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Currencies

Australia's Macro Environment Validates Long AUD Position
According to BCA Research’s Foreign Exchange Strategy service, Australia’s macroeconomic environment validates a long AUD position, especially at the crosses. The market expects that the RBA will cut interest rates soon, but that is not likely when we look…
Daily Insights
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Maintain Long AUD Trades

In this <i>Insight</i>, we revisit our long AUD trades, after the upgrade from our attractiveness ranking last week.

Foreign Exchange Strategy by Chester Ntonifor
Stay Long AUD/CAD
After briefly weakening in January, AUD/CAD has once again been moving higher over the past few weeks. Indeed, BCA’s Intermediate Term Technical Indicator is back to neutral from overbought territory, paving the way for this rebound. The question going…
Daily Insights
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The Joshi Rule Recession Indicator Stays Elevated, But Untriggered

The Joshi rule real-time US recession indicator remains at an elevated 0.154 versus its recession event horizon of 0.200, indicating weakening US labour demand. With the last mile of US disinflation requiring labour demand to ‘catch down’ with labour supply, investors should watch the Joshi rule very closely to pre-empt a potential tipping-point. Plus: tactically long Portugal versus Europe, and wheat versus cotton; and tactically short USD/CLP, Qualcomm (QCOM), and Salesforce (CRM).

Counterpoint by Dhaval Joshi
Will The Pound Continue Outperforming?
The British pound is the best performing G10 currency so far this year, gaining 0.7% vis-à-vis the US dollar. The outperformance of sterling over the past month coincides with an increase in Citigroup’s UK economic surprise index, both on an absolute basis as…
Daily Insights
Japan: Q4 GDP Expansion Raises Odds Of BoJ Hike
Japanese equities and government bonds sold off on Monday and the yen strengthened following the release of the revised Q4 GDP report showing the economy expanded by an annualized 0.4% q/q in Q4 2023 versus earlier estimates of a 0.4% contraction. A…
Daily Insights
FX Attractiveness Model Update: NOK, USD At The Top
As we discussed in a recent Insight, the krone is the top pick for our Foreign Exchange Strategy team. The krone upgrade is one of the most significant changes in our colleagues’ attractiveness ranking model. Norway has the perfect storm of sticky inflation,…
Daily Insights
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Where We Have Conviction

Presently, our four high-conviction themes are: (1) the US dollar will rally as US growth continues to outpace the rest of the world; (2) US equities will continue to outperform EM and European stocks until a major sell-off occurs; (3) a US profit margin squeeze is imminent; (4) EM domestic bonds and sovereign USD bonds are due for a setback.

Emerging Markets Strategy by Arthur Budaghyan
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Month-In-Review: Changes In The FX Attractiveness Ranking

This week, we review our currency positions, based on the latest data from G10 economies.

Foreign Exchange Strategy by Chester Ntonifor
Mexico: The Future Remains Bright
In the past couple of years, Mexico has been among the favorite markets for investors within the EM space. As our Emerging Markets Strategy team argued in a recent report, the cyclical and structural outlook for Mexican risk assets remains brighter than ever.…
Daily Insights

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