BCA Research’s Geopolitical Strategy service upgraded the odds of Russia invading Ukraine from 50% to 75%. Of the 75% war risk, they give 10% odds to Russia conquering all of Ukraine. Ukraine’s economy is small but…
Highlights The combination of a temporarily negative domestic demand effect and a lingering domestic labor and global supply chain effect from the Omicron variant has increased the urgency for the Fed to raise interest rates. The…
The monthly Citi/YouGov survey revealed that UK consumer inflation expectations over the coming 12 months surged from 4.0% in December to 4.8% in January. This is the highest level on record in the history of the series which…
The German IFO Business Climate index increased by 0.9 points to 95.7 in January, surprising expectations of a deterioration. The improvement comes on the back of a stronger expectations component, which gained 2.5 points to 95.2…
BCA Research’s Global Fixed Income Strategy service’s highest conviction investment recommendation for 2022 is to position for a wider 10-year US Treasury/Germany Bund spread. With markets already priced for…
The UK CPI inflation rate rose to a 30-year high of 5.4% y/y in December. Similarly, the retail price index grew 7.5% y/y. Elevated inflation is raising pressure on the BoE to continue to increase rates following the 15 basis point…
Highlights US Vs. Europe: Growth and inflation momentum remains stronger in the US versus Europe. The latter is taking the bigger economic hit from more severe Omicron economic restrictions and a greater exposure to slowing Chinese…
Euro Area equities underperformed US stocks by 14% in 2021. However, this underperformance has reversed so far this year with Eurozone stocks up relative to US ones. Nevertheless, risks to European equities remain elevated over…
Dear Client, Next week there will be no regular strategy report. Instead, we will hold our quarterly webcast which will discuss the outlook for the European economy and assets in 2022. I look forward to this interaction. Best…