Capital Daily Rise in euro-zone bond yields may be overdone We think the recent rise in euro-zone government bond yields will reverse course over the rest of 2023, and that “periphery” spreads may widen a bit as investors’ risk appetite deteriorates. 28th February 2023 · 6 mins read
Capital Daily What to make of the yield curve phoney war With the US yield curve more deeply inverted than at any time since the early 1980s, it is worth (again) considering what the implications for financial markets are. 27th February 2023 · 5 mins read
Capital Daily Markets and Russia’s invasion, one year on Despite first appearances, financial markets haven’t shrugged off the effects of Russia’s invasion of Ukraine and we think the ramifications could continue to be important to investors. 24th February 2023 · 7 mins read
Capital Daily Bond market may already be braced for “higher for longer” Investors have ramped up their expectations for the near-term path of the Fed funds rate amid talk of “higher for longer”. But long-run expectations for the policy rate have already climbed... 23rd February 2023 · 5 mins read
Capital Daily EZ markets may keep struggling to shake off concerns in the US We doubt “risky” assets in the euro-zone will be resilient to the further weakness we foresee in their counterparts in the US. 22nd February 2023 · 5 mins read
Capital Daily Making sense of mixed signals on the global economy While not our base-case forecast, the recent resilience of service sectors and labour markets seem to have raised the chance of a “higher for longer” scenario for policy rates. That could be bad news... 21st February 2023 · 6 mins read
Capital Daily A tale of two pandemics and the importance of valuations Those hoping for stellar gains in the US stock market in the post-COVID years may be disappointed. Its valuation is far less appealing now than it was at the end of the big pandemic of the 20th... 20th February 2023 · 5 mins read
Capital Daily We think the Mexican peso’s outperformance will reverse soon While it has outperformed nearly all major currencies over the past couple of years, we think the Mexican peso will fall sharply against the dollar if, as we expect, the US economy weakens later this... 17th February 2023 · 7 mins read
Capital Daily We doubt equities and the dollar will move in tandem for long The recent strength of the US dollar and resilience of equity markets is a relatively unusual combination. While that could last for a while longer, we continue to think that the outlook for the... 16th February 2023 · 6 mins read
Capital Daily Trying to make sense of the mixed messages in US bond markets This year’s growing inversion of the Treasury curve can be reconciled with the accompanying slump in credit spreads if the monetary tightening that has caused short-term yields to rise further above... 15th February 2023 · 6 mins read
Capital Daily Stocks, bonds, and inflation compensation Although they seem to have begun to rise again over recent weeks, we think that investors’ inflation expectations in the US are likely to fall back over the coming months. That would help Treasuries... 14th February 2023 · 7 mins read
Capital Daily Equities and commodities may move in lockstep again this year Despite the recent divergence, we think equity and commodity prices will move increasingly in tandem over the next year. 13th February 2023 · 5 mins read
Capital Daily We still think the BoJ’s YCC is on borrowed time Kazuo Ueda’s impending appointment as Bank of Japan (BoJ) Governor doesn’t alter our view that Yield Curve Control (YCC) will be abandoned in a few months’ time, pushing up the 10-year JGB yield and... 10th February 2023 · 7 mins read
Capital Daily We think bond yields will fall further despite QT Shrinking central bank balance sheets might push up “term premia” on long-dated government bonds, but we think their yields will nonetheless fall a bit further this year. 9th February 2023 · 7 mins read
Capital Daily EM LC bond yields will probably fall a bit further by end-2023 We think emerging market (EM) local-currency (LC) sovereign bond yields will generally fall a bit further by end-2023. 8th February 2023 · 5 mins read
Capital Daily Why the plunge in credit spreads may be a head fake A recent plunge in credit spreads in the US is one clear sign of hope that the economy there is heading for a soft landing. It jars, however, with two developments that point to the slightly gloomier... 7th February 2023 · 6 mins read
