Global Markets Update We expect EM LC government bonds to be a mixed bag We think that yields of 10-year emerging market local-currency government bonds may, in general, increase by more in Asia than in other regions by end-2023, in contrast with the pattern over the past... 11th February 2022 · 4 mins read
Capital Daily The Treasury yield curve: 1994 up front, 2015 in the back? We think long-term Treasury yields will rise only gradually even if the Fed hikes rates at a rapid clip. 11th February 2022 · 7 mins read
FX Markets Update Revisiting the case for a stronger dollar Although last week’s hawkish surprises from the ECB and the Bank of England weaken the case for further US dollar appreciation against the euro, sterling, and other European currencies, we are... 11th February 2022 · 4 mins read
Asset Allocation Update Commodities & US equities: 1970s or mid-2010s? We suspect that the pattern of returns from commodities and US equities over the next few years will more closely resemble that in 2014-15 – positive from the US stock market, negative from... 11th February 2022 · 4 mins read
Global Markets Update Some more tweaks to our DM bond yield forecasts We continue to expect 10-year government bond yields across developed markets to rise over the next few years. But given some upward revisions to our policy rate forecasts for the euro-zone, Australia... 11th February 2022 · 5 mins read
Japan Economics Weekly BoJ sets its stall out, three more weeks of restrictions The Bank of Japan’s first unlimited fixed rate auction in three-and-a-half years is likely to send a strong signal to investors that +0.25% is right now a clear line in the sand for 10-year JGB yields... 11th February 2022 · 7 mins read
Long Run Economic Outlook Higher inflation to persist and real rates stay negative Recent developments have supported our view that the pandemic will not do much permanent damage to the level of GDP in most countries, especially developed markets. Nonetheless, it will accelerate... 10th February 2022 · 1 hr, 8 mins read
Capital Daily Treasuries may keep struggling even after inflation peaks The longer inflation in the US stays high, the more it is likely to affect investors’ expectations. That is another reason why long-term Treasury yields might not drop back quickly even if inflation... 10th February 2022 · 6 mins read
FX Markets Update Relative equity performance and the US dollar Although a major drop in US equities poses a key downside risk to our view that the US dollar will rise, we doubt the slight underperformance of US equities relative to global equities that we... 10th February 2022 · 4 mins read
Global Markets Update Quantitative tightening and Treasury term premia We think upcoming “quantitative tightening” by the Fed will contribute to further increases in the yields of long-dated Treasuries this year and next. 10th February 2022 · 4 mins read
UK Economics Household incomes taking a big hit We estimate that the leap in utility prices and hike in taxes on 1 st April will reduce real household disposable incomes over the next two years by a cumulative £80bn. The resulting 2.0% decline in... 10th February 2022 · 8 mins read
Asset Allocation Update Assessing the risk of contagion from a slump in US equities One of our key calls for 2022 is that mid- and large-cap equities in the US will generally underperform those in other developed markets, and only fare about as well on average as those in emerging... 10th February 2022 · 3 mins read
Capital Daily Is the worst now over for US equities? We do not expect the S&P 500 to surge again following the rebound from its slump in January. Even so, we think that it will make more headway and end 2022 above its current level. 9th February 2022 · 6 mins read
Capital Daily Monetary tightening & the outlook for DM corporate bonds Despite recent increases, we don’t think that corporate credit spreads in the developed world will rise much, in general, over the next couple of years. 8th February 2022 · 5 mins read
Europe Chart Pack Shift in ECB stance poses risks to the bond market Both we and the market are now discounting 100bp of ECB rate hikes by the end of 2023. And given the sequencing set out by Christine Lagarde, it seems likely that net asset purchases will end in Q3... 8th February 2022 · 12 mins read
Capital Daily EM monetary policy and LC government bond yields We don’t think government bond yields in emerging markets outside Asia will continue to rise much more rapidly than those in Asia over the next couple of years. 7th February 2022 · 5 mins read
