The strength in China’s post-pandemic policy support likely peaked in October. Interbank rates have normalized to their pre-pandemic levels and bond yields have risen sharply since May. The renewed emphasis on financial de-risking is…
The dollar is tentatively sending a positive signal for the near-term outlook of cyclical assets around the world. At the end of the summer, we began to expect that the dollar would form a counter-trend rebound. Sentiment toward…
Highlights Inflation Breakeven Trades: We are taking profits on our recommended inflation breakeven widening trades in Italy and Canada, as breakevens in both countries are no longer below the fair values implied by our models. We are…
Mr. X and his daughter, Ms. X, are long-time BCA clients who visit our office toward the end of each year to discuss the economic and financial market outlook for the year ahead. This report is an edited transcript of our recent…
According to BCA Research's Geopolitical Strategy service, it is not too late to go long GBP-EUR. A near-term global risk-off move would work against this trade, but it is a strategic opportunity. The Brexit finale is…
Highlights President Trump’s final actions and the US fiscal impasse pose non-trivial risks to the rally. Biden’s foreign policy cabinet picks have limited impact but are mildly positive for now. Biden’s…
Among Central European (CE) currencies, BCA Research's Emerging Markets Strategy service remains upbeat on the Czech koruna (CZK) due to a relatively hawkish central bank. Meanwhile, the Hungarian forint and Polish zloty are…
On Monday, Paulo Guedes, Brazil’s economy minister, argued that the Brazilian real has likely overshot its equilibrium level of around USD-BRL = 5. The chart above highlights the divergence that has developed between the…
According to BCA Research's Foreign Exchange Strategy service, there is some evidence that the euro could gravitate to 1.50 over the next few years. The key assumption is that the equilibrium rate of interest will rise in…
Highlights There is some evidence that the euro could gravitate to 1.50 over the next few years. The key assumption is that the equilibrium rate of interest will rise in the euro area relative to that in the US. Our bias is that fair…