DM Valuations Monitor Remaining Gilt risk premia may be slow to disappear While the latest change of plans by the UK government takes, in our view, a lot of the upside risk out of Gilt yields, we suspect stubborn risk premia remain that may take some time to fade completely... 18th October 2022 · 8 mins read
Capital Daily We doubt Gilt yields will perform a full Truss-style U-turn While today’s announcements by new UK Chancellor Jeremy Hunt have been welcomed by the Gilt market, we don’t expect the 10-year Gilt yield to fall too much further in the near term. 17th October 2022 · 5 mins read
Japan Chart Pack Another intervention wouldn’t reverse yen weakness With the yen currently trading just below 149, it now appears to be a question of when and not if policymakers step in again. But as recent weeks and the Asian Financial Crisis have shown, such... 17th October 2022 · 11 mins read
Capital Daily A further fiscal retreat in the UK seems only partly discounted We think that we could see a small boost for both Gilts and sterling if the UK government is forced to capitulate further on its plans for fiscal policy. 14th October 2022 · 7 mins read
FX Markets Weekly Wrap US dollar grinds higher as CPI reinforces Fed hawkishness The dollar is ending another volatile week in FX markets a touch higher against most major currencies. The market reaction to the upside surprise in September’s US CPI data (released yesterday) was... 14th October 2022 · 9 mins read
UK Economics Weekly Fiscal crisis to market crisis to political crisis The sacking of the Chancellor and the U-turn on corporation tax might not be enough for the government to regain the full confidence of the financial markets. For that to happen, more may need to be... 14th October 2022 · 9 mins read
Global Markets Update We think EM Asian equities may drop further We think benchmark equity indices in Taiwan, Korea and India will fall a bit further over the remainder of this year and into 2023, as the global economy slips into a recession. 14th October 2022 · 4 mins read
Asset Allocation Update High FX-hedged Gilt yields may be short-lived The spread between the 10-year Gilt yield hedged in US dollar terms and the 10-year Treasury yield has widened dramatically of late. But given our forecasts for short-term interest rates in the UK and... 14th October 2022 · 4 mins read
Global Markets Update What still-hot inflation means for US Treasuries Despite the hot September US CPI print from yesterday, we still expect Treasury yields to drop back over time. And we think the drop will mostly be driven by falls in the real yield, rather than... 14th October 2022 · 4 mins read
Asset Allocation Update What to make of gold’s resistance to the surge in TIPS yields We suspect that the reduced liquidity of inflation-protected Treasuries vis-à-vis their conventional counterparts is one reason why the price of gold has not fallen as much as might have been expected... 14th October 2022 · 5 mins read
Capital Daily We still think US Treasury yields will fall back eventually Although core inflationary pressures in the US seem more persistent than we and most others had anticipated, we still think Treasury yields are near their peak and will fall in time. 13th October 2022 · 5 mins read
Asset Allocation Update Sector allocation as the economic outlook darkens We think that traditional “defensive” sectors of the US stock market – consumer staples, health care and utilities – will continue to hold up better than “tech-orientated” sectors – information... 12th October 2022 · 6 mins read
FX Markets Update We think the aussie and kiwi have a bit further to fall We expect the aussie and the kiwi to weaken further against the US dollar and trough around mid-2023. And while we don’t expect the aussie to outperform the kiwi as it has recently, we think it will... 12th October 2022 · 4 mins read
Capital Daily Beware of misinterpreting the fall in UK inflation compensation A generous interpretation of the recent plunge in inflation compensation in the UK is that it has reflected confidence in the Bank of England’s commitment to tighten monetary policy by as much as it... 12th October 2022 · 6 mins read
Capital Daily Drama in Gilts highlights the strains in other bond markets While the turmoil in the Gilt market has been exacerbated by uncertainty over the UK government’s fiscal plans, it arguably underlines the challenges faced by central banks elsewhere in raising... 11th October 2022 · 6 mins read
UK Economics Update BoE’s gilt operations – easy to start, harder to end Given that the surge in gilt yields that has forced the Bank of England to intervene in the market was initially driven by the government’s loose fiscal policies, it makes sense that the Bank may not... 11th October 2022 · 8 mins read
