Capital Daily We expect yields to support further USD strength before long Although the recent surge in US government bond yields has made little impact on the US dollar, which has been broadly flat over the past month or so, we still think that widening yield differentials... 10th January 2022 · 5 mins read
Capital Daily We think the post-payrolls sell-off in Treasuries will continue Even though investors appear to have raised their expectations for Fed rate hikes following the latest US employment report, we think they may still be underestimating how far the federal funds rate... 7th January 2022 · 7 mins read
Capital Daily Rising yields and high valuations may limit gains in US stocks Although we do not think that US equities will continue to fall sharply, we nonetheless forecast that their gains over the next couple of years will fall well short of those in 2021. 6th January 2022 · 6 mins read
Capital Daily We expect higher US yields to lead to more weakness in the yen The Japanese yen fell to a 5-year low against the US dollar earlier this week, following a sharp rise in US Treasury yields. While the yen has rebounded slightly since then, we think that further... 5th January 2022 · 4 mins read
Capital Daily Valuations and rising yields more worrisome than Omicron After a somewhat turbulent end to 2021, most “risky” assets have started the new year on the front foot and “safe” government bond yields have risen sharply. Provided that concerns about the pandemic... 4th January 2022 · 6 mins read
Capital Daily Taking stock of a dismal year for EM equities Even if virus concerns abate, we doubt that 2022 will see a spectacular turnaround for emerging market equities. 21st December 2021 · 7 mins read
Capital Daily Omicron and the latest fall in the stock market If worries about the spread of Omicron abated, stock markets would probably recover some of the ground they’ve lost recently. Nonetheless, we wouldn’t expect that to mark the beginning of another big... 20th December 2021 · 5 mins read
Capital Daily We think BoE hikes will push up Gilt yields eventually While the yields of both short- and long dated Gilts have moved little following yesterday’s surprise rate hike by the Bank of England we still expect them to rise as monetary policy is tightened... 17th December 2021 · 7 mins read
Capital Daily Three key points after a busy few days for monetary policy In light of the raft of policy announcements from the world’s major central banks this week, we have three key points to make about the outlook for global markets. We are re-sending this publication... 16th December 2021 · 7 mins read
Capital Daily We think EM LC government bond yields will rise further We expect local-currency government bond yields in most emerging markets (EMs) to rise a bit in 2022, as EM central banks continue to tighten monetary policy and US Treasury yields increase. In China... 15th December 2021 · 7 mins read
Capital Daily What to make of the “narrowing” of the US stock market While the recent “narrowing” of major US equity indices is being interpreted by some as a sign of their impending collapse, the former hasn’t always been followed soon after by the latter. We suspect... 13th December 2021 · 5 mins read
Capital Daily Peak inflation and the bond market Although we think US inflation will fall back sharply over the next year, we expect long-term Treasury yields to rise further. 10th December 2021 · 7 mins read
Capital Daily We expect the rebound in the Brazilian real to be short-lived While the real has strengthened against the US dollar following a further 150bp hike from Brazil’s central bank yesterday, we doubt that there will be a sustained rebound. 9th December 2021 · 6 mins read
Capital Daily New German government may affect BTPs more than Bunds We think the new German Government will not have a significant impact on the outlook for German Bunds. But at the margin, the uncertainty surrounding its stance in the upcoming negotiations on reforms... 8th December 2021 · 6 mins read
Capital Daily What to make of recent developments in China We doubt that recent signs of policy easing in China are a precursor to a sharp rebound in either credit growth or the country’s economy. That in turn informs our forecast that government bond yields... 7th December 2021 · 7 mins read
Capital Daily Fed policy, the Treasury yield curve, and term premia The recent flattening of the US Treasury yield curve mainly reflects a renewed plunge in long-dated term premia, at least based on one set of estimates published by the Fed. Its “risk-neutral”... 6th December 2021 · 5 mins read
