Currencies

European stocks have massively underperformed US ones since the GFC. Demographics and productivity say this trend will continue, but is that really so?

The US economy is in the “Overheating” phase, so stronger growth brings higher inflation. Tight monetary policy means recession is still likely over the next 12 months. Stay defensive.

In this report, we gauge the outlook for the dollar given client visits in Africa.

MacroQuant sees significant downside risks to stocks over a 1-to-3 month horizon and suggests increasing allocation to long-term bonds. The model favours defensive equity sectors but is also hedging its bets by overweighting materials.

In this Insight, we revisit our "higher for longer" theme for the Reserve Bank of New Zealand, in light of the latest central bank meeting. In conclusion, we are inching towards a more dovish RBNZ ahead. Ergo, we recommend some fixed income and currency trades.

The economic schism in the world economy, between the non-US developed economy in recession and the US in strong growth, is unprecedented during our lifetimes. Now the schism will continue in reverse, as the non-US developed economy rebounds while the US fades. There are important implications for rates, the dollar, and sector and regional equity allocation which we discuss. Plus: base metals are a tactical short.