FICC

This report looks at the latest developments in G10 economies and implications for bond and FX market strategy.

This morning's employment report, particularly the downward revisions to prior months, strengthens our conviction that the US economy is headed for recession.

Central bank gold buying is likely to remain a tailwind for the yellow metal, supporting a continuation of the rally over the coming years. We maintain a long strategic position in COMEX gold and recommend an overweight to the yellow metal within commodity portfolios.

Our Portfolio Allocation Summary for September 2024.

Special Report

Turn negative on European credit. At current levels, spreads do not compensate for the risk of a recession materializing later this year or in early 2025.

This Insight looks at potential dollar moves in the next six-to-twelve months.

Oil prices failed to hold onto their recent rebound. They slid on Tuesday as demand con-cerns resurfaced. This dynamic is the latest iteration of a tug-of-war that has kept oil prices in a trading range since H2 2023. Bearish demand concerns are enforcing an upper limit on the price of crude while bullish supply risks are maintaining a floor.

Special Report

In this Special Report, we assess the impact of monetary policy tightening on major economies. Interest rate sensitive GDP already slowed significantly in response to the aggressive rate hiking cycle. Despite the beginning of policy easing, our forward-looking indicators suggest monetary policy will continue to weigh on the economy.

Special Report

The US fiscal outlook is more unappetizing than it was before the pandemic, but we are not convinced that a difficult day of reckoning awaits. A Treasury market crisis is conceivable, but it is far from inevitable.

Oil prices are caught in a tug-of-war. Concerns about the demand outlook are acting as a price ceiling while the risk of a geopolitically induced supply shock is providing a floor. Prices are likely to remain rangebound over the near term. Yet the path of least resistance over a 6-to-12-month horizon is to the downside.