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We still expect a higher 10-year Treasury yield, lower S&P 500 and stronger US dollar over the remainder of the year, but have pared back our forecasts for the rise in yields and fall in equities. In particular, we now suspect the 10-year yield is …
29th July 2022
Global economic and market analysis from Capital Economics We expect euro-zone GDP probably rose a little bit last quarter … … and intense price pressures kept regional inflation high in July (10.00 BST) We think that Colombia’s central bank will hike its …
28th July 2022
Global economic and market analysis from Capital Economics We expect the Fed to hike the fed funds rate by 75bp, to 2.25-2.50%(19.00 BST) We think the US economy expanded by just above 1% q/q annualised last quarter (13.30 BST) Register for our Drop-In on …
27th July 2022
We expect the Fed to hike rates by another 75bp, to 2.25-2.50% (19.00 BST) We think inflation in Australia accelerated further in Q2 (01.30 BST) Clients can register for our Drop-In on our latest Global Economic Outlook here (15.00 BST) Key Market Themes …
26th July 2022
Global economic and market analysis from Capital Economics Inflation probably edged down in Brazil in the first half of July (13.00 BST) We expect Hungary’s central bank to hike rates by 100bp (13.00 BST) Clients can register here for a Drop-In on our …
25th July 2022
We think US GDP expanded in Q2 (Thu.) Japan’s industrial output probably bounced back in June (Fri.) Euro-zone headline CPI inflation may have fallen in July (Fri.) Key Market Themes We doubt bad news for the US economy will continue to be good news for …
22nd July 2022
Headline CPI inflation probably eased in Japan in June (00.30 BST) Rising prices probably weighed on June retail sales volumes in the UK (07.00 BST) We expect July’s flash PMIs to show that activity weakened in the euro-zone & the UK Key Market Themes …
21st July 2022
Even though equity and bond valuations in frontier markets and a few smaller emerging markets (EMs) have fallen sharply, we think the risk of contagion is low and that most EMs will hold up relatively well. EM financial assets have come under serious …
While the valuation of the S&P 500 has fallen a long way, we don’t expect it to rebound any time soon; this is one reason we expect the index to continue to struggle over at least the remainder of this year. The backdrop for US corporate earnings looks …
We expect lift-off from the ECB and a rate hike in South Africa too… …but think that central banks in Indonesia, Turkey and Japan will stand pat Gas exports to Europe via NordStream are scheduled to resume tomorrow Key Market Themes The release of strong …
20th July 2022
We doubt China will lower its LPR despite weakness in the housing sector (02.15 BST) Inflation in the UK probably rose to a new 40-year high in June (07.00 BST) Clients can sign up for the Drop-In on our UK economic outlook here Key Market Themes While we …
19th July 2022
We think that the UK labour market remained healthy in May (07.00 BST) US housing starts may point to a further drop in construction activity in June (13.30 BST) We expect a 100bp rate hike from Nigeria’s central bank Key Market Themes Optimistic …
18th July 2022
UK CPI inflation may have risen further in June (Tue.) We expect a 25bp hike from the ECB next week... (Thu.) ...while the Bank of Japan could widen its tolerance band for the 10-year JGB yield (Thu.) Key Market Themes We think that several data releases …
15th July 2022
While a lot of attention has focussed naturally on the potential implications for the JGB market of a further tweaking of the Bank of Japan’s Yield Curve Control (YCC), the country’s huge investment in markets overseas means that they too might …
The valuations of euro-zone assets are now very low relative to those in the US, but we don’t think that’s a reason to expect the former to outperform the latter any time soon. The valuation of euro-zone assets has continued to fall over the past few …
Activity data from China likely to show a continued rebound from lockdowns (03.00 BST) US activity data may point to a further slowdown in growth in June Clients can view our new Oil Market dashboard on CE Interactive here Key Market Themes The latest …
14th July 2022
We think “quantitative tightening” (QT) may put upward pressure on long-dated Treasury yields over the coming years. But we think that changes in investors’ expectations for the fed funds rate will remain a far more important driver of these yields and …
We expect Chile’s central bank to hike by 50bp (Wed. 23.00 BST) Inflation in Sweden probably rose further above target last month (Thurs. 07.00 BST) Clients can watch our Drop-In on the latest US CPI surprise here Key Market Themes While we expect …
13th July 2022
Consumer prices in the US are likely to have risen again in June (13.30 BST) Growth of exports out of China probably edged lower in June We expect interest rate hikes in Canada, New Zealand, Korea and Chile Key Market Themes While the euro ’s rapid fall …
12th July 2022
Consumer price inflation in India likely to have risen further in June (13.00 BST) We expect Hungary’s central bank to raise its base rate by 200bp, to 9.75% Germany’s ZEW investor sentiment indicator probably fell again in July (10.00 BST) Key Market …
11th July 2022
Consumer prices in the US probably jumped yet again in June (Wednesday) Official data may show a contraction in China’s economy in Q2 (Friday) We expect interest rate hikes in Canada, New Zealand, Korea and Chile Key Market Themes June’s US Employment …
8th July 2022
While the largest increases in corporate spreads in the US and the euro-zone may now be behind us, we suspect that a challenging economic backdrop will keep spreads elevated in both places for some time . The option-adjusted spreads (OAS) of ICE BofA ML’s …
We think US non-farm payroll employment slowed to a decent 250,000 in June (13.30 BST) Headline inflation probably picked up further in Brazil last month (13.00 BST) Meanwhile employment growth in June probably also slowed in Canada (13.30 BST) Key Market …
7th July 2022
We suspect that the latest political turmoil in the UK adds to the reasons to expect a renewed rise in the 10-year Gilt yield, weakness in the pound, and continued trouble for the FTSE 100. The market reaction to the resignation of Boris Johnson as Prime …
Despite a rebound over the past day or so, 10-year developed market (DM) government bond yields have fallen substantially in recent weeks. This has coincided with investors lowering their expectations for peak policy rates and anticipating subsequent rate …
Fed minutes likely to solidify expectations for a 75bp hike this month (Wed, 19.00 BST) We expect 150bp and 75bp interest rate hikes in Sri Lanka and Pakistan, respectively Clients can sign up here for our Drop-in on the outlook for EM Currencies this …
6th July 2022
Euro-zone retail sales probably edged higher in May (10.00 BST) The FOMC’s Minutes from June should provide details on the pace of tightening (19.00 BST) We expect Romania’s central bank to raise rates by 100bp Key Market Themes Euro-zone assets and the …
5th July 2022
We expect the RBA to hike its cash rate by 50bp, to 1.35% (05.30 BST) Composite PMIs for Italy and Spain likely to have dropped further last month Headline inflation probably rose in Korea, but fell in the Philippines and Thailand in June Key Market …
4th July 2022
We expect 50bp hikes in Australia, Israel, and Peru next week... ... and 75bp hikes in Poland, and Pakistan We think US payrolls increased by 250,000 last month (Fri.) Key Market Themes We don’t expect US equities and Treasuries to fare well in the second …
1st July 2022
China’s Caixin manufacturing PMI might exceed 50 for the first time in four months (02.45 BST) Euro-zone inflation in June was probably a bit lower than consensus estimates (10.00 BST) ISM manufacturing index might provide further evidence of slowing US …
30th June 2022
We expect the yields of emerging market (EM) local-currency (LC) and dollar sovereign bonds to rise further and EM equities to lose more ground as “risk-free” rates continue to climb and global economic growth disappoints . EM bonds and equities have come …
We think the “official” China PMIs for June headed back above 50 (02.30 BST) Sweden’s central bank looks set to raise its policy rate by 50bp… (08.00 BST) … and we expect a 150bp hike from Colombia’s central bank (19.00 BST) Key Market Themes We think …
29th June 2022
We think developed market (DM) government bond yields will rise further while equity and corporate bond prices fall further, as central banks press ahead with tightening and the global economy slows. The past few weeks have brought hawkish surprises from …
We think that Germany’s inflation rose to 9.2% in June (13.00 BST) Fed’s Powell, ECB’s Lagarde and BoE’s Bailey to speak on panel at ECB Forum (14.00 BST) Clients can access our proprietary indicators and latest forecasts on CE Interactive Key Market …
28th June 2022
We expect Hungary’s central bank to hike rates by 50bp (13.00 BST) Consumer confidence in the US probably remained subdued this month (15.00 BST) Clients can sign up here for our Drop-In on the outlook for Asian central banks (15.00 BST) Key Market Themes …
27th June 2022
Sweden’s Riksbank may hike its policy rate by 50bp (Thursday) Euro-zone inflation probably increased further in June (Friday) We think the ISM Manufacturing Index slipped again this month (Friday) Key Market Themes The proximate cause of this week’s …
24th June 2022
We held a Drop-In on Wednesday to discuss what the evolving outlook for monetary policy and global growth means for our markets forecasts. This Update recaps the key questions we addressed in the Drop-In and answers several of the questions that we …
We think inflation in Japan held steady at 2.5% in May (00.30 BST) German IFO likely to point towards recession (09.00 BST) Watch today’s Drop-In on tightening in Switzerland and the Nordic economies here Key Market Themes While the yield of 10-year US …
23rd June 2022
We expect the Norges Bank to up the pace of tightening with a 50bp hike (09.00 BST) Policymakers in Egypt, the Philippines, and Mexico will also probably raise policy rates … … whereas we think that central banks in Indonesia and Turkey will leave rates …
22nd June 2022
We now think that the yields of 10-year developed market (DM) government bonds will peak earlier and, in some cases, at higher levels than we previously expected. That reflects a view that tightening cycles in many DMs will be more front-loaded and …
We think inflation in the UK continued to edge higher in May (07.00 BST) We expect policymakers in Czechia to raise rates by 100bp (13.30 BST) Clients can sign up here for our Drop-In on our new financial market forecasts (15.00 BST) Key Market Themes …
21st June 2022
We think rising mortgage rates continued to weigh on US home sales in May (Tue. 15.00 BST) In this week’s drop-ins, we’ll discuss the macro risks of higher interest rates …(Tue. 15.00 BST) … and our new financial markets forecasts (Wed. 15.00 BST) Key …
20th June 2022
We think that stock markets in the emerging world will continue to struggle alongside their developed market (DM) peers over the next eighteen months or so, for four main reasons. The MSCI Emerging Markets (EM) Index has also struggled during the renewed …
We expect rate hikes next week in Norway, Mexico, Czechia, the Philippines and Egypt Headline CPI inflation in the UK may have risen above 9% in May... (Wed.) ...but it probably remained around 2.5% in Japan (Fri.) Key Market Themes The BoJ left policy …
17th June 2022
We think the sell-offs in US government bonds and equities have further to run, and have revised our forecasts for 10-year Treasuries and the S&P 500 accordingly. US bonds and stocks have been volatile this week amid a raft of central bank decisions, …
Bank of Japan may resist widening the tolerance band around its yield target, for now Final euro-zone inflation data will reveal the breadth of inflationary pressures there (10.00 BST) US industrial output probably rose at a healthy pace in May (14.15 …
16th June 2022
We expect the SNB to leave interest rates unchanged for now… (08.30 BST) …while we think the BoE will deliver a 50bp hike (12.00 BST) Clients can sign up here for our Drop-In on the Fed, ECB, BoE and markets (15.00 BST) Key Market Themes Euro-zone …
15th June 2022
We think the Bank of Japan (BoJ) will widen the tolerance band around its 10-year Japanese Government Bond (JGB) yield target, and that the yield will consequently rise by around 25bp. But there is a clear risk of a larger and more disorderly sell-off …
The PBOC may ease policy tomorrow with a 10bp cut to its MLF rate (02.20 BST) We expect the Fed to hike by 75bp (19.00 BST) We think Brazil’s central bank will raise rates by 50bp (22.30 BST) Key Market Themes While the twin sell-off in bond and equity …
14th June 2022
The prospect of tighter Fed policy than we had previously envisaged (see here ) presents upside risks to our forecasts for the 10-year Treasury yield as well as downside risks to our forecasts for the S&P 500. The moves in financial markets have been …
