Highlights The fourth quarter will be volatile as China still poses a risk of overtightening policy and undermining the global recovery. US political risks are also elevated. A debt default is likely to be averted in the end. Fiscal…
BCA Research’s Global Fixed Income Strategy service recommends investors underweight government bonds where markets are discounting a path for future policy rates over the next two years that is too flat: the US, UK, Canada…
On Monday, Senate Republicans blocked a bill that would have extended federal funding to early December, provided emergency relief, and suspended the debt ceiling until December 2022. Democrats are now facing a tight deadline.…
Highlights The Evergrande crisis is not China’s Lehman moment. Nonetheless, Chinese construction activity will decelerate further in response to this shock. Global equities are frothy enough that a weaker-than-expected Chinese…
BCA Research’s Foreign Exchange Strategy service expects the Fed’s tapering of asset purchases to be a non-event for the US dollar. While the Fed is still considering tapering asset purchases (and would very likely do so…
Highlights We cannot predict how China will manage Evergrande precisely but we have a high conviction that it will do whatever it takes to prevent contagion across the property sector. However, China’s stimulus tools are losing…
Highlights A decline in the marginal propensity to spend out of both income and wealth over the past few decades generated a flood of excess savings. Facing a chronic shortfall of aggregate demand, central banks had no choice but to…
Highlights An Iran crisis is imminent. We still think a US-Iran détente is possible but our conviction is lower until Biden makes a successful show of force. Oil prices will be volatile. Fiscal drag is a risk to the cyclical…
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 China’s July Politburo meeting signaled that policy is unlikely to be overtightened. The Biden administration is likely to pass a bipartisan infrastructure deal – as well as a large spending bill by Christmas.…