Asia Economics Update Flaring political risks a major threat in South Asia A constitutional crisis in Pakistan threatens to scupper its deal with the IMF, which would throw its already-precarious external situation into very dangerous territory. Meanwhile, political meltdown... 4th April 2022 · 3 mins read
FX Markets Weekly Wrap Dollar treads water amid global tightening cycle Another solid gain in US payrolls did little to boost the dollar today, which seems set to end the week little changed against most major currencies. During the course of this week, central banks in... 1st April 2022 · 9 mins read
Global Markets Update We don’t think China’s stock market is set to surge While we suspect the recent recovery in the MSCI China Index may have further to run, we don’t think the stage is set for a big rally either. 1st April 2022 · 3 mins read
Capital Daily The Treasury market may yet make fools of investors in US equities Although the US stock market has often shrugged off rising Treasury yields at the outset of a Fed tightening cycle, we don’t think this is bound to continue if, contrary to our central scenario, oil... 1st April 2022 · 7 mins read
US Economics Weekly Long rates rising but still low, particularly in real terms The inversion of the 10y-2y Treasury yield spread this week led to predictable speculation that the Fed’s interest rate hikes would quickly push the US economy into recession. 1st April 2022 · 7 mins read
Asset Allocation Update What Russia’s exclusion means for MSCI’s EM EMEA Index Even though the ejection of Russia from the MSCI EM EMEA Index has changed its country and sector composition, we doubt that this will meaningfully change how it tends to behave. Our forecasts for... 1st April 2022 · 3 mins read
China Economics Focus What will China do with its FX reserves? In adapting to the threat of having its foreign exchange reserves frozen, the People’s Bank is likely to shift more of its portfolio into unconventional alternatives, including EM sovereign debt and... 1st April 2022 · 19 mins read
Asset Allocation Chart Pack Stocks may lag bonds if commodities keep on surging Given that the past couple of months has seen the outbreak of war in Ukraine, surging commodity prices, growing concerns about inflation, and increasingly hawkish noises from the world’s major central... 31st March 2022 · 13 mins read
FX Markets Chart Pack We think the dollar rally has stalled, not ended The rally in the dollar seems to have paused this month, and indeed the greenback has fallen against some major currencies – especially those in Europe – this month. We think this largely reflects the... 31st March 2022 · 6 mins read
Capital Daily We think Chinese equities might continue to struggle We think China’s stock market will continue to struggle, as the slowdown in global growth that we forecast weighs on earnings and valuations make little headway. 31st March 2022 · 6 mins read
Capital Daily EZ inflation surprises suggest sell-off in bonds may resume While the sell-off in euro-zone government bonds has paused today despite the release of some stronger-than-expected inflation prints for Germany and Spain, we think that there is scope for it to... 30th March 2022 · 6 mins read
EM Markets Chart Pack What the war and Fed tightening could mean for EM assets As a result of the Russia-Ukraine war and the Fed’s hawkish pivot, we have tweaked our forecasts for most major emerging market (EM) assets. The big picture, though, is that we still think EM equities... 30th March 2022 · 8 mins read
Emerging Markets Economics Update Frontier debt risks are crystallising The tightening of global financial conditions since the onset of the Fed’s hiking cycle and the war in Ukraine has caused sovereign dollar bond spreads to widen significantly in several frontier... 30th March 2022 · 3 mins read
Capital Daily The flip side of a distorted yield curve If the near-inverted spread between the yields of 10-year and 2-year Treasuries is grossly exaggerating the probability of a US recession in twelve months’ time because it has been distorted by the... 29th March 2022 · 6 mins read
UK Markets Chart Pack Financial conditions as tight as after the Brexit vote The war in Ukraine has contributed to a tightening in financial conditions that will contribute to weaker GDP growth for the rest of this year and next year. Admittedly, a lot of the initial plunges... 29th March 2022 · 9 mins read
Capital Daily “Safe-haven” currencies and monetary policy divergence Even though the Japanese yen and the Swiss franc are widely considered to be “safe-haven” currencies, the former has fallen a lot further than the latter this month. While we doubt this divergence... 28th March 2022 · 5 mins read
