Sweden

Highlights The dollar has decoupled from interest rate differentials, being hurt by buoyant global growth. For the dollar to weaken more in 2018, global growth will have to accelerate further from current lofty rates. The tightening in Chinese policy along with the poor performance of EM…

Highlights We are exploring the key FX implications of the views presented in BCA's 2018 annual outlook. The dollar is likely to experience some upside in the first half of 2018, but then weaken as U.S. monetary policy becomes increasingly onerous. The euro should mirror these dynamics,…

Highlights The euro doesn't have the key attributes of a funding or a risk-off currency. This means its behavior is not fixed. While in the past it has behaved as a risk-off currency, this year it has traded as a risk-on one, correlating with key risky assets. The current episode of market…

Highlights This week, we are reviewing all our current active trades in our Tactical Overlay. As a reminder, these positions (Table 1) are meant to complement our strategic GFIS Model Fixed Income Portfolio, typically with shorter holding periods and occasionally in smaller or less liquid…

Highlights Since the release of our currency hedging report on September 29, 2017,1 we have received an overwhelming positive response from clients around the globe. We thank our clients for their appreciation of our research. Instead of answering client requests individually, we have decided…

Feature Valuations, whether for currencies, equities, or bonds, are always at the top of the list of the determinants of any asset's long-term performance. This means that after large FX moves like those experienced this year, it is always useful to pause and reflect on where currency…

Highlights The ECB can talk down the euro, but not by much. The central bank has previously expressed comfort with EUR/USD at 1.15. The cyclical and structural direction of EUR/USD is higher... ...because the euro area versus U.S. long bond yield spread should ultimately compress to -40 bps…

Feature Dear client, This week we are publishing a brief Special Report highlighting ten charts that have captured our attention, charts we would like to emphasize before the summer lull ends. We will not be sending a report next week, but we will be resuming our regular publishing schedule…

Highlights Your portfolio cash weighting should be at least in the middle of its range, until the observed volatility of risk assets rises meaningfully from its record low. Cyclically add long SEK/USD to long EUR/USD. Within a European equity portfolio, this implies going cyclically…

Highlights The bottom in the dollar will have to wait for clearer signs that U.S. inflation has hit a trough. DXY is unlikely to punch below its May 2016 low. We examine balance of payments dynamics across the G10. This analysis shows that while the euro has long-term upside, it is too early…