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
FX Markets Weekly Wrap The ECB strikes back & US payrolls surprise A week after the FOMC’s hawkish message sent the US dollar soaring, the ECB delivered an even bigger surprise at yesterday’s policy meeting by opening the door to policy rate hikes later this year... 4th February 2022 · 9 mins read
Global Markets Update Earnings optimism may limit the upside for the S&P 500 We doubt the S&P 500 will get much of a boost from upward revisions to earnings forecasts between now and the end of 2022, which is one reason why we expect the index to make only small gains this... 4th February 2022 · 4 mins read
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
