Capital Daily Renminbi likely to weaken regardless of Phase One deal We think that today’s slight weakening of the renminbi against the US dollar is a sign of things to come. A lot of optimism about trade is already discounted in the markets and a Phase Two deal is... 15th January 2020 · 7 mins read
Capital Daily Earnings unlikely to become a strong support for US equities Corporate earnings in the US probably remained quite poor in Q4, and we doubt that a big rebound in on the cards anytime soon. As such, given our view that valuations will not rise as fast as they did... 14th January 2020 · 5 mins read
Capital Daily BoE policy likely to push sterling and Gilt yields higher this year While the negotiations between the UK and the EU on their future relationship will probably continue to influence UK financial markets this year, we think that monetary policy will be another... 13th January 2020 · 5 mins read
Capital Daily US employment report bolsters our bearish view of Treasuries Today’s US employment report adds further support to our view that the Fed will remain on hold for the foreseeable future. As such, we see no reason to change our forecast that Treasury yields will... 10th January 2020 · 6 mins read
Capital Daily EM equities’ underperformance likely to slow in 2020 EM equities have managed to keep pace with US equities since late 2019 after a long period of underperformance (see Chart 1), as global economic data have stabilised and the US and China struck a... 9th January 2020 · 6 mins read
Capital Daily Sterling’s ‘Boris bounce’ may have mostly run its course After a stellar performance in the final few months of 2019, sterling has been the only G10 currency to weaken against the US dollar since the Conservative Party’s election win on 12th December. While... 7th January 2020 · 6 mins read
Capital Daily Equity returns likely to be limited regardless of geopolitical events The limited response in US equities to rising tensions in the Middle East seems to reflect a view that the US economy will be largely unaffected by the latest escalation. But even if US stocks remain... 6th January 2020 · 7 mins read
Capital Daily We expect the US dollar to continue to recover Both US Treasuries and the dollar have started the year on the front foot as the escalation of tensions between the US and Iran has prompted renewed safe-haven demand. While we think that Treasury... 3rd January 2020 · 7 mins read
Capital Daily Bond-market sell-off unlikely to gather more momentum The yields of most 10-year developed market government bonds have fallen back a bit today. But the bigger picture is that they have risen over the past month, continuing an upward trend that started... 2nd January 2020 · 6 mins read
Capital Daily Other central banks unlikely to follow Riksbank’s example One reason why we expect the yields of 10-year government bonds to stay low in general for the foreseeable future is that we think that interest rates will remain very depressed. Indeed, in some cases... 19th December 2019 · 8 mins read
Capital Daily The best things may come in small packages this festive season Big has been best for investors in US equities in 2019. Nonetheless, we suspect that things will be different next year. 18th December 2019 · 6 mins read
Capital Daily Fed likely to keep a lid on US money market rates As the year-end approaches, the potential for funding market stress has again become a hot topic. While the Fed’s measures to provide liquidity have so far kept a lid on US funding rates, the... 17th December 2019 · 7 mins read
Capital Daily More upside for UK equities than sterling or Gilt yields next year Sterling and Gilt yields initially jumped following the UK general election results, but they have since fallen back a bit. In fact, we doubt that they will rise again substantially as long as there... 13th December 2019 · 7 mins read
Capital Daily Bond yields likely to fall further in the E-Z, but rise in the US This week’s ECB and Fed meetings reinforce our view that government bond yields will fall further in Germany, and the rest of the euro-zone, but rise slightly in the US in 2020. 12th December 2019 · 7 mins read
Capital Daily UK equities likely to rebound if the Conservatives win a majority We doubt that UK equities would continue to underperform in the event of a Conservative majority at the general election held on Thursday. That is because we think that the positive effects from... 11th December 2019 · 7 mins read
Capital Daily Election risks for sterling are skewed to the downside The continued climb in sterling this week suggests that a Conservative win in Thursday’s election is now close to fully discounted. So even a landslide victory might hardly see the pound rise. 10th December 2019 · 7 mins read
