Capital Flows

Barring a dramatic further de-escalation of the trade war, the US and much of the rest of the world will enter a recession over the next few months. Investors should remain defensively positioned for now.

In lieu of all the geopolitical and economic news in media, this report looks at where next the dollar is likely to trend in the next one-to-three months. Our view is down, though on a cyclical horizon (six-to-twelve months), we would not be short the dollar, for now. 

Investors have given up on European assets, which now suffer exceptional discounts to US ones. However, tighter US fiscal policy, the end of Europe’s austerity and deleveraging, the LNG Tsunami about to hit European shores, and the global capex fueled by the Impossible Geopolitical Trinity mean that Europe’s time to shine will soon come back.

Investors have given up on European assets, which now suffer exceptional discounts to US ones. However, tighter US fiscal policy, the end of Europe’s austerity and deleveraging, the LNG Tsunami about to hit European shores, and the global capex fueled by the Impossible Geopolitical Trinity mean that Europe’s time to shine will soon come back.

In this report, we gauge the reasons behind the persistently weak Norwegian krone, despite what appears to be benign domestic economic conditions.

As Trump’s victory odds rise, the underperformance of European equities deepens. How negative would a global trade war be for European assets?