Fixed Income
Downward pressure on the pound will rise in the coming months. Inflation will go up, so will bond yields. It’s time to book profits on Egyptian domestic bonds.
Trump’s immigration policies are protecting the US economy from a sharp rise in unemployment but steering it into a ‘mini stagflation’. Plus: a new tactical trade is to underweight global technology (IXN).
Banxico’s dovish stance reinforces our bullish view on Mexican local currency debt. The Mexican central bank cut interest rates by another 50 basis points to 8%. The central bank will continue easing monetary policy well into next year. Slower US…
Regional Fed surveys confirm sluggish US manufacturing and tame inflation, supporting long duration positioning outside the US. The June Dallas Fed Manufacturing survey missed expectations, rising to -12.7 from -15.3, still deep in contraction. New orders…
Pay Attention To Swap Spreads
Pay…
The Treasury/OIS spread has exerted notable upward pressure on Treasury yields during the past year, but the factors driving the spread are now turning more favorable.
Investors should modestly underweight equities in their portfolios and look to turn more aggressively defensive once the whites of the recession’s eyes are visible. We think that will happen within the next few months.
A dovish early Fed nominee would increase volatility in rates and FX as markets reassess the credibility of US monetary policy. News reports indicate the Trump administration is considering nominating a Fed successor ahead of the end of Chairman Powell’s…
Our Global Fixed Income, FX, and European strategists expect aggressive BoE easing amid disinflation and labor market weakness, supporting an overweight in Gilts and UK equities versus the euro area. While UK productivity remains sluggish, a recovery in labor…
Fed Governor Pivots Raise Risk of July Cut, But Focus On Labor
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