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Highlights The decline in US Treasury yields has once again reduced the appeal of US paper, relative to foreign developed and emerging market bonds. Historically, lower US bond yields relative to other markets has been dollar bearish. The caveat is that if declining yields are due to a flight to safety, the dollar initially benefits due to US bond inflows. The academic research on which yields matter for currencies is mixed. Historically, short rates have mattered more. But with short-term interest rates anchored at zero, there is evidence investors are moving out the curve. Our bias is that looking across the yield curve will provide a more accurate picture of the countries that will benefit from bond inflows. More importantly, it is the sum of portfolio flows that drive a currency. This means equity flows will be important as well. Feature Global bond yields have rolled over, driven by the long end of the curve. The US 10-year yield has fallen from a high of 1.74% at the end of March to 1.29% today. While other bond yields have rolled over, the move has been more pronounced in the US. For example, the spread between the US 10-year Treasury and the 10-year German bund has narrowed from 200bps to 175bps. Given the correlation between relative interest rates – especially in real terms – and the dollar, a rare divergence has opened up in favor of short dollar positions (Chart I-1). A fall in yields can be driven by prospects of either slowing growth, lower inflation expectations, or a combination of the two. In the case of the US and to a certain extent the eurozone, the culprit behind lower yields has been a drop in both the real and the nominal component. This suggests that the markets are worried about central banks becoming too hawkish at the exact moment global growth is set to slow. Across maturities, the US yield curve has thus flattened (Chart I-2). Chart I-1Real Yields And Currencies Have Diverged Chart I-2Flattening Yield Curves A few questions arise from the setup above. How do you trade the dollar in the current environment? What is the future path for yields, especially relative yields? Should investors focus on a specific maturity as a signal for future currency moves? Finally, are yields the key driver of currencies in the current environment or should investors focus on other factors as well? Explaining Recent Dollar Strength Chart I-3Rising Demand For Hedges If the decline in rates globally has been led by the US, then why has the dollar remained strong? The first reason is rising safe-haven demand, especially as global growth peaks. Usually, as a counter-cyclical currency, the dollar benefits in a risk-off environment. The latest Treasury International Capital (TIC) data show that foreign inflows into US bonds have been part of the reason for the decline in Treasury yields since March. A reset in equity markets has also been a driver. The DXY index has been very closely correlated with the put-call ratio in the US, and increased demand for hedges, including long dollar positions, have benefited the greenback (Chart I-3). This has been consistent with the outperformance of the more defensive US equity market. The third reason has been a slowdown in relative economic momentum between the G10 and the US. Chart I-4 shows that the Citigroup economic surprise index for the euro area relative to the US remains strong but has rolled over. The story is similar using relative PMIs between the US and the rest of the G10. Relative economic performance has usually tended to dictate currency movements in the near term. Chart I-4Relative Economic Momentum Is Slowing Finally, as we highlighted a fortnight ago, the dollar was oversold and due for a tactical bounce. Leveraged funds have been covering their short positions in recent weeks, while speculators are now long the dollar (Chart I-5). Chart I-5Speculators Are Now Long The Dollar Going forward, most of these trends should reverse. While the Delta variant of COVID-19 is raging across countries, hospitalizations are low, and thus the case for renewed lockdowns is weak. Meanwhile, non-US growth should regain the upper hand, especially in countries like Japan where vaccinations are ramping up quite fast. Global yields should also rise, as output gaps close and inflation remains well anchored.             The Dollar And Interest Rates: Real Versus Nominal? As Chart 1 highlights, it is important to think about relative rates when looking for the next move in the dollar. The historical evidence is that there is little correlation between the dollar and the absolute level or direction of bond yields. Over the last few decades, global bond yields have collapsed while the dollar has undergone rolling bull and bear markets. Currencies react more to the path of relative real rates than nominal rates. By definition, a currency is the mechanism by which prices are equalized across borders. Rising inflation lowers the purchasing power of a currency, which in turn forces the currency to adjust lower in a globally competitive pricing system. Across the G10, there has been a longstanding relationship between real interest rate differentials and the path of the currency (Chart I-6). Chart I-6Negative Real Rates In The US Across The Curve Chart I-7The US Sports A Very Negative ##br##Real Yield Importantly, US real rates, especially at the short end of the curve, are very depressed. In fact, compared to other G10 countries, the US sports one of the worst 2-year real yields (Chart I-7). Based on the historical precedent illustrated in Chart I-6, a significant increase in US real rates is required to allow the dollar to rise on a structural basis. What About Hedged Yields? It is true that hedged yields in the US are positive for foreign investors. For example, hedged 10-year US yields for German bond investors provide 97 bps of pickup. For a Japanese investor, the yield pickup in the US is 96 bps, and for a British investor, it is 73 bps (Chart I-8A, Chart I-8B, Chart I-8C). Chart I-8BUS Hedged Yields For Japanese Investors Chart I-8AUS Hedged Yields For Euro Investors Chart I-8CUS Hedged Yields For British Investors   However, there is little correlation between the hedged yields and currency performance, and for good reason: Under covered interest rate parity, a hedged yield will be an arbitrage opportunity, which should be duly uncovered by efficient markets. This arbitrage window for hedged yields disappears if you extend the maturity of your hedging, as economic theory suggests. For example, hedging a 10-year bond with a 3-month currency forward can lead to massive losses as you roll over these contracts. This is because the cost of hedging in the short term tends to have wild fluctuations. For example, hedging in euros for a German investor buying Treasurys was over 300bps at the end of 2018. This wiped out the positive spread between the two bonds.  Many investors do not hedge currency exposure. In fact, the “least regrets” approach of hedging 50% of currency exposure has been quite popular.1 Therefore, focusing on the real yield, rather than the hedged or nominal yield (Chart I-9), has been a far more robust solution in gauging the direction of currencies. By definition, a hedged yield means buying a currency at spot and selling it forward. This should be currency neutral, and especially, arbitrage away the yield differential. Chart I-9Hedged Yields And Currencies: No Correlation Which Bond Yields Matter? The academic evidence suggests that short-term interest rates matter more for currencies, especially when policy is close to the zero bound. According to a BIS paper,2  not only has the FX impact of monetary policy grown significantly in the last few years, but short maturity bonds have had the strongest impact. Moreover, at a lower level of interest rates, the foreign-exchange impact is greater as the adjustment burden falls onto the exchange rate. Looking purely through the lens of the US dollar, our view is more nuanced. Foreign inflows into US long-term Treasurys have been improving tremendously, while flows into T-bills are relapsing (Chart I-10). This suggests longer-term rates have been a bigger driver of inflows into the US, and, more recently, the dollar rally. It is similar to what occurred at beginning of the dollar bull market last decade. Admittedly, the picture shifted over time, with shorter term flows becoming increasingly important as the Fed began to hike interest rates. Taking a step back, bond investors tend to span the duration spectrum, with pension funds investing in bonds many years out. As 1-year and 2-year yield differentials are not meaningfully different across countries (Chart I-11), this curtails the appeal of short-term paper. If inflation differentials are considered, it reduces the appeal of US paper even further. Chart I-10Long-Term Versus Short-Term Flows Chart I-11Narrow Gap In Short Term Yields Let’s not forget quantitative easing. If a central bank explicitly targets a bond yield near zero, like in Japan or Australia, that makes it difficult for that same yield tenor to generate positive inflows or send a reliable signal about the economy. This suggests a better method is looking at a spectrum of indicators, including yields at various maturities. Charts I-12 plots the yield differentials across maturities and countries. It shows that currencies have been correlated across the relative yield maturity spectrum. As such, we recommend investors monitor both short- and long-term yields in evaluating currency decisions. Chart I-12AYield Differentials Across Different Maturities Chart I-12BYield Differentials Across Different Maturities Chart I-12CYield Differentials Across Different Maturities Chart I-12DYield Differentials Across Different Maturities Chart I-12EYield Differentials Across Different Maturities Chart I-12FYield Differentials Across Different Maturities Chart I-12GYield Differentials Across Different Maturities Chart I-12HYield Differentials Across Different Maturities Chart I-12IYield Differentials Across Different Maturities    Other Asset Classes There are multiple drivers of exchange rates. Bond yields are just one of them. Equity and other flows also matter. It is the sum of portfolio flows that drive a currency. In fact, inflows into US equities and agency bonds have been the bigger drivers of the US dollar this year (Chart I-13). Outside the US, the correlation between interest rates and the currency can be very weak. The Canadian dollar is much more correlated with terms of trade than with real interest rate differentials. Rising oil prices attract inflows into Canadian corporate bonds and equities, which are positive for the currency. The key point is that flows tend to gravitate to capital markets with the highest expected returns. As such, monitoring flows other than government bond purchases is important. We expect that yields will be higher on a cyclical horizon. This will be beneficial for cyclical stocks, especially banks. This will also be beneficial for flows into non-US bourses, that have a higher weighting of cyclical stocks..  In short, the US equity market has become very tech heavy. Rising interest rates will hurt higher duration sectors such as technology and health care. At the margin, this hurts the relative performance of US equities (Chart I-14). Given that equity inflows have been a key driver of the US dollar, this will also hurt at the margin Chart I-13Agency Bonds And Equity Purchases Have Driven US Inflows Chart I-14US Valuations Benefit From ##br##Lower Rates   Concluding Thoughts US real interest rates have deteriorated relative to the rest of the world. As such, it will require a significant rise in US real rates to seriously question a dollar bearish view. Meanwhile, a modest rise in global rates will also be bearish for US stocks compared to non-US bourses. US rates are usually high beta, and so could rise more in an improving growth environment. But relative rates are correlated to relative growth. As such, if non-US growth picks up relative to the US, like the IMF expects, this will provide a modest fillip to non-US yields (Chart I-15). US real rates are also very negative, so the bar to create a genuine dollar rally is very high. Finally, the market still expects the Federal Reserve to lead the hiking cycle. This means that there is still potential for an upside surprise in interest rates outside the US, compared to within (Chart I-16). Chart I-15Relative Bond Yields And Relative Economic Momentum Chart I-16The Market Is Still Relatively Hawkish On The Fed   Housekeeping Our long Scandinavian basket was triggered at our buy point of a -2% pullback from July 9th levels. As such, we are now short EUR/NOK, USD/NOK, EUR/SEK, and USD/SEK. We were also stopped out of our long silver/short gold position for a small loss. We will be looking to reopen this trade in the coming weeks.   Chester Ntonifor Foreign Exchange Strategist chestern@bcaresearch.com Footnotes 1 Michenaud, S., and  Solnik, B., , “Applying regret theory to investment choices: Currency hedging decisions,” Journal of International Money and Finance 27, 2008, 677-694. 2 Ferrari, Massimo, Kearns, Jonathan and Schrimpf, Andreas, “Monetary policy’s rising FX impact in the era of ultra-low rates,” Bank of International Settlements, April 2017. Currencies U.S. Dollar Chart II-1USD Technicals 1 Chart II-2USD Technicals 2 Data out of the US this week was mixed: June retail sales came in better than expected. The control group rose 1.1% month on month, versus a -1.4% decline in May. For July, the University of Michigan survey showed inflation expectations continue to edge higher, but the sentiment of current conditions and expectations was well below consensus. Inflows into US assets reversed in May, with net outflows of $30.2bn. Existing home sales rose by 1.4% month on month in June to 5.9 million units. The US dollar DXY index rose modestly this week. Technically, the dollar is now approaching overbought territory. Our intermediate-term indicator has broken above 60, speculators are now long the dollar and sentiment on the greenback has turned up at a time when real rates remain negative in the US. This suggests much optimism is in the price. Report Links: Arbitrating Between Dollar Bulls And Bears - March 19, 2021 The Dollar Bull Case Will Soon Fade - March 5, 2021 Are Rising Bond Yields Bullish For The Dollar? - February 19, 2021 The Euro Chart II-3EUR Technicals 1 Chart II-4EUR Technicals 2 Data out of the eurozone this week was robust: The trade balance came it at €9.4bn for May. Final June CPI was in line with expectations – 1.9% for headline and 0.9% for core. The ECB kept rates unchanged in their July 22 meeting, but added to their framework of forward guidance. The euro fell by 40bps this week. Following Christine Lagarde’s Bloomberg interview last week, the ECB made some policy changes. First, they will allow for an inflation overshoot should this be consistent with longer-term inflation at 2%. They will also likely extend the PEPP beyond the March deadline, so no tapering before then. Finally, interest rates are expected to remain negative as far as the eye can see. This is nudging the euro towards becoming a low-beta currency. Report Links: Relative Growth, The Euro, And The Loonie - April 16, 2021 The Euro Dance: One Step Back, Two Steps Forward - April 2, 2021 On Japanese Inflation And The Yen - January 29, 2021 The Japanese Yen Chart II-5JPY Technicals 1 Chart II-6JPY Technicals 2 There was some positive news out of Japan this week: Exports rose 48.6% year on year in June. Imports also expanded at a 32.7% year-on-year pace, signaling rising domestic demand momentum. National CPI for June was in line with expectations. The core measure was at 0.2%. Supermarket sales continued to improve in June. The yen was down 0.3% against the dollar this week. The yen is the most shorted developed-market currency, and our intermediate-term indicator is at bombed-out levels. This is occurring at a time when domestic data is on the mend. This is bullish from a contrarian perspective. Report Links: The Case For Japan - June 11, 2021 The Dollar Bull Case Will Soon Fade - March 5, 2021 On Japanese Inflation And The Yen - January 29, 2021 British Pound Chart II-7GBP Technicals 1 Chart II-8GBP Technicals 2 There was some mixed data out of the UK this week: Rightmove house prices rose 5.7% year on year in July. The CBI survey was softer than expected in July. Total orders fell from 19 to 17, while the component of selling prices and business optimism fell 4 and 5 points respectively. The pound fell by 0.5% against the US dollar this week. Momentum on the pound continues to suggest near-term downside. Our intermediate term indicator is still blasting downward, and speculators are cutting their long positions from very aggressive levels. This suggests continued near-term downside in cable. Report Links: Why Are UK Interest Rates Still So Low? - March 10, 2021 Portfolio And Model Review - February 5, 2021 Thoughts On The British Pound - December 18, 2020 Australian Dollar Chart II-9AUD Technicals 1 Chart II-10AUD Technicals 2 There was scant data out of Australia this week: NAB business confidence for Q2 fell from 19 to 17. The RBA minutes confirmed that the central bank will stay dovish in the near term. The AUD fell by 0.7% this week against the USD, the worst performing G10 currency. COVID-19 will continue to dictate near-term developments in Australia, with the latest lockdowns having slowed economic activity. Speculators have started shorting the AUD on this basis (in addition to the risk of a decline in metal prices). In the end, if the COVID-19 crisis proves transient, it will create a coiled spring response for the AUD. Report Links: The Dollar Bull Case Will Soon Fade - March 5, 2021 Portfolio And Model Review - February 5, 2021 Australia: Regime Change For Bond Yields & The Currency? - January 20, 2021 New Zealand Dollar Chart II-11NZD Technicals 1 Chart II-12NZD Technicals 2 The was scant data out of New Zealand this week: Credit card spending rose 6.3% year on year in June. The performance services index rose from 56.1 to 58.6 in June. The NZD was down 23bps versus the US dollar this week. Last week’s rally in the NZD, following the signal that the RBNZ will end QE this week, is fizzling. From a technical standpoint, speculators are neutral the NZD, but our intermediate-term indicator has not yet bottomed out. We are long CHF/NZD, as a reset in global asset prices could increase currency volatility and benefit the pair. Report Links: How High Can The Kiwi Rise? - April 30, 2021 Portfolio And Model Review - February 5, 2021 Currencies And The Value-Versus-Growth Debate - July 10, 2020 Canadian Dollar Chart II-13CAD Technicals 1 Chart II-14CAD Technicals 2 Data out of Canada this week has been robust: June housing starts came in at 282.1K versus expectations of 270K. Foreigners continued to accumulate Canadian securities in June, to the tune of C$20bn. House prices remain on fire. The Teranet/National Bank index rose 16% year on year in June. The Bloomberg Nanos Confidence index held steady at 66.3. The CAD rose by 0.2% this week, performing better than other G10 currencies. The longer-term outlook for the loonie is clearly positive as the BoC will hike interest rates ahead of the Federal Reserve. Near term, USD/CAD could retest the 1.28 level as our intermediate-term indicator continues to work off overbought conditions. Ultimately, we will be selling this pair between 1.28 and 1.30. Report Links: Relative Growth, The Euro, And The Loonie - April 16, 2021 Will The Canadian Recovery Lead Or Lag The Global Cycle? - February 12, 2021 The Outlook For The Canadian Dollar - October 9, 2020 Swiss Franc Chart II-15CHF Technicals 1 Chart II-16CHF Technicals 2 There was scant data out of Switzerland this week: Exports fell 3% month on month in June. However, watches continued to sell well, with exports rising 71% year on year. Total sight deposits were unchanged at CHF 712 bn for the week of July 16. The Swiss franc was down 0.2% this week. A rebound in global bond yields is a threat to franc long positions. However, we believe the period of volatility in both economic data and equity markets is not over. As such, the franc will benefit from safe-haven inflows. We are long the CHF/NZD cross on this basis. Report Links: An Update On The Swiss Franc - April 9, 2021 Portfolio And Model Review - February 5, 2021 The Dollar Conundrum And Protection - November 6, 2020 Norwegian Krone Chart II-17NOK Technicals 1 Chart II-18NOK Technicals 2 Data out of Norway is improving: Industrial confidence came in at 11.3 for Q2, from 8.6 the previous quarter. The NOK was down by 0.5% this week against the dollar. This triggered our limit-buy on Scandinavian currencies at the -2% trigger level we had originally been targeting. As such, we are now short EUR/NOK and USD/NOK. With real yields in Norway much higher than in the US or Europe, portfolio flows should benefit the NOK. Report Links: The Norwegian Method - June 4, 2021 Portfolio And Model Review - February 5, 2021 Revisiting Our High-Conviction Trades - September 11, 2020 Swedish Krona Chart II-19SEK Technicals 1 Chart II-20SEK Technicals 2 Recent data from Sweden have been somewhat mixed: There is a slight upward revision to the Bloomberg economic forecasts. GDP growth is now expected to be 4% year on year in 2021, from a previous estimate of 3.5%. However, CPI was revised down 10bps to 1.7% this year, and 1.4% next year, considering the disappointing CPI print last week. The SEK was down 20bps this week. The SEK remains one of our most potent plays on a global growth recovery. Historically, the SEK has correlated very well with global growth variables and relative economic growth between Sweden and the rest of the world. This week, our limit-buy on Scandinavian currencies was triggered. As such, we are now short EUR/SEK and USD/SEK. Report Links: Revisiting Our High-Conviction Trades - September 11, 2020 More On Competitive Devaluations, The CAD And The SEK - May 1, 2020 Sweden Beyond The Pandemic: Poised To Re-leverage - March 19, 2020 Trades & Forecasts Forecast Summary Core Portfolio Tactical Trades Limit Orders Closed Trades

Weekly Performance Update For the week ending Thu Jul 22, 2021 The Market Monitor displays the trailing 1-quarter performance of strategies based around the BCA Score. For each region, we construct an equal-weighted, monthly rebalanced portfolio consisting of the top 3 stocks per sector and compare it with the regional benchmark. For each portfolio, we show the weekly performance of individual holdings in the Top Contributors/Detractors table. In addition, the Top Prospects table shows the holdings that currently have the highest BCA Score within the portfolio. For more details, click the region headers below to be redirected to the full historical backtest for the strategy. BCA US Portfolio Total Weekly Return BCA US Portfolio S&P500 TRI 0.37% 0.18% Top Contributors   AN:US IPG:US JLL:US DELL:US ESGR:US Weekly Return 42 bps 19 bps 12 bps 7 bps 6 bps Top Detractors   SIG:US LPX:US FLO:US MTZ:US PEG:US Weekly Return -13 bps -9 bps -8 bps -6 bps -5 bps Top Prospects   TX:US MPLX:US BRK.A:US ESGR:US ANAT:US BCA Score 97.25% 95.16% 95.13% 93.88% 91.26% BCA Canada Portfolio Total Weekly Return BCA Canada Portfolio S&P/TSX TRI -0.95% -0.42% Top Contributors   ONEX:CA RCH:CA QBR.A:CA SMU.UN:CA TCL.A:CA Weekly Return 13 bps 12 bps 6 bps 6 bps 3 bps Top Detractors   IFP:CA CS:CA CFP:CA CRON:CA CNQ:CA Weekly Return -25 bps -21 bps -15 bps -13 bps -10 bps Top Prospects   LNF:CA CS:CA IFP:CA CFP:CA ELF:CA BCA Score 98.98% 98.62% 98.50% 96.76% 93.76% BCA UK Portfolio Total Weekly Return BCA UK Portfolio FTSE 100 TRI 0.73% -0.61% Top Contributors   FDEV:GB FDM:GB HFD:GB SVST:GB GLTR:GB Weekly Return 42 bps 26 bps 12 bps 12 bps 10 bps Top Detractors   SPI:GB RMG:GB TUNE:GB CMCX:GB MNOD:GB Weekly Return -18 bps -11 bps -10 bps -9 bps -8 bps Top Prospects   SVST:GB ROSN:GB GROW:GB NLMK:GB RMG:GB BCA Score 99.11% 96.58% 95.14% 93.80% 93.56% BCA Eurozone Portfolio Total Weekly Return BCA EMU Portfolio MSCI EMU TRI 0.22% 0.25% Top Contributors   CNV:FR MONT:BE REY:IT PHA:FR ROVI:ES Weekly Return 20 bps 16 bps 10 bps 9 bps 8 bps Top Detractors   ATS:AT RWAY:IT LOUP:FR PMAG:AT SON:PT Weekly Return -12 bps -11 bps -9 bps -7 bps -7 bps Top Prospects   STR:AT TESB:BE SOLV:BE BB:FR FDJ:FR BCA Score 99.74% 97.33% 96.76% 96.66% 96.57% BCA Japan Portfolio Total Weekly Return BCA Japan Portfolio TOPIX TRI -0.77% -1.81% Top Contributors   7593:JP 8117:JP 6960:JP 6413:JP 3459:JP Weekly Return 8 bps 7 bps 6 bps 4 bps 4 bps Top Detractors   5021:JP 5020:JP 3291:JP 7994:JP 6641:JP Weekly Return -19 bps -14 bps -13 bps -12 bps -12 bps Top Prospects   4966:JP 6960:JP 9436:JP 6641:JP 8117:JP BCA Score 99.72% 99.39% 99.01% 98.49% 98.41% BCA Hong Kong Portfolio Total Weekly Return BCA Hong Kong Portfolio Hang Seng TRI -0.77% -0.97% Top Contributors   215:HK 2380:HK 316:HK 990:HK 323:HK Weekly Return 30 bps 26 bps 14 bps 12 bps 11 bps Top Detractors   220:HK 3600:HK 468:HK 856:HK 2232:HK Weekly Return -29 bps -25 bps -24 bps -22 bps -19 bps Top Prospects   1277:HK 2232:HK 857:HK 1606:HK 990:HK BCA Score 99.81% 99.47% 99.25% 98.76% 98.51% BCA Australia Portfolio Total Weekly Return BCA Australia Portfolio S&P/ASX All Ord. TRI 0.10% 0.56% Top Contributors   NEC:AU RUL:AU JLG:AU SGF:AU GRR:AU Weekly Return 22 bps 17 bps 16 bps 15 bps 12 bps Top Detractors   AGI:AU FLN:AU BLX:AU DDR:AU PSQ:AU Weekly Return -47 bps -12 bps -8 bps -8 bps -8 bps Top Prospects   GRR:AU BFG:AU PIC:AU BLX:AU SOL:AU BCA Score 99.09% 98.31% 97.86% 97.46% 97.33%

Dear Client, We will be presenting our quarterly webcast next week, and, as a result, will not be publishing on 29 July 2021.  We will cover our major calls for the quarter and provide a look-ahead.  I look forward to the Q+A, and am hopeful you will tune in. Bob Ryan Chief Commodity & Energy Strategist   Highlights Chart Of The WeekOPEC 2.0's Hand Strengthened By Production Agreement The deal crafted by OPEC 2.0 over the weekend to add 400k b/d of oil every month from August preserves the coalition, and sends a credible signal of its ability to raise output after its 5.8mm b/d of spare capacity is returned to market next year.1 KSA and Russia will remain primi inter pares, but the position of OPEC 2.0's core producers – not just the UAE, which negotiated an immediate baseline increase – was enhanced for future negotiations. This deal explicitly recognizes they are the only ones capable of increasing output over an extended period. We assume the revised production baselines for core OPEC 2.0 effective May 2022 reflect the coalition's demand expectations from 2H22 onward. Our modeling indicates core OPEC 2.0's output will almost converge on the revised baseline production of 34.3mm b/d by 2H23, when we expect these producers to be at ~ 33.4mm b/d. Holding our demand estimates constant from last week, our revised supply expectations prompt us to move our forecast closer to our June forecast. We expect Brent to average $70/bbl in 2H21, with 2022 and 2023 averaging $74 and $80/bbl (Chart of the Week). Feature The deal concluded by OPEC 2.0 over the weekend will do more than add 400k b/d of spare capacity to the market every month beginning next month. It also does more than preserve the producer coalition's successful production-management strategy.  The big take-away from the deal is the clear message being sent by the coalition's core members – KSA, Russia, Iraq, UAE and Kuwait – that they are able to significantly increase output after their 5.8mm b/d of spare capacity has been returned to the market over the next year or so. It does so by raising the baselines of the core producers starting in May 2022, clearly indicating the capacity and willingness to raise output and keep it there (Table 1). Table 1Baseline Increases For Core OPEC 2.0 What OPEC 2.0's Deal Signals Internally, the deal is meant to recognize the investment made by the UAE in particular, which was not being accounted for in its current baseline. Externally – i.e., to competitors outside the coalition – the deal signals OPEC 2.0's successful production management strategy will continue, by raising the likelihood the coalition will remain intact. This has kept the level of supply below demand over the course of the COVID-19 pandemic (Chart 2), and is responsible for the global decline in inventories (Chart 3). Chart 2OPEC 2.0 Durability Increases Chart 3Inventories Will Remain Under Control Specifically, the massive spare capacity still to be returned to the market between now and 2H22 can be accomplished with minimal risk of a market-share war breaking out among the core OPEC 2.0 members seeking to monetize their off-the-market production before the other members of the coalition. Most importantly, the revised benchmark production levels that becomes effective May 2022 signal the coalition members with the capacity to increase production can do so. Longer-Term Forward Guidance We assume the revised production baselines for core OPEC 2.0 effective May 2022 reflect the coalition's demand expectations from 2H22 onward. Our modeling indicates core OPEC 2.0's output will approach the revised baseline reference levels of 34.3mm b/d, hitting 33.4mm b/d for crude and liquids output by 2H23 (Table 2).  Table 2BCA Global Oil Supply - Demand Balances (MMb/d, Base Case Balances) To Dec23 This implies the core group expects to be able to cover production declines within the coalition and to meet demand increases going forward. The estimates are far enough into the future to prepare ahead of time to increase production. Our estimates for core OPEC 2.0 production reflects our assumption the revised baseline levels do reflect demand expectations of the coalition. In estimating the coalition's production, we rely on historical data from the US EIA, which allows us to estimate future production using regressors we consider reliable (e.g., GDP estimates from the IMF and World Bank).  Non-OPEC 2.0 Production We use EIA historical data for non-OPEC 2.0 production as well. In last week’s balances, we substituted the EIA's estimates for non-OPEC 2.0 producers ex-US for our estimates, which resulted in lower supply numbers throughout our forecast sample.  This threw off our balances estimates in particular, as we did not balance the decrease in supply from this group using the new data set with an increase from another group. We corrected this oversight this week: We will continue to use EIA estimates for non-OPEC 2.0 ex-US countries, but will balance the decrease in oil production from this cohort with increased supply from other countries. Chart 4US Shales Are The Marginal Barrel For US oil production, we will continue to estimate it as a function of WTI price levels, the forward curve and financial variables – chiefly high-yield rates, which serve as a good proxy for borrowing costs for the marginal US shale producer, which we view as the quintessential marginal producer in the global price-taking cohort (Chart 4). Our research indicates US shale producers – like all producers, for that matter – are prioritizing shareholder interests first and foremost. This means they will focus on profitability and margins. While we have observed this tendency for some time, it appears it is gaining speed, as oil and gas producers are now considering whether they want to retain their existing exposure to their hydrocarbon assets.2   There appears to be a reluctance among resource producers generally – this is true in copper, as we have noted – to substantially increase capex. This could be the result of covid uncertainty, demand uncertainty, monetary-policy uncertainty or a real attempt to provide competitive returns. We think it is a combination of all of these, but the picture is clouded by the difficulty in separating all of these uncertainties. Income Drives Oil Demand Chart 5Income Drives Oil Demand Our demand estimates will continue to be driven by estimates of GDP from the IMF and the World Bank. We have found the level of oil consumption is highly correlated with GDP, particularly for EM states (Chart 5). Holding our demand estimates constant from last week, our revised supply expectations prompt us to move our forecast closer to our June forecast.  This week, we also will adjust our inventory calculations, which will rely less on EIA estimates of OECD stocks. In the recent past, these estimates played a sizeable role in our forecasts. From this month on, they will play a smaller part. This is why, even though our supply estimates have risen from last week, there is not a significant change to our inventory levels. Investment Implications Holding our demand estimates constant from last week, our revised supply expectations prompt us to move our forecast closer to our June forecast. We expect Brent to average $70/bbl in 2H21, with 2022 and 2023 averaging $74 and $80/bbl. We remain bullish commodities in general, given the continued tightness in these markets. We expect this to persist, as capex remains elusive in oil, gas and metals markets. This underpins our long S&P GSCI and COMT ETF commodity recommendations, and our long MSCI Global Metals & Mining Producers ETF (PICK) recommendation.   Robert P. Ryan  Chief Commodity & Energy Strategist rryan@bcaresearch.com Ashwin Shyam Research Associate Commodity & Energy Strategy ashwin.shyam@bcaresearch.com   Commodities Round-Up Energy: Bullish US natural gas exports via pipeline to Mexico averaged just under 7 bcf/d in June, according to the EIA. Exports hit a record high of 7.4 bcf/d on 24 June 2021. The record high for the month was 7.4 Bcf/d on June 24. The EIA attributes the higher exports to increases in industrial and power demand, and high temperatures, which are driving air-conditioning demand south of the US border. Close to 5 bcf/d of the imported gas is used to generate power, according to the EIA. This was up close to 20% y/y. Increases in gas-pipeline infrastructure are allowing more gas to flow to Mexico from the US. Base Metals: Bullish China reportedly will be selling additional copper from its strategic stockpiles later this month, in an effort to cool the market. According to reuters.com, market participants expect China to auction 20k MT of Copper on 29 July 2021. This will bring total sales via auction to 50k MT, as the government earlier this month sold 30k MT at $10,500/MT (~ $4.76/lb). Prior to and since that first auction, copper has been trading on either side of $4.30/lb (Chart 6). Market participants expected a higher volume than the numbers being discussed as we went to press. In addition to auctioning copper, the government reportedly will auction other base metals. Precious Metals: Bullish Interest rates on 10-year inflation-linked bonds remain below -1%, as U.S. CPI inflation rises. US 10-year treasury yields have rebounded since sinking to a five-month low at the beginning of this week. The positive effect of negative real interest rates on gold is being balanced by a rising USD (Chart 7). Safe-haven demand for the greenback is being supported by uncertainty caused by COVID-19’s Delta variant. Gold prices are still volatile after the Fed’s ‘dot shock’ in mid-June.3 This volatility is reducing safe-haven demand for the yellow metal despite rising economic and policy uncertainty. Ags/Softs: Neutral Hot, dry weather is expected over most of the grain-growing regions of the US for the balance of July, which will continue to support prices, according to Farm Futures. Chart 6Copper Prices Going Down Chart 7Weaker USD Supports Gold   Footnotes 1Please see 19th "OPEC and non-OPEC Ministerial Meeting concludes" published by OPEC 18 July 2021. 2Please see "BHP said to seek an exit from its petroleum business" published by worldoil.com July 20, 2021.  3Please refer to ‘“Dot Shock” Continues To Roil Gold; Oil…Not So Much’, which we published on  July 1, 2021 for additional discussion. It is available at ces.bcaresearch.com. Investment Views and Themes Strategic Recommendations Tactical Trades Commodity Prices and Plays Reference Table Trades Closed In 2021 Summary of Trades Closed

Highlights US Treasuries: Peaking global growth expectations and the growing spread of the Delta variant are challenging the “reflation and reopening” narrative that drove bond yields higher in Q1 of this year. Underlying growth, however, is likely to stay above-trend in most developed economies over the next 1-2 years, leading to tighter labor markets, increased domestic inflation pressures, and less dovish central banks - especially in the US. We continue to recommend an overall below-benchmark duration position in global bond portfolios, with an underweight stance on US Treasuries, on a strategic (6-24 month) basis. New Zealand: House prices, inflation, and the overall economic backdrop justify the RBNZ’s recent hawkish shift. However, government bond and interest rate swap markets have not fully priced in how quickly, and how far, the RBNZ can hike during the upcoming tightening cycle. As a play on further RBNZ hawkishness, we are entering a new recommended tactical trade: a 2-year/5-year yield curve flattener in New Zealand government bonds. Feature Dear Client, We will be taking a summer break over the next two weeks to recharge our batteries for what is shaping up to be an eventful time for global financial markets over the remaining months of 2021. Next week, you will be receiving a report written by our Chief US Bond Strategist, Ryan Swift. The following week, there will be no Global Fixed Income Strategy report published. We will return to our normal publishing schedule on Tuesday, August 10. Best Regards, -Rob Robis The World’s Most Important Asset Price We spent much of last week talking with clients (still virtually, sadly) in the US and Europe. In all the meetings, the first - and in some cases, only - topic of discussion was how to interpret the fall in longer-maturity US Treasury yields over the past few months. With the benchmark 10-year US yield hitting the lowest level since February earlier this week, breaching the 1.20% level, the message from the Treasury market will remain very much top of mind for investors - and for us, too - especially with bond yields in other countries also following US yields lower. Chart 1 The falling trend in US yields can be attributed to a number of factors, some of which are more legitimately bond bullish than others. Investors are increasingly convinced that global growth momentum has peaked, including in the US. While the global manufacturing PMI is still at the highest levels seen over the past decade, our global leading economic indicator (LEI) is rolling over from a very high level (Chart 1). The plunge in the global LEI diffusion index suggests that the dip in the global LEI is broad based across all the countries in the LEI (Chart 1, middle panel). This is not a sign that growth is slowing now, though, given the long lags between the swings in the diffusion index and the LEI, and between the LEI and actual economic growth. Importantly, US leading indicators like the Conference Board LEI are not rolling over and continue to signal that US growth will remain solid over the next 6-12 months. US consumer and business confidence are still upbeat, labor demand remains robust and corporate profits are growing smartly in the Q2 earnings data available so far. US growth will inevitably decelerate from the overheated pace of Q2 that was boosted by the rapid reopening from pandemic restrictions. Yet the US economy will continue to expand at an above-trend pace into 2022 – especially with an extra boost from fiscal stimulus - that is likely to tighten US labor markets and keep the Fed on the path towards bond-bearish tapering and, eventually, rate hikes by the end of next year. The renewed pickup in COVID-19 cases in the US could damage that positive narrative on US economic confidence. The uptick in the Delta variant raises the risk of a new wave of economic restrictions, even with nearly half the US population now fully vaccinated (Chart 2). To date, the latest surge in cases has not resulted in significant surges in hospitalizations and deaths in the US and, more importantly, the UK where the Delta variant has spread far more rapidly. If the hospitalization figures were to accelerate, investors would likely interpret that as a sign that a) vaccine efficacy against the variants is not as robust as for the original strain of the virus; and/or b) the next wave of COVID has arrived before the US could achieve herd immunity. At the moment, there is little political will to impose a new wave of growth-crushing - and bond bullish – economic restrictions in the US, especially with case numbers still low compared to previous waves of the virus amid ample vaccine supplies. Even in New York City, the epicenter of the first wave of the pandemic in the US in 2020 and one of the last major cities to reopen, the mayor said this week that a return to a mask-wearing mandate was not on the table (the city’s preference is to push for more of the unvaccinated to get their jabs to fight the variant). Lower US bond yields also reflect a growing belief that the rise in US inflation will prove to be transitory, as the Fed expects. Headline CPI inflation in the US reached 5.4% in June on a year-over-year basis, but was an even faster 8.8% on a 6-month annualized basis (Chart 3). Soaring US inflation rates have been dismissed by many as simply a function of temporary supply squeezes and favorable base effect comparisons versus the pandemic-fueled price collapses in Q2/2020. Yet the longer the inflation acceleration continues, the more the narrative will shift from “transitory” to “persistent” inflation, especially if inflation also keeps moving higher outside the US as well. Chart 2Delta Variant: Highly Contagious, But Not Lethal Investors, and the Fed, will not be able to assess if the US inflation surge is truly a short-lived phenomenon until at least 2-3 more inflation data prints are available. Chart 3Is This 'Transitory' Inflation? This means the “transitory or not” question will linger until the September inflation data is available in mid-October. What will be critical is the mix of US inflation. If more domestically generated inflation rates – rents, wages, etc. – accelerate, that would result in overall US inflation being driven more by stickier core inflation rather than surging non-core inflation fueled by rising commodity prices. That implies a higher floor for headline inflation, and a more bond-bearish challenge to the “transitory” narrative as the Fed would be even more emboldened to begin dialing back monetary accommodation sooner, or faster, than the current forward guidance. Beyond the fundamentals, the Treasury market continues to work off the technically oversold condition that developed in the first quarter of 2021, leading to short-covering that is pushing yields lower. The 10-year Treasury yield became extremely stretched versus the underlying trend in yields, defined by the 200-day moving average, with survey and positioning data showing large short positioning and below-benchmark duration exposures among bond investors (Chart 4). As the factors underpinning the US “reflation trade” in Q1 have come into question in Q2, speculators have covered much of the huge short positioning that built up in the 30-year Treasury, according to the CFTC (bottom panel). However, the JP Morgan survey of client duration positioning still shows a large number of clients are running duration exposures below that of their benchmark, suggesting that real money investors have not yet capitulated even as Treasury yields have moved lower. In a report published back in June, we looked at previous episodes where the 10-year US yield became stretched versus its underlying trend over the past two decades.1 We concluded that it could take until at least August before the 10-year Treasury worked off its oversold condition, defined as the yield returning to its 200-day moving average using daily closing prices, based on the average length of those past episodes. The US 10-year yield is now below its 200-day moving average of 1.28%, but it is still too soon to declare this oversold episode over given the still large underweight duration position visible in the JP Morgan survey. Some reduction in that tilt will be necessary before longer-term Treasury yields can begin to climb again. Summing it all up, the uncertainty over global growth momentum, the Delta variant, and the underlying pace of US inflation will likely keep Treasury yields under some downward pressure, especially with short positioning not yet completely cleaned out. We suspect that it will take a reacceleration of US employment growth before US Treasury yields can begin to move higher once again. That would not begin to be visible until at least the September payrolls data – a month when extended US federal unemployment benefits expire and children return to in-person learning at school, freeing up some of the supply bottlenecks in US labor markets. Our base case scenario is that the current pickup in COVID-19 cases will not derail the US economic recovery from the pandemic. A tightening US labor market and stickier-than-expected US realized inflation will lead the Fed to announce in December a tapering of its asset purchases starting in January 2022. A shift to a less dovish Fed, and eventual rate hikes beginning at the end of 2022 after tapering is complete, will be the driver of the next upleg in US Treasury yields. Looking outside the US, our Central Bank Monitors continue to highlight that developed economy central banks are all under cyclical pressure to begin dialing back the massive monetary accommodation put in place to fight the temporary economic shock of COVID-19 (Chart 5). Yet pricing in Overnight Index Swap (OIS) markets highlight the diverging messages from policymakers. Chart 4USTs Still Working Off Oversold Condition Chart 5A Clear Message From Our Central Bank Monitors A rate hike is now expected before year-end in New Zealand and by July 2022 in Canada (Table 1) “Liftoff” is now expected in January 2023 in the US, Australia and the UK; while rates are expected to remain unchanged until November 2023 in the euro area and February 2024 in Sweden. The bigger future issue for markets, however, is the pace of rate hikes given how little tightening is expected after liftoff. Table 1Bond Markets Are Vulnerable To Hawkish Monetary Policy Shifts OIS curves are only discounting a handful of rate hikes to occur by the end of 2024 in most countries. Beyond that, 5-year/5-year forward OIS rates – a good proxy for the so-called “terminal rate”, or how high rates will end up in the next tightening cycle – show that markets have downgraded their assessment of how high global interest rates can possibly go. With global growth likely to remain above trend over the next 1-2 years, the current surge in global inflation will likely not be as transitory as the Fed and other central banks expect, leading to a faster pace of monetary tightening than markets are discounting (outside of Europe and Japan) and a renewed move higher, on average, for global bond yields led by US Treasuries. Bottom Line: Peaking global growth expectations and the growing spread of the Delta variant are challenging the “reflation and reopening” narrative that drove bond yields higher in Q1 of this year. Underlying growth, however, is likely to stay above-trend in most developed economies over the next 1-2 years, leading to tighter labor markets, increased domestic inflation pressures, and less dovish central banks - especially in the US. We continue to recommend an overall below-benchmark duration position in global bond portfolios, with an underweight stance on US Treasuries, on a strategic (6-24 month) basis. New Zealand: Primed For Liftoff Recent news from New Zealand has confirmed the market pricing of the Reserve Bank of New Zealand (RBNZ) as one of the most hawkish central banks within the developed economies. We have been of the view that the RBNZ would be among the first to withdraw the monetary accommodation put in place because of the pandemic, and recommended that investors avoid New Zealand sovereign debt in our Special Report on global house prices earlier this year.2 Increasingly, that view is being borne out, with the RBNZ delivering a hawkish surprise last week by announcing an end to the Large-Scale Asset Purchase (LSAP) program by July 23. On the surface, New Zealand’s situation does not appear that different from other higher-yielding bond markets in the developed world such as the US, UK, Australia, and Canada. However, there are a number of factors that make higher interest rates more appropriate for this economy: An unsustainable housing market If nothing else, the RBNZ’s hawkish turn can be attributed to the country’s wildly unsustainable housing market (Chart 6). Nominal house prices have been in an unimpeded accelerating trend since mid-2019, and are now growing at a whopping 28% year-over-year as of June. The anecdotal stories of housing market frothiness in New Zealand are at times unbelievable, like the recent sale of a run-down house in an Auckland suburb, with no bathroom or toilet, for a whopping two million dollars.3 The housing boom has undoubtedly been caused by accommodative monetary policy, with mortgage rates reaching all-time lows during the pandemic. While the RBNZ has implemented macroprudential measures such as increased loan-to-value restrictions on mortgages, it will take a significant pickup in mortgage rates to truly curb the acceleration in house prices. Housing affordability – or, more accurately, unaffordability - has reached a point where a 20% down payment on the median national house price is equal to 223% of the median disposable income, according to the RBNZ (Chart 6, middle panel). A similar measure, the OECD’s house price-to-income ratio, is most elevated in New Zealand among the developed economies. The overheating housing market also poses a major financial stability risk. New Zealand also leads the pack when it comes to the housing exposure of commercial bank balance sheets (Chart 6, bottom panel). With nearly half of commercial bank balance sheets composed of housing loans, New Zealand’s financial system is especially susceptible to a housing downturn. The takeaway is clear - even in the absence of other factors, the housing situation alone would be enough to force the RBNZ to act. Inflation accelerating above target The RBNZ tapering decision came a mere two days before the release of a very strong CPI print for Q2/2021, with consumer prices rising 1.3% during the quarter and 3.3% on a year-over-year basis – the fastest pace since 2011 (Chart 7). The central bank had been expecting some near-term spikes in headline inflation owing to temporary supply shortfalls and high oil prices. However, the RBNZ does not see all inflation as “transitory” and acknowledges that rising capacity pressures and labor shortages could continue to push up inflation going forward Chart 6The RBNZ's Housing Headache Chart 7A Broad-Based Spike In NZ Inflation Inflation has also been broad-based, with both tradables and non-tradables inflation running above the upper band of the RBNZ’s 1-3% inflation target. Although the bank does, on net, favor a lower New Zealand dollar (NZD) for the export-driven New Zealand economy, the depreciation in the NZD could push up tradeables inflation further, making urgent action from the RBNZ all the more necessary. Also important are the sources of inflation. The housing basket was responsible for more than a third of the rise in prices in Q2 (Chart 8). With housing affordability now a politically fraught issue creating major headaches for the RBNZ, expect the bank to be extra-sensitive to this sort of inflation. Accelerating food prices also create the risk that the “sticker shock” of rapidly rising costs for everyday spending items pushes up consumer inflation expectations past the RBNZ target range. Chart 8Prices Are Rising For 11 Out Of The 12 Groups In The NZ CPI Basket Chart 9The RBNZ Is Running Out Of Bonds To Buy An asymmetric monetary policy backdrop The monetary policy backdrop in New Zealand also favors a withdrawal of stimulus, on the margin. After only sixteen months of quantitative easing, the RBNZ now owns nearly half of all the sovereign debt outstanding in the country. That is a level of ownership on par with the ECB, which has had a long-running asset purchase program, and far exceeds the shares held by peers such as the Fed and Bank of Canada (Chart 9). Had they not terminated purchases, the RBNZ would have been limited by the simple fact that there is not enough government bond issuance for it to buy up without starting to impair the liquidity of the bond market Looking beyond the end of the LSAP, the central bank may have to push policy rates considerably higher to contain inflation. At only 0.25%, the official cash rate is 165bps below the mean estimate of the neutral rate —the rate at which monetary policy would be neither restrictive or stimulative – derived from the RBNZ’s suite of quantitative models (Chart 10). There is also some uncertainty around this number, with the upper end of the range of estimates as high as 4.5%. This signals that the RBNZ could hike rates quite a bit without choking off the economy. Chart 10The Market Is Pricing In An Extremely Slow RBNZ Hiking Cycle In this context, market pricing in the New Zealand OIS curve, which discounts a very slow hiking cycle with the policy rate not expected to reach the median RBNZ neutral rate estimate until 2028, appears overly dovish. A buoyant economic backdrop Lastly, the RBNZ has arguably already satisfied its mandate to support the economic recovery coming out of the pandemic (Chart 11). Real GDP and aggregate employment are both above pre-COVID levels, while business and consumer confidence are continuing the recovery started last year. Yields have picked up across the New Zealand government bond curve, reflecting this improvement in growth and sentiment. Even though some pandemic restrictions remain in place, the vaccination program has shown steady progress and is likely to ramp up further as the government has just acquired a large shipment of the Pfizer vaccine. Looking at the broader picture, there appears to be little remaining justification for the RBNZ to remain as accommodative as it is right now. The economic recovery from the pandemic is largely complete and the upside inflation and financial stability risks are too important to ignore. After such an abrupt end to the RBNZ’s LSAP program, rate hikes are likely just around the corner. Yet with the OIS curve now discounting a full rate hike by October of this year, markets have adjusted to a sooner than expected RBNZ liftoff date. However, we believe that the New Zealand sovereign yield curve has not fully priced in how much the RBNZ - historically one of more active central banks that is not afraid to raise or lower interest rates aggressively - will need to tighten, and how flat the curve will get, once the rate hikes begin. Although the entire New Zealand government bond curve has already flattened somewhat, experience from previous hiking cycles shows that the curve usually continues to flatten well after rate hikes begin, usually reaching zero or inverting slightly by the time the RBNZ is done hiking rates. This is especially true for the yield curve between two and five years, which is the maturity range that is most sensitive to rate hike expectations (Chart 12). Chart 11The NZ Economy Has Recovered For The Most Part Chart 12Monetary Policy And The NZ Yield Curve Currently, the 2-year/5-year New Zealand yield curve is 22bps, leaving ample room for the curve the flatten further once the RBNZ begins to hike rates. Meanwhile, implied forward rates are currently priced for a re-steepening of the curve in the short term, making a 2-year/5-year flattener an especially attractive trade in New Zealand with the RBNZ set to tighten. This is also a “cleaner” play on monetary policy expectations over a cyclical horizon than, for example, a 2s/10s flattener where the longer-maturity yield could be boosted by higher inflation expectations (and where some flattening is already discounted in the forwards). Today, we are initiating a new recommended 2-year/5-year curve flattener trade in New Zealand using cash government bonds. This trade involves selling a 2-year bond, and using the proceeds to buy a combination of a 5-year bond and a 3-month treasury bill that has the same duration as the 2-year bond. This makes the trade both duration-neutral and “proceeds-neutral” by fully investing the cash from the sale of the 2-year bond. Details of the trade, including the duration weightings and specific bonds used, can be found in our Tactical Trade Overlay table on page 17. Bottom Line: House prices, inflation, and the overall economic backdrop justify the RBNZ’s hawkish shift. However, government bond and interest rate swap markets have not fully priced in how quickly, and how far, the RBNZ can hike during the upcoming tightening cycle. As a play on further RBNZ hawkishness, we are entering a new recommended tactical trade – a 2-year/5-year yield curve flattener in New Zealand government bonds.   Robert Robis, CFA Chief Fixed Income Strategist rrobis@bcaresearch.com Shakti Sharma Senior Analyst ShaktiS@bcaresearch.com Footnotes 1 Please see BCA Research Global Fixed Income Strategy Report, "A Summer Nap For Global Bond Yields", dated June 9, 2021, available at gfis.bcaresearch.com. 2 Please see BCA Research Global Fixed Income Strategy Special Report, "Global House Prices: A New Threat For Policymakers", dated May 28, 2021, available at gfis.bcaresearch.com. 3https://www.theguardian.com/world/2021/jul/15/house-with-no-toilet-sells-for-2m-as-new-zealand-property-market-soars Recommendations The GFIS Recommended Portfolio Vs. The Custom Benchmark Index Duration Regional Allocation Spread Product Tactical Trades Yields & Returns Global Bond Yields Historical Returns