Japan simply cannot catch a break. The economy was trying to heal from the 2% VAT increase to 10%, which caused a major plunge in retail sales, only to be hit by the negative impact of COVID-19, which will hurt export growth,…
Highlights The near-term path for the DXY remains up. Uncertainty about the trajectory of global growth is a potent tailwind. Central bank ammunition will eventually put a floor under global growth, but it remains a powerless weapon…
Highlights For stock markets, the best inoculation against Covid-19 is ultra-low bond yields. Our tactical underweight to equities versus bonds achieved its 5 percent profit target and is now closed. We are now awaiting the fractal…
Highlights The elevated uncertainty about global growth stemming from the COVID-19 virus in China has not only made investors more anxious, but central bankers as well. This means that, only six weeks into the year, policymakers may…
There was no sugarcoating the dismal reading from Japanese GDP in the last quarter of 2019. The annualized quarter-on-quarter figure was -6.3%. Both private consumption and business spending were much weaker than expected,…
Japanese equities still face two short-term hurdles. First, the foreign ownership rules that will enter into law in May 2020 will limit how much foreign investors will buy of certain equity sectors. Second, Japanese stocks…
Highlights A currency portfolio comprised of the US dollar, the Japanese yen and the Norwegian krone is likely to outperform a more diversified basket over multiple macroeconomic scenarios. Our work suggests that valuation matters for…
The yen constitutes an attractive insurance asset in portfolios with a pro-risk bias. In recent months, there has been the +130-basis-point move in favor of Japanese yields. The gap between the USD/JPY and real rates has…
Highlights Most central banks still consider economic risks asymmetrical to the downside. This means that even if global growth rebounds in earnest, policy is likely to stay pat over the next three to six months. The conclusion is…
Highlights 2020 Model Bond Portfolio Positioning: Translating our 2020 global fixed income Key Views into recommended positioning within our model bond portfolio comes up with the following conclusions: target a moderately aggressive…