Capital Daily We think BoE hikes will push up Gilt yields eventually While the yields of both short- and long dated Gilts have moved little following yesterday’s surprise rate hike by the Bank of England we still expect them to rise as monetary policy is tightened... 17th December 2021 · 7 mins read
FX Markets Chart Pack We expect the rally in the dollar to continue in 2022 While the dollar has not made much further headway this month, despite the Fed’s hawkish message at its latest policy meeting, we think the key underlying drivers of the greenback’s rally – the... 17th December 2021 · 8 mins read
Asset Allocation Update Revisiting our forecasts in light of the Fed After taking on board the Federal Reserve’s recent hawkish pivot, we now forecast that the central bank will raise its policy rate much more quickly than we had previously anticipated. This Update... 17th December 2021 · 3 mins read
Japan Economics Weekly Rapid manufacturing rebound, boosters, yen forecast The rapid recovery in car exports in November probably has further to run and continued strength into next year poses upside risks to our forecast for a cumulative 3.3% rise in Japanese exports across... 17th December 2021 · 7 mins read
Global Markets Update Tweaking our forecast for Treasuries We are revising down our end-2022 and end-2023 forecasts for the 10-year US Treasury yield by 25bp each, to 2.00% and 2.25%, respectively. This compares to its current level of ~1.4%. 17th December 2021 · 3 mins read
US Economics Weekly Markets wrong to doubt the Fed Market pricing suggests investors remain unconvinced that the now-hawkish Fed will hike interest rates as high as officials are projecting, either because inflation will drop back more quickly or... 17th December 2021 · 11 mins read
FX Markets Valuations Monitor Dollar strength hasn’t pushed its valuation to extremes The recent rally in the US dollar has been driven by strong economic fundamentals in the US relative to other major economies and a favourable shift in yield differentials, leaving the greenback only... 17th December 2021 · 10 mins read
Capital Daily Three key points after a busy few days for monetary policy In light of the raft of policy announcements from the world’s major central banks this week, we have three key points to make about the outlook for global markets. We are re-sending this publication... 16th December 2021 · 7 mins read
Nordic & Swiss Chart Pack Riksbank has some catching up to do The Riksbank (along with the RBNZ) is one of the few major central banks not to have a scheduled meeting in December. But with the Fed having put its hawkish cards on the table, rate hikes by the Bank... 16th December 2021 · 5 mins read
Capital Daily We think EM LC government bond yields will rise further We expect local-currency government bond yields in most emerging markets (EMs) to rise a bit in 2022, as EM central banks continue to tighten monetary policy and US Treasury yields increase. In China... 15th December 2021 · 7 mins read
UK Markets Chart Pack Investors spooked by Omicron risks The discovery of the Omicron COVID-19 variant in late November rattled UK markets. Equities tumbled, sterling weakened and corporate credit spreads jumped. And, while the initial reaction was not... 15th December 2021 · 8 mins read
Global Markets Update We think EM earnings expectations are too optimistic In our view, analysts’ expectations for earnings across the emerging world over the next couple of years generally look a bit optimistic. And, since we don’t expect a major increase in valuations, we... 14th December 2021 · 4 mins read
Asset Allocation Update US REITs may outperform ordinary US equities The recent resilience of US real estate investment trusts (REITs) seems to reflect both easing concerns about the Omicron variant and a net decline in long-dated Treasury yields. Although we expect... 13th December 2021 · 4 mins read
Capital Daily What to make of the “narrowing” of the US stock market While the recent “narrowing” of major US equity indices is being interpreted by some as a sign of their impending collapse, the former hasn’t always been followed soon after by the latter. We suspect... 13th December 2021 · 5 mins read
FX Markets Weekly Wrap Diverging monetary policies may extend the USD rally Today’s US CPI data produced a relatively limited reaction in the US dollar, which is set to end the week a bit weaker against most major currencies. Attention now turns to the 17(!) central bank... 10th December 2021 · 10 mins read
Capital Daily Peak inflation and the bond market Although we think US inflation will fall back sharply over the next year, we expect long-term Treasury yields to rise further. 10th December 2021 · 7 mins read
