Capital Daily A lot of bad news about COVID-19 already in the bond market Investors are now pricing in a large amount of monetary policy loosening in the countries where government bond yields have dropped the most since the coronavirus epidemic started. This suggests that... 25th February 2020 · 5 mins read
Capital Daily Virus spread challenges our forecasts for equities and bonds The likelihood that the coronavirus will take a greater toll on China’s economy and spread more widely around the world than we had initially assumed suggests that there are downside risks to our... 24th February 2020 · 6 mins read
Capital Daily Australia’s currency and bond yields likely to fall further While Australia’s currency and 10-year government bond yields have already dropped a long way this year, we think that they will fall further as a weak domestic economy prompts the RBA to loosen... 20th February 2020 · 7 mins read
Capital Daily We doubt the rally in gold will last Given our view that investors’ expectations for further Fed rate cuts this year will be disappointed, we think that the rally in gold will end before long. 19th February 2020 · 7 mins read
Capital Daily Equities still appear to price in a benign virus outcome While global equities have taken a hit today, the bigger picture is that they have recovered most or all of their initial falls after the coronavirus outbreak first became a major concern a month ago... 18th February 2020 · 7 mins read
Capital Daily Equities likely to outperform bonds in Japan, despite recession We don’t expect Japan’s economy to bounce back quickly from Q4’s contraction. But even if we are right, bonds may still not do as well as equities. 17th February 2020 · 5 mins read
Capital Daily Investors unlikely to show much love for the euro anytime soon While the euro has already fallen to its lowest level in nearly two years against the US dollar, we think that it will drop a bit further during the rest of 2020, pushed down by several factors... 14th February 2020 · 7 mins read
Capital Daily UK Cabinet reshuffle deals our forecasts a stronger hand The surprise change of Chancellor as part of today’s UK Cabinet reshuffle bolsters our view that looser fiscal policy and tighter monetary policy are on the way. In turn, this supports our forecasts... 13th February 2020 · 6 mins read
Capital Daily Investors dismiss Sanders’ chances at their peril While there is a long way yet to go in the race, Bernie Sanders’ win in the New Hampshire primary has cemented his position as the front runner for the Democratic presidential nomination. Although... 12th February 2020 · 6 mins read
Capital Daily US equities appear undervalued compared to Treasuries It is more than two decades since the Fed famously compared the yields of US equities and Treasuries in its semi-annual report to Congress, the latest instalment of which Jerome Powell delivered today... 11th February 2020 · 6 mins read
Capital Daily Presidential election could yet weigh down US equities In our view, the lack of reaction so far in the US equity market to the election campaign may be too complacent. We think that the substantial downside risks posed by a Bernie Sanders presidency could... 10th February 2020 · 6 mins read
Capital Daily Labour market could matter more for US equities later this year January’s employment report has unusually taken a back seat in markets today, as the coronavirus outbreak still dominates the headlines. However, that might not last – the health of the US labour... 7th February 2020 · 7 mins read
Capital Daily Investors appear to be taking their cue from SARS Judging by the rebound in equity markets this week, investors are banking on the coronavirus outbreak in China being brought under control quickly. While that may yet prove too optimistic, the market... 6th February 2020 · 6 mins read
Capital Daily Rally in bonds may continue to unwind While the yields of most 10-year developed and emerging market government bonds have risen today, they are still substantially lower than prior to the coronavirus outbreak. Unless the fallout from the... 5th February 2020 · 7 mins read
Capital Daily US equity market seems complacent about a Sanders presidency There so far seems to have been little reaction in the US stock market to the recent surge in support for Bernie Sanders, despite the major shift in policy that his presidency could represent. That... 4th February 2020 · 7 mins read
Capital Daily Rally in China’s local-currency bonds likely to continue Regardless of how the coronavirus epidemic evolves, we think that the People’s Bank of China (PBOC) will loosen policy further in 2020, and by more than investors currently anticipate. If we are right... 3rd February 2020 · 6 mins read
