- Change to YCC in Japan, with new effective yield cap of +1.0% on 10-year JGB. JGB yields jumped, but there is a long way to go. Indeed, the yen has been weakening since the announcement on Friday, as real yields climb globally. BoJ may have to be more forceful in future YCC changes to prevent yen from sliding further. Dollar hedging costs for Japanese investors remain elevated (pages 16-18; page 29)
- US real yields look poised to take out the early July highs (pages 7-8)
- Breakeven inflation rates in the US are edging higher: WTI crude prices rose 15.6% in July. The GSCI climbed 10.7% last month on the back of these higher energy prices. Industrial metals also turning up, gaining 6.3% (page 5; page 33; page 35)
- Energy stocks (+7.3%) led the S&P 500 (+3.1%) higher in July. This brings the YTD rise in the S&P 500 to 19.5%. The rally this year has broadened, with the equal-weighted index also up 9.5% YTD. Philly Sox index climbs to highest since January 17th 2022. Tech sector not far from recovering all its losses from 2022 – should see a warmer environment for IPOs as shares of newly publicly-listed companies rally (pages 42-52)
- Private credit, leveraged loans, high-yield bonds, show no signs of stress (page 14)
- Credit spreads continue to narrow: tighter bank lending standards having little impact here (page 15)
- New highs for TOPIX, up 22.9% YTD, but still trailing the S&P 500 when converted into USD (+14.2% YTD). Stoxx up 14.6% in USD terms (page 40)
- Major concerns over China persist: CGB yields continue to drift lower (page 53)
To download a pdf of this chartbook, click here
