Capital Daily The economic consequences of Mr Johnson’s potential demise With UK Prime Minister Boris Johnson facing a vote of no confidence in his leadership of the Conservative Party later today, it is worth considering what the implications for UK financial markets of... 6th June 2022 · 6 mins read
Capital Daily Quantitative tightening and the market sell-off Investors have greeted the official start of the Fed’s “quantitative tightening” policy with a renewed sell-off across equity and bond markets. That is probably coincidence not causation, but we think... 1st June 2022 · 8 mins read
Latin America Economics Weekly Reasons for optimism in Colombia and Brazil? Populist Rodolfo Hernández is now the favourite to become Colombia’s next president and this has buoyed local financial markets this week, but we think that the scope for a further rally is limited... 1st June 2022 · 6 mins read
China Economics Update We think the renminbi will fall further While it has rebounded over the past couple of weeks, we expect the renminbi to resume its fall against the US dollar as China’s economy underwhelms, interest rate differentials continue to shift... 1st June 2022 · 4 mins read
India Economics Focus Policymakers will turn to financial repression Policy tightening by the RBI is putting public finances stretched by the pandemic under further strain. While an increase in debt financing costs is inevitable, we expect the government and RBI to... 1st June 2022 · 10 mins read
Capital Daily Three market implications of the EU’s embargo on Russian oil We think that, at the margin, the EU’s embargo on Russian oil, announced yesterday, adds to reasons to expect the yields of long-dated government bonds to rise, equities to struggle and commodity... 31st May 2022 · 6 mins read
Asset Allocation Chart Pack Twin recoveries in Treasuries and US equities may not last For much of this year, expectations of tighter Fed policy have driven up Treasury yields, weighing on the US stock market’s valuation in the process. That has changed since we published our last Asset... 31st May 2022 · 12 mins read
EM Markets Chart Pack We think EM sovereign bond yields will resume their rise While the yields of emerging market local-currency and dollar-denominated sovereign bonds have dropped back in recent weeks, we expect them to resume their rise before long. US Payrolls Drop-In (3 rd... 31st May 2022 · 8 mins read
Emerging Europe Chart Pack Resilience so far, but weakness on the horizon GDP across Central Europe expanded strongly in Q1 and the latest figures for March and April suggest that activity has remained resilient since the war in Ukraine started. Russia’s economy has not... 31st May 2022 · 14 mins read
Africa Chart Pack The monetary policy tide turns African central banks have turned up their hawkish noises over the past month. Policymakers in Nigeria and Kenya delivered their first interest rate hikes following pandemic-era cuts. In South Africa... 31st May 2022 · 12 mins read
Capital Daily Stock-bond correlation may stay positive for some time yet While the relationship between the US stock market and government bond prices has reverted towards “normal” over the past couple of weeks, we doubt that this will last; we expect equity and bond... 30th May 2022 · 5 mins read
China Chart Pack Policymakers trying to revive property sales China’s beleaguered property developers may soon see some respite both from their inability to borrow at reasonable rates and from sliding property sales. Last week, PBOC Governor said that the... 30th May 2022 · 11 mins read
FX Markets Weekly Wrap We doubt near-term headwinds for the dollar will last The US dollar seems set to end the week lower against most major currencies, a third successive weekly decline, and a drop of ~3% in the DXY index from its multi-year high earlier this month. In part... 27th May 2022 · 9 mins read
Capital Daily Hawkish ECB raises risk of a surge in peripheral spreads While the latest hawkish turn by the ECB hasn’t had much of an impact on euro-zone “peripheral” spreads, we think the risk of ECB policy normalisation sparking a sell-off in peripheral bond markets... 27th May 2022 · 7 mins read
Asset Allocation Update Consumer staples stocks may outperform again Even if high inflation continues to put downward pressure on profit margins, we still suspect that the consumer staples sector in the US will be a relative bright spot against a backdrop of... 27th May 2022 · 5 mins read
FX Markets Chart Pack We think the dollar rally will eventually resume While the US dollar has fallen back over the past couple of weeks after a strong run, we think that the key underlying drivers of the greenback’s appreciation this year remain in place. 27th May 2022 · 11 mins read
