Highlights Recommended Allocation The global economy will continue to grow at an above-trend rate over the next 12 months and central banks will remove accommodation only slowly.But the second year of a bull market is often…
Inflationary pressures are likely to keep the Bank of Canada at least as hawkish - if not more hawkish - than the Fed. Headline CPI accelerated to a 18-year high of 4.1% y/y in August. The diffusion index's extremely…
Highlights Canada has been a G10 leader in innoculating its population. This should allow economic activity to resume, boosting the CAD/USD. A cresting in COVID-19 infections should permit the Bank of Canada to reintroduce a hawkish…
Highlights Geopolitical risk is trickling back into financial markets. China’s fiscal-and-credit impulse collapsed again. The Global Economic Policy Uncertainty Index is ticking back up after the sharp drop from 2020. All of our…
Highlights The US is only one deflationary shock away from a European level of bond yields. On a multi-year horizon, a deflationary shock is a near-certainty. The shock will be deflationary, because even if it starts inflationary, it…
Highlights There are tentative signs that US growth outperformance is ebbing. The recovery in the manufacturing sector abroad is already taking leadership from the US. This trend will soon rotate to the service sector. As such, long-…
Dear client, Next week, in lieu of our weekly report, I will be hosting a webcast on Thursday, March 25 at 10:00 am EDT and Friday March 26 at 9:00 am HKT. I look forward to your comments and questions during the webcast. Best regards…
Highlights A rise in global bond yields has rarely been a reliable precursor of a stronger dollar. This is because the dollar reacts to interest-rate differentials, rather than the level of global yields. Changes in the dollar…
Highlights The Canadian economy is usually a high-beta play on global growth. However, given the stop-and-go pattern of the pandemic, Canada might lag the global recovery for now. The Bank of Canada’s (BoC) stance will be to…