Yield Curve

The ECB will begin cutting rates in June, what does this start date imply for the yield curve and European cyclicals?

Investors have taken comfort in the fact that unemployment has remained low in the major economies. But underneath the surface, there are clear signs that labor demand is weakening. The clock keeps ticking towards our H2 2024 recession call. After being bullish on risk assets last year, we are slowly turning more defensive.

In light of the hotter-than-expected US CPI report, we look at what interest rate currency investors should focus on. Our conclusion largely keeps our existing trades in place, as published in our outlook, a few weeks ago.

Our Portfolio Allocation Summary for January 2024.

In this, our final report of the year, we present our main global fixed income investment themes and recommendations for 2024.

Our US fixed income team’s key investment views for 2024.

Our Portfolio Allocation Summary for December 2023.

In this Insight, we discuss the outlook for monetary policy in New Zealand after this week’s RBNZ policy meeting, and introduce related fixed income and currency trade ideas.

Inflation won’t fall fast enough for the Fed to cut rates preemptively before recession arrives. The risk/rewards balance is unfavorable for risk assets. Stay overweight bonds versus equities.

Our kinked Phillips curve framework predicted the immaculate disinflation of 2023. That same framework is now warning that the global economy is heading towards a recession in the second half of 2024.