Chief Economist's Note When it comes to questions of fiscal sustainability, words matter as much as actions Bond markets have been on the proverbial rollercoaster over the past month, with long-dated yields shooting up over the second half of October only for both long and short-dated yields to collapse... 13th November 2023
Capital Daily Fiscal versus monetary policy and the outlook for Treasuries Although yesterday’s poorly digested auction of 30Y Treasuries served as a reminder that the outlook for fiscal policy has the potential to undermine US long-dated government bonds, we still think... 10th November 2023 · 6 mins read
Emerging Markets Economics Update Emerging Markets Capital Flows Monitor (Nov. 2023) Flows out of EM bond and equity markets have eased since early October, but we think the recent dollar weakness which has helped to support capital flows into EMs is unlikely to continue. The good... 10th November 2023 · 4 mins read
Global Markets Update Economic turbulence could still knock “risky” assets off course Even though we expect the S&P 500 to end 2024 at a much higher level than it is now, we doubt it will build on its recent gains over the coming months given the outlook for the economy. 10th November 2023 · 4 mins read
Capital Daily What next for the greenback? While the US dollar has bounced back a bit this week, its struggles over the past month or so are in some ways similar to the lead up to its sharp fall in Q4 of last year. But we think a comparable... 9th November 2023 · 5 mins read
Asset Allocation Update Answering your questions about the effects of R* on markets Following the release of our new analysis on real equilibrium interest rates (R*) last month, we held an online Drop-In last week and in-person Roundtable events with clients yesterday to discuss our... 9th November 2023 · 5 mins read
UK Economics Chart Pack UK Economics Chart Pack (Nov. 2023) The recent weakening in employment, easing in wage growth and signs that households are saving more and spending less have provided more confidence that higher interest rates are working. But we think... 8th November 2023 · 1 min read
Asset Allocation Update Shifting correlations may also be driving Treasury term premia One factor that may have contributed to higher Treasury term premia, as posited recently by the Treasury Borrowing Advisory Committee in connection with the Quarterly Refunding, is a shift in the... 7th November 2023 · 5 mins read
Capital Daily RBA/Fed divergence may not be enough to pry 10y yields apart Despite some differences in the monetary policy outlooks for Australia and the US, we doubt 10-year yields in the two economies will diverge much. 7th November 2023 · 5 mins read
Capital Daily High-yield credit spreads may rise again We think the risks to the “goldilocks” view now being discounted in markets are skewed towards a bigger slowdown in the US economy than is currently discounted, driving credit spreads up over the... 6th November 2023 · 3 mins read
Europe Economics Focus Riksbank “bailout” not as bad as it looks The Riksbank’s request for a capital injection from the government is not a good look for an independent central bank. But its QE-related losses will be smaller than those of many other central banks... 3rd November 2023 · 14 mins read
Capital Daily A goldilocks Employment Report for US bonds and equities We think today’s big moves in markets in the wake of October’s US Employment Report are a sign of things to come over the next twelve months or so. 3rd November 2023 · 5 mins read
Long Run Returns Monitor Long Run Returns Monitor (Q4 2023) Our Long Run Returns Monitor provides our updated long-term projected returns for major asset classes. All projections in this publication are as of 1st November 2023. Our latest projections have been... 2nd November 2023 · 1 min read
Capital Daily It’s a long way down from the mountain for Gilt yields The yields of UK government bonds (Gilts) have dropped back in recent days, and we think that they will fall further over the next year or so, even if they settle far above their post-pandemic lows. 2nd November 2023 · 4 mins read
Global Markets Update BoJ normalisation points to higher JGB yields & stronger yen We think the Bank of Japan’s continued steps towards policy normalisation are consistent with somewhat higher JGB yields and a significant rebound in the yen over the coming quarters. In view of the... 2nd November 2023 · 4 mins read
Global Markets Focus Will falling inflation ultimately push US Treasury yields down? Although Treasury yields have fallen back in recent days, the big picture is that they are still much higher than they were when headline and core inflation peaked more than a year ago in the US. In... 2nd November 2023 · 11 mins read