Capital Daily ECB emergency meeting not enough to contain spreads durably Euro-zone “peripheral” spreads have narrowed significantly on the back of today’s emergency ECB meeting, but we think that they will resume their rise before long. Markets Drop-In (22 nd June, 10:00... 15th June 2022 · 7 mins read
Capital Daily Central banks part of the problem, not the solution, for markets While the twin sell-off in bond and equity markets has re-accelerated over the past few trading days, there is still little evidence of serious strains in core money markets. And broader market... 14th June 2022 · 7 mins read
Capital Daily Stubborn US inflation highlights the risks to our forecasts The strength of price pressures evident in May’s US CPI report seems to have raised the risk of the Fed hiking rates by even more than we had thought in order to bring inflation under control, and... 13th June 2022 · 5 mins read
Capital Daily The pain for US markets is probably not over yet Given that price pressures in the US show little sign of easing, we doubt that the Fed will take its foot off the brakes anytime soon. We therefore suspect that more pain is yet in store for US asset... 10th June 2022 · 8 mins read
Capital Daily Hawkish ECB much more concerning for BTPs than Bunds While the yields of 10-year government bonds have risen across the euro-zone after the ECB sounded particularly hawkish at its meeting today, we suspect that further upward pressure on “core” yields... 9th June 2022 · 7 mins read
Capital Daily We expect pressure on JGBs and the yen to continue The BoJ’s tolerance band for 10-year government bond yields is under pressure again as US Treasury yields rise. We think continued policy divergence will mean that the Japanese yen weakens further... 8th June 2022 · 6 mins read
Capital Daily We think a hawkish RBA will continue to support the AUD Although we doubt it will appreciate much against the US dollar, we expect the Australian dollar to continue to hold up well relative to most other G10 currencies. 7th June 2022 · 6 mins read
Capital Daily The economic consequences of Mr Johnson’s potential demise With UK Prime Minister Boris Johnson facing a vote of no confidence in his leadership of the Conservative Party later today, it is worth considering what the implications for UK financial markets of... 6th June 2022 · 6 mins read
Capital Daily Quantitative tightening and the market sell-off Investors have greeted the official start of the Fed’s “quantitative tightening” policy with a renewed sell-off across equity and bond markets. That is probably coincidence not causation, but we think... 1st June 2022 · 8 mins read
Capital Daily Three market implications of the EU’s embargo on Russian oil We think that, at the margin, the EU’s embargo on Russian oil, announced yesterday, adds to reasons to expect the yields of long-dated government bonds to rise, equities to struggle and commodity... 31st May 2022 · 6 mins read
Capital Daily Stock-bond correlation may stay positive for some time yet While the relationship between the US stock market and government bond prices has reverted towards “normal” over the past couple of weeks, we doubt that this will last; we expect equity and bond... 30th May 2022 · 5 mins read
Capital Daily Hawkish ECB raises risk of a surge in peripheral spreads While the latest hawkish turn by the ECB hasn’t had much of an impact on euro-zone “peripheral” spreads, we think the risk of ECB policy normalisation sparking a sell-off in peripheral bond markets... 27th May 2022 · 7 mins read
Capital Daily Falling profit margins another potential threat to the S&P 500 Although the first estimate of US corporate profits for Q1 2022 didn’t reveal a big squeeze on margins in the nonfinancial sector, this could yet be another headwind for the US stock market: we doubt... 26th May 2022 · 5 mins read
Capital Daily Chinese stimulus may not save the day this time around China’s policymakers have had a busy few weeks. Between the ongoing lockdown policy, the depreciation of the renminbi, and the various fiscal and monetary stimulus measures that have been rolled out... 25th May 2022 · 4 mins read
Capital Daily The relationship between the US dollar and the stock market We anticipate a renewed rally in the US dollar and further declines in US equity prices over the next twelve months or so. 24th May 2022 · 5 mins read
Capital Daily We think the peak in Treasury yields is still to come We doubt that the 10-year Treasury yield has peaked in this cycle. Admittedly, it has fallen back markedly on net over the past couple of weeks; having briefly climbed above 3.20% earlier this month... 23rd May 2022 · 5 mins read
