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
Capital Daily Treasury term premia may not fall back The Treasury’s Quarterly Refunding announcement (QRA) today may have eased some upward pressure on Treasury term premia, but we think these premia are unlikely to fall further over the coming years. 1st November 2023 · 4 mins read
Europe Economics Focus High bond yields to push up Italy’s debt ratio to 150% The prospect of a long period of high bond yields and some signs of fiscal slippage by Prime Minister Meloni’s government have worsened the outlook for public finances in Italy. We now think the debt... 1st November 2023 · 19 mins read
Capital Daily YCC tweak fails to help the yen, MoF intervention next? As is often the case, it is hard to know just what to make of the Bank of Japan’s latest policy announcement. Our sense is that the resulting rise in Japanese government bond yields is more likely to... 31st October 2023 · 5 mins read
DM Markets Chart Pack Global Markets Chart Pack (Oct. 2023) Our Global Markets Chart Pack has been updated with the latest data and our analysis of recent developments. Our View: Growth in the US and other advanced economies will disappoint, keeping pressure... 31st October 2023 · 1 min read
Asset Allocation Chart Pack Asset Allocation Chart Pack (Oct. 2023) Our Asset Allocation Chart Pack has been updated with the latest data and our analysis of recent developments. We expect the fortunes of 'safe' assets to improve over the rest of this year, largely... 30th October 2023 · 1 min read