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Fixed Income

The upward trend in global food prices suggests that food inflation risks re-accelerating in the US. Historically, US food inflation lags the United Nations’ global food price index by about nine months. The annual growth in global food prices has been…
The latest political developments in Argentina increase the odds of further liberalizing reforms and solidify the economy’s structural upside. First, the libertarian governing party came out on top in Buenos Aires’ legislative elections. While municipal…
Producer prices in Spain surprised to the downside, foreshadowing a relapse in Euro Area inflation and cementing the ECB’s dovish stance. The Spanish PPI index fell to 1.9% in April, continuing the disinflation trend from the last period while recording the…
According to our fixed income strategists, the main drivers of rising global yields have been widening bond/OIS spreads and term premiums. Wider government bond/OIS spreads reflect increasing government bond supply (net of central bank purchases) among…

Five questions, five answers from the road. We unpack what Europe’s biggest investors are worried about right now, from trade‑war whiplash to bund‑versus‑Treasury positioning; and where the real opportunities still lie.

Special Report

We perform a decomposition of yields moves across six major developed government bond markets to get to the bottom of what’s been driving the global bond selloff of the past eight months.

Tokyo CPI surprised to the upside in April, signaling that Japanese inflation shows no sign of deceleration and putting the Bank of Japan (BoJ) in a complicated position. Investors should remain maximum underweight in JGBs and overweight in…
The rebound in UK retail sales and consumer confidence surprised to the upside, and suggests that the re-acceleration in inflation observed earlier this week may not be transitory. UK retail sales rose 1.2% m/m in April from 0.1% m/m, significantly…
European corporate bond spreads have more room to narrow in the near term, but their next big leg is up. After a significant widening in option-adjusted spreads caused by stagflation fears in the US and “Liberation Day,” European spreads continue…

Right now, the major stock and bond markets are more ‘anti-fragile’ than fragile, and the Joshi rule recession indicators signal that a US recession is not imminent. This justifies a neutral, or default, tactical weighting to both stocks and bonds until a major market does become fragile, or until recession risk elevates. The one major price trend that is fragile is the 65-day selloff in the US dollar, which justifies a tactical overweighting to the dollar.