FICC | Currencies

The Norges Bank will cut rates only once until year-end as the NOK weakens and inflation hovers around 3%. Expect aggressive easing next year as the economic recovery is delayed by weakness in the energy sector and the labor market deteriorates.

The Indian rupee remains vulnerable to further depreciation amid slowing growth, tight domestic policy, and fragile capital flows. Trade risks and a weakening external balance will likely keep INR underperforming EM Asia peers.

In a widely anticipated move, the RBA resumed cutting rates. However, with housing, consumption, and PMIs improving, we see little scope for the RBA to ease beyond market expectations.

Despite widespread investor optimism Brazil’s currency outlook is challenged by a toxic mix of poor external, fiscal, and macro fundamentals. Expect BRL to underperform most EM peers.

The BoE is easing, but risks falling behind. Labor and growth cracks are starting to emerge, and the Bank may soon be forced to move more decisively. This report outlines why gilts remain a buy and sterling’s path is diverging vs. USD and EUR.

The yen’s discount, surplus, and rising real rates line up for a multi-quarter surge. Find out why EUR/JPY is the first short and when USD/JPY follows.

We apply a systematic approach to investing based on economic, inflation, and monetary policy surprises to the foreign exchange market. The signals from this framework are broadly consistent with the tactical views of our FX strategists, which anticipate a pause in the USD’s decline and a partial reversal of the recent euro strength.

Consensus sees one final ECB cut; we argue two are coming as deflationary forces are building in Europe. Dive in for the trade map: falling Bund yields, tighter peripheral spreads, and a euro primed for a 2026 rebound.

EUR/JPY has reached stretched levels, prompting new short trade recommendations across BCA Strategies. The calls are underpinned by compelling valuation, macro, and technical signals.