Capital Daily Stress tests, the financial sector and bond yields We think the positive results from the Federal Reserve’s stress tests remove an obstacle to higher bond yields, while reinforcing the positive outlook for the financial sector. 29th June 2021 · 6 mins read
Capital Daily Assessing the risks to our positive view of E-Z peripheral bonds While the risk that political events cause an increase in euro-zone “peripheral spreads” has arguably diminished recently, a withdrawal of ECB support has become more of a concern. On balance though... 28th June 2021 · 5 mins read
Capital Daily Banxico & the prospects for high carry EM currencies Banxico’s surprise interest rate hike highlights the growing pressure on many emerging market central banks from the combination of rising inflation and the Fed’s shift towards policy normalisation... 25th June 2021 · 6 mins read
Capital Daily BoE policy may ultimately lead to a steeper UK yield curve The yield of 10-year Gilts fell after the Bank of England kept its policy settings and forward guidance unchanged at its meeting today. However, we suspect that if the Bank continues to look through... 24th June 2021 · 6 mins read
Capital Daily Assessing the post-FOMC moves in bond and stock markets As the dust finally begins to settle following last week’s FOMC announcement, we think a couple of significant shifts in market pricing since then merit a closer look. 23rd June 2021 · 6 mins read
Capital Daily We think that returns from US corporate bonds will underwhelm US corporate credit spreads have reached post-Global-Financial-Crisis (GFC) lows in recent weeks. So, despite our forecast for a healthy US economy, we expect US corporate bonds to outperform... 22nd June 2021 · 5 mins read
Capital Daily We expect further US dollar appreciation We think that the surge in the US dollar which has followed Wednesday’s FOMC meeting is a sign of things to come. 18th June 2021 · 6 mins read
Capital Daily Three key points on the fallout from the FOMC The market reaction to the Fed’s optimistic assessment of the economic outlook strengthens our conviction that US Treasury yields will end the year significantly higher. 17th June 2021 · 6 mins read
Capital Daily We think the outlook for bonds is brighter in India than in Brazil While we expect a renewed rise in the 10-year US Treasury yield to put upward pressure on the yields of 10-year government bonds in both India and Brazil, we project the increase in the former to be... 16th June 2021 · 7 mins read
Capital Daily Treasury yields and US stock market rotation We don’t expect the unwinding of the rotation trade in the US stock market over the past month or so, which has coincided with a pull-back in long-dated Treasury yields, to continue. 15th June 2021 · 5 mins read
Capital Daily DM central banks, bond yields and the US dollar We think that the various developed market (DM) central bank meetings this week will support our view that long-dated government bond yields will generally rise further in the US than elsewhere over... 14th June 2021 · 6 mins read
Capital Daily Inflation, monetary policy and the outlook for US & E-Z yields Despite the limited market reaction to today’s higher-than expected US CPI print, we still think that the yield of US 10-year Treasuries will rise this year as high inflation proves persistent. We... 10th June 2021 · 6 mins read
Capital Daily We don’t expect rising inflation to lead to EM currency strength Despite rising inflation, we continue to think that most emerging market (EM) central banks will tighten policy more slowly than investors currently expect. 9th June 2021 · 6 mins read
Capital Daily Taking stock of US inflation expectations and Treasuries The recent pull-back in the 10-year Treasury yield mainly seems to reflect less concern about the long-term outlook for inflation, even though Thursday’s CPI data will probably show that core... 8th June 2021 · 5 mins read
Capital Daily Slowing exports may weigh on China’s stock market We expect China’s stock market to eke out only small gains over the next couple of years, as slowing exports and domestic demand continue to weigh on corporate earnings. 7th June 2021 · 5 mins read
Capital Daily We don’t expect US Treasury yields to continue falling We don’t expect the small fall in long-dated US Treasury yields following May’s US Employment Report to last, and continue to expect yields to resume their earlier rise before long. 4th June 2021 · 7 mins read
