Asset Allocation Update High FX-hedged Gilt yields may be short-lived The spread between the 10-year Gilt yield hedged in US dollar terms and the 10-year Treasury yield has widened dramatically of late. But given our forecasts for short-term interest rates in the UK and... 14th October 2022 · 4 mins read
Global Markets Update What still-hot inflation means for US Treasuries Despite the hot September US CPI print from yesterday, we still expect Treasury yields to drop back over time. And we think the drop will mostly be driven by falls in the real yield, rather than... 14th October 2022 · 4 mins read
Asset Allocation Update What to make of gold’s resistance to the surge in TIPS yields We suspect that the reduced liquidity of inflation-protected Treasuries vis-à-vis their conventional counterparts is one reason why the price of gold has not fallen as much as might have been expected... 14th October 2022 · 5 mins read
Capital Daily We still think US Treasury yields will fall back eventually Although core inflationary pressures in the US seem more persistent than we and most others had anticipated, we still think Treasury yields are near their peak and will fall in time. 13th October 2022 · 5 mins read
Asset Allocation Update Sector allocation as the economic outlook darkens We think that traditional “defensive” sectors of the US stock market – consumer staples, health care and utilities – will continue to hold up better than “tech-orientated” sectors – information... 12th October 2022 · 6 mins read
FX Markets Update We think the aussie and kiwi have a bit further to fall We expect the aussie and the kiwi to weaken further against the US dollar and trough around mid-2023. And while we don’t expect the aussie to outperform the kiwi as it has recently, we think it will... 12th October 2022 · 4 mins read
Capital Daily Beware of misinterpreting the fall in UK inflation compensation A generous interpretation of the recent plunge in inflation compensation in the UK is that it has reflected confidence in the Bank of England’s commitment to tighten monetary policy by as much as it... 12th October 2022 · 6 mins read
Capital Daily Drama in Gilts highlights the strains in other bond markets While the turmoil in the Gilt market has been exacerbated by uncertainty over the UK government’s fiscal plans, it arguably underlines the challenges faced by central banks elsewhere in raising... 11th October 2022 · 6 mins read
UK Economics Update BoE’s gilt operations – easy to start, harder to end Given that the surge in gilt yields that has forced the Bank of England to intervene in the market was initially driven by the government’s loose fiscal policies, it makes sense that the Bank may not... 11th October 2022 · 8 mins read
Capital Daily US policy deals a blow to China’s equities, not for the last time China’s equities came under pressure today, partly in response to the US announcing fresh curbs on technology exports to the country last Friday. This is another crack in an increasingly fractured... 10th October 2022 · 6 mins read
Asset Allocation Update We don’t expect the relative rout in US REITs to persist Although we think that US equity REITs may have further to fall, we don’t expect them to continue to underperform the broader US stock market. The key reason is that we don’t expect Treasury yields to... 7th October 2022 · 5 mins read
Capital Daily Payrolls point to yields staying high, for now Today’s strong September US employment report added support to the view that Treasury yields will stay high, and the S&P 500 will remain under pressure, for a while yet. But we still think yields will... 7th October 2022 · 8 mins read
FX Markets Weekly Wrap Resilient US economic data leave the dollar rally intact The dollar looks set to end the week on the front foot, having rallied over the past three days after a weak spell following the BoE’s intervention in the Gilt market last Wednesday. The key driver... 7th October 2022 · 11 mins read
Global Markets Update S&P 500 may fall even further than we’d thought With the Fed seemingly still in a hawkish mood and the US and global economies struggling, we now expect the S&P 500 to decline further than we’d previously thought. 7th October 2022 · 4 mins read
UK Economics Weekly Three possible flashpoints for the markets The end of the Bank of England’s gilt purchases (14 th October), the publication of the Chancellor’s Medium-term Fiscal Plan (perhaps late this month) and the Bank of England’s next monetary policy... 7th October 2022 · 10 mins read
CE Spotlight What might fracturing mean for the markets? Fracturing will be felt very differently by markets in different parts of the world. Sectors within US-aligned markets where ties with China are most likely to fracture could see significant ructions... 6th October 2022 · 23 mins read
