Capital Daily The correlation between bond yields and equities The correlation between changes in bond yields and in equities has rarely been so negative, and we suspect this will continue as yields fall back and equities rebound. 16th April 2024 · 4 mins read
Asset Allocation Update Oil prices and the stock market Many of the usual relationships between oil prices and equities haven’t held over recent months. This Update explores the reason for that, and what may lie in store for energy equities and the broader... 16th April 2024 · 5 mins read
Capital Daily Fed – not the Middle East – still the bigger worry for markets Financial markets have, so far, taken the latest escalation in the Middle East over the weekend largely in stride. Our sense remains that, absent an even larger conflagration that disrupts energy... 15th April 2024 · 5 mins read
FX Markets Weekly Wrap Dollar soars on CPI bombshell; more to come? The US dollar has surged in the wake of another too-hot US CPI print, a dovish ECB and disappointing credit data out of China. The DXY index is now approaching its peak of last autumn (~106 currently... 12th April 2024 · 6 mins read
Capital Daily Fall in EM yields may be delayed but is still on the cards Inflationary pressures both domestically and in the US may keep government bond yields in emerging markets high for a while yet. But we think they will eventually fall later in the year. 12th April 2024 · 5 mins read
Asset Allocation Update Higher yields might not stop value underperforming growth We think ‘value’ stocks will generally underperform their ‘growth’ counterparts while a bubble in the US stock market continues to inflate, even if Treasury yields don’t drop back in the way that we... 12th April 2024 · 4 mins read
Asset Allocation Update The causes, consequences, and future of the Treasury sell-off We don’t expect the tough times to last for Treasuries. But although their woes so far have coincided with big gains in the stock market (at least until very recently) we don’t think a recovery in... 12th April 2024 · 5 mins read
Global Markets Update Taking stock of inflation risk premia Despite yet another hotter-than-expected US CPI release, there are few signs in bond markets that long-term inflation expectations are de-anchoring. That supports our base case that US Treasury yields... 11th April 2024 · 4 mins read
FX Markets Update Assessing the scope for further euro weakness The euro has fallen sharply against the greenback this week, and we wouldn’t be surprised if it weakens a bit further in the short term. That said, we think a fall below parity in the EUR/USD rate is... 11th April 2024 · 4 mins read
Australia & New Zealand Chart Pack Australia & New Zealand Chart Pack (Apr. 2024) Our Australia and New Zealand Chart Pack has been updated with the latest data and our analysis of recent developments. The minutes of their most recent meetings revealed that the RBA and the RBNZ... 11th April 2024 · 1 min read
Capital Daily How big a threat is inflation to US equities? Today’s slump in S&P 500, following the release of a hotter-than-expected US CPI report for March, underscores the US stock market’s vulnerability to disappointing news on inflation. (See Chart 1.)... 10th April 2024 · 5 mins read
Capital Daily Chinese gold craze likely to unwind later this year We think the price of gold will have eased back from current record highs by end-2024, but falling US Treasury yields and some softness in the US dollar will keep the price elevated. 9th April 2024 · 4 mins read
Capital Daily Tough times for Japanese equities may not last We expect Japanese equities to do quite well this year, as hype around artificial intelligence proves a more powerful catalyst than the headwind we anticipate from a stronger yen. 8th April 2024 · 4 mins read
FX Markets Weekly Wrap Payrolls report points to continued near-term dollar resilience Another robust US non-farm payrolls report has seen the dollar rebound a bit, unwinding some of its losses earlier in the week and putting the DXY index on track to end the week near its highest level... 5th April 2024 · 6 mins read
Capital Daily Further upside in US yields & dollar looks limited to us Continued strength in the US labour market may keep US Treasury yields elevated and the greenback strong in the short term, but we think the upside for both is limited from here. And the backdrop for... 5th April 2024 · 5 mins read
Asset Allocation Outlook Asset allocation in an equity bubble We expect equities to outperform most other assets as an AI-fuelled bubble continues to inflate, supported by a backdrop of resilient economic growth and monetary easing cycles. In particular, we... 4th April 2024 · 29 mins read
