Opec isn’t scaring anyone For example, here is Capital Economics’ Adam Hoyes: The [initial] moves in the bond market [with inflation breakevens rising following the Opec + announcement] have more than reversed since the... 4th April 2023 · Financial Times
Capital Daily We doubt higher oil prices will stop Treasury yields falling further Although the decision by OPEC+ members to cut oil production might push up oil prices further, we don’t think that will stop US Treasury yields falling further over the rest of the year. 3rd April 2023 · 6 mins read
China Chart Pack Uneven consumer recovery slowing down Consumer spending jumped during the first two months of the year as virus disruptions faded. The March retail sales data won’t be published for another couple of weeks. But the data we have so far... 3rd April 2023 · 11 mins read
Asset Allocation Outlook We doubt that risky assets will remain so resilient Despite only being three months old, 2023 has already seen several macro narratives play out in markets. “Soft landing” optimism in January was followed by a “no landing” narrative in February which... 31st March 2023 · 21 mins read
FX Markets Weekly Wrap US dollar edges lower even as banking concerns ease Despite making up some ground today, the dollar seems set to end the week somewhat lower against nearly all major currencies. Banking turmoil in the US and elsewhere appears to be receding (for now)... 31st March 2023 · 10 mins read
Africa Economics Weekly Monetary policymakers in hawkish mode, debt in focus Central banks in South Africa, Kenya and Ghana all stepped up the pace of monetary tightening this week as concerns about inflation and currency weakness flared up. But we doubt that the rule of... 31st March 2023 · 5 mins read
Global Markets Outlook Amid banking turmoil, outlook for “risky” assets seems bleak The recent turmoil in the global banking sector have sent ripples through financial markets. So far, a full-blown financial crisis doesn’t seem likely to us, although clearly any escalation would add... 31st March 2023 · 14 mins read
FX Markets Outlook Dollar is down but not (yet) out The dollar’s February rebound has been cut short by turmoil in the US regional banking sector, but we continue to think the greenback will make one final push higher as advanced economies fall into... 30th March 2023 · 16 mins read
Capital Daily Stubborn core inflation may be a headwind for euro-zone bonds Persistent core inflationary pressures will, in our view, keep euro-zone sovereign bonds under pressure this year, at least relative to those in other major developed market economies. 30th March 2023 · 6 mins read
Capital Daily Assessing the contagion risk from US commercial property During the Global Financial Crisis (GFC), non-US investors’ ownership of US residential mortgage-backed securities (RMBS) was a key way in which they were exposed to problems in the US housing market... 29th March 2023 · 6 mins read
China Economic Outlook Reopening recovery to shift down a gear Much of the economic boost from China’s reopening has already happened. While there is still some upside to consumer and services activity, weakened balance sheets and limited policy support mean the... 29th March 2023 · 23 mins read
Capital Daily Surge in CMBS spreads may not have run its course The recent surge in the yield spreads of US BBB-rated commercial mortgage-backed securities (CMBS) over Treasuries underscores the risks to US regional banks from their significant exposure to the... 28th March 2023 · 4 mins read
Capital Daily European G-SIBs need a better RoE to justify a higher valuation While the shares of Global Systemically Important Banks (G-SIBs) in Europe bounced today on the news that a buyer has been found for parts of the failed US lender, Silicon Valley Bank, their price... 27th March 2023 · 5 mins read
FX Markets Weekly Wrap Dollar continues to see-saw on banking sector turmoil The US dollar had spent much of the week on the back foot amid a growing belief that banking sector issues might prove a largely US-specific problem. But that narrative, and price action, has (again)... 24th March 2023 · 9 mins read
Capital Daily How the turmoil is playing out within the stock market We suspect some of the recent trends in the relative performance of equity market sectors will fade or even reverse, perhaps even if the current turmoil persists. 24th March 2023 · 7 mins read
Global Markets Update Credit spreads still have a long way to go before peaking There has been a rise in risk premia in the bond market since the start of the banking sector turmoil. But we think impending recessions will push corporate credit spreads up further from here. 24th March 2023 · 3 mins read
