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Fixed Income

The Fed Is Proceeding Carefully
As expected, the Fed stood pat at its Wednesday meeting, maintaining the target for the fed funds rate at 5.25-5.50%. The minimal changes made to the Fed Statement were to emphasize the strong pace of economic activity in Q3, to characterize job gains as…
Daily Insights
October In Review
The broad-based selloff continued in October. Fixed income markets performed particularly poorly as stronger-than-anticipated US economic data generated upside pressure on long-dated bond yields in the US and, to a lesser extent, across other major…
Daily Insights
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Did Policymakers Just Solidify The Cyclical Peak In Yields?

Our reaction to today’s FOMC meeting and the Treasury’s Quarterly Refunding Announcement.

US Bond Strategy, Global Fixed Income Strategy by Ryan Swift
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Worrying Uptrends In Inflation Expectations Are Being Masked

The fundamental component of long-term inflation expectations has climbed to its highest level since 2008 in both the US and the euro area. This means that both the Fed and the ECB will need to engineer inflation to undershoot 2 percent for an extended period if they are to maintain their 2 percent inflation targets. We explain what this means for investment strategy over the coming 6-12 months. Plus, we pinpoint what to focus on in this Friday’s US jobs report. And we identify food and beverages (PBJ) and the Indonesian rupiah (IDR/USD) as excellent rebound candidates.

Counterpoint by Dhaval Joshi
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Bridging The Fiscal Gap

We maintain our view that China’s economic growth in the coming months will remain lackluster. Beijing's recent measures to provide additional financing may help to bridge the gap in government spending in the rest of 2023 and into 2024, but the impact on growth will be very limited.

China Investment Strategy by Jing Sima, Arthur Budaghyan
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Monthly Portfolio Update: The Cure For High Rates Is High Rates

High interest rates will eventually cause growth to slow. Signs of stress are already starting to show. Stay cautiously positioned.

Global Asset Allocation by Garry Evans
Chinese PMIs Relapse In October
Tuesday’s China PMI release delivered a negative update on economic activity in October. The NBS’ Manufacturing PMI fell from 50.2 to 49.5 while the Non-manufacturing PMI declined from 51.7 to 50.6. Both measures fell below consensus expectations, and the…
Daily Insights
Yen Weakens Following BoJ's YCC Tweak
The Bank of Japan adjusted the language of its Monetary Policy Statement on Tuesday to indicate that it will allow greater flexibility it its yield curve control policy (YCC). It indicated that although the target level of 10-year JGB yields remains unchanged…
Daily Insights
US ECI Growth Unexpectedly Accelerates
The US Employment Cost Index (ECI) unexpectedly accelerated in Q3, rising by 1.1% q/q versus anticipations the pace of increase would remain unchanged at 1.0% q/q. A pickup in wages and salaries drove the increase. On an annual basis, the ECI slowed from 4.5%…
Daily Insights
Structural Bear Market For European Bonds
The European money market curve anticipates three rate cuts by October 2024. This pricing is appropriate considering the outlook for European growth next year. BCA’s Europe strategist expect a recession in the second half of the year, which will force the ECB…
Daily Insights

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