Capital Daily Low VIX is not a recipe for disaster We don’t think that the very low level of the VIX index in the run-up to the Thanksgiving weekend is a sign that investors are too complacent, and unlike last year we doubt that this will be followed... 27th November 2019 · 6 mins read
Capital Daily RBA likely to launch QE in 2020, boosting Aussie bonds In a much-awaited speech on unconventional monetary policy, RBA Governor Philip Lowe set a high bar for launching quantitative easing (QE) in Australia. But against a backdrop of stubbornly-low... 26th November 2019 · 5 mins read
Capital Daily Grim outlook for euro-zone growth suggests more euro weakness Our view that the gap between GDP growth in the US and the euro-zone will not close anytime soon is one of the key reasons why we forecast that the euro will weaken further against the US dollar next... 25th November 2019 · 5 mins read
Capital Daily EZ yields likely to fall further as pleas for fiscal stimulus ignored The decline in the euro-zone Composite PMI for November reinforces our view that growth in the monetary union will deteriorate further in the coming months. With governments so far resisting pressure... 22nd November 2019 · 7 mins read
Capital Daily Trump has not been kind to equities exposed to China While the equity prices of companies highly exposed to China may appear to have been unaffected by the ongoing trade war, that is because most of them are in the information technology (IT) sector... 21st November 2019 · 6 mins read
Capital Daily UK election campaign could be the calm before the storm Although UK markets have had a volatile year, driven in large part by the twists and turns around Brexit, the first few weeks of the election campaign have been fairly quiet. While that may reflect... 20th November 2019 · 6 mins read
Capital Daily Prospects for government bonds brighter in Australia than the US While we think that the Fed’s easing cycle has now come to an end, the minutes of the RBA’s November meeting reinforce our view that the Australian central bank is far from done loosening policy. With... 19th November 2019 · 6 mins read
Capital Daily Global equities remain vulnerable even if a trade deal is finalised With the global economy likely to remain in the doldrums, and a US/China trade deal now largely priced in, we think that global equities will struggle to make further headway given how far they have... 18th November 2019 · 6 mins read
Capital Daily Is the CAPE covering up the true valuation of the S&P 500? Although the S&P 500 has now risen by well over 20% this year following a further surge this week, Shiller’s widely-watched cyclically-adjusted price/earnings ratio (CAPE) for the index has only edged... 15th November 2019 · 7 mins read
Capital Daily Dollar bear case is unconvincing While the US dollar has strengthened over recent days and remains near its highest level since 2002 on a trade-weighted basis, investors and forecasters appear increasingly bearish on the outlook for... 13th November 2019 · 7 mins read
Capital Daily Euro-zone banks’ outperformance unlikely to last The recent outperformance of euro-zone bank equities suggests that the ECB’s measures to mitigate the adverse effects of negative interest rates are having some success. But we still think that the... 12th November 2019 · 6 mins read
Capital Daily EZ bond spreads likely to stay tight despite political uncertainty In spite of signs that political uncertainty is weighing on government bonds in Spain and Italy, there are a few reasons why we think that bond yield spreads there and in the rest of the euro-zone... 11th November 2019 · 6 mins read
Capital Daily Dollar likely to stay strong as trade tensions continue Until President Trump’s negative comments today, rising optimism about the US-China trade negotiations had seen risky assets rise and the renminbi/dollar fall back below the symbolic 7 level. Other... 8th November 2019 · 7 mins read
Capital Daily Looser fiscal policy unlikely to mean a bloodbath for Gilts Despite a slight dovish shift, the Bank of England’s decision to leave rates on hold today led to only a small market reaction. Speeches from both Conservative Chancellor Sajid Javid and his Labour... 7th November 2019 · 8 mins read
Capital Daily Trade deal unlikely to provide more upside for global equities Optimism about a trade deal between the US and China has given a lift to global equities. But with a lot of good news already discounted and global economic growth likely to remain sluggish, we... 5th November 2019 · 7 mins read
Capital Daily US economy likely to deteriorate, keeping Treasury yields low Although the US GDP and employment data released this week were stronger than most analysts had expected, we continue to think that the Fed will have to cut rates again soon, as the economy slows... 1st November 2019 · 7 mins read
