Executive Summary Low-Yielding Countries Facing High USD Hedging Costs The US dollar will remain strong alongside continued Fed rate hikes. Interest rate differentials will remain positive for the greenback, alongside other…
Executive Summary Upgrade Euro Area ILBs To Overweight Inflation breakevens have stabilized in the US, where gasoline prices have fallen, but have reaccelerated in the UK and euro area, where natural gas prices have…
Executive Summary More Regional Divergences Within Our Global LEI The BCA global leading economic indicator (LEI) is still in a downtrend, but its diffusion index – which tends to lead the overall global LEI at major…
Executive Summary Realized Real Interest Rates Must Rise Policymakers must continue engineering higher real interest rates, and tighter financial conditions, to help cool off growth and bring down overshooting inflation.…
Executive Summary High profile economists Larry Summers and Olivier Blanchard have recently cast doubt on the Federal Reserve’s claim that a soft landing is possible for the US economy. We explore the arguments from both sides…
Executive Summary Government bond yields worldwide are falling due to fears of a global recession that will lead to monetary easing in 2023. This pricing is too optimistic with inflation likely to remain well above central bank targets…
Highlights Chart 1Are Expectations Too Dovish? The bond market is now priced for the fed funds rate to peak at 3.44% in January and then head back down to 2.79% by the end of 2023 (Chart 1). We strongly push back against…
Executive Summary China's Unemployment Over the past week we have been visiting clients along the US west coast. In this report we hit some of the highlights from the most important and frequently asked questions. Xi…