Capital Daily UK markets have scope to rally after Brexit As the clock ticks down towards Brexit, it is worth taking stock of where the many twists and turns over the past four years have left UK financial markets. Our view is that, having fallen a long way... 31st January 2020 · 7 mins read
Capital Daily Path towards tighter BoE policy, and higher Gilt yields, is clearer The Bank of England left rates unchanged today, and we think that it will continue to keep policy on hold in 2020, before hiking in 2021. As such, we expect the 10-year UK government bond (Gilt) yield... 30th January 2020 · 6 mins read
Capital Daily Bond market reaction to virus outbreak seems overdone A sharp fall in bond yields triggered by growing concerns about the coronavirus outbreak means that the US yield curve is close to inverting again. But in our view, investors anticipating further... 29th January 2020 · 6 mins read
Capital Daily Rally in gold may soon be over The rally in the price of gold of the past few days has coincided with the US 10-year TIPS yield breaking below zero for the first time since September. But unless the coronavirus outbreak becomes a... 28th January 2020 · 5 mins read
Capital Daily We think there is more room for yields to fall in Greece than Italy The yields of government bonds in Italy and Greece have fallen particularly sharply today, but only in the latter do we think that they will continue to edge down. In fact, we suspect that yields in... 27th January 2020 · 5 mins read
Capital Daily Rest of 2020 likely to be brighter for sterling Sterling has failed to rise so far in 2020. However, we expect it to pick up over the course of this year, as the UK economy starts to turn a corner. 24th January 2020 · 7 mins read
Capital Daily US corporate bonds likely to fare nowhere near as well this year Even if a hunt for yield drives the credit spreads of US corporate bonds through their post-Global-Financial-Crisis (GFC) lows, the returns from these assets – and by extension US equities – are... 22nd January 2020 · 7 mins read
Capital Daily Fed unlikely to have played a big role in the latest equity rally Although the Fed’s renewed expansion of its balance sheet has coincided with a surge in the S&P 500 since October, we are sceptical that it has been a major factor behind the rally. 20th January 2020 · 5 mins read
Capital Daily Lira & peso stability unlikely to last While the Turkish lira and the Argentine peso were two of the worst performing currencies in 2019, both have stabilised in recent months. But we don’t expect that resilience to last. 17th January 2020 · 7 mins read
Capital Daily Swiss central bank likely to keep resisting a stronger franc Despite renewed appetite for risk recently, the Swiss franc has continued to rise against most currencies. This might reflect a view that Switzerland’s central bank will refrain from intervening in... 16th January 2020 · 6 mins read
Capital Daily Renminbi likely to weaken regardless of Phase One deal We think that today’s slight weakening of the renminbi against the US dollar is a sign of things to come. A lot of optimism about trade is already discounted in the markets and a Phase Two deal is... 15th January 2020 · 7 mins read
Capital Daily Earnings unlikely to become a strong support for US equities Corporate earnings in the US probably remained quite poor in Q4, and we doubt that a big rebound in on the cards anytime soon. As such, given our view that valuations will not rise as fast as they did... 14th January 2020 · 5 mins read
Capital Daily BoE policy likely to push sterling and Gilt yields higher this year While the negotiations between the UK and the EU on their future relationship will probably continue to influence UK financial markets this year, we think that monetary policy will be another... 13th January 2020 · 5 mins read
Capital Daily US employment report bolsters our bearish view of Treasuries Today’s US employment report adds further support to our view that the Fed will remain on hold for the foreseeable future. As such, we see no reason to change our forecast that Treasury yields will... 10th January 2020 · 6 mins read
Capital Daily EM equities’ underperformance likely to slow in 2020 EM equities have managed to keep pace with US equities since late 2019 after a long period of underperformance (see Chart 1), as global economic data have stabilised and the US and China struck a... 9th January 2020 · 6 mins read
Capital Daily Sterling’s ‘Boris bounce’ may have mostly run its course After a stellar performance in the final few months of 2019, sterling has been the only G10 currency to weaken against the US dollar since the Conservative Party’s election win on 12th December. While... 7th January 2020 · 6 mins read
