Global Markets Update Reassessing our forecasts for US markets We still expect a higher 10-year Treasury yield, lower S&P 500 and stronger US dollar over the remainder of the year, but have pared back our forecasts for the rise in yields and fall in equities. In... 29th July 2022 · 6 mins read
UK Markets Chart Pack Fall in gilt yields won’t last, equities to trough sooner Given our forecast that the Bank of England will raise interest rates from 1.25% now to a peak of 3.00%, we still think that gilt yields have further to rise. However, with attention in the markets... 29th July 2022 · 9 mins read
India Economics Weekly More left in the locker The drop in FX reserves to the lowest level in almost two years has raised concerns in some quarters that the RBI’s policy of FX intervention to slow the depreciation of the rupee is not sustainable... 29th July 2022 · 5 mins read
FX Markets Valuations Monitor Overvaluation may limit further strength in the USD We estimate that, in aggregate, the US dollar has become more overvalued over the past few months. In our view, this is because fundamentals in the US relative to other major economies have not... 29th July 2022 · 14 mins read
Japan Economics Weekly Bank of Japan won’t widen tolerance band any further Long-term bond yields have dropped back in recent weeks which meant that the Bank of Japan had to work less hard to defend its 10-year yield target. Given that we no longer expect US 10-year Treasury... 29th July 2022 · 5 mins read
Capital Daily This is (probably) not the Powell pivot markets are looking for Financial markets have taken the combination of yesterday’s FOMC’s announcement and today’s negative US GDP print as confirmation that policymakers will ease off their aggressive monetary tightening... 28th July 2022 · 7 mins read
Emerging Europe Chart Pack Growth outlook darkens The economic outlook has deteriorated across the region. Inflation is soaring and monetary conditions are tightening, which is weighing on households’ real incomes and spending power. The latest... 28th July 2022 · 11 mins read
BoE Watch Stepping up the fight We expect the Monetary Policy Committee (MPC) to step up its fight against high inflation at its meeting on Thursday 4 th August by raising interest rates by 50 basis points (bps), from 1.25% to 1.75%... 28th July 2022 · 9 mins read
China Chart Pack Housing crisis flares up again The mortgage boycotts are a double threat to developers and to the housing market. They have drawn attention to the problem of cash-strapped developers being unable to complete properties that they... 27th July 2022 · 11 mins read
Capital Daily For EM financial markets, bad news is just bad news We expect weak global growth to keep the pressure on EM sovereign bonds over the rest of 2022, and think that most EM currencies will weaken against the US dollar over this period. 27th July 2022 · 5 mins read
US Economics Update Recession Watch (Jul.) While the deterioration in the survey data and renewed inversion of the Treasury yield curve imply that the risks are rising, our composite models suggest that the economy is still more likely than... 27th July 2022 · 4 mins read
Middle East & North Africa Chart Pack Gulf economies feeling the oil boost The recently-released activity data from Saudi Arabia, the UAE, Qatar, and Bahrain confirmed that strong hydrocarbon production supported rapid economic growth at the start of this year. And strong... 27th July 2022 · 10 mins read
Canada Chart Pack Weaker new home sales to drag down construction The extent of the downturn in the housing market and broader residential investment will determine whether the economy enters a recession in the next 12 months, and in that respect there has been some... 26th July 2022 · 8 mins read
Capital Daily Valuations still don’t point to a rebound in US stocks Despite the plunge from its highs late last year, the valuation of the S&P 500 still doesn’t look all that low to us. This informs our view that the index has not yet reached a trough. 26th July 2022 · 6 mins read
Emerging Markets Economics EM FX has a bit further to fall; some pockets of greater concern With global economic growth weakening and risk sentiment unlikely to rebound sustainably this year in our view, we think that EM currencies generally will remain under pressure over the next several... 26th July 2022 · 4 mins read
Capital Daily Central banks may yet put more upward pressure on bond yields We expect elevated inflation to keep developed market (DM) central banks hiking rates aggressively this year, even as economies slow sharply, in some cases falling into recession. Accordingly, we... 25th July 2022 · 5 mins read
