On March 6 our Geopolitical Strategy team argued that a deal had a 50% chance of getting settled by the June 28-29 G20 summit in Japan, with a 30% chance talks would totally collapse. Since then, they have reduced the odds of a…
The Sino-U.S. trade war is heating up further. After veiled threats of curtailing rare earth shipments to the West, Chinese policymakers are now announcing their preparation of a blacklist of “unreliable” entities.…
Highlights So What? U.S.-China relations are still in free fall as we go to press. Why? The trade war will elicit Chinese stimulus but downside risks to markets are front-loaded. The oil risk premium will remain elevated as Iran…
Highlights In the political economy of oil, an awareness of the speed at which policy in systematically important states can change can restrain risk taking and investment. This can keep markets in an agitated state of anticipation,…
Highlights The Federal Reserve’s monetary policy stance is slightly accommodative for the U.S., but it is too tight for the rest of the world. Inflation is likely to slow further before making a durable bottom toward year-end.…
This suggests that the risk-aversion bid for U.S. Treasuries will result in an even more deeply negative U.S. term premium and lower bond yields. Already, we are seeing such increasingly negative correlations between returns…
This new scenario could trigger a deeper selloff in global equity and credit markets if investors begin to price in a larger and more prolonged hit to economic growth and corporate profits from the U.S. tariffs. This would…
Biden, who is still enjoying a very sizable bump to his polling a month after formally announcing his candidacy, is a direct threat to Trump’s electoral strategy of maximizing white blue-collar turnout and support,…
The macro backdrop is hardly encouraging: global export volumes are contracting and a huge spike in global policy uncertainty is providing additional support to the dollar. Any further rebound in the greenback will pile…
Highlights Currency markets continue to fight a tug of war between weak incoming data but easier financial conditions. Our thesis remains that the path of least resistance for the dollar is down, but the rising specter of global…