Capital Daily Taking stock of diverging euro-zone spreads Yields in Greece, Italy, Portugal, and Spain have diverged in unusual directions this year, and we doubt that these trends will revert any time soon. 26th October 2023 · 4 mins read
Capital Daily Is the US Treasury yield curve about to “disinvert”? We expect the US Treasury 10-year/2-year yield spread to turn positive before long, and subsequently rise further over the next year or so. 25th October 2023 · 4 mins read
Capital Daily More signs that UST yields may reverse course soon Long-term Treasury yields have risen to new cyclical highs despite a generally weak global economic backdrop. Short-term “technical” indicators also suggest to us the surge in yields may have run its... 24th October 2023 · 3 mins read
Capital Daily Inflation uncertainty and Treasury term premia Concerns over supply-demand dynamics in the Treasury market seem to be a key factor pushing up Treasury term premia. But we think rising inflation uncertainty among investors has also played a part. 23rd October 2023 · 5 mins read
Capital Daily Treasury yields, credit spreads and financial conditions US financial conditions may soon tighten further, as the economy slows and credit spreads rise. But, by then, the 10-year Treasury yield may be falling. 20th October 2023 · 4 mins read
Capital Daily Bank equities may not recover much in the near term Big banks in the US have reported quite strong earnings in Q3 but, given our pessimistic view of the economy there, we doubt that their stocks will outperform much in the next couple of months. 19th October 2023 · 4 mins read
Capital Daily China’s economic momentum may help its struggling equities We think China’s improving economy may help stop the fall in the country’s stock markets, and see them outperform those of the US for a bit. 18th October 2023 · 4 mins read
Capital Daily Cyclically higher for shorter; structurally higher for longer We think equilibrium real policy rates in advanced economies will continue to rise over the next decade or so. That has profound implications for government bond yields and risky asset valuations. 17th October 2023 · 5 mins read
Capital Daily What to make of the risks around the Hamas-Israel conflict Market jitters around the war between Hamas and Israel appear to have stabilised today. But given that the uncertainty on that front is unlikely to fade entirely any time soon, it is worth taking... 16th October 2023 · 4 mins read
Capital Daily Could earnings give the S&P 500 a lift? We don’t expect a rise in earnings expectations to give the S&P 500 much of a near-term boost, but think the picture is more positive further ahead. 13th October 2023 · 5 mins read
Capital Daily Falling inflation may (eventually) weigh on UST yields We still think the Fed and investors are too pessimistic about inflation in the US returning to target. We expect a continued fall in both core and headline inflation to push down US Treasury yields... 12th October 2023 · 4 mins read
Capital Daily Rally in Treasuries may not keep “riskier” assets rising The fall in Treasury yields since last Friday has pushed corporate bond yields down and equities up in the US. But while we think that Treasuries will keep rallying, we suspect that corporate bonds... 11th October 2023 · 4 mins read
Capital Daily “Higher for longer” Fed funds rate or term premia? We expect a continued paring back of US interest rate expectations to keep pushing long-dated Treasury yields down in coming quarters. But higher term premia may limit those falls in yields. 10th October 2023 · 4 mins read
Capital Daily War in Israel & Gaza adds to market uncertainty The latest war between Hamas and Israel comes at a tricky juncture for global markets, and could easily increase volatility further. At this point, we think there are three key considerations around... 9th October 2023 · 5 mins read
Capital Daily Equity relief rally may not last long The US stock market has rallied so far today and is on track to bring to an end a spell of weekly losses. Although we think that the proximate cause of this recent weakness – rising bond yields – has... 6th October 2023 · 5 mins read
Capital Daily Are surging bond yields responsible for surging bond yields? A laundry list of explanations has been provided for the surge in the term premia of Treasuries since mid-year, which has accounted for more than ~100bp rise in the 10-year yield based on the ACM... 5th October 2023 · 5 mins read
