Capital Daily Rising US rates bigger worry for EMs than Turkey contagion Turkey’s currency crisis – the lira is down another ~11% against the US dollar today, and ~35% in two months – is now reaching a scale where it raises the question of how badly it will affect other... 23rd November 2021 · 6 mins read
Capital Daily What to make of renewed COVID concerns The news that lockdowns are once again being imposed in parts of Europe puts COVID-19 and its impact on economic activity and financial markets back into back into focus. While predicting the course... 22nd November 2021 · 6 mins read
Capital Daily Low relative valuation of euro-zone equities may not last We think the recent fall in the valuation of euro-zone equities relative to those in the US may partly unwind, and expect the former to outperform the latter over the next few years. 19th November 2021 · 6 mins read
Capital Daily Further rate cuts likely to put more pressure on the lira The Turkish lira has continued to plummet after Turkey’s central bank (CBRT) delivered a further 100bp cut to the one-week repo rate today. We think that continued political pressure will lead to... 18th November 2021 · 5 mins read
Capital Daily We think that Gilt yields will rise by less than Treasury yields Although today’s UK inflation release has probably raised the likelihood that the Bank of England lifts interest rates next month, we think that investors are pricing in too many hikes over the next... 17th November 2021 · 7 mins read
Capital Daily We don’t expect the renminbi’s resilience to last Although the renminbi’s strength may persist for a bit longer, we still think the currency will weaken against the US dollar over the next year or so. 15th November 2021 · 7 mins read
Capital Daily How far can the dollar rise? After its most recent surge on the back of last week’s strong payrolls report, this week’s exceptionally high inflation reading, and hawkish comments from some FOMC members, the DXY index has now... 12th November 2021 · 7 mins read
Capital Daily Why isn’t high inflation taking a greater toll on the stock market? US equities have shrugged off this year’s surge in inflation, probably because it has not coincided with either a rise in the real yields of Treasuries or weakness in corporate earnings. We expect a... 11th November 2021 · 6 mins read
Capital Daily US inflation compensation revisited US Treasury yields rose sharply following the release of US CPI inflation figures, which showed that inflation reached 6.2% y/y in October, reversing some of their recent falls. But, despite the pick... 10th November 2021 · 6 mins read
Capital Daily Property sector woes not the only headwind for China’s equities The weakness in China’s real estate sector is only one of a number of reasons why we think that the country’s equities will remain under pressure over the coming years 9th November 2021 · 6 mins read
Capital Daily Some more thoughts on the puzzling behaviour of Treasuries Last week’s behaviour of the Treasury market is puzzling for two reasons. First, a further paring back of expectations for tighter monetary policy following the Fed’s mid-week meeting might reasonably... 8th November 2021 · 5 mins read
Capital Daily We doubt the post-payrolls fall in Treasury yields will continue The decline in long-dated Treasury yields following the publication of the latest US employment report today is hard to justify, and we do not expect it to last. 5th November 2021 · 6 mins read
Capital Daily Three key points on the latest round of central bank meetings Over the past three days, the BoE, the Fed, and the RBA all delivered relatively dovish policy announcements, pushing back, to varying degrees, against the relatively aggressive policy rate paths... 4th November 2021 · 7 mins read
Capital Daily Two points on US corporate earnings and the stock market We think the earnings picture looks better for some sectors of the stock market than others, but overall it is likely to support only limited gains in equities over the next couple of years. 3rd November 2021 · 7 mins read
Capital Daily Investors’ expectations and the outlook for DM monetary policy Although near-term inflationary pressures may prompt most developed market (DM) central banks to bring forward their plans to normalise policy a bit, we continue to think that most will raise rates... 2nd November 2021 · 5 mins read
Capital Daily We still expect E-Z peripheral spreads to remain low While the spreads of 10-year euro-zone “peripheral” government bonds have risen sharply since the ECB’s policy announcement last Thursday, we still expect them to remain very low over the next few... 1st November 2021 · 6 mins read
