Capital Daily Omicron, Powell and the US dollar With financial markets already firmly in risk-off mode following the emergence of the Omicron variant, Fed Chair Powell’s suggestion that the FOMC may still increase the pace of policy tightening has... 30th November 2021 · 7 mins read
Asset Allocation Chart Pack Omicron uncertainty provides a sense of déjà vu News of the spread of the Omicron variant has put COVID-19 back at the top of many investors’ list of concerns. While on a far smaller scale, the impact on markets so far has been qualitatively... 30th November 2021 · 12 mins read
Emerging Europe Chart Pack Virus outbreaks diverge, but Omicron a renewed risk COVID-19 outbreaks in Central and Eastern Europe have diverged in the past month and that may continue in December, but the emergence of the potentially highly-transmissible Omicron variant could... 30th November 2021 · 16 mins read
China Chart Pack Omicron tests China’s zero-COVID strategy The global spread of a more transmissible COVID variant is a particular challenge for a country trying to remain COVID-free. But after nearly two years of success suppressing infections domestically... 29th November 2021 · 13 mins read
Australia & New Zealand Chart Pack Diverging outlook for monetary policy While the RBNZ has lifted interest rates by 50bp and signalled that as much as 200bp of tightening is still to come, the RBA’s central scenario remains that interest rates won’t be raised until 2024... 29th November 2021 · 11 mins read
FX Markets Weekly Wrap COVID throws another curveball News late yesterday of a new and potentially more dangerous variant of COVID-19 emerging in South Africa has made a dramatic impact on financial markets today. In general, market shifts have been... 26th November 2021 · 8 mins read
Capital Daily We think E-Z peripheral spreads will widen further, eventually While the accounts of the ECB’s October meeting and recent comments by some ECB officials suggest to us that there might not be much scope for euro-zone “peripheral” spreads to increase further in the... 25th November 2021 · 6 mins read
Long Run Returns Monitor Long Run Returns Monitor (Nov.) Our monthly Long Run Returns Monitor provides our updated long-term projected returns for major asset classes, as well as a summary of the macroeconomic forecasts which underpin them. All projections... 25th November 2021 · 1 min read
EM Markets Chart Pack Contagion from Turkey’s crisis likely to remain limited Spillovers to other emerging markets from Turkey’s ongoing currency crisis have been limited so far and we think this will remain the case even if Turkey’s financial markets remain under pressure. 24th November 2021 · 8 mins read
Emerging Europe Economics Update Macro fundamentals to support further shekel strength The Israeli shekel has appreciated sharply in the past few weeks, making it one of the best performing currencies during the pandemic. While we don’t expect this recent strength to continue in the... 24th November 2021 · 4 mins read
Capital Daily Steeper NZ yield curve may be sign of things to come elsewhere We think developed market yield curves will generally steepen in the near term, as central banks don’t deliver as many rate hikes as appear to be discounted in markets. 24th November 2021 · 6 mins read
Emerging Europe Economics Update Turkey & policy responses during past “sudden stops” The Turkish lira’s sharp fall yesterday looks similar to the experience of sudden stops elsewhere. In those instances, central banks usually responded with interest rate hikes of around 600bp as well... 24th November 2021 · 3 mins read
India Chart Pack Backsliding on reforms? The repeal this month of controversial reforms aimed at liberalising the agriculture sector is arguably the biggest political setback that the Modi government has faced since coming to power in 2014... 24th November 2021 · 9 mins read
Capital Daily Rising US rates bigger worry for EMs than Turkey contagion Turkey’s currency crisis – the lira is down another ~11% against the US dollar today, and ~35% in two months – is now reaching a scale where it raises the question of how badly it will affect other... 23rd November 2021 · 6 mins read
Global Economics Update Global exposure to Turkey’s currency crisis With the Turkish lira down by 9% so far today and 20% over the past week, the currency is now firmly in crisis territory. Higher inflation and tighter domestic financial conditions are likely to sap... 23rd November 2021 · 5 mins read
Emerging Europe Economics Update Lira in freefall as policymakers remain defiant The Turkish lira has plunged this morning after President Erdogan signalled yesterday that policymakers have no appetite to respond to the currency’s recent falls by hiking interest rates. Further... 23rd November 2021 · 3 mins read
