Capital Daily China’s renminbi dilemma We still think the PBOC will allow the renminbi to depreciate against the US dollar, perhaps quite significantly, by the end of the year. 20th February 2025 · 4 mins read
Capital Daily We think moves in DM yields may diverge before long Although long-term government bond yields in developed markets (DM) have moved in tandem with those of US Treasuries in recent months, we think they will diverge in the coming months. 19th February 2025 · 4 mins read
Capital Daily We doubt China equity outperformance will last Chinese stocks have generally outperformed those elsewhere in recent weeks amid signs that investors’ enthusiasm over AI is (belatedly) benefiting stocks there. While we agree that the outlook for... 18th February 2025 · 5 mins read
Bonds Update Trump’s tariffs a headwind for EM debt We doubt that Donald Trump’s reciprocal tariff threat, nor his broader protectionist agenda, are priced in markets fully. We expect US Treasury yields and the dollar to edge up as these tariffs come... 18th February 2025 · 4 mins read
Capital Daily Peace talks, defence spending, and European markets Increased defence spending in Europe would in our view point not only to higher bond yields but also to wider spreads with German bonds. While industrial equities would presumably benefit, they might... 17th February 2025 · 5 mins read
FX Markets Weekly Wrap Dollar falters further as tariffs & Ukraine trump hot CPI Despite Wednesday’s hotter than expected US CPI report, the greenback remains on the backfoot as the dollar “Trump trade” has gone into reverse. Between news on President Trump’s tariffs plans, his... 14th February 2025 · 5 mins read
Capital Daily Is Trump’s love for tariffs really reciprocal in markets? US President Donald Trump’s announcement that he will pursue imposing reciprocal tariffs triggered rallies in bond and equity markets, but we would be surprised if investors were really enthusiastic... 14th February 2025 · 6 mins read
India Economics Weekly India Weekly: What we learnt from the Modi-Trump meeting India would appear to be one of the most exposed countries worldwide to a US reciprocal tariff. But concessions made in the meeting between PM Modi and President Trump this week raise hope that India... 14th February 2025 · 4 mins read
Bonds Update Rising Treasury term premia and the stock-bond correlation Our base case is that Treasury term premia – and yields – rise only a little further. But we think disruptive US trade policy, among other things, poses a threat to that view and, relatedly, to... 14th February 2025 · 5 mins read
Capital Daily Peace in Ukraine? Market implications of Trump-Putin call President Trump’s push for a peace agreement in the Russia-Ukraine war would affect major financial markets mainly through lowering energy prices, especially in Europe. In turn, that would be a boost... 13th February 2025 · 5 mins read
Capital Daily Treasury sell-off has a bit further to run Another January price surge has sparked a sell-off in US stocks and bonds, and supports our view that further Fed rate cuts are off the table this year. While we think US equities will resume their... 12th February 2025 · 4 mins read
Equities Update Indian rupee and equities set for further weakness A slowdown in the economy, alongside an unfavourable external environment, have contributed to declines in the Indian stock market and the rupee. We continue to expect the stock market to decline... 12th February 2025 · 5 mins read
Capital Daily Getting to grips with TIPS Although the 10-year TIPS yield has fallen on net since the start of this year, we doubt it will drop to an even lower level by the end of 2025. That’s because we don’t expect the slight further... 11th February 2025 · 4 mins read
Equities Update Tariffs, the federal election, and German equities We expect equities in Germany to underperform those in other major developed markets in the coming year or so because German firms are more exposed to the increase in protectionism which appears to be... 11th February 2025 · 4 mins read
FX Markets Weekly Wrap FX Weekly: Tariff relief may prove fleeting for currency markets The dollar’s boost from tariff announcements last weekend proved short-lived and, despite rallying a bit in response to the latest Employment Report, the greenback is set to end the week lower against... 7th February 2025 · 5 mins read
Event Drop-In: US-China tariffs rollback – Does this mark a lasting ceasefire in the trade war? 1747058400 Markets have received a boost from news that the US and China have agreed to a significant rollback of tariffs.
