Highlights The Biden administration’s budget reconciliation bill will close the output gap, so markets will have to start thinking about upcoming tax hikes, rising wages, and eventual Fed interest rate hikes. Biden’s lax…
After bottoming in early August, US 10-year Treasury yields have risen steadily, just shy of the 1.2 mark. Do higher yields create a risk for equities? The dividend discount model provides some insight. The dividend yield can…
Dear client, On behalf of the China Investment Strategy team, I would like to wish you a very happy, healthy, and prosperous Chinese New Year of the Ox (Bull)! Gong Xi Fa Chai, Jing Sima, China Strategist Highlights A…
According to BCA Research’s US Bond Strategy service, the Ba credit tier still offers the most attractive risk-adjusted returns within corporate bonds. The difference between the average option-adjusted spread (OAS) of…
Highlights Duration: Long-maturity Treasury yields are closing in on our intermediate-term targets. On balance, cyclical and valuation indicators continue to support an outlook for higher yields, but a few are sending warning signs…
Expecting higher US yields is now a consensus call among investors, yet, it is a view that remains valid on a cyclical basis. The Fed’s reflationary efforts, as well as the fiscal stimulus coming out of Washington, will…
In lieu of the next strategy report, I will be presenting the quarterly webcast titled ‘Five Contrarian Predictions For 2021-22’ on Thursday February 11 at 10.00AM EST (3.00PM GMT, 4.00PM CET, 11.00PM HKT). I hope you can…
Highlights We are hesitant to call a top to the volatility spike just yet. The US dollar is experiencing a counter-trend bounce. We also see political and geopolitical risks flashing yellow. House Democrats are drafting a…
Highlights Chart 1Inflation Indicators Hook Up There’s no doubt that inflationary pressures are building in the US economy. The latest piece of evidence is January’s ISM Manufacturing PMI which saw the Prices Paid…