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Developed Countries

Has The Dollar Bottomed?

From a technical standpoint, the dollar is due for a bounce. In this report, we review various indicators to gauge the magnitude and duration of this rally. We also recommend two new trades: sell the gold/silver ratio at 90 and EUR/SEK at 11.30.

Foreign Exchange Strategy by Chester Ntonifor
US Economic Data: A Mixed Picture
US data released on Thursday provide a mixed picture of economic conditions. On the one hand, results from the PPI report, New York Fed’s Business Leaders Survey and jobless claims corroborate the signal from the latest CPI, retail sales, JOLTS, and…
Daily Insights
Strong US Retail Sales: A Curse In Disguise?
US retail sales delivered a positive signal about consumer demand in January. The 3.0% m/m increase – the largest since March 2021 – easily beat expectations of 2.0% m/m and marked a significant improvement from December’s 1.1% m/m decline. The retail…
Daily Insights
Manufacturing Indicators Improve In Early 2023
US manufacturing sector indicators corroborate the positive signal about the US economy from the January retail sales report (see The Numbers). Although industrial output was flat in January, a 9.9% m/m drop in utilities – reflecting an unseasonably warm…
Daily Insights
The Dollar Selloff May Have Reached An Extreme
After declining by 11% between late-September and February 1, the DXY index has since gained 2%. Notably, this improvement in the dollar’s performance coincides with positive US economic data surprises over the past two weeks. In particular, nonfarm payroll…
Daily Insights
Stocks Versus Bonds Not Yet Priced For Recession
Stocks have always underperformed bonds ahead of recessions, even during the inflationary 1970s. So, the current absence of underperformance of stocks versus bonds indicates that the markets are not yet priced for a recession. The main driver of stock…
Daily Insights
Euro Area IG Offers The Most Attractive “Spread Cushion”
According to BCA Research’s Global Fixed Income Strategy service, European investment grade corporates are the most attractive among corporate bond markets in the US and Europe. Last year’s rise in US and European corporate bond yields to more “attractive”…
Daily Insights
Don't Bet Against Disinflation

Core CPI rose sequentially in January compared to December, but we don’t see this as the beginning of a new trend. Disinflation is very much still in the cards for the US economy between now and the end of the year.

US Bond Strategy by Ryan Swift
Is There Any Value Left In US & European Corporates?

The backdrop for corporate bonds is turning more risky after the spread tightening seen over the past few months in the US and Europe. A tour of our favorite corporate spread valuation metrics on both sides of the Atlantic suggests a worsening cyclical risk/reward tradeoff for both investment grade and high-yield bonds, especially in the US.

Global Fixed Income Strategy
Too Hot
US headline CPI inflation eased slightly from 6.5% y/y to 6.4% y/y in January – above consensus estimates of a greater decline to 6.2% y/y. Similarly, core inflation’s moderation from 5.7% y/y to 5.6% y/y was a slight disappointment to expectations it would…
Daily Insights

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