The “September Effect” was in full force again this year as the broad-based selloff continued. Nearly all major financial assets generated outsized returns last month. In particular, the “higher for longer…
Aggressive monetary tightening has always led to recession, although the timing is uncertain. The effects of high interest rates are starting to be felt. Investors should stay risk off and buy government bonds as a safe haven…
The US Personal Income and Outlays report for August sent a positive signal about the disinflationary trend. The core PCE deflator – the Fed’s preferred inflation gauge – slowed to a 33-month low of 0.1% m/m…
The BoJ remains an outlier among global DM central banks. While many of its peers are now debating whether to end their rate tightening cycles, the Japanese central bank has not even started raising interest rates yet.…
According to BCA Research’s Emerging Markets Strategy service, US Treasury yields are set to overshoot before topping out. The selloff in global bonds is becoming advanced, but there will be more damage to bond…
In Section I, we note that the recent surge in long-maturity government bond yields is symptomatic of a sharp reduction in market expectations for a soft-landing economic outcome. This underscores that the US and other developed…
German inflation delivered an optimistic signal about the disinflation trend on Thursday. The headline CPI EU harmonized index collapsed from 6.4% y/y to 4.3% y/y in September– its lowest level since September 2021 and…
The bear market in US bonds will likely end with a bang rather than a whimper. Even during the secular US bond bull market of 1982-2021, cyclical bond bear markets ended only after an eruption of financial turmoil. It would be…