According to BCA Research's China Investment Strategy service, at least a good portion of the recent capital outflows out of China likely occurred due to an effort by Chinese policymakers to slow the pace of the RMB’s…
Highlights In the first nine months of 2020, China's capital outflows, measured by the Balance of Payments (BoP) data, have been the largest since 2016. Unlike 2016, the outflows are mainly driven by a strategic accumulation of…
Highlights COVID-19: Markets are trading off the longer-term positive news on COVID-19 vaccines, rather than the shorter-term negative news of surging numbers of new virus cases in Europe and North America. This will continue as long…
Highlights The DXY is still overvalued by 13%, despite the 10% drop since March. The Scandinavian currencies remain very cheap. The Japanese yen should be a core holding in every currency portfolio. It is cheap relative to the US…
Highlights The vaccine promises an eventual return to “normal” life – just as Americans voted to “return to normalcy.” Markets are cheering and hinting at an eventual rotation into value stocks. The…
Highlights US inflation expectations will moderate, and US real yields will rise. This will support the US dollar. The potential rebound in the US dollar will cap any upside in EM ex-TMT stocks. Rising US real yields are a risk to…
Since late-March, the MSCI Emerging Markets Currency Index has rallied nearly 10%, and has recently risen above its pre-pandemic peak. This has caught the attention of some investors, who often interpret aggregate EM currency…
This past weekend was an eventful one in Turkey. President Recep Tayyip Erdogan fired central bank governor Murat Uysal on Saturday, replacing him with former finance minister and trusted ally Naci Agbal. The following day,…
According to BCA Research's Foreign Exchange Strategy service, currency markets also continue to ignore the risks of a no-deal Brexit and the significant acceleration in the pace of COVID-19 infections. The Bank of England…
Highlights Biden’s chances of winning the US election are rising, but it is still unsettled and could bring negative surprises to financial markets. The fiscal cliff will not subside immediately as the Senate Republicans have…