China Economics Focus What will China do with its FX reserves? In adapting to the threat of having its foreign exchange reserves frozen, the People’s Bank is likely to shift more of its portfolio into unconventional alternatives, including EM sovereign debt and... 1st April 2022 · 19 mins read
Asset Allocation Chart Pack Stocks may lag bonds if commodities keep on surging Given that the past couple of months has seen the outbreak of war in Ukraine, surging commodity prices, growing concerns about inflation, and increasingly hawkish noises from the world’s major central... 31st March 2022 · 13 mins read
FX Markets Chart Pack We think the dollar rally has stalled, not ended The rally in the dollar seems to have paused this month, and indeed the greenback has fallen against some major currencies – especially those in Europe – this month. We think this largely reflects the... 31st March 2022 · 6 mins read
Capital Daily We think Chinese equities might continue to struggle We think China’s stock market will continue to struggle, as the slowdown in global growth that we forecast weighs on earnings and valuations make little headway. 31st March 2022 · 6 mins read
Capital Daily EZ inflation surprises suggest sell-off in bonds may resume While the sell-off in euro-zone government bonds has paused today despite the release of some stronger-than-expected inflation prints for Germany and Spain, we think that there is scope for it to... 30th March 2022 · 6 mins read
EM Markets Chart Pack What the war and Fed tightening could mean for EM assets As a result of the Russia-Ukraine war and the Fed’s hawkish pivot, we have tweaked our forecasts for most major emerging market (EM) assets. The big picture, though, is that we still think EM equities... 30th March 2022 · 8 mins read
Emerging Markets Economics Update Frontier debt risks are crystallising The tightening of global financial conditions since the onset of the Fed’s hiking cycle and the war in Ukraine has caused sovereign dollar bond spreads to widen significantly in several frontier... 30th March 2022 · 3 mins read
Capital Daily The flip side of a distorted yield curve If the near-inverted spread between the yields of 10-year and 2-year Treasuries is grossly exaggerating the probability of a US recession in twelve months’ time because it has been distorted by the... 29th March 2022 · 6 mins read
UK Markets Chart Pack Financial conditions as tight as after the Brexit vote The war in Ukraine has contributed to a tightening in financial conditions that will contribute to weaker GDP growth for the rest of this year and next year. Admittedly, a lot of the initial plunges... 29th March 2022 · 9 mins read
Capital Daily “Safe-haven” currencies and monetary policy divergence Even though the Japanese yen and the Swiss franc are widely considered to be “safe-haven” currencies, the former has fallen a lot further than the latter this month. While we doubt this divergence... 28th March 2022 · 5 mins read
Global Markets Update US corporate earnings may be resilient to Ukraine war While we think that the war in Ukraine and Fed tightening will weigh on US corporate earnings, we still expect those earnings to grow in the next two years or so. This underpins our view that US... 28th March 2022 · 4 mins read
FX Markets Weekly Wrap Stage set for payrolls to renew the rally in the dollar Amid the broad-based “risk-on” tone in markets this week, the US dollar has edged down against most major currencies. As was the case last week, an increasingly hawkish tone by the Fed and a rise in... 25th March 2022 · 8 mins read
Asset Allocation Update High inflation no guarantee of US REIT outperformance We think that the poor performance of US REITs in 2022 so far – despite rising concerns about inflation – adds to the evidence that REITs are not necessarily a better inflation hedge than ordinary... 25th March 2022 · 3 mins read
Capital Daily We think Latam currencies will give up some recent gains Following their strong appreciation against the US dollar since the start of the year, we expect Latam currencies in general to reverse some of their gains over the remainder of 2022. 25th March 2022 · 6 mins read
Emerging Europe Economics Weekly Russian markets re-open, gas payments & refugees The resumption of trading on the Moscow Stock Exchange this week marked the first steps towards rolling back crisis measures, but policymaking in Russia remains erratic as highlighted by President... 25th March 2022 · 7 mins read
FX Markets Valuations Monitor Fundamentals continue to underpin dollar strength We estimate that, on balance, the US dollar’s “fair value” has risen alongside an appreciation of the greenback against most major currencies. This increase in fair value largely reflects the relative... 25th March 2022 · 10 mins read
