For more than two decades, the Australian dollar has been mostly driven by external conditions, especially the commodity cycle. But for the first time in several years, domestic factors have joined in to exert powerful downward…
Highlights Currency markets continue to fight a tug of war between weak incoming data but easier financial conditions. Our thesis remains that the path of least resistance for the dollar is down, but the rising specter of global…
Dynamics in EM exchange rates typically define the trajectory for all major EM asset classes: stocks, credit spreads and local currency bonds. Odds are that the RMB along with other emerging Asian currencies will continue to…
U.S. import prices from various Asian countries are deflating. This typically warrants currency depreciation to mitigate the impact of export price deflation on national producers. Furthermore, emerging Asian exports are still…
Analysis on central Europe and Pakistan is published below. Highlights There are several reasons why Chinese authorities will likely allow the yuan to depreciate 6-8% from current levels in the coming months. RMB depreciation will…
Highlights In the second half of 2019, economic growth will stop accelerating… …but an underpinning of equity valuations will limit sell-off magnitudes to around 10 percent or so, rather than deeper sustained plunges.…
Switzerland ticks off all the characteristics of a safe-haven currency. Its large net international investment position of 125% of GDP generates huge income inflows. Meanwhile, rising productivity over the years has led to a…
Highlights The rising spectre of global market volatility has reignited interest in the Swiss franc. In the current geopolitical game of brinksmanship between the U.S. and China, the risk of miscalculation is high, suggesting it pays…
Feature In what has become a tradition, I met with Ms. Mea following client meetings in Europe last week. Ms. Mea is a long-term BCA client who has been following our Emerging Markets Strategy very closely over the years. It was our…
While we remain bullish on global equities and other risk assets over 12 months, we went tactically short the S&P 500 last Friday following the market’s complacent reaction to the Trump Administration’s further tariffs increases…