Asset Allocation Update Another look at the underperformance of Gilts Although we no longer expect Gilts to outperform in local-currency terms, we do think they’re set to hold up better against Treasuries and Bunds over the rest of this year than they have done lately. 15th June 2023 · 5 mins read
Capital Daily Fed and ECB to hike in July, but US & EZ bond yields may fall While the ECB and the Fed took slightly different paths this week, we think they will both tighten policy again in July. Nonetheless, we still think government bond yields in the US and the euro-zone... 15th June 2023 · 7 mins read
Europe Data Response Euro-zone Industrial Production (Apr.) The uptick in industrial production in April was mostly driven by strong growth in Ireland, with many other major euro-zone economies recording a fall in output. We expect industry to struggle this... 14th June 2023 · 2 mins read
UK Data Response UK Monthly GDP (Apr. 2023) The 0.2% m/m rise in real GDP in April, following March’s 0.3% m/m contraction will further raise hopes that the economy will escape a recession this year. But the rise in GDP is not as good as it... 14th June 2023 · 4 mins read
Europe Data Response Sweden Consumer Prices (May) Headline inflation fell back into single digit territory in May, but the underlying rate came down a bit less than anticipated. This suggests there are upside risks to our forecast that the Riksbank... 14th June 2023 · 2 mins read
Capital Daily Sticky UK inflation is unlikely to keep Gilt yields higher forever The 10-year Gilt yield has continued to march higher on the back of recent data releases, outpacing the equivalent Treasury yield and putting upward pressure on the pound against the greenback. But we... 13th June 2023 · 6 mins read
Event UK Drop-In: The BoE's June meeting – Policy rates, mortgage rates and the macro outlook 1687442400 With inflation still running hot, the Bank of England has little choice to keep raising interest rates.
UK Housing Market Data Response Mortgage Lenders and Administrators Return (Q1 23) With mortgage rates surging, the number of loans issued to buy a home dropped sharply in Q1, with Buy-to-Let lending seeing the most severe drop. Those that did press ahead with a home purchase... 13th June 2023 · 2 mins read
Emerging Europe Economics Update Poland’s government spending spree looks unsustainable The Polish government’s ambitious plans to raise defence and social spending are unlikely to be achieved without pushing up the public debt-to-GDP ratio later this decade. Imminent risks to the... 13th June 2023 · 4 mins read
UK Data Response UK Labour Market (Apr./May 2023) The labour market became tighter in April and wage growth reaccelerated. That will only add to the pressure on the Bank of England to raise interest rates further at the policy meeting next Thursday... 13th June 2023 · 3 mins read
UK Economics Update How much scope is there for pre-election tax cuts? With less than a year and a half to go until the next general election, calls for the Chancellor, Jeremy Hunt, to cut a range of taxes have been growing. But recent economic developments mean the... 12th June 2023 · 4 mins read
Energy Update No need to panic about Europe’s gas supply … yet Having fallen steadily for much of the last year, European natural gas prices surged last week. The catalyst was constrained supply. Given seasonally high stocks and subdued demand, we are not worried... 12th June 2023 · 3 mins read
Europe Chart Pack Euro-zone recession to drag on The euro-zone has fallen into recession, albeit only by the finest of margins – the economy contracted by 0.1% q/q in both Q4 last year and Q1 this year. The consensus view is that the worst is now... 9th June 2023 · 10 mins read
Emerging Europe Economics Weekly Turkey’s shift to orthodoxy, CEE rate cuts on the horizon Optimism about a shift towards orthodox economic policymaking was at the heart of developments in Turkey this week amid the appointments of a new cabinet and central bank governor and a sharp fall in... 9th June 2023 · 5 mins read
