According to BCA Research’s Geopolitical Strategy service, Mexican politics will remain stable and overall supportive for markets. Sheinbaum is a credible policymaker and technocrat whose rhetoric is not as ideological or…
The Bank of Canada reduced its policy rate by 25 basis points from 5% to 4.75% on Wednesday, in line with the market consensus. Headline inflation and the BoC’s preferred measures of core inflation are within the BoC’…
According to BCA Research’s US Bond Strategy service, Mortgage-Backed Securities are currently priced below fair value. Mortgage-Backed Securities outperformed the duration-equivalent Treasury index by 49 basis points in…
Corporate and junk bonds are the fixed-income sectors that are most exposed to an economic downturn. We’ve highlighted that markets continue to price in a Goldilocks scenario, with spreads narrowing despite ongoing…
According to BCA Research’s Global Asset Allocation service, the economy has been in the “Overheating” phase of the cycle for a while, with signs of slowing growth but also stubbornly high inflation. The most…
MORENA has once again swept the Mexican election: Claudia Sheinbaum will be president, with little to no constraint in Congress. All in all, Mexican politics will remain stable and overall supportive of markets. In the medium term,…
The risk-on soft-landing narrative dominated markets in May, with both equities and bonds rallying throughout the month. Meanwhile, the counter-cyclical US dollar slumped, and the cyclical euro appreciated against the greenback…
Our Portfolio Allocation Summary for June 2024.
The US economy is in the “Overheating” phase, so stronger growth brings higher inflation. Tight monetary policy means recession is still likely over the next 12 months. Stay defensive.
MacroQuant sees significant downside risks to stocks over a 1-to-3 month horizon and suggests increasing allocation to long-term bonds. The model favours defensive equity sectors but is also hedging its bets by overweighting…