BCA’s Global Asset Allocation strategists find that international diversification outperforms home bias in both bonds and equities, especially when FX risk is hedged. Unhedged foreign bonds have consistently underperformed domestic…
Our DM ex-US strategists see EUR/USD in a multi-year bull market and recommend selling EUR/JPY at 172.5. The euro’s 2025 rally has been driven first by improving Eurozone growth expectations, then by mounting concerns over the US…
In this chartbook, we look at the balance of payments across DM and EM countries. The US does not fare well, but neither do a few other countries.
The RBA’s surprise hold reinforces a slower easing path, warranting an underweight on Australian bonds. Markets had priced in a 25 bps cut, but the central bank opted to keep rates at 3.85%. Governor Bullock characterized the…
Japan’s improving growth momentum and structural inflation shift support an underweight in JGBs and long JPY positioning. The June Eco Watchers Survey was broadly in line with expectations, with current conditions ticking up to 45.0…
Stronger-than-expected June inflation will likely keep the Riksbank on hold in August, despite soft underlying trends. Headline inflation accelerated more than expected to 0.5% m/m (0.8% y/y), while CPI ex-housing rose to 2.9% y/y…
The dollar is breaking down, as capital leaves the US. The important question investors must answer is how much downside is left for the greenback, and whether depreciation will continue in a straight line over the coming months or pause (…
Alligator Bite #1: As US net portfolio inflows decline (the alligator's upper jaw closes), its current account deficit must narrow (the lower jaw will also shut). Alligator Bite #2: As the US current account deficit shrinks (the…
Downward pressure on the pound will rise in the coming months. Inflation will go up, so will bond yields. It’s time to book profits on Egyptian domestic bonds.