The Czech National Bank surprised markets with a massive 125 basis point rate hike on Thursday – significantly above the anticipated 75 bp increase. The central bank’s sharp move – which follows a 75 bp hike in…
BCA Research’s Global Fixed Income Strategy service downgraded strategic (6-18 months) exposure to inflation-linked bonds (vs nominals) to underweight in Germany, France, and Italy. The surge in global inflation this…
Over the past couple of weeks, global sovereign bond markets and currencies have been sending conflicting signals. Bond markets have brought forward their rate hike expectations. Two rate hikes are now expected by mid-2022 in…
Highlights Duration & Country Allocation: Global bond yields have been driven by growth and inflation expectations over the past year, but shifting policy expectations are now the more important driver. Tighter monetary policies…
BCA Research’s US Bond Strategy service recommends investors shift out of 2/10 flatteners and into steepeners. The 2/5/10 butterfly spread has risen a lot during the past few weeks and it now looks extremely high, both…
Highlights Chart 1Buy The 2-Year, Sell The 10-Year Treasury yields have been volatile of late, but the biggest move has been a flattening of the yield curve led by a sell-off at the front-end. Our recommended yield curve…
The markets were deluged by a lot of information in late October. Several central banks made surprise moves towards tightening (the Bank of Canada, for example, ended asset purchases, and the Reserve Bank of Australia…
Highlights The market pricing of the ECB is too aggressive. More so than in the US, temporary factors explain the European inflation surge. Energy, taxes, and base effects account for the bulk of the price increases. In contrast to…
Highlights The circumstances of the pandemic improved in October, but data highlighting the economic consequences of the Delta wave grew more severe. US economic activity slowed meaningfully in the third quarter, driven by lower car…
The ECB stuck to a dovish tone on Thursday and pushed back slightly against expectations that inflationary pressures will force the central bank to tighten next year. Instead, the central bank announced it would continue its…