The ECB left policy unchanged in September, reiterating a data-dependent stance and signaling no urgency to ease. Markets barely reacted, consistent with a fully discounted decision. The Governing Council appears confident in a soft…
August US CPI was in line with expectations, reinforcing the case for Fed easing and a long-duration stance. Headline CPI rose 0.4% m/m (2.9% y/y), while core held at 0.3% m/m (3.1% y/y). Core goods inflation ticked up to 1.5% y/y…
High US inflation is being driven by tariffs, not domestic inflationary pressure. This argues for Fed easing and a bull-steepening of the Treasury curve.
China’s August inflation data confirm entrenched deflation, reinforcing our overweight in onshore bonds and a tactical long in onshore small- and mid-caps versus large caps ahead of potential stimulus. Producer prices declined 2…
August PPI inflation cooled, reinforcing the case for Fed easing and long duration with steepeners. Headline PPI fell 0.1% m/m, bringing the annual rate down to 2.6% after July’s 0.7% gain. Core PPI (ex-food, energy, and trade)…
European sentiment continues to weaken, reinforcing the tactical case for US outperformance over Europe. The September Sentix Investor Confidence index fell to -9.2 from -3.7, defying expectations for an increase and signaling that…
Core Europe’s industrial sector will relapse in the coming months due to US tariffs and a strong euro. Investors can play the imminent deflationary shock by being long Central European bonds. They should, however, hedge the…
USD-denominated Emerging Market bonds have been outperforming US corporates for the past year. We don’t think the rally is exhausted yet.
The August NFIB survey shows a fragile US economy with disinflationary signals and weak employment, supporting our defensive stance. The Small Business Optimism Index rose to 100.8 from 100.3, a six-month high, though still below…
Despite the post-election selloff, investors should continue buying Argentine assets on weakness. Argentine markets sold off sharply after President Milei’s party suffered a crushing defeat in Sunday’s Buenos Aires election.…