Fixed Income
US Treasury yields fell sharply following yesterday’s soft October CPI report, and investors have now officially priced out all remaining rate hikes from the yield curve. In fact, the fed funds futures curve is priced for a 25 basis point rate cut by next…
The ZEW survey of investor sentiment continues to send an optimistic signal. German sentiment jumped from -1.1 to +9.8 in November – its highest level since March and beating expectations of a smaller improvement to 5.0. Similarly, expectations for the Euro…
BCA Research’s Global Fixed Income Strategy service remains long 10-year German bunds vs short 10-year Japanese government bonds (JGBs) as a tactical trade. This trade mirrors the team's two highest conviction strategic views in government bond space,…
Our thoughts on this morning’s CPI print and the bond market’s reaction.
In this Insight, we review the performance and rationale for our current set of tactical fixed income trade recommendations. Our highest conviction positions also happen to be our most successful trades: positioning for a narrowing of the German bund-JGB spread and wider Japanese inflation breakevens.
China's money and credit data remained weak in October. New total social financing amounted to RMB 1.85 trillion – less than the RMB 1.95 trillion anticipated and below the prior month's increase of RMB 4.12 trillion. Similarly, loans extended by banks fell…
Our equally weighted global cyclical equity index has outperformed equally weighted defensives for most of this year. By October 17, this outperformance stood at about 12.6%. This outperformance is consistent with US Treasury market dynamics. The relative…
The preliminary release for the University of Michigan’s Consumer Survey sent a pessimistic signal about consumer sentiment on Friday. The headline index fell from 63.8 to 60.4 in November, below expectations of a marginal decrease to 63.7. Declines in both…
The UK economy stagnated in Q3 – a deterioration from the minor 0.2% q/q expansion in the prior quarter. Although the Q3 figure is slightly better than anticipations of a 0.1% q/q contraction, the details of the report are generally weak. Consumption dropped…
The recent rate hike by the Philippines central bank cannot control food inflation. Nor can it stem the currency slide.