Asset Allocation Update Sector allocation as the economic outlook darkens We think that traditional “defensive” sectors of the US stock market – consumer staples, health care and utilities – will continue to hold up better than “tech-orientated” sectors – information... 12th October 2022 · 6 mins read
FX Markets Update We think the aussie and kiwi have a bit further to fall We expect the aussie and the kiwi to weaken further against the US dollar and trough around mid-2023. And while we don’t expect the aussie to outperform the kiwi as it has recently, we think it will... 12th October 2022 · 4 mins read
Capital Daily Beware of misinterpreting the fall in UK inflation compensation A generous interpretation of the recent plunge in inflation compensation in the UK is that it has reflected confidence in the Bank of England’s commitment to tighten monetary policy by as much as it... 12th October 2022 · 6 mins read
Capital Daily Drama in Gilts highlights the strains in other bond markets While the turmoil in the Gilt market has been exacerbated by uncertainty over the UK government’s fiscal plans, it arguably underlines the challenges faced by central banks elsewhere in raising... 11th October 2022 · 6 mins read
UK Economics Update BoE’s gilt operations – easy to start, harder to end Given that the surge in gilt yields that has forced the Bank of England to intervene in the market was initially driven by the government’s loose fiscal policies, it makes sense that the Bank may not... 11th October 2022 · 8 mins read
Capital Daily US policy deals a blow to China’s equities, not for the last time China’s equities came under pressure today, partly in response to the US announcing fresh curbs on technology exports to the country last Friday. This is another crack in an increasingly fractured... 10th October 2022 · 6 mins read
Asset Allocation Update We don’t expect the relative rout in US REITs to persist Although we think that US equity REITs may have further to fall, we don’t expect them to continue to underperform the broader US stock market. The key reason is that we don’t expect Treasury yields to... 7th October 2022 · 5 mins read
Capital Daily Payrolls point to yields staying high, for now Today’s strong September US employment report added support to the view that Treasury yields will stay high, and the S&P 500 will remain under pressure, for a while yet. But we still think yields will... 7th October 2022 · 8 mins read
FX Markets Weekly Wrap Resilient US economic data leave the dollar rally intact The dollar looks set to end the week on the front foot, having rallied over the past three days after a weak spell following the BoE’s intervention in the Gilt market last Wednesday. The key driver... 7th October 2022 · 11 mins read
Global Markets Update S&P 500 may fall even further than we’d thought With the Fed seemingly still in a hawkish mood and the US and global economies struggling, we now expect the S&P 500 to decline further than we’d previously thought. 7th October 2022 · 4 mins read
UK Economics Weekly Three possible flashpoints for the markets The end of the Bank of England’s gilt purchases (14 th October), the publication of the Chancellor’s Medium-term Fiscal Plan (perhaps late this month) and the Bank of England’s next monetary policy... 7th October 2022 · 10 mins read
CE Spotlight What might fracturing mean for the markets? Fracturing will be felt very differently by markets in different parts of the world. Sectors within US-aligned markets where ties with China are most likely to fracture could see significant ructions... 6th October 2022 · 23 mins read
Capital Daily What to make of the fleeting bounce in the US stock market Today’s sizeable pull-back in the US stock market after a much brighter start to the month fits with our view that it is not yet out of the woods. We don’t expect it continue to struggle for the... 5th October 2022 · 6 mins read
FX Markets Chart Pack We don’t think the US dollar has peaked yet While the dollar has dropped back sharply over the past week, we continue to think that its rally has further to run as the global economy slows further and safe-have demand intensifies. 4th October 2022 · 11 mins read
EM Markets Chart Pack Monetary policy may turn tailwind for EM sovereign bonds With monetary tightening cycles approaching their ends in many emerging markets (EMs), we think local-currency (LC) sovereign bond yields will, in general, be much lower in a couple of years than they... 4th October 2022 · 8 mins read
Capital Daily Policy U-turns unlikely to take the pressure off the pound Even though recent developments in the UK may have provided some reassurance to investors and helped sterling to recover, we think that the deteriorating global economic outlook will ensure that the... 3rd October 2022 · 6 mins read
