Asset Allocation Outlook Higher bond yields more headwind than hurricane Although we expect a further rise in government bond yields to undermine the returns from most “safe” assets, we don’t expect it to be big enough to bring the prices of most “risky” financial assets... 31st January 2022 · 25 mins read
Capital Daily Political risks fall, but ECB tightening points to higher spreads While we think that the re-election of Sergio Mattarella as Italy’s President of the Republic and the victory in the Portuguese general election of the current Prime Minister Antonio Costa’s socialist... 31st January 2022 · 7 mins read
UK Markets Chart Pack Equities adjusting to the end of ultra-low real yields It is possible that equity prices will continue to struggle in the near term if central banks send more signals that they are willing to raise interest rates further in order to control inflation. But... 31st January 2022 · 8 mins read
China Chart Pack A less subdued Lunar New Year Millions of people traditionally travel across China to spend this evening, the eve of Lunar New Year, with their families. The tradition has been severely disrupted by the pandemic. Last year, amid a... 31st January 2022 · 12 mins read
FX Markets Weekly Wrap Hawkish FOMC meeting provides a boost to the dollar The trade-weighted US dollar reached its highest level since July 2020 this week after short-term rate differentials moved strongly in its favour following Wednesday’s hawkish FOMC meeting. 28th January 2022 · 8 mins read
Capital Daily Rising bond yields and the prospects for risky assets this year Even if this month’s falls in equity prices don’t continue, we think returns from risky assets in 2022 will be underwhelming when compared with last year. 28th January 2022 · 7 mins read
Global Markets Outlook We expect higher bond yields and limited gains in equities Although government bond yields have already risen sharply this year, we think that they will continue to increase as central banks press ahead with monetary tightening this year and next. Higher... 28th January 2022 · 30 mins read
Emerging Markets Economic Outlook A slower recovery in 2022 Growth across much of the emerging world will be weaker this year than last, with Emerging Europe and China in particular likely to fall short of consensus expectations. The EM monetary tightening... 28th January 2022 · 28 mins read
Australia & New Zealand Chart Pack Inflationary surge prompting monetary tightening New Zealand’s inflation surged to a 30-year high of 5.9% in Q4. And while Australia’s 3.5% was much lower, it is well above the RBA’s 2-3% target band. Trimmed mean inflation is about one percentage... 28th January 2022 · 11 mins read
Capital Daily We expect Fed tightening to push US yields and the USD higher The FOMC’s latest policy announcement reinforces our view that strong underlying inflationary pressures in the US will prompt a sustained tightening cycle, which we think will drive US Treasury yields... 27th January 2022 · 6 mins read
FX Markets Update We think CEE currencies will weaken despite rate hikes We expect the major central and eastern European (CEE) currencies to depreciate against the euro this year. We think that the Czech koruna will continue to fare better than the other CEE currencies... 27th January 2022 · 2 mins read
Emerging Europe Chart Pack Industry shifts into gear amid signs of easing shortages Industry across Emerging Europe turned a corner in Q4 as auto production rebounded strongly. This comes amid signs that supply shortages are starting to ease; our proprietary shortages dashboard... 27th January 2022 · 12 mins read
Bonds & Equities Four points on Russia’s market sell-off The sell-off in Russia’s financial markets in response to the reassessment of the likelihood of conflict with Ukraine has pushed up the risk premium on Russian assets to a similar level to that which... 27th January 2022 · 4 mins read
Capital Daily We think emerging market currencies will generally fall from here Although emerging market currencies have held up surprisingly well so far this year amid the volatility in global equity markets, we think they will weaken in general against the US dollar before too... 26th January 2022 · 4 mins read
Nordic & Swiss Economic Outlook Rate hikes showing on all policy radars The re-tightening of restrictions has overshadowed the start of the year in Switzerland and the Nordics, and our GDP growth forecasts for 2022 are about 0.5%-pts lower than the consensus. Nonetheless... 26th January 2022 · 12 mins read
China Economic Outlook Cyclical trough, tepid rebound China will be buffeted in the first half of 2022 by COVID outbreaks and a further slowdown in property construction. Policy support should improve the picture later in the year, but mounting... 26th January 2022 · 23 mins read
