Highlights Stay tactically neutral to equities. The market may meet some short-term resistance, especially as a slew of poor earnings are released in the coming weeks. The long-term threat to equities comes from the pandemic’s…
Highlights US Corporates: The Fed continues to expand the reach of its extraordinary monetary policies designed to combat the COVID-19 recession, now giving itself the ability to hold BB-rated US high-yield bonds within its corporate…
Highlights The near-term is fraught with risk for US equities and global risk assets. Investors concerned over uncertainty, a slow recovery, and economic aftershocks must also guard against geopolitics. COVID-19 is not a victory for…
Highlights Oil prices are up strongly from their lows, but conditions for a durable bottom may not yet be in place. The main hiccup is that an air pocket will likely remain under global oil demand until most social-distancing measures…
BCA Research's European Investment Strategy service recommends investors overweight Italian BTPs and underweight German bunds on a cyclical (6-12 month) horizon. Europe is dithering on its fiscal response to the pandemic.…
Highlights Europe’s dirty little secret: Euro area debt is already mutualised. Investment implication: Overweight Italian BTPs, underweight German bunds, and overweight the euro on a structural (2-year plus) horizon. ESM plus…
Highlights Bond Yield Differentials: The deepening global recession has prompted aggressive monetary easing measures by virtually every developed economy central bank. With policy rates now near zero everywhere, government bond yield…
We have been closely monitoring the dynamics of the COVID-19 outbreak in Italy. If the containment of the virus can gather momentum, it could fuel the prospect that other Western countries can also gain control of the epidemic.…
The number of newly reported cases of COVID-19 in Italy and Spain seems to have peaked 13 days ago. This by no means indicates that an end of the lockdowns is imminent, but if China’s experience is any guide, it suggests…
Highlights The Federal Reserve’s temporary FIMA repo facility will go a long way in helping ease dollar-funding stress outside the US. However, with the duration of the lockdown highly uncertain, a liquidity crisis could…