FX Markets Update Untangling the effect of Omicron, the Fed, and China easing Three recent developments – the emergence of the Omicron variant, the Fed’s signal that it may further accelerate the pace of policy normalisation, and China’s move towards policy easing – have... 9th December 2021 · 4 mins read
Capital Daily We expect the rebound in the Brazilian real to be short-lived While the real has strengthened against the US dollar following a further 150bp hike from Brazil’s central bank yesterday, we doubt that there will be a sustained rebound. 9th December 2021 · 6 mins read
Capital Daily New German government may affect BTPs more than Bunds We think the new German Government will not have a significant impact on the outlook for German Bunds. But at the margin, the uncertainty surrounding its stance in the upcoming negotiations on reforms... 8th December 2021 · 6 mins read
Capital Daily What to make of recent developments in China We doubt that recent signs of policy easing in China are a precursor to a sharp rebound in either credit growth or the country’s economy. That in turn informs our forecast that government bond yields... 7th December 2021 · 7 mins read
Emerging Europe Economics Update Turkey: five key questions (and answers) This Update answers some of the most common questions that we have received from clients during Turkey’s recent turmoil. In short, the economic fallout doesn’t look like it will be as bad as it was... 7th December 2021 · 4 mins read
Emerging Markets Financial Risk Monitor Turkey and frontiers in the firing line The dramatic slump in the Turkish lira over the past month once again leaves the currency firmly in crisis territory. One crumb of comfort is that Turkish banks are in a better position to cope with... 7th December 2021 · 6 mins read
UK Economics Omicron may weaken activity but lift price pressures While the emergence of the Omicron COVID-19 variant has increased the downside risks to our GDP forecasts, it has arguably increased the upside risks to our CPI inflation forecasts. The... 7th December 2021 · 9 mins read
Capital Daily Fed policy, the Treasury yield curve, and term premia The recent flattening of the US Treasury yield curve mainly reflects a renewed plunge in long-dated term premia, at least based on one set of estimates published by the Fed. Its “risk-neutral”... 6th December 2021 · 5 mins read
Europe Chart Pack Omicron adds to downside risks High frequency data show that travel to retail and recreation destinations, restaurant bookings and flights have all declined in the past few weeks as coronavirus restrictions have been tightened in... 6th December 2021 · 11 mins read
FX Markets Weekly Wrap FX markets likely to remain volatile into year-end After rallying to its highest level of the year last week, the US dollar seems set to end this week broadly unchanged. In our view, this reflects the offsetting effects of rising short-term yields in... 3rd December 2021 · 9 mins read
Global Markets Update Assessing the market reaction to Omicron so far This Update takes stock of the moves in developed market (DM) asset markets in response to the “Omicron” variant, and provides initial thoughts on how we think things might progress if some of the... 3rd December 2021 · 5 mins read
Emerging Europe Economics Update Turkey & the macro fallout from past “sudden stops” The history books show that currency crises in other parts of the emerging world in recent decades have resulted in peak-to-trough falls in GDP of around 8% on average and pushed headline inflation up... 3rd December 2021 · 5 mins read
Capital Daily We see little upside for developed market corporate bonds Even if the global economy proves fairly resilient to Omicron, we don’t think that there is much scope for corporate bonds to perform better than government bonds over the coming years. 2nd December 2021 · 5 mins read
Africa Economics Update We anticipate that the rand will remain weak The South African rand has rallied over the past few days after reaching its lowest level against the US dollar in more than a year following last week’s news about the Omicron variant. Even if the... 1st December 2021 · 3 mins read
Nordic & Swiss Economics Pandemic-era lessons for the Swiss franc Given the uncertainty around Omicron, and the revealed preference of the SNB in recent weeks to largely stay out of the FX market, we would not be surprised to see the Swiss franc rise further against... 1st December 2021 · 3 mins read
Global Markets Focus Is inflation about to spell trouble for the stock market? US inflation hit its highest level since the 1990s in October and has now reached a rate that, historically, has coincided with very poor stock market returns. Notwithstanding the uncertainty around... 1st December 2021 · 13 mins read
