Yield Curve

This Special Report introduces a framework for assessing the relative importance of slope change and initial yield in curve trade performance. The yield penalty for curve steepeners has fallen significantly since the beginning of the year, and we recommend shifting out of Treasury curve flatteners and into Treasury curve steepeners in US bond portfolios.

EUR/USD collapsed in the wake of last week’s hotter-than-expected US CPI report. Is this pessimism warranted and will the euro’s trading range that has prevailed since 2023 breakdown?

Contrary to conventional wisdom, most leading indicators suggest that the US labor market is weakening, including our very own “Mel rule.” After being overweight stocks last year, we moved to neutral at the start of 2024, and are now putting equities on downgrade watch with the expectation of shifting them to underweight later this year.

Our reaction to this morning’s employment report and bond market moves.

Our Portfolio Allocation Summary for April 2024.

The global economy is wobbling precariously between slowing growth and reaccelerating inflation. This is unlikely to end well. Stay cautious, and hedge against both recession and inflation.

Italy is no longer Europe’s problem child. Investors will be better off reassessing their views of Italian assets, which represent a buying opportunity on a structural time horizon.

MacroQuant downgraded equities from overweight to neutral on a 1-to-3 month horizon. The model maintains a neg­ative view on stocks over a 12-month horizon.

We expand our risk/reward analysis of US investment grade corporate bonds to focus on the 44 industry groups included in the Bloomberg index.

In this Strategy Outlook we examine why, contrary to popular perception, the odds of a global recession over the next 12 months are rising not falling.