Highlights Oil prices are up strongly from their lows, but conditions for a durable bottom may not yet be in place. The main hiccup is that an air pocket will likely remain under global oil demand until most social-distancing measures…
Highlights Please note that we are publishing an analysis on Vietnam below. The unprecedented depth of this recession entails that many businesses will likely be operating below their break-evens for a while, even after the…
The Japanese economy is in freefall. Yesterday’s release of the Economy Watchers survey confirmed that Japan is likely to suffer a shock comparable to the Great Financial Crisis, as both the Current Conditions and the…
The US dollar is increasingly vulnerable to a sharp pullback. Among 20 currencies, spanning both the DM and EM spaces, 17 are more than one-sigma oversold on a 13-week rate-of-change basis. Such a violent and broad-based dollar…
The chart above presents the March monthly returns of a variety of important financial assets, shown as the number of standard deviations from the average that has prevailed since the end of the Great Recession in 2009. Several…
Last Friday, BCA Research's Foreign Exchange Strategy service concluded that the Fed’s actions have been insufficient to quench the global thirst for dollar liquidity. There are three reasons for this: First, the Fed has…
Highlights The Federal Reserve’s temporary FIMA repo facility will go a long way in helping ease dollar-funding stress outside the US. However, with the duration of the lockdown highly uncertain, a liquidity crisis could…
Highlights Extreme global economic uncertainty has pushed demand for USD higher, and forced investors to liquidate gold holdings to raise cash for margin calls and to provide precautionary balances. Gold endured a succession of down…
Highlights Recommended Allocation The outlook for markets over the next few months is highly uncertain. On the optimistic side, new COVID-19 cases are probably close to peaking (for now), and so equities could continue to…
The Australian dollar has been trading below the lows seen during the Great Financial Crisis in recent days. Having touched an intra-day low of 55 cents, the latest selloff represents a peak-to-trough decline of around 50%. We…