FX Markets Update Why we don’t think the dollar has peaked yet Although we think the end of the Fed’s hiking cycle is drawing nearer and that yields of long-term US Treasuries have already peaked for this cycle, we don’t believe this necessarily spells the end of... 11th August 2022 · 5 mins read
UK Economics Increased risk of “second-round” effects We’ve been warning for some time that CPI inflation would rise further than most people expect, triggering a recession. The prospect of even bigger rises in utility prices on 1 st October and in the... 10th August 2022 · 9 mins read
Emerging Markets Economics Update Emerging Markets Capital Flows Monitor Capital outflows from EMs have eased over the past month, helping to stabilise local asset prices. But we think outflows will pick up again before long. That’s a threat to those EMs whose current... 10th August 2022 · 2 mins read
Asset Allocation Outlook We think the worst is yet to come for most risky assets Although we think that we have now passed this cycle’s peak in long-dated US Treasury yields, we still suspect that investors are underestimating just how far the Federal Reserve will raise interest... 5th August 2022 · 24 mins read
FX Markets Weekly Wrap Dollar rallies as hope for a Fed pivot proves short-lived The huge upside surprise in US payrolls data pushed the greenback higher against most major currencies today in an otherwise quiet week for FX markets. The continued strength of the labour market in... 5th August 2022 · 9 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
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
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
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 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
