Asset Allocation Update Treasuries and US equities less likely to bottom out together The prospect of even tighter Fed policy than we had previously envisaged raises the risk of a worse outcome for the US economy and corporate earnings further down the line than we had assumed. So, we... 15th June 2022 · 5 mins read
Global Markets Update How changes to yield curve control might affect JGBs We think the Bank of Japan will widen the tolerance band around its 10-year Japanese Government Bond yield target, and that the yield will consequently rise by around 25bp. But there is a clear risk... 15th June 2022 · 4 mins read
FX Markets Update We think the sharp falls in the lira have much further to run The Turkish lira is once again depreciating sharply against the US dollar and we expect this to continue. We revise our forecasts for the lira and pencil in further substantial weakness by the end of... 15th June 2022 · 4 mins read
Capital Daily Central banks part of the problem, not the solution, for markets While the twin sell-off in bond and equity markets has re-accelerated over the past few trading days, there is still little evidence of serious strains in core money markets. And broader market... 14th June 2022 · 7 mins read
Global Markets Update Turning more downbeat on both Treasuries & US equities The prospect of tighter Fed policy than we had previously envisaged 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. In... 14th June 2022 · 4 mins read
Capital Daily Stubborn US inflation highlights the risks to our forecasts The strength of price pressures evident in May’s US CPI report seems to have raised the risk of the Fed hiking rates by even more than we had thought in order to bring inflation under control, and... 13th June 2022 · 5 mins read
Global Markets Update New, higher forecasts for EZ bond yields and spreads We are raising our forecasts for euro-zone 10-year government bond yields and “peripheral” spreads to reflect the ECB’s further hawkish shift as well as its apparent unwillingness to commit to a... 10th June 2022 · 4 mins read
FX Markets Weekly Wrap Souring risk sentiment reignites the dollar rally The US dollar rose against all major currencies this week, reversing some of its fall over the past month or so. Much of this strength came late in the week as equity markets came under renewed... 10th June 2022 · 8 mins read
Capital Daily The pain for US markets is probably not over yet Given that price pressures in the US show little sign of easing, we doubt that the Fed will take its foot off the brakes anytime soon. We therefore suspect that more pain is yet in store for US asset... 10th June 2022 · 8 mins read
Emerging Europe Economics Weekly Lira on shaky ground, Russia dropping capital controls The Turkish lira remained under pressure this week and the raft of policy measures announced on Thursday show that officials are doing whatever they can to avoid interest rate hikes. Capital controls... 10th June 2022 · 6 mins read
Asset Allocation Update US equity valuations still much higher than elsewhere Despite the sharp fall in the US stock market this year so far, US equities still appear much more highly valued than their peers in the rest of the world. While that might not tell us much about the... 10th June 2022 · 5 mins read
Capital Daily Hawkish ECB much more concerning for BTPs than Bunds While the yields of 10-year government bonds have risen across the euro-zone after the ECB sounded particularly hawkish at its meeting today, we suspect that further upward pressure on “core” yields... 9th June 2022 · 7 mins read
FX Markets Update Four key points on the renminbi’s spillovers to EM currencies While the spillovers from the renminbi’s depreciation against the US dollar over the past two months have in some ways been similar to previous periods of renminbi weakness, the impact on other... 9th June 2022 · 4 mins read
FX Markets Update Fed’s “QT” supports our case for a stronger US dollar While we doubt it will be the main driver of the US dollar, the ongoing reduction in the size of the Fed’s balance sheet (i.e., “quantitative tightening”, or “QT”) adds to our conviction that the... 9th June 2022 · 3 mins read
Australia & New Zealand Chart Pack Steeper interest rate hikes and larger house price falls Hawkish shifts by the RBA and the RBNZ in recent weeks have prompted us to forecast an even more aggressive hiking cycle by both central banks in the months ahead. Both central banks hiked rates by... 9th June 2022 · 11 mins read
Capital Daily We expect pressure on JGBs and the yen to continue The BoJ’s tolerance band for 10-year government bond yields is under pressure again as US Treasury yields rise. We think continued policy divergence will mean that the Japanese yen weakens further... 8th June 2022 · 6 mins read
