today and is on track to bring to an end a spell of weekly losses. Although we think that the proximate cause of this recent weakness – rising bond yields – has... 6th October 2023 · 5 mins read
Capital Daily Are surging bond yields responsible for surging bond yields? A laundry list of explanations has been provided for the surge in the term premia of Treasuries since mid-year, which has accounted for more than ~100bp rise in the 10-year yield based on the ACM... 5th October 2023 · 5 mins read
Capital Daily What to make of the bond market meltdown While government bond yields have stabilised today, their sharp rises over recent weeks are increasingly concerning. We think there are four key observations to make at this point. 4th October 2023 · 3 mins read
Capital Daily Australian bonds could yet decouple from US Treasuries We think that the yields of Australian long-term sovereign bonds will fall by a bit less than those of US Treasuries over the next couple of years, even though they’ve moved in lockstep lately. But... 3rd October 2023 · 4 mins read
Capital Daily “Higher for longer” may not see the new year The higher-for-longer narrative took hold over the third quarter, pushing bonds and equities down in most markets. But we doubt that this narrative will last. We expect bond markets to rebound as... 2nd October 2023 · 4 mins read
Capital Daily Assessing the round trip in euro-zone bond markets While concerns about euro-zone public finances put upward pressure on bond yields there, the outlook for inflation will probably remain the focus for investors. In our view, that means bond yields in... 29th September 2023 · 5 mins read
Capital Daily Examining the resilience of “tech” stocks to higher yields We think the “tech”-heavy sectors of the stock market, which have largely shrugged off the rout in Treasuries, will generally continue to do well. 28th September 2023 · 4 mins read
Capital Daily We doubt long-dated USTs will keep underperforming 10Y Treasuries have underperformed 2Y Treasuries over recent months, bucking the usual pattern after the final Fed hike (if, as we think, the final hike was in July). But we think the stage is now set... 27th September 2023 · 4 mins read
Capital Daily How we see AI playing out in stock markets We think that investors’ enthusiasm for artificial intelligence (AI) will grow again next year and inflate a bubble in stock markets. This is just one of the many consequences that AI will have on the... 26th September 2023 · 4 mins read
