Developed Countries

The European bond market is pricing in a more optimistic outlook. The BTP-Bund spreads have narrowed 30bps since April 9 and are now within reach of their pre-Ukraine war level. BCA’s European strategists do not share this optimism, at least not in the…

Canadian Inflation: The Tree That Hides The Forest …

Weak April housing data and deteriorating builder sentiment reinforce our defensive stance, as recession risks remain underpriced. Housing starts rose at a 1.6% m/m annualized rate, missing expectations. Similarly, building permits, a leading indicator of…

A strong Australian labor market is limiting the scope for RBA easing, reinforcing our underweight on Australian government bonds. Our Chart Of The Week comes from Robert Timper, strategist in our Global Fixed Income Strategy team. The April NAB business…

Deteriorating US consumer sentiment and surging inflation expectations add to growth concerns and reinforce our long-duration bond stance. The preliminary May University of Michigan Consumer Sentiment Index missed expectations, falling to 50.8 from 52.2. The…

April retail sales slowed, but signs of resilience in discretionary spending and labor data suggest US consumers are holding up. Headline retail sales rose 0.1% m/m, above expectations but decelerating from the upwardly revised 1.7% March gain. Core sales…

The US-China trade truce lifted short-term manufacturing sentiment in May, but margin pressures persist, reinforcing the case for defensive, domestic-focused equity positioning. The Empire and Philly Fed regional manufacturing surveys delivered a split signal…

UK labor market weakness is reinforcing the case for BoE cuts and supporting our overweight in UK Gilts. April payrolls fell by 33k, marking a third consecutive monthly decline, while job vacancies remain below pre-COVID levels for the first time in nearly…

Expect broad-based dovish surprises from major central banks, and stay overweight UK and euro area government bonds. Our Global Fixed Income, European, and FX strategists published a joint update of BCA’s Central Bank Monitors. They expect the Bank of…

The stock-bond yield correlation is stabilizing after months of jitters, setting the stage for renewed Treasury demand as recession risks build. A negative correlation typically points to inflation concerns, while a positive one reflects growth optimism. In…