Highlights Since June, 6 structured recommendations achieved their profit targets: short building and construction (XLB) versus healthcare (XLV); long USD/CAD; long USD/HUF; long Nike versus L’Oréal; short corn versus…

Highlights The post-pandemic investment phase is just a continuation of the post-credit boom investment phase. This is because the pandemic has just accelerated the pre-existing shifts to a more remote way of working, shopping and…

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…

Highlights The dollar smile theory was valid around the COVID-19 crisis but does not stand the test of time. A more useful framework for determining the long-term trend in the dollar is observing global business cycle dynamics. The…

Highlights China's high-profile jawboning draws attention to tightness in metals markets, and raises the odds the State Reserve Board (SRB) will release some of its massive copper and aluminum stockpiles in the near future. Over…

Highlights On a timeframe of a few years, a net deflationary shock is a near-certainty even if we do not know its precise nature or its precise timing. Hence, investors must build such a deflationary shock or shocks into their long-…

Highlights Underweighting T-bonds, tech versus the market, growth versus value, new economy versus old economy, and US versus the euro area are all just one massive correlated trade. Get the direction of the T-bond yield right, and you…

Special Report

Highlights We use a correlation-hedge approach to manage emerging market (EM) currency exposure for global investors with nine different home currencies. For USD-based investors, EM debt volatility is driven by the EM spot exchange…

Global equity valuations are at a level where they are very sensitive to changes in the discount rate. Chart 1 shows that the cyclically-adjusted earnings yield on the S&P 500 is slightly below its 2000 low. Equity investors have thus…

Highlights Does it still make sense to use historical yield betas for fixed income country allocation? Yes, favoring countries with higher government bond yield betas when global yields are falling, and vice versa, is still an…