Europe

Worrying Uptrends In Inflation Expectations Are Being Masked

The fundamental component of long-term inflation expectations has climbed to its highest level since 2008 in both the US and the euro area. This means that both the Fed and the ECB will need to engineer inflation to undershoot 2 percent for an extended period if they are to maintain their 2 percent inflation targets. We explain what this means for investment strategy over the coming 6-12 months. Plus, we pinpoint what to focus on in this Friday’s US jobs report. And we identify food and beverages (PBJ) and the Indonesian rupiah (IDR/USD) as excellent rebound candidates.

2 years ago

Portfolio

Monthly Portfolio Update: The Cure For High Rates Is High Rates

High interest rates will eventually cause growth to slow. Signs of stress are already starting to show. Stay cautiously positioned.

2 years ago

Essentials

A Roadmap Of The Next Eurozone Manufacturing Cycle

According to BCA Research’s European Investment Strategy service, 2012 provides a tentative roadmap of the next Eurozone manufacturing cycle. The resemblance between today and 2012 is uncanny. The overlap matches the current cycle down to a couple of months…

2 years ago

Essentials

EUR/USD: Potential For Some Near-Term Upside

The Eurozone's October inflation release confirmed the signal from the German and Spanish reports that price pressures are moderating. CPI inflation softened from 4.3% y/y to 2.9% y/y (below expectations of 3.1% y/y) while the monthly rate of change eased to…

2 years ago

Essentials

Eurozone Data Raises Odds Hiking Cycle Is Over

Eurozone economic data sent a positive signal on Monday. Preliminary CPI releases from Germany and Spain show price pressures continue to moderate. In Germany, the harmonized index declined by 0.2% m/m while the annual rate of change eased from 4.3% y/y to…

2 years ago

Essentials

Will US Stocks Retain Their YTD Lead?

In a recent Insight we highlighted that the S&P 500's year-to-date rally is narrow in breadth and that the equal weighted index has erased all its year-to-date gains. This is also true in the case of the Euro Area where the MSCI price index is still up by…

2 years ago

Essentials

Structural Bear Market For European Bonds

The European money market curve anticipates three rate cuts by October 2024. This pricing is appropriate considering the outlook for European growth next year. BCA’s Europe strategist expect a recession in the second half of the year, which will force the ECB…

2 years ago

Essentials

Has The ECB Reached The Pinnacle?

As expected, the ECB kept policy on hold on Thursday. In a unanimous decision, it maintained the deposit rate at an all-time high of 4% following 10 consecutive increases. Ultimately, the tone of the communication was on the dovish side. True, the ECB…

2 years ago

Essentials

German Business Sentiment Inches Up In October

Results of the October German IFO survey corroborate the positive signal from the latest ZEW survey. The headline Business Climate Index increased for the first time since April, rising from 85.8 to 86.9, above expectations of 86.0. This was driven by…

2 years ago

FICC

BCA Global Central Bank Monitors: Applications To Fixed Income & FX Investing

Special Report

In this Special Report, we introduce two strategies that use our Central Bank Monitors for global fixed income country allocations and currency trades. We find that using the Monitors in country selection helps improve the performance of a developed markets government bond portfolio. The CBMs can also help substantially minimize the drawdowns on a standard FX carry strategy.

2 years ago

Europe

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