Canada Economics Weekly Higher forecasts for bond yields and the loonie Following the recent upgrades to our forecasts for GDP growth, inflation and interest rates, we now expect bond yields to be higher, and the loonie stronger, than we previously assumed. Meanwhile, we... 25th March 2022 · 5 mins read
India Economics Weekly Rupee-ruble exchange, virus restrictions lifted Indian authorities are in advanced discussions with their Russian counterparts over a rupee-ruble exchange system that would enable the two countries to continue trading even as Russia gets blocked... 25th March 2022 · 4 mins read
Asset Allocation Update A closer look at Treasuries vs. US equities in the 70s & 80s We doubt Treasuries would underperform US equities as emphatically as they have in recent weeks if oil prices and inflation surged a lot more. Indeed, they could conceivably outperform – as they did... 25th March 2022 · 5 mins read
Capital Daily What might be the impact of wider embargo on Russian energy? While not our base case, a complete Western ban on imports of energy commodities from Russia would probably send the prices of many soaring. We suspect that such an outcome would have some key... 24th March 2022 · 6 mins read
Global Markets Update Petrodollars probably won’t save Treasuries this time The reinvestment of oil revenues into US markets probably helped avert a rout in Treasuries during the mid-2000s hiking cycle, but even with oil prices on the rise again we don’t expect so-called... 24th March 2022 · 4 mins read
Capital Daily We don’t expect fiscal restraint to prevent Gilt yields from rising The yield of 10-year Gilts dropped back today after the UK Chancellor announced a relatively modest support package in the Spring Fiscal Statement, but we still expect it to rise between now and the... 23rd March 2022 · 6 mins read
Emerging Markets Economics Update Tighter financial conditions point to sluggish growth Our proprietary Financial Conditions Indices suggest that global financial conditions have recently been as tight as they were during the China hard landing fears of 2015 and point to GDP growth... 23rd March 2022 · 5 mins read
DM Markets Chart Pack How the war in Ukraine has changed our thinking The war in Ukraine, as well as the hawkish tone adopted by some developed market (DM) central banks, have led us to revise up our end-22 and end-23 forecasts for government bond yields in some DMs and... 23rd March 2022 · 8 mins read
Canada Chart Pack Market-implied policy tightening could topple housing The surge in interest rate expectations is a key risk to housing. We recently set out how, due to the much larger share of variable rate mortgages than before the pandemic, the Bank of Canada would... 23rd March 2022 · 9 mins read
Latin America Economics Update IMF & Argentina: a historical guide to restoring confidence History suggests that for an IMF deal to restore market confidence, a credible shift towards policy tightening which delivers positive economic results, alongside favourable external conditions, is... 23rd March 2022 · 5 mins read
FX Markets Update We expect some further yen weakness amid rising US yields Our expectation that US Treasury yields will rise further leads us to conclude that the yen will weaken more against the dollar and we have revised up our end-year USD/JPY forecasts for both 2022 and... 22nd March 2022 · 3 mins read
Capital Daily How the Fed and the war are affecting the stock-bond correlation The economic backdrop we expect over the next couple of years is consistent with a negative correlation between US stock and bond returns, in contrast with earlier this year. Long Run Outlook Drop-In... 22nd March 2022 · 5 mins read
Capital Daily Some more thoughts on the flattening of the Treasury yield curve The post-FOMC meeting revisions that we made to our 10-year Treasury yield forecasts reflect a view that the US economy will avoid a recession, despite what is happening to the curve. Long Run Outlook... 21st March 2022 · 5 mins read
Africa Economics Weekly Cost of FX policies rising in Nigeria, fuel price cap in SA? Evidence is building that Nigeria’s unorthodox exchange rate policies are fuelling inflation and increasingly damaging economic activity. Meanwhile, the authorities in South Africa are reportedly... 18th March 2022 · 8 mins read
FX Markets Weekly Wrap Hawkish Fed reinforces our case for a stronger dollar Even after its broad-based appreciation today, the US dollar seems set to end the week a bit lower against most major currencies. This is somewhat surprising given the FOMC’s hawkish tone on Wednesday... 18th March 2022 · 8 mins read
Capital Daily We doubt the post-FOMC respite for Treasuries will last Although the 10-year Treasury yield has fallen back a bit since the FOMC raised its federal funds rate target on Wednesday, we don’t think this is a sign of things to come. Long Run Outlook Drop-In... 18th March 2022 · 6 mins read
