Europe
The cyclical outlook is gloomy for EUR/USD. We subscribe to neither the soft-landing nor the no-landing view and expect a recession to occur in late 2024/early 2025. The pro-cyclical euro would suffer in a global downturn while a recession would support the…
According to BCA Research’s European Investment Strategy service, US and Euro Area growth will likely converge in the next 12 months. Fiscal policy differences were the most visible headwind to Eurozone growth last year. The IMF estimates that the…
Central banks are in a dilemma whether to prioritize supporting growth or bringing inflation back to target. This is unlikely to end well. Investors should be defensively positioned.
Euro area inflation and GDP numbers were released on Tuesday. The preliminary harmonized core consumer price index came in at 0.7% on a month-on-month basis, a decrease from 1.1% in March. The preliminary year-on-year core CPI also decreased, clocking in at…
In its latest report, BCA Research’s Global Fixed Income Strategy service introduces the latest addition in its framework for investing in global inflation-linked bonds (ILB). To apply the Euro Inflation-Linked Golden Rule, investors should follow these…
A few preliminary measures of German inflation for April were released on Monday. The month-on-month headline inflation measure came in at 0.5% an increase from last month’s reading of 0.4% but below expectations of 0.6%. Meanwhile the year-on-year version…
EUR/USD has fallen by almost 5% since July last year. There are fundamental reasons why this move has taken place. The US economy has shown significant more resilience than the European one. Consumption continues to be strong, and GDP is still growing at a…
Investors anticipate a record growth gap between the US and the Eurozone in 2024. Does this skewed expectation create market opportunities?
In this Special Report, we introduce our Euro Inflation-Linked Golden Rule – a framework to profitably trade and invest in Euro Area inflation-linked bonds versus nominals. The Rule is currently signaling that nominal government bonds should outperform inflation-linked bonds over the next year as disinflation in the Euro Area continues.
According to BCA Research’s Global Fixed Income Strategy service, a hard landing is the only way to solve the UK inflation problem. Sticky inflation and lingering inflation pressures have made the BoE’s job much more challenging. The UK economy weakened in…