Capital Daily Rally in Treasuries may not keep “riskier” assets rising The fall in Treasury yields since last Friday has pushed corporate bond yields down and equities up in the US. But while we think that Treasuries will keep rallying, we suspect that corporate bonds... 11th October 2023 · 4 mins read
Emerging Markets Economics Update Higher bond yields and the risks for EMs We’ve long argued that EMs were well placed to weather the Fed’s tightening cycle and episodes of rising US Treasury yields – and that has largely been borne out. And, as it happens, the latest sell... 11th October 2023 · 4 mins read
Capital Daily “Higher for longer” Fed funds rate or term premia? We expect a continued paring back of US interest rate expectations to keep pushing long-dated Treasury yields down in coming quarters. But higher term premia may limit those falls in yields. 10th October 2023 · 4 mins read
Emerging Markets Economics Update Emerging Markets Capital Flows Monitor (Oct. 2023) Flows out of EM bonds and equity markets have intensified in recent weeks amid the sell-off in global bond markets, and an escalation of the conflict between Israel and Gaza would exacerbate this... 10th October 2023 · 3 mins read
Europe Economics Update How worried should we be about Italy’s public debt? The recent shift towards looser fiscal policy in Italy and increase in sovereign bond yields once again have raised concerns that investors may lose confidence in Italy’s ability to sustain its debt... 9th October 2023 · 3 mins read
Japan Chart Pack Japan Chart Pack (Oct. 2023) Our Japan Chart Pack has been updated with the latest data and our analysis of recent developments. With the economy growing at an above-trend pace, the labour market should soon start to tighten... 9th October 2023 · 1 min read
Capital Daily Equity relief rally may not last long The US stock market has rallied so far today and is on track to bring to an end a spell of weekly losses. Although we think that the proximate cause of this recent weakness – rising bond yields – has... 6th October 2023 · 5 mins read
Latin America Economics Weekly Latin America better placed to face rising US yields Spillovers from rising US Treasury yields have hit Latin American financial markets harder than those of most other EMs. But the good news is that current account deficits in the region have narrowed... 6th October 2023 · 6 mins read
UK Economics Weekly Bond market sell-off already hurting the economy The rapid rise in the 30-year gilt yield has lifted it to a 20-year high but, while striking, so far the speed of the increase is slower than in the run-up to the liability-driven investment crisis... 6th October 2023 · 8 mins read
Europe Economics Weekly What the bond market sell-off means for the euro-zone The bond market sell-off, and associated tightening of financial conditions, reinforces our view that the ECB has finished hiking. The market moves have been nowhere near big enough to prompt the ECB... 6th October 2023 · 8 mins read
Global Markets Focus How worried should we be about the Treasury sell-off? The government bond sell-off over the past three months raises uncomfortable questions around the risks of financial instability and the outlook for fiscal policy. This note takes stock of what has... 6th October 2023 · 14 mins read
Japan Economics Weekly Virtuous cycle continues as yen weakens The sudden strengthening of the yen after it breached 150 against the dollar earlier this week has triggered speculation that the Ministry of Finance sold foreign exchange reserves to support the yen... 6th October 2023 · 5 mins read
Global Markets Update Assessing the outlook for euro-zone “peripheral” spreads While we think the risk of a material increase in euro-zone “peripheral” spreads has risen, our central forecast remains that they will end 2024 a bit below their current levels. 5th October 2023 · 4 mins read
Capital Daily Are surging bond yields responsible for surging bond yields? A laundry list of explanations has been provided for the surge in the term premia of Treasuries since mid-year, which has accounted for more than ~100bp rise in the 10-year yield based on the ACM... 5th October 2023 · 5 mins read
Japan Economics Update How a surge in bond yields could yet wreak havoc We expect any rise in bond yields to be gradual and don’t believe it will create major economic or market dislocation. But there are risks that the Bank of Japan loses control over longer-term yields... 5th October 2023 · 6 mins read
Asset Allocation Update Bonds in Australia, NZ & Canada could outperform Treasuries We think the yields of 10-year government bonds in Australia, New Zealand and Canada will diverge from the yield of 10-year US Treasuries – which they have tracked very closely this year – over time... 5th October 2023 · 4 mins read