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How changes to yield curve control might affect JGBs

We think the Bank of Japan will widen the tolerance band around its 10-year Japanese Government Bond yield target, and that the yield will consequently rise by around 25bp. But there is a clear risk of a larger and more disorderly sell-off than that. Markets Drop-In (22nd June, 10:00 ET/15:00 BST): Join our Markets team for this special briefing on the outlook for equities, bonds and FX and a discussion about revisions to our forecasts. Register now
Thomas Mathews Markets Economist
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More from Global Markets

Global Markets Update

Answering your questions on our market forecasts

We held a Drop-In on Wednesday to discuss what the evolving outlook for monetary policy and global growth means for our markets forecasts. This Update recaps the key questions we addressed in the Drop-In and answers several of the questions that we received but didn’t have time to answer during the event.

24 June 2022

Global Markets Update

We now expect higher and earlier peaks in bond yields

We now think that the yields of 10-year developed market government bonds will peak earlier and, in some cases, at higher levels than we previously expected. That reflects a view that tightening cycles in many DMs will be more front-loaded and aggressive than we previously thought. Markets Drop-In (22nd June, 10:00 ET/15:00 BST): Join our Markets team for this special briefing on the outlook for equities, bonds and FX and a discussion about revisions to our forecasts. Register now

22 June 2022

Global Markets Update

Four reasons why we expect further falls in EM equities

We think that stock markets in the emerging world will continue to struggle alongside their developed market peers over the next eighteen months or so, for four main reasons. Markets Drop-In (22nd June, 10:00 ET/15:00 BST): Join our Markets team for this special briefing on the outlook for equities, bonds and FX and a discussion about revisions to our forecasts. Register now

20 June 2022

More from Thomas Mathews

Global Markets Update

What to make of the decline in inflation compensation

We don’t expect long-term inflation compensation to continue to tumble, and think long-term government bond yields will bounce back before long.

26 May 2022

Capital Daily

The relationship between the US dollar and the stock market

We anticipate a renewed rally in the US dollar and further declines in US equity prices over the next twelve months or so.

24 May 2022

Capital Daily

What to make of the latest falls in the S&P 500

Although the S&P 500 has stabilised at the time of writing, its 4% drop yesterday has brought the index close to a bear market. We suspect there may be more pain to come for equities, even if the US economy avoids a recession and the functioning of core markets holds up. ECB Drop-In (24th May 10:00 ET/15:00 BST): Could the ECB deliver a hawkish surprise? Join economists from our Europe and Markets teams for a discussion about what to expect from the Bank’s tightening cycle, including the chances for a bumper hike in July or even an early move at next month’s meeting. Register now.

19 May 2022
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