Developed Countries
According to BCA Research’s US Political Strategy service, Republicans are more likely to win the Senate than the White House – and more likely to win either of these than the House. But Republicans are favored in both Senate and House if they win the White…
US Treasury yields bounced after this morning’s employment report. We offer our updated views about how long the recent trading range will hold.
Republicans are favored in the House and Senate even if they do not win the White House. A Democratic sweep is a 20% risk. The policy implication would be inflationary, but not so much as under a Republican sweep. Election uncertainty should increasingly weigh on cyclical and high-beta assets in the second half of 2024.
After holding rates steady over the past nine months, the ECB delivered on its widely expected rate cut on Thursday. The Governing Council lowered all three key ECB interest rates by 25 bps, bringing the refinancing, marginal lending facility and deposit…
The ISM Services PMI largely surpassed expectations in May. The headline index grew by 4.4 ppt to 53.8, returning to expansion following April’s one-month contraction. Double-digit jumps in new export orders (13.9 ppt) and business activity (+10.3 ppts) drove…
The Bank of Canada reduced its policy rate by 25 basis points from 5% to 4.75% on Wednesday, in line with the market consensus. Headline inflation and the BoC’s preferred measures of core inflation are within the BoC’s target range of 1-3%, and shorter-term…
Utilities have had a stellar run since February with the MSCI ACW Utilities index outperforming the MSCI ACW by nearly nine percentage points. Despite being a defensive sector, Utilities’ performance this year has been comparable to that of top performing…
According to BCA Research’s US Bond Strategy service, Mortgage-Backed Securities are currently priced below fair value. Mortgage-Backed Securities outperformed the duration-equivalent Treasury index by 49 basis points in May, bringing year-to-date excess…
The long-term winners from the generative-AI gold rush are unlikely to be the ‘picks and shovels’ stock Nvidia or the overvalued US superstars of Web 2.0. We discuss the structural investment implications. Plus: time to go tactically overweight global consumer discretionary (RXI).
Corporate and junk bonds are the fixed-income sectors that are most exposed to an economic downturn. We’ve highlighted that markets continue to price in a Goldilocks scenario, with spreads narrowing despite ongoing deterioration in the labor market. Spreads…