Capital Daily We suspect the rally in the Brazilian real is nearing its end This week the Brazilian real has reversed some of its rally against the US dollar, and we think there is scope for it to weaken a bit further this year. 8th April 2022 · 7 mins read
Capital Daily What to make of the divergence of gold and real yields While the gold price has been surprisingly strong lately despite surging real yields, we still think it will fall back eventually. 7th April 2022 · 5 mins read
Capital Daily What quantitative tightening could mean for Treasuries We think quantitative tightening by the Fed will contribute to Treasury yields rising a bit further. 6th April 2022 · 6 mins read
Capital Daily What to make of the return of “Le Pen risk” in Europe The recent polling shift in favour of far-right candidate Marine Le Pen ahead of France’s presidential election is starting to affect financial markets. If the experience of the last election in 2017... 5th April 2022 · 6 mins read
Capital Daily Real yields and the relative performance of growth and value Although the 10-year TIPS yield may appear to have lost its influence on the relative performance of the growth and value factors in the US stock market since mid-February, we suspect this is just a... 4th April 2022 · 5 mins read
Capital Daily The Treasury market may yet make fools of investors in US equities Although the US stock market has often shrugged off rising Treasury yields at the outset of a Fed tightening cycle, we don’t think this is bound to continue if, contrary to our central scenario, oil... 1st April 2022 · 7 mins read
Capital Daily We think Chinese equities might continue to struggle We think China’s stock market will continue to struggle, as the slowdown in global growth that we forecast weighs on earnings and valuations make little headway. 31st March 2022 · 6 mins read
Capital Daily EZ inflation surprises suggest sell-off in bonds may resume While the sell-off in euro-zone government bonds has paused today despite the release of some stronger-than-expected inflation prints for Germany and Spain, we think that there is scope for it to... 30th March 2022 · 6 mins read
Capital Daily The flip side of a distorted yield curve If the near-inverted spread between the yields of 10-year and 2-year Treasuries is grossly exaggerating the probability of a US recession in twelve months’ time because it has been distorted by the... 29th March 2022 · 6 mins read
Capital Daily “Safe-haven” currencies and monetary policy divergence Even though the Japanese yen and the Swiss franc are widely considered to be “safe-haven” currencies, the former has fallen a lot further than the latter this month. While we doubt this divergence... 28th March 2022 · 5 mins read
Capital Daily We think Latam currencies will give up some recent gains Following their strong appreciation against the US dollar since the start of the year, we expect Latam currencies in general to reverse some of their gains over the remainder of 2022. 25th March 2022 · 6 mins read
Capital Daily What might be the impact of wider embargo on Russian energy? While not our base case, a complete Western ban on imports of energy commodities from Russia would probably send the prices of many soaring. We suspect that such an outcome would have some key... 24th March 2022 · 6 mins read
Capital Daily We don’t expect fiscal restraint to prevent Gilt yields from rising The yield of 10-year Gilts dropped back today after the UK Chancellor announced a relatively modest support package in the Spring Fiscal Statement, but we still expect it to rise between now and the... 23rd March 2022 · 6 mins read
Capital Daily How the Fed and the war are affecting the stock-bond correlation The economic backdrop we expect over the next couple of years is consistent with a negative correlation between US stock and bond returns, in contrast with earlier this year. Long Run Outlook Drop-In... 22nd March 2022 · 5 mins read
Capital Daily Some more thoughts on the flattening of the Treasury yield curve The post-FOMC meeting revisions that we made to our 10-year Treasury yield forecasts reflect a view that the US economy will avoid a recession, despite what is happening to the curve. Long Run Outlook... 21st March 2022 · 5 mins read
Capital Daily We doubt the post-FOMC respite for Treasuries will last Although the 10-year Treasury yield has fallen back a bit since the FOMC raised its federal funds rate target on Wednesday, we don’t think this is a sign of things to come. Long Run Outlook Drop-In... 18th March 2022 · 6 mins read
