Capital Daily Steeper NZ yield curve may be sign of things to come elsewhere We think developed market yield curves will generally steepen in the near term, as central banks don’t deliver as many rate hikes as appear to be discounted in markets. 24th November 2021 · 6 mins read
Emerging Europe Economics Update Turkey & policy responses during past “sudden stops” The Turkish lira’s sharp fall yesterday looks similar to the experience of sudden stops elsewhere. In those instances, central banks usually responded with interest rate hikes of around 600bp as well... 24th November 2021 · 3 mins read
India Chart Pack Backsliding on reforms? The repeal this month of controversial reforms aimed at liberalising the agriculture sector is arguably the biggest political setback that the Modi government has faced since coming to power in 2014... 24th November 2021 · 9 mins read
Capital Daily Rising US rates bigger worry for EMs than Turkey contagion Turkey’s currency crisis – the lira is down another ~11% against the US dollar today, and ~35% in two months – is now reaching a scale where it raises the question of how badly it will affect other... 23rd November 2021 · 6 mins read
Global Economics Update Global exposure to Turkey’s currency crisis With the Turkish lira down by 9% so far today and 20% over the past week, the currency is now firmly in crisis territory. Higher inflation and tighter domestic financial conditions are likely to sap... 23rd November 2021 · 5 mins read
Emerging Europe Economics Update Lira in freefall as policymakers remain defiant The Turkish lira has plunged this morning after President Erdogan signalled yesterday that policymakers have no appetite to respond to the currency’s recent falls by hiking interest rates. Further... 23rd November 2021 · 3 mins read
UK Markets Markets mistaken on speed of rate hikes Although the economic backdrop has recently become less favourable for UK asset prices, we expect that the economic recovery will regain some vigour in the second half of next year, that CPI inflation... 22nd November 2021 · 12 mins read
Asset Allocation Update Taking stock of potential corporate tax reforms This Update answers several questions on the Biden administration’s latest proposals for US corporate taxes as well as the global tax deal recently agreed among the world’s major economies. The... 19th November 2021 · 8 mins read
FX Markets Weekly Wrap Continued dollar rally looks increasingly likely The US dollar is set to end another week higher against nearly all major currencies. To a large extent, this latest rally appears to be driven by the rise in short-term government bond yields in the... 19th November 2021 · 8 mins read
Capital Daily Low relative valuation of euro-zone equities may not last We think the recent fall in the valuation of euro-zone equities relative to those in the US may partly unwind, and expect the former to outperform the latter over the next few years. 19th November 2021 · 6 mins read
Nordic & Swiss Economics Weekly SNB abandons its long-standing line of defence We argued only last week that the SNB would be comfortable with letting the Swiss franc rise against the euro. As it happens, after the franc pushed through the long-defended CHF 1.05 per euro mark in... 19th November 2021 · 4 mins read
DM Markets Chart Pack We think US inflation compensation will rise further US 10-year inflation compensation has risen by another 20bp or so over the past month and we think it will increase further as inflation in the US proves more persistent than most expect. This is one... 19th November 2021 · 8 mins read
FX Markets Chart Pack US dollar bull market might just be getting started The dollar has risen to its strongest level in more than a year and, though it is not our central forecast, we think the risk of a more sustained dollar bull market is increasing. 19th November 2021 · 10 mins read
Emerging Markets Economics Chart Pack EM tightening cycles have further to run Inflation in the emerging world has generally surprised to the upside in recent months. But while inflation in most parts of Asia remains at levels which central banks are comfortable with, it has... 19th November 2021 · 10 mins read
Capital Daily Further rate cuts likely to put more pressure on the lira The Turkish lira has continued to plummet after Turkey’s central bank (CBRT) delivered a further 100bp cut to the one-week repo rate today. We think that continued political pressure will lead to... 18th November 2021 · 5 mins read
Emerging Europe Economics Update Lira sell-off and lessons from other “sudden stops” The fresh falls in the Turkish lira following the CBRT’s interest rate cut today have left Turkey firmly in crisis territory and echoes of previous “sudden stops” during major EM currency crises in... 18th November 2021 · 3 mins read
