The Politburo meeting in late July will set the course for economic policy for 2H23. We think China will only resort to "irrigation-style" stimulus if something breaks in the economy and/or financial markets. Furthermore, the gradual…
China’s CPI and PPI inflation updates indicate that deflationary pressures continue to dominate the domestic economy in June. Producer prices declined at a faster pace than in the prior month, falling by -5.4% y/y following…
Investors’ positioning in the USD is not homogenous: they are short some currencies but long others versus the greenback. Market commentators often refer to the US dollar. They implicitly mean the US currency is moving…
Latin American currencies are among the best performers in the FX space this year. The Colombian peso, Mexican peso, and Brazilian real occupy the top three spots among the major EM and DM currencies, up by 16%, 13%, and 7% vis-…
BCA Research’s Foreign Exchange Strategy service uses three simple rules when trading the dollar over a medium-term horizon (12-18 months). What could the macro outlook look like? What is happening to valuations? And where…
In this short weekly report, we review some of the most common questions clients asked us in the last few weeks.
On one hand, China will be exporting deflation to the rest of the world. On the other hand, core inflation is sticky in the US, making the Fed err on the hawkish side. Altogether, these crosscurrents are creating a toxic mix for risk…
The performance of financial markets continued to improve in June, with most of the major financial assets we track generating positive abnormal returns. The US equity rally – which had been narrowly concentrated among…
Recession is on track to start around year-end. Stocks usually peak shortly before recession begins. So, position defensively but be prepared for a few more months of the rally.
This report reviews our key calls for major currencies, in light of recent data releases.