In our FX strategists’ models, the Norwegian krone is one of the cheapest currencies. On its own, valuation is usually not a sufficient catalyst to unlock value in any currency. That said, there are a few signs that the…
In this short weekly report, we review some of our favorite FX trades.
Global financial markets relapsed in May. After a relatively strong start to Q2, most of the major financial assets we track generated below average returns last month. A shift in investor expectations for the path of the Fed…
Symptoms of a liquidity trap for Chinese households are appearing. Our proprietary indicators for the marginal propensity to spend among households and enterprises continue falling. There has been a paradigm shift in Beijing’s…
Risk assets would perform well over 12 months only if inflation falls to 2% without triggering a recession. That would be unprecedented. We recommend investors stay defensive.
Expectations for oil demand growth through 2023-24 are way too optimistic. Until these expectations fall to -0.5-1 percent, the oil price has further downside. Plus: collapsed complexity confirms that AI is in a mania, while basic…
The Chinese currency has underperformed most of its emerging market peers so far this year, depreciating by 2.5% vis-à-vis the US dollar. RMB weakness is consistent with the signal from other Chinese risk assets including…
The rally in gold fizzled out in May. The price of the yellow metal dropped by 5.2% over the past few weeks following a 26% gain between late-September and early-May. Indeed, the forces that supported the late-2022/early-2023…
The Turkish lira hit a fresh record low on news that President Recep Tayyip Erdogan secured another five-year term following Sunday’s run-off election. Notably, despite an economic crisis (including headline CPI inflation…