Currencies
Global growth will weaken in the coming months, yet monetary authorities worldwide will be reluctant to ease policy. This state of affairs foreshadows a clash between markets and policymakers in the months ahead. China’s recovery is losing steam. The latest divergence between Emerging Asian and LATAM currencies will not last.
The change in the BoE’s tone has likely altered the path for sterling. In this report, we explore if the BoE’s lens for monetary policy is justified, and provide some targets for the pound.
Erdogan will most likely lose the Turkish election but it could go onto a second round. A strong opposition majority in the assembly would justify a tactical overweight in Turkish equities on a relative basis. For now, go long Turkish equity volatility.
The change in the BoE’s tone has likely altered the path for sterling. In this report, we explore if the BoE’s lens for monetary policy is justified, and provide some targets for the pound.
There is a 50:50 chance of experiencing a major deflationary shock in the next two years, and an even greater likelihood on a longer timeframe. The good news is that several assets provide a good insurance against this risk, and that this insurance is now cheap. Plus we highlight a compelling commodity pair-trade.
