Monetary
Indonesia will not revert to dictatorship. Yet the guardrails against authoritarianism are also constraining the actions of the next government in tackling near term domestic and regional challenges. For long-term positioning, use potential selloff from a “dictatorship scare” to build position as structural outlook for Indonesia is positive due to the China-West divorce and the global energy transition.
The US Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) continues to show the impact of the Fed’s tightening cycle. Banks were still tightening lending standards for commercial and industrial (C&I), commercial real estate (CRE), home equity…
Treasury yields continued to push higher on Monday, bringing the total increase over the past two trading days to 29bps. The move comes on the back of strong economic data releases indicating that conditions in the US are resilient. Notably, Friday’s…
BCA Research’s European Investment Strategy service upgrades Swedish government bonds to neutral from underweight within European fixed-income portfolios. The Riksbank kept its policy rate steady at 4% last week. Governor Erik Thedéen and the Riksbank…
The US Employment report came in well above consensus expectations on Friday, delivering a strong positive signal on labor market conditions in January. The 353 thousand increase in nonfarm payroll employment beat expectations of a slowdown to 185 thousand.…
The S&P500 During Fed Rate Cuts
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Our thoughts on bond positioning following this morning’s employment data.
As expected, the Bank of England voted to keep its bank rate unchanged at 5.25% on Thursday – maintaining policy on hold for the fourth consecutive meeting. Two of the nine MPC members voted in favor of a 25bps rise (one less than in December) while one…
Given the huge disparities in wage inflation between the US, euro area and UK, it is remarkable that the markets are pricing near-identical rate cuts from the Fed, ECB, and BoE of around 150 bps through 2024. Assuming central banks don’t behave recklessly –…
In this Insight, we share our thoughts on yesterday’s FOMC meeting and the Fed’s likely next moves, with implications for US bond strategy.