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Developed Countries

BoJ Maintains YCC: What Next For The Yen?

We remain bullish the yen, despite the BoJ maintaining yield curve control. In this report, we outline a few reasons for this stance.

Foreign Exchange Strategy by Chester Ntonifor
Eurozone Morale Improves Further In January
The ZEW survey of investor sentiment sent an upbeat signal about economic conditions in both Germany and the Eurozone in January. Most notably, the expectations subindices for both regions rebounded sharply to positive territory, from -23.6 to 16.7 in the…
Daily Insights
Empire State Manufacturing Index Plummets In January
The gauge of manufacturing activity in the state of New York sank a whopping 21.7 points to -32.9 in January, largely disappointing expectations of a marginal improvement to -8.6. Notably, new orders and shipments dropped by 27.5 and 27.7 points respectively,…
Daily Insights
Deteriorating Canadian Business And Consumer Sentiment In Q4
The Bank of Canada’s (BoC) Business Outlook Survey highlights weakening business sentiment in Q4. The overall index fell to 0.1 from 1.7 in Q3, below the average that has prevailed over the past decade. Notably, most firms surveyed cited rising interest rates…
Daily Insights
US Cyclicals Outperform Despite Weaker Macro Backdrop
US equity market dynamics are consistent with an improvement in risk-on sentiment in financial markets. US cyclical equities have outperformed defensives by nearly 7% since the beginning of July. However, this market action is inconsistent with the macro…
Daily Insights
US Junk Bonds Remain Unattractive
Speculative-grade US corporate bonds have been rallying alongside other risky financial assets recently. In particular, yields on US junk bonds have declined by roughly 160bps since early October and credit spreads have narrowed. Although continued signs…
Daily Insights
Europe’s Big Risk
BCA Research’s European Investment Strategy service concludes that the biggest threat hanging over European markets is the increasingly hawkish tone displayed by the ECB. The ECB is very worried about inflation, especially with core CPI bucking the trend…
Daily Insights
The Effect Of China's Reopening On US Equities

China's reopening is much more positive for the Chinese economy than it is for the rest of the world, as it will boost its domestic service sector activity and consumer spending much more than the industrial economy. A slowdown in Chinese industrial activity will put downward pressure on its demand for raw materials and energy, helping the world avoid another spike in inflation. Upgrade Macau casinos to overweight as the key beneficiaries of reopening. Off-shore TMT and bank shares face structural headwinds.

US Equity Strategy by Irene Tunkel
Assessing Inflation-Linked Bonds As Global Inflation Peaks

In this Strategy Insight, we assess the best and worst opportunities for inflation-linked bonds within the major developed markets. We see a case for underweighting inflation protection in the euro area, while overweighting Japanese inflation-linked bonds with the Bank of Japan moving away from yield curve control at a time of relatively high Japanese inflation.

Global Fixed Income Strategy
Tug-Of-War

In response to lower energy prices and China’s reopening, European assets prices are outperforming. Will the ECB spoil the party?

European Investment Strategy by Mathieu Savary

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