Global Markets Update The impact of QT on Treasury yields 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... 14th July 2022 · 3 mins read
Europe Economic Outlook Recession won’t stop aggressive ECB tightening The euro-zone looks on course to fall into a mild recession in the coming quarters. Real incomes are falling, business sentiment has plummeted and growth in the region’s export markets is slowing... 14th July 2022 · 29 mins read
Emerging Markets Economics Update EM default risks: more than meets the eye The effects of the pandemic followed by the war in Ukraine have pushed a growing number of EMs into debt distress. And while some (Tunisia, Ghana) look likely to follow Sri Lanka’s path into default... 14th July 2022 · 5 mins read
Asset Allocation Update China’s equity outperformance may prove short-lived The resurgence in China’s stock market may already be over. We forecast that the MSCI China Index will struggle alongside major equity indices elsewhere over the next year or two, as China’s economic... 12th July 2022 · 5 mins read
Emerging Markets Economics Update Emerging Markets Capital Flows Monitor Capital outflows from EMs picked up over the past month and are likely to persist over the rest of the year. That’s a particular threat to those EMs whose current account deficits have widened or are... 12th July 2022 · 2 mins read
Capital Daily We think the gold price has further to fall While the price of gold has fallen sharply over the past couple of months, including another small decline today, it still appears much higher than its typically strong inverse relationship with the... 11th July 2022 · 4 mins read
FX Markets Weekly Wrap The dollar breaks through; more to come? The US dollar has continued to surge this week, with the key EUR/USD rate breaching a two-decade low and approaching the symbolic parity level as fears around Europe’s energy supply worsened. Solid US... 8th July 2022 · 8 mins read
Capital Daily Headwinds growing again for US bonds and equities June’s US Employment Report lends support to our forecast that the Federal Reserve will raise interest rates by more than is currently discounted in markets, pushing up Treasury yields this year. And... 8th July 2022 · 7 mins read
Africa Economics Weekly Political risks piling up, rand on the rocks Resurfacing political risks in some parts of Sub-Saharan Africa are another threat to recoveries that are already facing multiple headwinds, while at the same time raising the pressure on several... 8th July 2022 · 6 mins read
Global Markets Update We think US and EZ corporate spreads will stay high 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... 8th July 2022 · 4 mins read
Emerging Europe Economics Weekly Is Hungary falling into a crisis? Hungary’s economy is now under substantial pressure. The forint has slumped and interest rates have been hiked aggressively. The only way through this is to accept the pain of a weak currency and... 8th July 2022 · 5 mins read
Asset Allocation Update Equities may underperform bonds if earnings falter As forecasts for corporate earnings in the US finally start to come down amid worries about the outlook for the economy there, this Update considers the implications for equities and bonds. 8th July 2022 · 3 mins read
Europe Economics Weekly Euro nears parity, energy effects erase German surplus The depreciation in the euro to its lowest level in almost two decades against the dollar this week in large part reflects investors’ view that the ECB will tighten less aggressively than the Fed. The... 8th July 2022 · 5 mins read
India Economics Weekly Policy tweaks should provide some relief to rupee New measures to reduce gold imports are unlikely to lead to a substantially narrower current account deficit and support the rupee, not least because the decision to discourage fuel exports will have... 8th July 2022 · 7 mins read
Capital Daily We think risks for the euro remain skewed to the downside Our base case is that the euro will weaken a bit further against the US dollar from here, but the balance of risks suggest to us that it could fall well below our current forecast for parity. 7th July 2022 · 7 mins read
FX Markets Update What would it take to generate an even stronger US dollar? We forecast a further ~2% appreciation of the trade-weighted US dollar over the rest of this year. But we continue to think that the risks are skewed towards even greater dollar strength. This Update... 7th July 2022 · 4 mins read
