Global Markets Update Revising up our S&P 500 forecasts We don’t think growing enthusiasm about AI will be enough to stop the S&P 500 from declining if, as we expect, the US economy falls into recession later this year. Nonetheless, we now think the index... 20th June 2023 · 3 mins read
Capital Daily What to make of even more inverted yield curves The greater inversion of yield curves, in response to the prospect of higher-for-longer interest rates, suggests to us the strength of equities won’t last. 19th June 2023 · 4 mins read
Capital Daily The S&P 500’s rally: 1995 or 2000? While the lessons from the late-1990s suggest that euphoria over AI could support the stock market for quite a while, especially in the US, we still think that weak economies will take some of the... 16th June 2023 · 7 mins read
FX Markets Weekly Wrap Has the dam burst for the dollar (and the yen)? The US dollar has fallen for a third week in a row, with the DXY closing in on its weakest level so far this year. But, although it is increasingly challenged by the current “risk-on” environment, we... 16th June 2023 · 10 mins read
Asset Allocation Update Bubbles, recessions, & AI We now suspect growing euphoria over AI will drive the S&P 500 to a significantly higher level than we had previously forecast by the end of next year. In the meantime, though, we still think a mild... 16th June 2023 · 4 mins read
UK Economics Weekly Growing pains in the gilt, mortgage and rental markets The surge in gilt yields above the level reached after the Truss/Kwarteng mini-budget last September has pushed mortgage rates even higher and illustrates that most of the drag on real activity and... 16th June 2023 · 10 mins read
FX Markets Update China, OPEC+ & the prospects of commodity currencies Despite faltering commodity prices and growing concerns around China’s economic rebound, most commodity currencies have held up reasonably well this year. But we continue to think that will change in... 16th June 2023 · 4 mins read
Global Markets Update Investors may be underestimating eventual rate cuts How low Fed and ECB policy rates will go, when they are eventually normalised, is at least as important for financial markets as the precise timings of the ends of tightening cycles, in our view. We... 16th June 2023 · 4 mins read
Asset Allocation Update Another look at the underperformance of Gilts Although we no longer expect Gilts to outperform in local-currency terms, we do think they’re set to hold up better against Treasuries and Bunds over the rest of this year than they have done lately. 15th June 2023 · 5 mins read
Capital Daily Fed and ECB to hike in July, but US & EZ bond yields may fall While the ECB and the Fed took slightly different paths this week, we think they will both tighten policy again in July. Nonetheless, we still think government bond yields in the US and the euro-zone... 15th June 2023 · 7 mins read
Capital Daily The fed funds rate may go lower than investors think Investors may be right about the near-term path of the fed funds rate, but we suspect they’re underestimating how far it will fall; that’s one reason we think long-dated Treasuries will rally. 14th June 2023 · 7 mins read
Capital Daily Sticky UK inflation is unlikely to keep Gilt yields higher forever The 10-year Gilt yield has continued to march higher on the back of recent data releases, outpacing the equivalent Treasury yield and putting upward pressure on the pound against the greenback. But we... 13th June 2023 · 6 mins read
Global Markets Update Rate cuts may not be a big boost for EM local-currency bonds We think an upcoming shift in emerging market monetary policy towards rate cuts will provide long-dated local-currency government bonds there with a bit of a tailwind. But gains may be limited in the... 13th June 2023 · 4 mins read
Capital Daily We think that most EM currencies will fall back by year-end Emerging Market (EM) currencies have generally appreciated against the US dollar since the start of this month, and indeed since last October. However, we think that nearly all “major” EM currencies... 12th June 2023 · 4 mins read
Capital Daily What to make of the S&P 500’s latest bull market We doubt the stock market rally will extend much further over the rest of this year. 9th June 2023 · 8 mins read
FX Markets Weekly Wrap Central bank surprises work against dollar ahead of FOMC The US dollar looks poised to end another week down a touch – the DXY index’s first consecutive weekly fall since April. That probably reflects yield gaps vis-à-vis most other developed markets (DMs)... 9th June 2023 · 9 mins read
