Capital Daily Two points on US corporate earnings and the stock market We think the earnings picture looks better for some sectors of the stock market than others, but overall it is likely to support only limited gains in equities over the next couple of years. 3rd November 2021 · 7 mins read
Global Markets Update We think DM yield curves will steepen again While the recent rise in the yields of short-dated developed market (DM) government bonds looks overdone to us, we still think that the yields of long-dated bonds will resume their rise. 3rd November 2021 · 4 mins read
Emerging Europe Economics Update Turkey: comparisons with the 2018 currency crisis The economic and political backdrop in Turkey is eerily similar to that which preceded the currency crisis in 2018, although one key difference now is that the lira doesn’t appear to be fundamentally... 3rd November 2021 · 4 mins read
Asia Economics Update Malaysia: rates on hold throughout 2022 Bank Negara Malaysia (BNM) left its main policy rate unchanged at 1.75% today, and with inflation set to remain subdued, rates are likely to stay on hold at their current all-time low throughout next... 3rd November 2021 · 3 mins read
Australia & New Zealand Economics Update Australia- The impact of rate hikes on household finances If the RBA hiked rates by nearly 200bp as the financial markets were anticipating until recently, households’ debt servicing burden would hit an all-time high and housing would become the least... 3rd November 2021 · 3 mins read
Capital Daily Investors’ expectations and the outlook for DM monetary policy Although near-term inflationary pressures may prompt most developed market (DM) central banks to bring forward their plans to normalise policy a bit, we continue to think that most will raise rates... 2nd November 2021 · 5 mins read
Australia & New Zealand Economics Update Patient RBA set to hike rates only gradually The RBA abandoned its yield target and its pledge that rates will remain low until 2024 today, but still sounded dovish. While the financial markets expect the first rate hike in May next year, we... 2nd November 2021 · 3 mins read
Capital Daily Monetary policy, the yield curve, and bond market conundrums While rises in short-term bond yields haven’t always coincided with higher long-term yields, we are sticking with our view that 10-year bond yields will rise in most major economies over the next... 29th October 2021 · 7 mins read
Canada Economics Weekly Market pricing too aggressive despite hawkish Bank Following the Bank of Canada’s hawkish message this week there is a risk that it raises interest rates sooner than we anticipate. Nevertheless, we continue to doubt that the Bank will hike by as much... 29th October 2021 · 6 mins read
Latin America Economics Weekly BCB in a tight spot, bailout for Pemex? Brazil’s central bank is in a quandary. The market fallout after this week’s 150bp rate hike suggests investors didn’t think it went far enough to quash concerns about fiscal risks and rising... 29th October 2021 · 5 mins read
UK Economics Weekly The Budget, the cycle and the size of the state Now that the dust has settled, two key points on the Autumn Budget stand out to us. The first relates to the size of the state. The Chancellor claimed to be on a “moral mission” to limit the size of... 29th October 2021 · 4 mins read
Europe Economics Weekly Investors unconvinced by ECB’s dovish message The ECB’s “soul searching” over inflation has made investors less, not more, convinced that the Bank will buck the hawkish trend elsewhere and keep policy rates on hold. We think investors have got... 29th October 2021 · 8 mins read
Nordic & Swiss Economics Weekly Supply problems remain; Norges Bank to press on Sweden’s Q3 GDP data, published this week, were not as strong as they first appeared, and we expect supply problems to continue to weigh on activity there. The latest data for Switzerland suggest that... 29th October 2021 · 5 mins read
Australia & New Zealand Chart Pack Surging inflation puts pressure on monetary policy Trimmed mean inflation rose to 2.1% in Australia in Q3, the first time it has entered the RBA’s 2-3% target band since 2015. Even more strikingly, trimmed mean inflation in New Zealand rose to 4.4%... 29th October 2021 · 11 mins read
Middle East & North Africa Economics Update Rising inflation to delay resumption of CBE’s easing The Central Bank of Egypt (CBE) kept interest rates unchanged at Thursday’s MPC meeting amid rising price pressures. Against this backdrop, we think that the central bank is likely to delay the... 29th October 2021 · 2 mins read
Australia & New Zealand Economics Weekly RBA set to ditch yield target next week The rise in trimmed mean inflation into the RBA’s 2-3% target band for the first time in six years has only added to the aggressive repricing in the outlook for the RBA’s policy rate over the past... 29th October 2021 · 7 mins read
