Yield Curve

In this report, we argue that the Bank of Japan is unlikely to hike interest rates this week, but the relative trajectory of bond yields in Japan is higher. This warrants an underweight position in JGBs and a leveraged bet on a higher yen. The positioning for equity investors is murkier, as progress on corporate reforms is necessary for a rerating in Japanese shares. That is not yet very clear. The bottom line is: Stay long the yen.

Crucial leading indicators of the global and European economies continue to deteriorate. How should investors position their European portfolios to benefit from these trends?

Our Portfolio Allocation Summary for September 2024.

What do the mixed signals sent by the UK economy mean for the Bank of England, and what are the implications for Gilts and the British pound?

The unwind of yen carry trades caused violent tremors across the globe. Was this shock a one-off event or the prelude to more troubles?

Our Portfolio Allocation Summary for August 2024.

Investors hope that the ECB rate cuts priced into the curve will be sufficient to achieve a soft landing in Europe. History argues against this view, but will this time be different?

After this morning’s jobless claims number, we have now seen enough deterioration in our preferred labor market indicators to increase portfolio duration from “at benchmark” to “above benchmark”.

The real threat to European equities is growth, not political risk. How low will Eurozone earnings fall during the coming recession and how much will equities decline in response?