Capital Daily BoE gives little away, but we still expect lower gilt yields While we would not be surprised if the Bank of England raises rates by a bit more in the coming months, we think investors are underestimating the scope for rate cuts further ahead. We expect this to... 11th May 2023 · 5 mins read
Capital Daily Stubborn core inflation may not prevent Treasury outperformance Despite a persistently elevated core rate, today’s US CPI release was not strong enough to detract from our view that slower economic growth and souring risk appetite will support Treasuries and weigh... 10th May 2023 · 5 mins read
Capital Daily Credit spreads still look too low to us With credit conditions tightening and, in our view, recessions looming in the US and other advanced economies, we think it is only a matter of time before corporate credit spreads widen. 9th May 2023 · 6 mins read
Capital Daily We still think Treasury yields and the S&P 500 will fall this year Despite today’s stronger-than-expected US non-farm payrolls report, we continue to think that the 10-year Treasury yield and S&P 500 will fall over the next couple of quarters. 5th May 2023 · 8 mins read
Capital Daily Shifting yield gaps probably not enough to sustain euro strength The ECB’s 25bp rate hike today and subsequent comments from President Lagarde suggest the Bank will continue to hike for a while longer than the Fed. Although this may shift government bond yield gaps... 4th May 2023 · 7 mins read
Capital Daily Final Fed hike unlikely to preclude a further rally in Treasuries The FOMC looks set to shrug off the latest banking sector turmoil and deliver another, probably final, 25bp rate hike today. But we think it will turn to rate cuts soon, and cut further than is... 3rd May 2023 · 6 mins read
Capital Daily Some lessons from the RBA and RBNZ for global yield curves We don’t think central bank hawkishness in major developed markets would necessarily push long-term yields up by much. 2nd May 2023 · 6 mins read
Capital Daily YCC set to survive for a while yet: what next for JGBs and the yen With Yield Curve Control set to stay in place at least for the rest of this year, we now expect the yield of 10-year JGBs to settle close to the 50bp tolerance band ceiling. But given we predict... 28th April 2023 · 8 mins read
Capital Daily The euro’s rebound against the US dollar looks stretched to us We think the euro’s rebound over the past six months or so has largely run its course and expect the EUR/USD rate to fall back towards parity before year-end. 27th April 2023 · 7 mins read
Capital Daily Tight credit conditions still pose a threat to risky assets Deposit outflows at First Republic Bank don’t tell us much more than we already knew about the state of the broader US banking sector. But it highlights the evidence of an ongoing credit crunch, and... 26th April 2023 · 6 mins read
Capital Daily A debt ceiling crisis wouldn’t necessarily be worse for Treasuries We don’t think long-dated government bonds are bound to fare worse than equities in the US if there is a debt ceiling crisis. 25th April 2023 · 5 mins read
Capital Daily We expect Treasury and S&P 500 volatility to converge We suspect that volatility in the Treasury market will fall over the rest of 2023 as tail risks around Fed policy shrink. But our downbeat view of economic growth in advanced economies leads us to... 24th April 2023 · 5 mins read
Capital Daily US growth stocks may lose some more of their shine We think that the more recent underperformance of some of the largest US growth stocks could be a sign of things to come over the coming years, given how large the valuation gaps between growth and... 21st April 2023 · 7 mins read
Capital Daily Bad news for risky assets: financial conditions really are tight We think Fed Chair Powell was right to suggest last month that financial conditions have probably tightened by more than the traditional indices imply. That spells bad news for risky assets. We are... 20th April 2023 · 5 mins read
Capital Daily Persistent UK inflation unlikely to preclude lower Gilt yields While we think investors are correct to price in more persistent UK inflation, we think a sharp decline in core inflation next year will allow the Bank of England to cut rates by more than most expect... 19th April 2023 · 5 mins read
Capital Daily We still expect strong gains for China’s equities this year Despite the generally muted market reaction to today’s strong data releases for China’s economy, we think the reopening rally in China’s equity market still has further to run this year. 18th April 2023 · 6 mins read
