Fiscal
The October 1 partial US government shutdown risks denting near-term GDP and sentiment but should present a buying opportunity if it triggers equity weakness. The US federal government partly shutdown on October 1 after the Republican-held Senate failed to…
President Trump said a partial federal government shutdown is "probably likely" late in the afternoon on September 30. Senators have until midnight to pass a continuing resolution already passed by the House that would keep the government operating until…
Will the US federal government shutdown on October 1? Congressional leaders are meeting with President Trump in the White House as we go to press. If eight Democratic senators do not vote with Republicans to pass a no-frills "continuing resolution" by…
Banxico cut rates to 7.5%, reinforcing our call to go long Mexican local bonds and overweight Mexico across EM portfolios. Inflation is within target, giving policymakers space to ease. Sound fiscal management and strong external accounts continue to support…
Our US Political Strategists give a one-third probability of a federal government shutdown before November. The odds could increase after that. But the market impacts are limited. The source of the disagreement is the enhanced subsidy for health care under…
Indonesia’s policy easing will boost domestic demand, but fuel inflation. Current account deficit will widen, and the rupiah will weaken. Stay short the rupiah and go underweight Indonesian stocks, domestic bonds, and sovereign credit in their respective EM portfolios.
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. Investors did not expect the…
In the Alpha report, we maintain our bullishness on the equity market. We are optimistic that the cash-fueled cycle will evolve into a leverage-driven one, with the AI capex cycle acting as the "bridge" between the two. Our view is easily falsifiable. If the 10-year yield starts moving against us, we will pull the plug on the cycle. One reason to fret is that tariff revenue has now become critical to the equity bull market. Without it, bonds could riot.
France’s renewed political turmoil highlights fiscal risks for OATs, but creates opportunities to buy French equities on dips. PM Bayrou has called a September 8 confidence vote over his deficit-cutting budget proposals, triggering a selloff in the…
July data confirm China’s weak growth, with no near-term shift toward meaningful stimulus. New home prices fell 0.31% m/m, retail sales slowed to 3.7% y/y from 4.8%, and industrial production eased. Flooding in July disrupted infrastructure spending…