Capital Daily EM equities’ underperformance likely to slow in 2020 EM equities have managed to keep pace with US equities since late 2019 after a long period of underperformance (see Chart 1), as global economic data have stabilised and the US and China struck a... 9th January 2020 · 6 mins read
Capital Daily Equity returns likely to be limited regardless of geopolitical events The limited response in US equities to rising tensions in the Middle East seems to reflect a view that the US economy will be largely unaffected by the latest escalation. But even if US stocks remain... 6th January 2020 · 7 mins read
Capital Daily Bond-market sell-off unlikely to gather more momentum The yields of most 10-year developed market government bonds have fallen back a bit today. But the bigger picture is that they have risen over the past month, continuing an upward trend that started... 2nd January 2020 · 6 mins read
Capital Daily Other central banks unlikely to follow Riksbank’s example One reason why we expect the yields of 10-year government bonds to stay low in general for the foreseeable future is that we think that interest rates will remain very depressed. Indeed, in some cases... 19th December 2019 · 8 mins read
Australia & New Zealand Chart Pack Unemployment rates will continue to rise in 2020 Annual GDP growth in Australia has probably bottomed out already but we expect growth to remain below potential in 2020. As such, jobs growth will probably not be strong enough to absorb the expansion... 19th December 2019 · 10 mins read
DM Markets Chart Pack Equities likely to rise more slowly in 2020 than 2019 Despite recent optimism about trade and Brexit, we doubt that equities in developed markets (DMs) will fare as well next year as they have in 2019. That said, those in the UK will be an exception in... 17th December 2019 · 7 mins read
Capital Daily Bond yields likely to fall further in the E-Z, but rise in the US This week’s ECB and Fed meetings reinforce our view that government bond yields will fall further in Germany, and the rest of the euro-zone, but rise slightly in the US in 2020. 12th December 2019 · 7 mins read
EM Markets Chart Pack EM currencies likely to weaken; Chilean peso an exception Optimism about an imminent resolution to the trade war between the US and China and subsiding protests in Latin America have supported EM currencies over the past month. But, barring a few exceptions... 11th December 2019 · 7 mins read
Global Markets Update We don’t think that the dollar is especially overvalued Despite President Trump’s frequent complaints about the strength of the dollar, its valuation is not especially high in our view and is unlikely to prevent it from rising further in the next couple of... 2nd December 2019 · 3 mins read
DM Markets Chart Pack Central bank asset purchases likely to keep yields low Although we think that the Fed is now done cutting rates, we think that more easing is coming outside the US and that major central banks will remain net buyers of bonds. With this in mind, we... 28th November 2019 · 7 mins read
Capital Daily RBA likely to launch QE in 2020, boosting Aussie bonds In a much-awaited speech on unconventional monetary policy, RBA Governor Philip Lowe set a high bar for launching quantitative easing (QE) in Australia. But against a backdrop of stubbornly-low... 26th November 2019 · 5 mins read
Capital Daily EZ yields likely to fall further as pleas for fiscal stimulus ignored The decline in the euro-zone Composite PMI for November reinforces our view that growth in the monetary union will deteriorate further in the coming months. With governments so far resisting pressure... 22nd November 2019 · 7 mins read
Capital Daily Prospects for government bonds brighter in Australia than the US While we think that the Fed’s easing cycle has now come to an end, the minutes of the RBA’s November meeting reinforce our view that the Australian central bank is far from done loosening policy. With... 19th November 2019 · 6 mins read
Global Markets Update Trade deal unlikely to provide more upside for equities Optimism about trade has been a factor behind the rally in global equities in the past month. But with a “mini-deal” now largely discounted in the markets, and economic growth unlikely to do better... 19th November 2019 · 3 mins read
Capital Daily Global equities remain vulnerable even if a trade deal is finalised With the global economy likely to remain in the doldrums, and a US/China trade deal now largely priced in, we think that global equities will struggle to make further headway given how far they have... 18th November 2019 · 6 mins read
EM Markets Chart Pack Equity rally unlikely to last, regardless of a trade deal EM equities have continued to rise over the past month, seemingly driven by optimism about an imminent US/China trade deal and some improvement in the economic data. But we are sceptical that the... 13th November 2019 · 7 mins read
