Capital Daily Warnings for the US equity market from 1994 The US equity market struggled to make much ground during the rapid rate hikes of 1994/95, and there is reason to think it might do worse this time around if the Federal Reserve continues to tighten... 4th May 2022 · 6 mins read
Capital Daily Why inflation could drag down stock market multiples further We don’t subscribe to the view that the current high level of inflation in the US justifies a very big drop in its stock market. Nonetheless, we do think its valuation looks a bit high even if... 3rd May 2022 · 6 mins read
FX Markets Weekly Wrap Dollar surge continues ahead of the FOMC & payrolls The US dollar rose for a third week in a row, reaching its strongest level since early 2017 as the growing policy divergence between the major Asian central banks and the rest of the world as well as... 29th April 2022 · 8 mins read
Capital Daily Stagflation may prolong the woes of euro-zone financial markets The latest euro-zone economic data reinforce our view that the region is headed for a year of stagflation; against this backdrop we expect that euro-zone assets and the euro will struggle over the... 29th April 2022 · 8 mins read
FX Markets Outlook The next stage of the dollar bull market The combination of aggressive tightening from the Fed and worsening risk appetite has driven the dollar to its strongest level, in aggregate, since the early 2000s. While the greenback looks due a... 29th April 2022 · 23 mins read
Asia Chart Pack Tightening cycles to be gradual Central banks across the region have recently turned more hawkish. Over the past month or so, policymakers in Korea, Taiwan, Singapore, Sri Lanka, India and Pakistan have all tightened policy... 29th April 2022 · 14 mins read
China Chart Pack China will barely grow in dollar terms this year President Xi has reportedly told officials to ensure that China’s real GDP growth exceeds that of the US this year. This is likely to happen on paper. The published data usually confirm that growth... 29th April 2022 · 12 mins read
Global Markets Outlook Further pain may still be in store for global markets We think the rises in global government bond yields – and falls in equity prices – have not run their course yet. Yields have typically peaked only shortly before the ends of central bank tightening... 29th April 2022 · 29 mins read
Europe Economics Weekly Euro-zone economy struggling, euro heading to parity Data released this week showed that the euro-zone economy eked out a small expansion in Q1, but we think that it will contract in Q2. The weak economic outlook combined with the ECB's likely more... 29th April 2022 · 9 mins read
UK Markets Chart Pack Markets too sanguine on interest rates Our new forecasts that inflation will stay higher for longer and that the labour market will remain tight into 2023 suggests that Bank Rate will rise to a peak of 3.00% next year rather than the peak... 29th April 2022 · 8 mins read
Emerging Markets Economic Outlook Growth to underwhelm as inflation surges Lockdowns in China and spillovers from the war in Ukraine will slow the EM recovery and growth is likely to be weaker than most expect. Recession risks are rising in Emerging Europe in particular. On... 28th April 2022 · 28 mins read
Capital Daily What to make of the yen’s new lows We wouldn’t be surprised if the yen fell further against most major currencies but doubt this would give the country’s equity market a relative boost, in common-currency terms at least. 28th April 2022 · 7 mins read
India Chart Pack Monetary conditions tighten The key policy development this month was the introduction of a new Standing Deposit Facility, through which the RBI will drain excess banking sector liquidity. The SDF now provides the floor for the... 28th April 2022 · 9 mins read
Emerging Europe Chart Pack Inflation risks mount as commodity prices surge Surging commodity prices have pushed up inflation across the region and we expect inflation to hit fresh multi-year highs in the coming months. A loss of Russian gas supplies should not lead to... 28th April 2022 · 11 mins read
Africa Chart Pack Fiscal positions largely going from worse to bad Fiscal positions across Sub-Saharan Africa have been a persistent source of concern since the onset of the pandemic – and in some cases, even before. And the commodity price moves resulting from the... 28th April 2022 · 10 mins read
Latin America Chart Pack Food inflation a growing concern Inflation continues to march higher in Latin America, most recently driven by surging food prices owing to poor domestic weather conditions and rising global agricultural prices. This has led to... 27th April 2022 · 11 mins read
