Protectionism/Competitive devaluation
Highlights A flurry of policy announcements over the past month has given investors the impression that Beijing has turned the policy dial in the direction of supporting growth. We agree that China is easing at the margin, but several observations suggest that the stimulus proposed so far…
Highlights Chart of the WeekTrade Fears Weighing On Ag Complex
Trade Fears Weighing On Ag Complex…
In this Special Report, we shed light on the implications of the U.S./Sino trade war for U.S. equity sectors. The threat that trade action poses to the U.S. equity market is greater than in past confrontations. Perhaps most importantly, supply chains are much more extensive, globally and…
Highlights President Trump has taken the next step in the trade war by charging some of America's major trading partners with outright currency manipulation. However, we are not headed for Plaza Accord 2.0, because neither the ECB nor the PBOC will re-orient policy until their own economic and…
Highlights Our forecast of higher geopolitical risk in 2018 is coming to fruition; President Trump's two key policies, economic populism (fiscal stimulus) and mercantilism (trade tariffs), will counteract each other; Stimulus is leading to trade deficits and a stronger dollar, while a…
Highlights Investors are too complacent about the risks of a trade war. Standard economic models understate the potential economic damage that a trade war could cause. Global equities would suffer mightily from a trade war. Deep cyclical sectors would be hardest hit. Financial equities would…
Highlights The fundamental case to buy the dollar and sell non-U.S. risk assets is currently extremely obvious. This suggests that investors likely have already placed their bets. As such, the case for a counter-trend correction espoused last week has grown. The impact of tariffs on the dollar…
Dear Client, Geopolitical analysis is a fundamental part of the investment process. My colleague, and BCA’s Chief Geopolitical Strategist, Marko Papic will introduce a one-day specialized course - Geopolitics & Investing - to our current BCA Academy offerings. This special inaugural session…
Dear Client, Geopolitical analysis is a fundamental part of the investment process. BCA’s Chief Geopolitical Strategist, Marko Papic, will introduce a one-day specialized course - Geopolitics & Investing - to our current BCA Academy offerings. This special inaugural session will take place on…
Highlights Growing trade tensions are exacerbating risks created by a decline in global liquidity. A weaker CNY will only increase pressures on the dollar. China is in fact likely to try to push the CNY lower, as it is a useful tool to reflate the economy. USD/CNY at 7.1 is necessary to…