Fixed Income
Worsening manufacturing momentum supports a long duration stance as recession risks remain elevated. The June Philly Fed survey came in below expectations, unchanged at -4.0. While shipments increased, new orders decelerated and employment measures fell.…
A stronger Norwegian krone has opened the door to more rate cuts, making Norwegian government bonds more attractive. Our Chart Of The Week comes from Jeremie Peloso, European Strategist. With its surprise 25 basis point cut, the Norges Bank made its first…
Our Geopolitical strategists expect US involvement in Israel’s military campaign against Iran, raising near-term risks to oil supply and market stability. Iran is likely to retaliate by targeting regional oil production and transport infrastructure,…
UK disinflation and labor market softening support our overweight in Gilts and short GBP trade. UK CPI came in slightly hotter than expected in May, with headline inflation at 3.4% y/y (vs. 3.5% in April) and core CPI meeting expectations at 3.5%, down from…
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Fed Split On 2025 Cuts, But Cooling Data Supports Dovish Case
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In this note, we reaffirm our underweight position in JGBs and long yen positions given the BoJ’s meeting overnight.
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US Retail Worries
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ZEW expectations jumped in May, but underlying macro fragility supports a cautious stance on eurozone assets. The ZEW expectations index for the euro area rose to 35.3 from 11.6, with Germany also beating expectations. The current situation component improved…
Household data beat in May, but China’s macro story remains fragile, reinforcing our overweight in local government bonds. Traditional supply-side activity decelerated, with industrial production and fixed asset investment both weaker, while retail sales and…
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Consumer Sentiment Rebounds, But Fed Still Trapped by Sticky Expectations
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