European equities are not cheap; European currencies are. The central bank's own currency valuation indicator admits that the trade-weighted euro is 10 percent undervalued. Hence, investors seeking alpha should focus on…
The yen constitutes an attractive insurance asset in portfolios with a pro-risk bias. In recent months, there has been the +130-basis-point move in favor of Japanese yields. The gap between the USD/JPY and real rates has…
Highlights Most central banks still consider economic risks asymmetrical to the downside. This means that even if global growth rebounds in earnest, policy is likely to stay pat over the next three to six months. The conclusion is…
As tensions from the US-China trade war abate, investors are starting to refocus on economic fundamentals. This year, Chinese policymakers will maintain their tight grip on local government spending and bank lending, and will…
Highlights The bank credit 6-month impulse is likely to drop sharply in Europe, drop modestly in the US, but remain positive in China. Hence, the momentum of first-half economic data is likely to be worse in Europe than in China…
Highlights The recently signed Phase One deal is positive for China and global equity markets as it brings a temporary truce to the trade war. However, China is unlikely to change its current policy trajectory to create additional…
Over the longer term, the Australian dollar will outperform its commodity-currency counterparts. This bullish view is predicated on three key developments: Commodity Prices: As the market becomes more liberalized and long-term…
Highlights We expect both the Australian dollar and Chinese RMB to move higher in the coming months. A key catalyst is broad-based weakness in the US dollar. The composition of goods benefiting from the US-China Phase I deal are a…
Rising oil prices will go a long way towards improving Canada’s and Norway’s trade balances. In the case of Norway, net trade fell in 2019 due to lower exports of oil and natural gas, but still stands at 5.1% of GDP.…