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Currencies

The BoJ’s Dovish Pause
The Bank of Japan kept its policy rate unchanged at 0.25% in September and signaled it was in no rush to lift rates further. This move follows two hikes this year, one of them unanticipated.   The signaling is consistent with dovish comments in August…
Daily Insights
Japanese Banks Face Crosscurrents
The Bank of Japan’s policy normalization has been accompanied by exceptional outperformance by Japanese banks. Japanese banks have outperformed both the country’s broader market as well as the MSCI ACW Banks index by 10.3% and 2.6%, respectively, so far this…
Daily Insights
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Japan: Escape Velocity Is At A Higher Altitude
Special Report

In this report, we argue that the Bank of Japan is unlikely to hike interest rates this week, but the relative trajectory of bond yields in Japan is higher. This warrants an underweight position in JGBs and a leveraged bet on a higher yen. The positioning for equity investors is murkier, as progress on corporate reforms is necessary for a rerating in Japanese shares. That is not yet very clear. The bottom line is: Stay long the yen.

Foreign Exchange Strategy, Global Fixed Income Strategy, Global Investment Strategy by Melanie Kermadjian, Chester Ntonifor
Hotter August UK CPI Doesn’t Impact BoE Meeting Outcome
UK headline CPI grew at a stable 2.2% y/y in August, though the core measure accelerated from 3.3% to 3.6%, in line with expectations. An 11.6% annual increase in airfare largely drove core CPI higher, while offsetting contributions from food and alcohol led…
Daily Insights
US Equities: A Port In The Coming Storm
Despite the recent correction, US equity leadership remains intact. The MSCI US index has outperformed global markets by 3.8% in 2024YTD. A 7.8% expansion in forward earnings drove the MSCI US index’ 2024YTD gains which was higher than the increases in…
Daily Insights
Growth And Inflation Backdrops Warrant Overweighting Canadian Bonds
Canadian headline CPI inflation decelerated at a faster-than-anticipated pace from 2.5% y/y to 2.0% in August, the slowest since 2021. Notably, core median and trimmed-mean CPI ticked 0.1 ppt and 0.3 ppt lower to 2.3% and 2.4%, respectively. Lower oil…
Daily Insights
Building A Portfolio: Bitcoin Vs. "Boringcoin"
According to BCA Research’s Global Asset Allocation Strategy service, a common objection to buying Bitcoin raised by traditional investors is that it is too volatile. In the past it has been argued that this is irrelevant, however, this also turns out to be…
Daily Insights
Markets Price Increased Odds Of 50 Bps
We noted earlier this month that the Fed would be unlikely to deliver a jumbo rate cut without telegraphing it first. President Williams' and Governor Waller’s September 6 speeches offered policymakers one last chance to do so before the customary pre-FOMC…
Daily Insights
The Fed’s Upcoming Rate Cut And The RMB
According to BCA Research’s China Investment Strategy service, the Fed’s upcoming rate cut will temporarily alleviate some of the downward pressure on the RMB, but beyond the short term the USD will likely rebound in anticipation of a global slowdown. The…
Daily Insights
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Heed Warnings From Market Undercurrents

The undercurrents of global financial markets signal deteriorating global growth conditions. There is little cash on the sidelines in the US, the Euro Area, and Japan. If the budding bear market resembles the 2000-2003 one, EM stock prices are unlikely to outperform global equities in the initial leg but could outperform in the latter stage of the global selloff.

Emerging Markets Strategy by Arthur Budaghyan

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