Fixed Income
The Reserve Bank of Australia kept its cash rate at 4.35% at its policy meeting on Tuesday, in line with market expectations. Australia’s monthly measure of headline inflation came in at 3.6% in April, still considerably above the midpoint of the RBA’s 2-3%…
The equity risk premium (ERP) allows investors to assess the additional compensation they are offered as an enticement to assume equities’ incremental risk. The ERP measures equities’ excess return by deducting the inflation-linked 10-year yield from the…
According to BCA Research’s Commodity & Energy Strategy service, a Fed pivot to rate cuts will provide gold prices with a tailwind. At first blush, the historical evidence is mixed. While gold rallied in the three months leading up to the start of…
In light of this week’s RBA decision to keep policy on hold, we look at the best possible trades in fixed income markets. In our view, inflation-linked bonds, relative to nominals remain a good bet.
European assets are selling off as investors panic about the upcoming French election. Is this panic justified, and if so, for how long?
The BoE had to deal with a stagflationary headache in the second half of 2023. Inflation was stickier and growth was weaker in the UK than in many of its DM peers. This trend turned around earlier this year with a late-cycle growth reacceleration. The UK…
Our reaction to this morning’s CPI report and this afternoon’s FOMC meeting.
In a widely expected move, the Fed kept its policy rate unchanged within a 5.25%-5.5% range following its June 11-12 meeting. However, the median dots have moved higher for both 2024 and 2025. The median FOMC member now expects to cut only once this year…
US CPI inflation continued to ease in May. Headline CPI stagnated on a month-on-month basis (3.3% y/y) in May, down from April’s 0.3% m/m (3.4% y/y), and below expectations of a more muted rate of growth. Core CPI also slowed more than expected, rising…
The ECB is now firmly in easing mode, even if it refuses to pre-commit to a specific rate path. What does this data dependency mean for the euro and European yields?