Capital Daily We doubt the US labour market will hold back its stock market US equity markets largely shrugged off the disappointing US Employment Report. We think that markets will continue to look through short-term economic disruption from rising COVID-19 cases and focus... 4th December 2020 · 7 mins read
Capital Daily Why we think the weaker dollar/stronger equities pattern will last While both the rally in equities and the decline in the US dollar are likely to slow down from here in our view, we think that the relationship between them will remain strong for some time. 3rd December 2020 · 6 mins read
Capital Daily Brexit probably more key than vaccines for sterling in near term Sterling was largely unmoved by news that the UK would be the first developed economy to approve a COVID-19 vaccine on Wednesday. In our view, this is because the key driver of the country’s exchange... 2nd December 2020 · 6 mins read
Capital Daily Assessing the outlook for global equities We think there is scope for global equities to make more headway over the next couple of years, even if they don’t continue to rise as rapidly as they did last month. 1st December 2020 · 7 mins read
Capital Daily We think that the euro will make further ground against the dollar The euro has risen to its highest level against the US dollar since the middle of 2018, at the time of writing. And we think that it will gain further ground in the next couple years against a... 30th November 2020 · 6 mins read
Capital Daily Vaccines and the outlook for yields in Australia, NZ and Sweden Given this month’s positive news on vaccines, we no longer expect further monetary policy easing in a handful of advanced economies where we had done previously. But the bigger picture is that bond... 27th November 2020 · 8 mins read
Capital Daily Fiscal, not monetary, policy may pose a bigger risk to equities Although this month’s gains in global equities can be largely attributed to the reaction to the US elections and encouraging news about potential vaccines against COVID-19, the rally since the spring... 26th November 2020 · 4 mins read
Capital Daily We doubt bond yields will rise much even if equities rally more We think that the relatively muted reaction of developed market government bonds to positive vaccine news is a sign of things to come. While the introduction of effective vaccines should help drive a... 25th November 2020 · 4 mins read
Capital Daily Further dollar weakness may be path of least resistance Although the US dollar has strengthened a little this week, it is about 2% weaker on a trade-weighted basis since the US elections three weeks ago. And it is now weaker in trade-weighted terms than it... 24th November 2020 · 6 mins read
Capital Daily Making sense of the market reaction to vaccine developments We think that the relatively muted gains in most equity markets in recent weeks reflects how positive news about potential COVID-19 vaccines has been partly offset by the renewed surge of infections... 23rd November 2020 · 6 mins read
Capital Daily Rate hike suggests to us lira could gain further ground this year Today’s decision by Turkey’s central bank (CBRT) to hike its one-week repo rate by 475bp to 15.00% adds to the evidence that policymakers are shifting to a more aggressive stance towards high... 19th November 2020 · 6 mins read
Capital Daily We don’t think EM Asian currencies in general are overvalued The Bank of Thailand expressed concern over the strength of the baht at its meeting on Wednesday. Like most EM Asian currencies, the baht has appreciated against the US dollar in recent months. But we... 18th November 2020 · 6 mins read
Capital Daily The market implications of rising inflation compensation Long-term inflation expectations in the US have ticked back above their level on the eve of the COVID-19 pandemic following recent positive headlines about vaccines. (See Chart 1.) But we suspect that... 17th November 2020 · 6 mins read
Capital Daily We think that the renminbi’s appreciation has further to run While the appreciation of the Chinese renminbi has stalled over the past week or so, we think that it will make further headway against the US dollar over the coming months. Amongst the financial... 16th November 2020 · 7 mins read
Capital Daily Economic forecasts, risky assets and upside risk from vaccines While investors appear to have become much more optimistic after recent news about a COVID-19 vaccine, central banks have struck a more cautious tone. In our view, a higher chance of an effective... 13th November 2020 · 7 mins read
Capital Daily We think that EM currencies have further room to rally While emerging market (EM) currencies have generally fallen back a touch over the past couple of days, they are still considerably stronger than at the start of last week. We expect that most will... 11th November 2020 · 7 mins read
