Capital Daily ECB’s dovishness suggests peripheral yields will fall further The ECB’s decision today to step-up the pace of its purchases suggests that the central bank will continue to underpin the sovereign bond market for some time yet and supports our view that the yields... 11th March 2021 · 5 mins read
Capital Daily Rising inflation no obstacle to continued super-loose Fed policy Although some measures of expected inflation have been creeping up recently in the US, they generally remain well below the levels that in our view might conceivably prompt the Fed to reassess its... 10th March 2021 · 7 mins read
Capital Daily Counting the headwinds to China’s stock market We doubt the recent underperformance of the stock market in China has run its course, even if it may not continue to fall in absolute terms for the rest of the year. 9th March 2021 · 6 mins read
Capital Daily US equities still at the mercy of the bond market Today’s early pull-back in the US stock market is a reminder that good news for the economy can be bad news for equities when it leads to a reassessment of the outlook for bonds. Nonetheless, the... 5th March 2021 · 7 mins read
Capital Daily Cross-country equity market performance and rotations We think that stock markets in the US and China will resume their upward trends before long. Nonetheless, we suspect that they will keep underperforming those in many other countries. 4th March 2021 · 5 mins read
Capital Daily Appetite for risk and the US stock market Even if a lot of good news is now embedded in the US stock market, we still think that it will make some more headway over the coming year. Our end-2021 forecast for the S&P 500 remains 4,200, which... 3rd March 2021 · 7 mins read
Capital Daily We think that the rotation in the stock market will continue While the recent rise in the yields of US 10-year TIPS has probably contributed to the renewed rotation in the US stock market, in our view other factors – like vaccination progress and economies re... 2nd March 2021 · 6 mins read
Capital Daily Fed’s next steps crucial to the outlook for DM real yields While the sell-off in DM government bond markets has partly reversed over the past two days, the bigger picture is that government bond yields have risen significantly over the past month or so, which... 1st March 2021 · 7 mins read
Capital Daily Struggling to make sense of the surge in real yields This week’s surge in the real yields of Treasuries is hard to square with the prospects for US monetary policy. (See here.) One suggestion is that the surge reflects a view that the Fed will have to... 26th February 2021 · 7 mins read
Capital Daily Rising government bond yields and currency/equity correlations As developed market government bond yields have risen, they have become a more important driver of currency markets than was the case last year. One interesting feature of the two brief equity market... 25th February 2021 · 5 mins read
Capital Daily Politics may spur renewed falls in the Brazilian real We doubt that the political concerns that have contributed to the latest sell-off in the Brazilian real will go away, which is why we expect the real to be one of the few EM currencies to depreciate... 23rd February 2021 · 5 mins read
Capital Daily COVID-19 & equity markets: one year on Today marks a year since the pre-COVID-19 peak in global equities, a level which has long been surpassed as markets have come roaring back from their March lows. We expect a combination of continued... 19th February 2021 · 8 mins read
Capital Daily Hawkish CBRT suggests Turkish lira may appreciate further The hawkish statement accompanying today’s decision by the Central Bank of Turkey (CBRT) to keep its one-week repo rate on hold at 17.0% supports our view that the rally in the lira has further to run... 18th February 2021 · 6 mins read
Capital Daily Inflation compensation may continue to rise fastest in the US The yields of 10-year government bonds have risen in several developed markets lately, but rising inflation compensation has played a greater role in the US than elsewhere. We suspect that will... 17th February 2021 · 7 mins read
Capital Daily We think that UK equities will outperform this year The FTSE 100 made a flying start to the week on Monday, and although its rally has paused today, we expect it to outperform its peers elsewhere the world over the rest of this year. We think that the... 16th February 2021 · 6 mins read
Capital Daily We expect EM local currency govt. bond yields to remain low Although central banks in a couple of emerging markets (EMs) have taken a less accommodative stance than we had expected over the last two weeks, we remain more dovish than the consensus and investors... 12th February 2021 · 7 mins read
