Highlights The enormous size of US stimulus and overflow of liquidity is creating a thrill akin to riding a tiger. Remarkably, this kind of jubilation is very similar to what EM experienced in 2009-10. That was followed by a lost…
Highlights Pandemic uncertainty is keeping the USD well bid by raising global economic policy uncertainty. When this breaks – i.e., as higher vaccination rates push contagion rates down – the USD will resume its bear market…
Highlights Biden’s initial political capital is moderate-to-strong according to our Political Capital Matrix. He will pass his American Rescue Plan and one or two budget reconciliation bills over the next 18 months. Investors…
Highlights A positive backdrop still supports a cyclical bull market in Chinese stocks, but the upside in prices could be quickly exhausted. Investors may be overlooking emerging negative signs in China’s onshore equity market.…
Cyclical equities have recently underperformed defensive ones, a development we expected. However, it is too early to determine whether this move represents anything more than noise. To make this judgment, we must evaluate…
Highlights Global Yields: The fall in global bond yields over the past two weeks represents a corrective pullback from an overly rapid rise in inflation expectations, especially in the US. The underlying reflationary themes that drove…
Yesterday, we highlighted the tactical vulnerability of risk assets, stocks in particular. While the near-term risks to stocks are considerable, the work of investors is made considerably more complex by the fact that equities…
Highlights Pandemic uncertainty and global economic policy uncertainty likely will rebound with increasing COVID-19 infection, hospitalization and death rates, which will keep the USD well bid as a safe haven, and continue to stymie…
Recent data from Asia’s manufacturing powerhouses reveal a surge in exports, suggesting that the global manufacturing recovery is alive and well, despite the current soft patch. Japanese exports rebounded to 2.0% y/y in…