In the Mundell-Fleming model, tight fiscal policy often leads to a lower exchange rate because it causes monetary authorities to maintain more accommodative monetary conditions than would have been the case absent any budget…
BCA Research's Foreign Exchange Strategy service estimates that while the evolution of the pandemic will have some near-term impact on currencies, the biggest driver of FX returns remain fiscal policy. As we approach the…
Highlights Three tail risks will continue to dominate the FX market narrative in the coming weeks: The upcoming November elections, Brexit, and the new wave of COVID-19 infections. As such, markets remain vulnerable in the near term…
In recent weeks, we have repeatedly warned that since March, the dollar had fallen too quickly and risked staging a countertrend bounce. As a corollary, the euro was expected to undergo a temporary correction that could see it…
BCA Research is positive on equities on a cyclical basis. However, the easiest part of the rally is behind us and while stocks will climb over the next 12 to 18 months, violent episodes of correction will punctuate this rise.…
Highlights Near-Term Uncertainties: Investors have grown a bit more nervous in recent weeks, amid signs of a second wave of the coronavirus in Europe and with the contentious US presidential election only five weeks away. The pro-…
Dear Client, We are sending you our Quarterly Strategy Outlook today, where we outline our thoughts on the macro landscape and the direction of financial markets for the rest of the year and beyond. We will also be hosting a webcast…
According to BCA Research's Foreign Exchange Strategy service, the ebbing of the reflation trades remain the dominant force affecting global markets, and the FX space in particular. The equity market downdraft this past March…
Highlights Most sentiment and technical indicators suggest the dollar is undergoing a countertrend bounce rather than entering a new bull market. However, the internal dynamics of financial markets remain short-term constructive for…
Highlights While we are bearish on the US dollar in the long run, the greenback is primed for a rebound in the near term. Consistently, commodities prices will relapse and EM currencies will depreciate versus the US dollar. Global…