The four key factors that suggest the Swiss economy needs a weaker currency, especially versus the euro are: The Swiss trade balance has held up well in the face of the global slowdown, but this has been largely driven by…
Highlights The slowdown in the U.S. manufacturing sector is at risk of becoming deeper than elsewhere. This is not bearish for the U.S. dollar, given that it is a countercyclical currency, but it is not a constructive development,…
Highlights MARKET FORECASTS Investment Strategy: Markets have entered a “show me” phase. Better economic data and meaningful progress on the trade negotiations will be necessary for stocks to move sustainably…
Analysis on Chile is available below. Highlights Major equity leadership rotations normally occur around bear markets or corrections. Hence, a major broad selloff will likely be a precondition for EM, commodities, global cyclicals…
Highlights Chinese economic activity is declining at a slower pace, but has not yet bottomed. The September PMIs surprised to the upside, suggesting that activity improved last month. Still, PMIs can provide false signals (as they did…
Highlights The global manufacturing cycle is likely to bottom soon, and consumption and services remain robust. The risk of recession over the next 12 months is low. This suggests that equities will continue to outperform bonds. But…
Sometimes, the best ideas are the simplest ones. The Norges bank is the most hawkish G-10 central bank, while the European Central Bank restarted QE at its latest meeting. This is a powerful catalyst for a short EUR/NOK trade. The…
The ECB’s tiering of reserves might prevent euro zone banks from teetering over the edge, but unless the manufacturing recession ends soon and firms start to borrow to invest, banks will continue to have a demand problem.…
Highlights The world remains mired in a manufacturing recession. As such, it is still too early to put on fresh pro-cyclical trades. Focus on the crosses rather than outright U.S. dollar bets. Two new trade ideas: sell EUR/NOK and…
Highlights U.S. growth will soon rebound thanks to robust drivers of domestic activity, and strengthening money and credit trends. The U.S. Federal Reserve will maintain an easing bias and will expand its balance sheet again. A…