Financial Markets
The S&P 500 sits near all-time highs, but sentiment and positioning suggest euphoria has not driven this rally. Prices are elevated, yet the SKEW/VIX ratio sits at 8.3, or its 67th percentile. While not at extreme levels associated with reversals, it…
European equities have recently lagged the S&P 500, with short-term risks building despite a constructive long-term outlook. After reaching all-time highs in February, the EURO STOXX 50 began to stall as US markets sold off on Deep Seek headlines. The…
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Japan’s improving growth momentum and structural inflation shift support an underweight in JGBs and long JPY positioning. The June Eco Watchers Survey was broadly in line with expectations, with current conditions ticking up to 45.0 and expectations modestly…
Labor market cracks reinforce long duration and steepener positioning as growth risks mount. Job market data has looked strong on the surface, but the details of the June employment and JOLTS reports confirm a slowing trend within the “low hiring, low firing”…
Deteriorating macro momentum supports a defensive asset allocation stance as hard data deteriorates. Last week’s ISM Manufacturing and Services PMIs confirmed that growth is slowing and price pressures are easing from a high level. The ISM Manufacturing index…
Stronger-than-expected June inflation will likely keep the Riksbank on hold in August, despite soft underlying trends. Headline inflation accelerated more than expected to 0.5% m/m (0.8% y/y), while CPI ex-housing rose to 2.9% y/y and core inflation to 3.3%…
Our European Investment strategists upgrade small caps to maximum overweight, citing improving margins, supportive macro trends, and attractive valuations. They expect small caps to continue outperforming large caps over the next 12 to 18 months. With…
Canada’s stronger currency and tightening financial conditions point to further BoC easing and support long Canadian bond positions. The CAD has appreciated this year alongside the global push to diversify away from USD assets, which has weakened the US…
Downward pressure on the pound will rise in the coming months. Inflation will go up, so will bond yields. It’s time to book profits on Egyptian domestic bonds.