Capital Daily Better news for the US economy than the US stock market Today’s stronger-than-expected US Employment Report (see the US section below) serves as a reminder that good news on the economy isn’t necessarily good news for the stock market. 4th February 2022 · 7 mins read
FX Markets Update Taking stock of the prospects for EM currencies We expect most emerging market (EM) currencies to struggle, despite their strong start to 2022, as commodity prices fall and the Fed seeks to tighten financial conditions. That said, we think that... 4th February 2022 · 4 mins read
Capital Daily Hawkish BoE and ECB point to higher government bond yields Today’s hawkish surprises from both the Bank of England and the ECB reinforce our view that the yields of long-dated government bonds in the UK and euro-zone will rise over the next two years and that... 3rd February 2022 · 7 mins read
Capital Daily Japan and the global bond market sell-off We don’t think Japan’s 10-year government bond yield will rise much further, even as yields elsewhere do so. We expect this to contribute to further weakness in the yen. 2nd February 2022 · 5 mins read
Asset Allocation Update The threat to Treasuries from inflation hysteresis We envisage an end to the markedly better performance of TIPS than Treasuries since inflation compensation rebounded from an initial, liquidity-distorted, slump at the start of the pandemic. But this... 2nd February 2022 · 3 mins read
EM Valuations Monitor Assessing the relative valuations of EM equities Emerging market equities’ relatively low valuations may continue to hold them in better stead than equities in the US, but we think they will do less well compared to other developed market equities. 1st February 2022 · 8 mins read
Capital Daily Currency market calm & dollar stability may not last Amid a turbulent start to the year in bond and equity markets, currency markets have remained relatively calm, and the US dollar has not gained much despite the FOMC’s increasingly hawkish stance. We... 1st February 2022 · 7 mins read
Asset Allocation Outlook Higher bond yields more headwind than hurricane Although we expect a further rise in government bond yields to undermine the returns from most “safe” assets, we don’t expect it to be big enough to bring the prices of most “risky” financial assets... 31st January 2022 · 25 mins read
Capital Daily Political risks fall, but ECB tightening points to higher spreads While we think that the re-election of Sergio Mattarella as Italy’s President of the Republic and the victory in the Portuguese general election of the current Prime Minister Antonio Costa’s socialist... 31st January 2022 · 7 mins read
UK Markets Chart Pack Equities adjusting to the end of ultra-low real yields It is possible that equity prices will continue to struggle in the near term if central banks send more signals that they are willing to raise interest rates further in order to control inflation. But... 31st January 2022 · 8 mins read
China Chart Pack A less subdued Lunar New Year Millions of people traditionally travel across China to spend this evening, the eve of Lunar New Year, with their families. The tradition has been severely disrupted by the pandemic. Last year, amid a... 31st January 2022 · 12 mins read
FX Markets Weekly Wrap Hawkish FOMC meeting provides a boost to the dollar The trade-weighted US dollar reached its highest level since July 2020 this week after short-term rate differentials moved strongly in its favour following Wednesday’s hawkish FOMC meeting. 28th January 2022 · 8 mins read
Capital Daily Rising bond yields and the prospects for risky assets this year Even if this month’s falls in equity prices don’t continue, we think returns from risky assets in 2022 will be underwhelming when compared with last year. 28th January 2022 · 7 mins read
Global Markets Outlook We expect higher bond yields and limited gains in equities Although government bond yields have already risen sharply this year, we think that they will continue to increase as central banks press ahead with monetary tightening this year and next. Higher... 28th January 2022 · 30 mins read
Emerging Markets Economic Outlook A slower recovery in 2022 Growth across much of the emerging world will be weaker this year than last, with Emerging Europe and China in particular likely to fall short of consensus expectations. The EM monetary tightening... 28th January 2022 · 28 mins read
Australia & New Zealand Chart Pack Inflationary surge prompting monetary tightening New Zealand’s inflation surged to a 30-year high of 5.9% in Q4. And while Australia’s 3.5% was much lower, it is well above the RBA’s 2-3% target band. Trimmed mean inflation is about one percentage... 28th January 2022 · 11 mins read
