Latest from BCA Research

FX markets have dominated headlines over the past week, with a meltdown in the dollar and a surge in the yen. This week’s note unpacks the forces behind these moves and assesses whether recent price action marks a temporary dislocation or the start of a more durable FX shift.

Bank Credit Analyst

In Section I, Doug highlights the risks to US consumption if job growth does not soon recover. The US economy has yet to pass its tipping point, however, arguing against defensive positioning for now. In Section II, Jonathan examines whether the AI “scaling laws” are likely to hold. They will over the near term, but cracks are already beginning to form in the narrative of ever-improving AI.

Bank Credit Analyst

In Section II, Jonathan examines whether the AI “scaling laws” are likely to hold. They will over the near term, but cracks are already beginning to form in the narrative of ever-improving AI.

Our new Private Credit taxonomy adds granularity to the opaque lending universe and introduces Asset-Based Lending—attractive entry points, elevated risks. Private Real Estate delivers the largest upgrades from 2025, while Public REITs and Public Infrastructure present compelling opportunities that investors should not overlook.

Contrary to widespread narratives, there is little cash on the sidelines. The aggregate amount of investable funds-to-equity market cap ratio is at an all-time low in the US and very low in other developed markets.

The US is likely to take significant military action in Iran, justifying our 40% risk of a major oil shock. Tactically go long Brent crude.

The Fed will keep rates on hold in H1 2026, but dovish policy surprises are likely in the second half of the year.

Our first release of the China High-Frequency Indicators for 2026 suggests that economic growth will continue to decelerate in Q1, leading us to adopt a tactically cautious stance on Chinese equities.

Special Report

Recession risks in the UK are clearly rising. In this Special Report, we unpack why labor market deterioration, falling wage growth, and normalizing inflation support deeper BoE cuts ahead. We then discuss how to position across gilts, the pound, and UK equities.

Special Report

Checks and balances in the US political system are underrated. Social unrest and government shutdown will have fleeting market implications.