Capital Daily Economic resilience may end the twin rally in bonds and stocks After a few weeks of strong performance, “safe” and “risky” assets have both generally sold off today after the strong US payrolls data. We expect this to continue over the rest of 2022. 5th August 2022 · 7 mins read
FX Markets Outlook We think the dollar rally still has further to run We think the dollar will appreciate further through at least the end of the year as the global economy continues to falter and “safe-haven” demand remains strong. Although we see limited scope for a... 4th August 2022 · 22 mins read
Emerging Europe Economics Update CNB brings its tightening cycle to an end The Czech National Bank became the first major EM central bank to end its tightening cycle after it left its policy rate on hold at 7.00% today. The communications were not as dovish as we had... 4th August 2022 · 3 mins read
Capital Daily We still expect BoE hikes to put upward pressure on Gilt yields While the 10-year Gilt yield initially dropped after today’s 50bp hike by the Bank of England, we still expect ongoing monetary tightening to push that yield up over the rest of this year. 4th August 2022 · 6 mins read
Europe Chart Pack Slowing sharply amid high inflation Euro-zone GDP increased by more than we had expected in Q2 as reopening effects boosted the services sector, particularly in the southern countries. But things have already taken a turn for the worse... 4th August 2022 · 10 mins read
Global Markets Outlook We think the latest asset price rallies will prove short-lived We doubt the recent rallies in global bond and equity markets will be sustained over the remainder of the year. While we no longer think the 10-year US Treasury yield will exceed its June peak, we... 3rd August 2022 · 30 mins read
Capital Daily We expect real yields to be a near-term headwind for gold We think that real yields in the US will continue to rise and put renewed pressure on the price of gold and most other assets. 3rd August 2022 · 5 mins read
Frontier Markets Wrap Five questions and answers on frontier default risks The spreads of sovereign dollar bonds over US Treasuries are in distressed territory in almost a third of EMs covered in the JP Morgan EMBI Index, with the majority of those being frontier markets. In... 3rd August 2022 · 4 mins read
Capital Daily We don’t think the dollar has peaked yet Although the US dollar has faltered over the past couple of weeks, we doubt its bull run is over. 2nd August 2022 · 5 mins read
Japan Economics Focus What does a weak yen mean for Japan? The yen may have bottomed out against the dollar, but it is likely to remain weak for some time. That should boost Japan’s economy as higher revenues from exports and from overseas subsidiaries... 2nd August 2022 · 15 mins read
Capital Daily What to make of recent sector rotation We don’t expect the renewed outperformance of the consumer discretionary and information technology sectors of the US stock market to continue. It appears to have been driven both by a plunge in TIPS... 1st August 2022 · 5 mins read
Global Markets Update A brighter outlook for EM local currency bonds We continue to expect the yields of 10-year emerging market (EM) local currency (LC) sovereign bonds to rise over the rest of 2022. But we anticipate smaller rises than we did previously, given our... 1st August 2022 · 2 mins read
Middle East & North Africa Economics Update Egyptian pound has a lot further to fall Spillovers from the war in Ukraine have caused Egypt’s large current account deficit to widen this year and, with the country struggling to attract stable forms of external financing, officials will... 1st August 2022 · 3 mins read
FX Markets Weekly Wrap Dollar struggles on market’s hope of a Powell pivot The dollar looks set to lose further ground this week after the FOMC’s 75bp hike was, somewhat strangely, interpreted as the start of a dovish pivot and US Q2 GDP disappointed. However, the greenback... 29th July 2022 · 9 mins read
Capital Daily What a stronger yen could mean for the US stock market The surge in the yen against the dollar seems to be a logical, but delayed, response to a shrinking gap between US and Japanese government bond yields. In the wake of big revisions to our forecasts... 29th July 2022 · 7 mins read
UK Economics Weekly Gilt yields to rebound, economics point a Lionesses win If our forecasts that Bank Rate will rise to 3.00% and that high inflation will prevent the Bank of England from cutting interest rates during the coming recession both prove right, then 10-year gilt... 29th July 2022 · 4 mins read
