Investors hope that the ECB rate cuts priced into the curve will be sufficient to achieve a soft landing in Europe. History argues against this view, but will this time be different?
The yen rallied against most major currencies in July and has climbed close to 3.5% so far this month against the greenback. Resurfacing suspicion of central bank interventions to prop up the currency is one of the factors…
We review some of the key data releases this week that we find have an impact on our currency strategy. Long yen positions make sense today. Long sterling and the euro bets are more of a judgment call, and we will fade any strength…
Japanese wage growth fell below expectations in May, expanding by 1.9% y/y versus consensus estimates calling for a 2.1% y/y increase. Although this marks an acceleration from April’s 1.6% y/y, that figure was revised down…
According to BCA Research’s Global Fixed Income Strategy service, while equity markets can drive US dollar crosses from time to time, bond market inflows matter a lot more. Part of the US exceptionalism story can be…
Concerns about the global economy have shifted from sticky inflation to faltering growth. Tight monetary policy is finally starting to bite. We suggest increasing portfolio defensiveness.
According to BCA Research’s Counterpoint service, absent China’s exponential credit growth, China’s trend growth rate will fall to 4 percent and the world’s trend growth rate will fall to sub-3 percent.…
The consensus soft-landing narrative is wrong. The US will fall into a recession in late 2024 or early 2025. We were tactically bullish on stocks most of last year, turned neutral earlier this year, and are going underweight today.…
Japanese exports in JPY increased from 8.3% y/y to 13.5% in May, surpassing expectations of 12.7%. 23.9% and 17.8% y/y growth in exports to the US and China, respectively, led the overall surge. Trade data from Asian export-…
In this insight, we update our thinking on the recent BoJ move in terms of positioning for the yen and JGB yields.