Capital Daily Renminbi rally may stall even as the Fed turns less hawkish We think the recent rally in the renminbi against the US dollar will lose a bit of steam over the next few months, as China’s economy struggles amid virus-related disruptions. 14th December 2022 · 8 mins read
Capital Daily We don’t think US disinflation will prevent a drop in US equities The weaker US inflation data released today have bolstered our view that Treasury yields will drop a bit between now and the end of next year. But we still think that growing fears of a recession will... 13th December 2022 · 6 mins read
Capital Daily We think the rally in DM government bond is mostly behind us With nominal bond yields having fallen considerably over the past month, we think there is now less scope for developed market government bonds to rally over the next couple of years. 12th December 2022 · 5 mins read
Capital Daily Another look at the stock-bond correlation The positive correlation between the prices of stocks and bonds that has defined much of this year in financial markets may be starting to weaken. Our sense is that this shift back towards the... 9th December 2022 · 7 mins read
Capital Daily Dovish Bank of Canada points to widening US-Canada yield gap We think the yield gap between 10-year US Treasuries and Canadian Government Bonds will remain wide next year, as we expect the Bank of Canada is nearing an early end of its hiking cycle and will... 8th December 2022 · 5 mins read
Capital Daily What China’s re-opening could mean for global markets An accelerated re-opening of China’s economy wouldn’t necessarily be good for global bonds and equities if it stoked inflation in developed markets. But a more gradual re-opening could be more benign... 7th December 2022 · 6 mins read
Capital Daily Why this might have been another false start for the S&P 500 Although the 10-year Treasury yield has already dropped by roughly 60bp since the release of October’s CPI report on 10th November, we still see scope for it to end 2023 a bit lower than its current... 6th December 2022 · 6 mins read
Capital Daily A few reasons for caution on the China rally While investors in Chinese equities have had some more reasons to cheer of late, we doubt that they will reverse much more than a small fraction of their earlier underperformance relative to US stocks... 5th December 2022 · 6 mins read
Capital Daily Strong payroll numbers don’t change our view of Treasuries We still think that the 10-year Treasury yield will end next year lower than it is now, despite the latest US employment data. 2nd December 2022 · 6 mins read
Capital Daily We think the equity rally will run out of steam The upbeat market reaction to Fed Chair Powell’s speech last night topped off a storming November for equity markets. But the rally in equities has generally taken a breather today after a... 1st December 2022 · 7 mins read
Capital Daily Sustained turnaround in China’s markets probably still some way off We continue to think that recent optimism around the prospects for China’s economy and financial markets will founder. 30th November 2022 · 6 mins read
Capital Daily Bund yields may not fall much more given outlook for inflation Although Bund yields have fallen today amid early signs that inflation may have peaked in the euro-zone, we don’t expect those yields to continue to drop sharply given only a gradual decline in core... 29th November 2022 · 6 mins read
Capital Daily Another look at the prospects for equity sector performance A continuation of last week’s twin slump in US “risk-free” real government bond yields and global high-yield credit spreads would be a relative boon for comparatively rate-sensitive, cyclical sectors... 28th November 2022 · 5 mins read
Capital Daily A lot of bad news already seems discounted in China Chinese equities have held up remarkably well in the past few weeks, despite a serious COVID outbreak that raises the risk of a lot of disruption to the economy. That might reflect how a lot of bad... 25th November 2022 · 8 mins read
Capital Daily Prospect of rate cuts may drive DM sovereign yields lower in 2023 Despite the lingering uncertainty over how far policy rates will rise in many advanced economies, we expect the economic data to shift the debate towards rate cuts next year, putting more downward... 24th November 2022 · 7 mins read
Capital Daily Still no sign of an earnings recession & why it matters for equities Our view that most stock markets haven’t reached a bottom yet is driven by a conviction that the world economy is slipping into a recession. But if we’re wrong about the outlook for global growth... 23rd November 2022 · 6 mins read
