Highlights Duration: The Treasury market has moved quickly to price-in expectations of a strong economic recovery, while the Fed has been more cautious about moving its own rate forecasts. We think that the market’s expectations…
Highlights Global manufacturing activity will soon peak due to growing costs and China’s policy tightening. This process will allow the dollar’s rebound to continue. EUR/USD’s correction will run further. This…
Dear Client, We are sending you our Strategy Outlook today, where we outline our thoughts on the macro landscape and the direction of financial markets for the rest of 2021 and beyond. Next week, please join me for a webcast on…
Highlights Biden’s policy on China is hawkish so far, as expected, but temporary improvement is possible. We are cyclically bearish on the dollar but are taking a neutral tactical stance as the greenback’s bounce could go…
The market is pricing a significantly more hawkish Fed versus the FOMC dot plot. This is not unusual. Historically, markets tend to prematurely anticipate Fed rate hikes. Most often, unforeseen deflationary shocks force the Fed…
Highlights Fiscal stimulus is no longer a free lunch. US mortgage applications are down by 20 percent since the start of February. With rising bond yields now starting to choke private sector borrowing, bond yields are nearing an…
Highlights Biden has enough political capital to pass at least one more major piece of legislation. The next major bill will increase the budget deficit further, adding additional stimulus, though it will consist of structural reforms…
According to BCA Research’s US Political Strategy service, government spending has taken a big step up and Biden’s second major legislative initiative will ensure that this new profligacy is permanent rather than a…
Highlights Duration & The Fed: Unlike the bond market, the Fed is being intentionally cautious about how quickly it revises its interest rate expectations higher, focusing more on hard economic data than on surveys. We expect the…