Economy
Core Europe’s industrial sector will relapse in the coming months due to US tariffs and a strong euro. Investors can play the imminent deflationary shock by being long Central European bonds. They should, however, hedge the currency risk vis-à-vis the euro.
USD-denominated Emerging Market bonds have been outperforming US corporates for the past year. We don’t think the rally is exhausted yet.
Despite the post-election selloff, investors should continue buying Argentine assets on weakness. Argentine markets sold off sharply after President Milei’s party suffered a crushing defeat in Sunday’s Buenos Aires election. Investors did not expect the…
The August NFIB survey shows a fragile US economy with disinflationary signals and weak employment, supporting our defensive stance. The Small Business Optimism Index rose to 100.8 from 100.3, a six-month high, though still below December 2024 levels. Much of…
Australia’s NAB survey shows underlying resilience, reinforcing our underweight on ACGBs and the case for AUD flatteners vs. CAD steepeners. The August survey was mixed, with current conditions improving to 7 from 5, while business confidence softened to 4…
Stable long-term inflation expectations and weak labor perceptions support a defensive stance. The NY Fed Survey of Consumer Expectations showed 1-year inflation expectations ticking up to 3.2% in August, while the 3-year (3.0%) and 5-year (2.9%)…
Japan’s Eco Watchers Survey points to stabilization; JGBs remain unattractive and the yen’s near-term setup is less favorable versus USD. The August survey modestly beat expectations, with the current component rising to 46.7 from 45.2 and expectations…
A fleeting greenback rally post Fed rate cut will offer a final chance to reset short dollar exposures. See why undervalued Asian FX are poised to lead the next leg lower in USD and how to position now.
The August US employment report confirmed a significant labor market deceleration, keeping us modestly defensive. Nonfarm payrolls rose just 22k after 79k in July, while net revisions subtracted 21k from prior months. The 3-month average slowed to 29k,…
Canada’s August jobs report confirms the economy remains weak, supporting Canadian bonds and CAD steepeners. Employment fell by 66k, driven by declines in both part-time (-60k) and full-time (-6k) positions, against expectations for a modest gain. The…