Special Report

This week we are sending you two Special Reports (both included in this document) that were previously published in the May and June editions of The Bank Credit Analyst. Both reports discuss the long-term outlook for global bond yields.…

Highlights EUR/USD is likely to correct over the course of the coming weeks, however, the picture remains too murky to be aggressive. The dollar move since 2015 is still in line with previous sideways consolidations. Economic…

Special Report

Highlights The RBA will not hike as quickly as markets expect. Weak wage growth and high underemployment suggest plenty of spare capacity. Inflation is only barely at the bottom of the central bank's range. Massive household debt…

Highlights The Fed is behind the curve in raising rates, as is the Bank of Canada, the Reserve Bank of Australia, the Reserve Bank of New Zealand, and the Swedish Riksbank. In contrast, the Bank of Japan, the ECB, and the Swiss…

Highlights BCA's Central Bank Monitors support the case for less stimulus. Yellen's "dovish" testimony does not change our Fed call. The BCA Beige Book Monitor and related indicators support our view on the economy…

Highlights Duration: Investor optimism about U.S. growth and inflation will return in the coming months. Remain at below-benchmark duration and enter a short position in the July fed funds futures contract. Close short positions in the…

Highlights Economic Outlook: Global growth will remain strong over the next 12 months, but will start to slow in the second half of 2018, potentially setting the stage for a recession in 2019. Overall Strategy: Investors should…

Highlights The divergence between global bond yields and equity prices is not as puzzling as it may first appear. Thus far, lower inflation has dampened the need for central banks to tighten monetary policy. This has caused bond yields…

Special Report

Highlights The European Central Bank's ultra-dovish policies have depressed the value of the euro and, by extension, boosted German manufacturing. Germany has diffused its inflationary pressures by outsourcing jobs and production…

Highlights The Fed Is Right: Wage growth and inflation increase as growth rebounds in the second half of the year. Treasury yields move higher, the yield curve steepens and TIPS breakevens widen. This is the most likely scenario. The…