Fixed Income
Our Portfolio Allocation Summary for June 2026.
The collapse in FX volatility reinforces broader market optimism and repricing of tail risks, while cheap volatility pricing offers investors a good window of opportunity to add hedges. DM FX implied volatility has continued to drop precipitously despite…
Canada’s growth backdrop has weakened sharply. Q1 GDP fell 0.1% on a quarterly annualized basis, missing expectations for 1.5% growth, after Q4 was revised down to a 1% contraction. The drag is broadening. Business capital investment fell 0.7% q/q, its…
In Romania, large fiscal and current account deficits, high inflation, negative real rates, an overvalued exchange rate, and deteriorating growth point to budding currency devaluation. Investors should short the Romanian currency versus the euro and underweight Romanian local bonds, equities, and sovereign credit.
Bank Indonesia raised its policy rate by 50 bps to 5.25% last week, 25 bps above expectations, as a response to persistent rupiah weakness. The recent sell-off in the rupiah and local bonds was partly triggered by the finance minister's plan to spend an…
Go long German 10-year Bunds versus US 10-year Treasuries as US resilience diverges from euro area weakness. The trade is backed by a widening growth gap, with the US better insulated from rising oil prices and the euro area losing momentum. The US…
Markets become vulnerable when the wisdom of crowds gives way to the madness of crowds, creating exploitable opportunities for active managers. Our Chart Of The Week comes from Dhaval Joshi, Chief Counterpoint Strategist. Dhaval examines what makes markets…
Downgrade global and US portfolio duration from “above benchmark” to “at benchmark” as the risk of hawkish monetary policy surprises is rising.
The Iran war has made inflation the market’s main focus again, creating a backdrop where resilient data could hurt equities. Long-term inflation expectations remain anchored, but the near-term inflation path is still uncertain. Markets are still trying to…
Our EM strategists see divergence across frontier markets. They favor Kenyan, Kazakh, and Sri Lankan equities within frontier market portfolios. For sovereign credit, they recommend overweights in Kazakhstan and Sri Lanka, and an underweight in…