Why aren’t Treasuries benefiting from protectionism?

Although US Treasuries might have been expected to benefit from the recent slump in the stock market, the 10-year yield has not changed much. By contrast, the 10-year German Bund yield has fallen sharply. The divergence in these yields can only be partly explained by a relative shift in expectations for monetary policy in the US and the euro-zone. Some of it has probably reflected safe-haven flows.
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Global Markets Update

We don’t expect higher inflation to derail US equities

While we think that inflation in the US will prove more persistent than both the Fed and investors appear to anticipate, we still expect the S&P 500 to make some further gains over the next couple of years.

11 June 2021

Global Markets Update

We expect the tailwind to stocks from commodities to fade

The rise in commodity prices has boosted some commodity-heavy stock markets, but we suspect that it will run out of steam before long, limiting those stock markets’ gains over the next couple of years.

10 June 2021

Global Markets Update

Assessing the outlook for EM monetary policy & LC bonds

While we expect the yields of 10-year emerging market (EM) local-currency (LC) government bonds to increase as the US 10-year Treasury yield resumes its rise, we think increases in yields will generally be smaller than in the US. This reflects our view that most EM central banks will tighten policy more slowly than investors currently anticipate.

4 June 2021

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Emerging Europe Economics Update

What should we make of Russia’s data revisions?

The upwards revisions to Russia’s industrial production figures have raised concerns about the quality of the data but, based on the figures released so far, the new series does seem to reflect economic conditions more accurately than the older series.

29 June 2018

Middle East Economics Update

Egypt rates on hold, easing cycle to resume in September

The Egyptian central bank’s decision to leave interest rates on hold (rather than lower rates) was a response to recently-announced subsidy cuts that will push up inflation. But the easing cycle is likely to resume at September’s MPC meeting. And we still think interest rates will, ultimately, be lowered by more than most analysts expect over the next couple of years.

28 June 2018

Energy Focus

Is the sun setting on the oil market?

Slowing economic growth and rapidly rising fuel efficiency, partly due to a surge in the number of electric vehicles, mean that growth in demand for oil will slow and eventually peak over the next twenty years. At the same time, plentiful oil reserves mean that supply should be ample. Indeed, the marginal cost of production is likely to fall as OPEC loses its pricing power and advances in shale technology force more expensive forms of production out of the market. As a result, we expect real oil prices to trend down over the next two decades.

28 June 2018
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