Capital Daily Still far from an unsustainable US stock market valuation Although the US stock market has started to come under pressure from rising Treasury yields, the valuation of equities relative to government bonds is still a long way from being as stretched as it... 18th August 2023 · 6 mins read
Capital Daily The Fed looks to be done… so why aren’t Treasury yields? The continued rise in Treasury yields, following what may well have been the Fed’s final interest rate hike last month, contrasts with the experience of recent tightening cycles. But we still expect... 17th August 2023 · 4 mins read
Capital Daily Mixed disinflation paths, but US and UK yields may both fall Although disinflation in the UK is lagging that in the US, we expect yields in both places to fall this year. And we think that Gilt yields are set to fall by a bit more than Treasury yields through... 16th August 2023 · 4 mins read
Capital Daily The market implications of China’s economic struggles The difficulties facing China’s economy and financial system continue to dominate much of the headlines. So far, the gloom has not made a major dent in the optimism reflected in global markets... 15th August 2023 · 4 mins read
Capital Daily What Country Garden wilting means for China’s equities We don’t think the ongoing troubles in China’s property sector mark the beginnings of a financial crisis, but do expect them to be a drag on returns from the country’s stock market over time. 14th August 2023 · 5 mins read
Capital Daily Troubled times continue for the yen and the renminbi With more poor economic data out of China and US yields again threatening to push towards new highs, it is little wonder that the yen and the renminbi have come under renewed pressure. While we still... 11th August 2023 · 5 mins read
Capital Daily Falling US inflation may continue to benefit “safe” assets We think disinflationary pressures will help the Fed pivot to rate cuts sooner than investors expect, giving a boost to “safe” assets this year and next. 10th August 2023 · 4 mins read
Capital Daily We think oil’s muted impact on markets will continue Despite oil prices hitting new year-to-date highs, other factors seem to be dominating the effect of rising oil prices on equity, bond, and FX markets. Even if, as we expect, oil prices edge lower... 9th August 2023 · 4 mins read
Capital Daily A brighter future for banks may require one for the economy The share prices of US banks have recovered some ground since a low point in May, as concerns about further failures in the industry have abated; Treasury yields have rebounded; and the economy has... 8th August 2023 · 4 mins read
Capital Daily More yield curve “disinversion”, perhaps, but not like that We think the 10-year/2-year Treasury yield spread will become less inverted over the next year or so, but doubt this will come primarily via a continued rise in the 10-year yield like we saw last week... 7th August 2023 · 4 mins read
Capital Daily US payrolls and (the end of?) the bond market sell-off The US Employment Report for July adds support to our view that long-dated Treasury yields will fall over the rest of this year. 4th August 2023 · 5 mins read
Capital Daily BoE decision another reason to expect lower gilt yields Though investors appear to be increasingly moving towards our view of Bank Rate peaking at 5.50%, we think the levels priced into the market beyond this year – and, accordingly, expectations for gilt... 3rd August 2023 · 3 mins read
Capital Daily US Treasuries have problems, but credit ratings aren’t one The US government losing another one of its “AAA” ratings after Fitch Ratings’ downgrade decision last night is unlikely to matter much in the near term, but three points are worth highlighting. 2nd August 2023 · 4 mins read
Capital Daily “Risky” assets may face a harder road to further gains Some measures of market risk premia have become quite low, suggesting to us that the bar for further big gains in risky assets has risen. 1st August 2023 · 4 mins read
Capital Daily EZ bond yields may fall back after one last ECB hike While we suspect that sticky core inflation in the euro-zone will mean “higher for longer” interest rates there, we think that the ECB will eventually deliver more rate cuts than currently priced into... 31st July 2023 · 5 mins read
Capital Daily RIP YCC: What next for Japanese and global markets? The Bank of Japan seems to have effectively ended yield curve control without making a big splash in financial markets, but we wouldn’t rule out further effects – on Japan’s markets and those around... 28th July 2023 · 5 mins read
