Capital Daily We still expect high US inflation to weigh on Treasuries While the Treasury market shrugged off another stronger-than-expected CPI print today, we continue to expect the US 10-year Treasury yield to rise over the next few years, as high inflation proves... 13th July 2021 · 6 mins read
US Economics A whiff of stagflation Supply shortages will ease only gradually over the next couple of years, putting sustained upward pressure on core inflation and constraining real activity. We expect core inflation to remain above 3%... 13th July 2021 · 23 mins read
Asset Allocation More thoughts on the effects of inflation on asset returns The muted reaction in the markets so far to today’s above-consensus surge in US inflation presumably reflects a view that it won’t have as much of a bearing on economic growth or monetary policy as... 13th July 2021 · 6 mins read
US Data Response Consumer Prices (Jun.) The 0.9% m/m surge in both headline and core consumer prices in June was much stronger than we expected and illustrates that temporary supply bottlenecks stemming from the pandemic are still putting... 13th July 2021 · 2 mins read
Capital Daily China’s RRR cut & the outlook for markets The surprise decision on Friday by the PBOC to cut the reserve requirement ratio (RRR) for China’s banks suggests to us that there will be further downward pressure on government bond yields in China... 12th July 2021 · 5 mins read
India Data Response Consumer Prices (Jun.) & Industrial Production (May) India’s consumer price inflation remained above the 6% upper limit of the RBI’s target range for a second consecutive month in June. But if we are right in thinking that inflation has peaked, the... 12th July 2021 · 2 mins read
Latin America Economics Unpacking Banxico’s minutes, Sinovac success? The fairly hawkish minutes to Banxico's last meeting, where it delivered a surprise 25bp hike, reaffirm our initial view that more tightening is in the pipeline. We now expect a further 125bp of hikes... 9th July 2021 · 5 mins read
Nordic & Swiss Economics ECB move shifts goalposts for SNB; Löfven’s back! The ECB’s new monetary policy strategy means that the SNB is even less likely to be in a position to start raising rates in 2023, which is what investors currently expect. And it reinforces our view... 9th July 2021 · 5 mins read
UK Economics Less scarring means lower inflation and higher tax revenues The bigger and longer-lasting rises in commodity and component costs means that we now think that CPI inflation will rise to a peak of 4.0% at the turn of the year. But if we are right in thinking the... 9th July 2021 · 6 mins read
Emerging Europe Economics Weekly Hungary’s inflation surprise, Russia & OPEC+ The surprisingly large rise in Hungarian inflation in June to its highest rate in almost nine years suggests that the risks to our interest rate forecast are skewed to the upside. Elsewhere, the... 9th July 2021 · 6 mins read
India Economics Weekly Inflation concerns will prove misplaced A further jump in government bond yields in India this week points to growing expectations of monetary tightening, perhaps fuelled by concerns over rising inflation. But while CPI data next week are... 9th July 2021 · 5 mins read
Asia Economics Weekly Singapore bouncing back, rate cut for the Philippines The government in Singapore is starting to ease restrictions, and the success of the country’s vaccination programme will hopefully allow a rapid return to normality. This should set the stage for a... 9th July 2021 · 5 mins read
Nordic & Swiss Data Response Norway Consumer Prices (June) The small increase in headline CPI inflation and small decrease in the Norges Bank’s target measure of inflation will make no difference to the immediate outlook for monetary policy, not least because... 9th July 2021 · 2 mins read
Bank of Japan Watch New climate change facility not a game changer At its July meeting we expect the Bank of Japan to outline that it will offer interest-free loans to banks under its new fund-provisioning measures aimed at addressing climate change. Beyond that... 9th July 2021 · 8 mins read
Japan Economics Weekly Pandemic unlikely to herald period of higher inflation With producer prices rising at their fastest pace in years and goods shortages showing no signs of easing, the risks to inflation seem to be tilted to the upside. However, we aren’t convinced that a... 9th July 2021 · 4 mins read
China Data Response China Consumer & Producer Prices (Jun.) After reaching a 12-year high in May, producer price inflation dropped back in June as the rally in global commodity prices faltered. Consumer price inflation declined too, on the back of a sharp drop... 9th July 2021 · 3 mins read
