Fixed Income
Treasury yields are generally following the pattern of past interest rate cycles, but with a larger term premium keeping the curve steeper than usual.
In this Q4 Strategy Outlook, we discuss where we stand on our recession call, the outlook for stocks and bonds in various scenarios, why investors are misunderstanding the impact of AI on corporate profits, whether the US dollar has entered a structural downtrend, our perspective on the yen, gold and other commodities, and much more.
Japanese markets reacted sharply to Sanae Takaichi’s election as the leader of the ruling Liberal Democratic Party and the frontrunner to become Japan’s next Prime Minister. The Nikkei surged 4.8% and the yen plunged nearly 2% across major pairs. Seen as a…
Our Portfolio Allocation Summary for October 2025.
Our DM strategists recommend regional bond overweights in the UK, Canada, and Sweden, and express policy divergence through tactical FX trades: long USD, underweight GBP and SEK, and long JPY vs. EUR. Most G10 central banks are nearing neutral, but their next…
The RBA held rates at 3.6% as expected, maintaining caution as inflation could prove stronger than expected. Policy remains slightly restrictive, and at most one additional cut is on the table as the central bank has achieved a soft landing. While the RBA has…
Banxico cut rates to 7.5%, reinforcing our call to go long Mexican local bonds and overweight Mexico across EM portfolios. Inflation is within target, giving policymakers space to ease. Sound fiscal management and strong external accounts continue to support…
Our tactical framework, which tracks the reflexive loop between financial conditions and economic surprises, points to stronger near-term growth, leaving equities vulnerable if inflation re-accelerates. Data surprises move markets, while bond yields and the…
This week’s US Bond Strategy Special Report takes a look at the two most provocative papers presented at last month’s Jackson Hole conference.
Post-FOMC speeches reveal divisions across the committee, reinforcing long duration as policy remains mildly restrictive. The September dots showed a split, with half of participants expecting at most one 25 bps cut and the rest seeing at least two. Gov.…