China Economics Update Renminbi turning a corner The renminbi has gained 9% against the US dollar since last May. But the factors that underpinned this appreciation have faded. With US yields moving in the dollar’s favour and China’s economic... 26th March 2021 · 3 mins read
Global Markets Update Revising up our forecast for the US dollar We now expect that the US dollar will strengthen somewhat over the next couple of years as the US economy outperforms and its policy mix diverges from that in most other major economies. 26th March 2021 · 5 mins read
India Economics Weekly NPL floodgates open, new FX forecasts, state elections With the Supreme Court this week lifting its ban on banks classifying delinquent loans as non-performing, the last major extra-ordinary banking sector measure has been unwound and recorded NPLs are... 26th March 2021 · 4 mins read
Emerging Markets Economics Update Emerging Market Capital Flows Monitor Portfolio outflows from several EMs have intensified over recent weeks as fears over a re-run of the “Taper Tantrum” appear to be playing on investors’ minds. But outflows are currently much smaller... 15th March 2021 · 3 mins read
Frontier Markets Wrap SDR allocation no panacea for distressed frontiers A fresh allocation of IMF Special Drawing Rights (SDRs), if implemented, would provide a welcome boost to the depleted foreign exchange reserves of some distressed frontier economies. But an... 3rd March 2021 · 3 mins read
Africa Economics Update Nigeria: another unconvincing devaluation The reported (but unconfirmed) devaluation of one of Nigeria’s exchange rates would help to improve the public finances, but it would keep already strong price pressures elevated. We doubt that the... 3rd March 2021 · 4 mins read
Asset Allocation Chart Pack Rotation in equity markets may have further to run While equity markets came under pressure towards the end of the month, they generally weathered February’s roughly 30bp rise in the 10-year US TIPS yield quite well, with most major indices still... 2nd March 2021 · 13 mins read
Australia & New Zealand Chart Pack Wage growth near its trough Labour markets in both countries have tightened in recent months. In Australia, the unemployment rate has fallen from a peak of 7.1% to just 6.4% in January. And other measures of spare capacity have... 1st March 2021 · 11 mins read
Canada Economics Update We expect oil to be the key driver for the loonie Given our latest forecast for oil prices, we now expect the Canadian dollar to rise further in 2021 than we previously thought, but to drop back a bit in 2022. 25th February 2021 · 2 mins read
Capital Daily Rising government bond yields and currency/equity correlations As developed market government bond yields have risen, they have become a more important driver of currency markets than was the case last year. One interesting feature of the two brief equity market... 25th February 2021 · 5 mins read
Nordic & Swiss Economics Update What to make of the weaker Swiss franc? The recent fall in the Swiss franc against the euro will be music to the SNB’s ears, and we think that there is plenty of scope for the currency to drift lower over the coming years. 24th February 2021 · 3 mins read
UK Economics Update Why we think the rally in sterling will continue The pound has performed better than all other G10 currencies so far in 2021 (see Chart 1), rising from $1.36 at the start of January to almost a three-year high of $1.41 now. We expect the strength of... 24th February 2021 · 2 mins read
India Chart Pack Activity returning to pre-virus levels Indian GDP data due to be released on Friday are likely to show only a small contraction in annual growth in Q4 2020, and high-frequency indicators point to a relatively strong start to 2021. Indeed... 24th February 2021 · 9 mins read
Capital Daily Politics may spur renewed falls in the Brazilian real We doubt that the political concerns that have contributed to the latest sell-off in the Brazilian real will go away, which is why we expect the real to be one of the few EM currencies to depreciate... 23rd February 2021 · 5 mins read
Japan Chart Pack GDP will soon be back at pre-virus path The strong rise in output in Q4 2020 to just 1.2% below Q4 2019 levels bolsters our view that Japan’s economy will be back to the level it reached before the tax hike and close to its pre-virus path... 22nd February 2021 · 10 mins read
Global Markets Update We expect EM currency appreciation to moderate While we expect that EM currencies in general will rise further this year due to strong appetite for risk and a recovering global economy, we think several headwinds will limit their appreciation. 19th February 2021 · 2 mins read
