Fixed Income
Japan’s improving growth momentum and structural inflation shift support an underweight in JGBs and long JPY positioning. The June Eco Watchers Survey was broadly in line with expectations, with current conditions ticking up to 45.0 and expectations modestly…
The RBA’s surprise hold reinforces a slower easing path, warranting an underweight on Australian bonds. Markets had priced in a 25 bps cut, but the central bank opted to keep rates at 3.85%. Governor Bullock characterized the decision as a matter of timing,…
Stronger-than-expected June inflation will likely keep the Riksbank on hold in August, despite soft underlying trends. Headline inflation accelerated more than expected to 0.5% m/m (0.8% y/y), while CPI ex-housing rose to 2.9% y/y and core inflation to 3.3%…
Labor market cracks reinforce long duration and steepener positioning as growth risks mount. Job market data has looked strong on the surface, but the details of the June employment and JOLTS reports confirm a slowing trend within the “low hiring, low firing”…
Deteriorating macro momentum supports a defensive asset allocation stance as hard data deteriorates. Last week’s ISM Manufacturing and Services PMIs confirmed that growth is slowing and price pressures are easing from a high level. The ISM Manufacturing index…
Relative growth and inflation trends point to a narrower UST/Bund spread. Our Chart Of The Week comes from Robert Timper, Global Fixed Income Strategist. This week, our rates strategists introduced a new US/Euro Area Relative Duration Indicator, designed to…
June’s employment report showed a tick down in the unemployment rate, an improvement that rules out a Fed rate cut later this month.
Downward pressure on the pound will rise in the coming months. Inflation will go up, so will bond yields. It’s time to book profits on Egyptian domestic bonds.
Trump’s immigration policies are protecting the US economy from a sharp rise in unemployment but steering it into a ‘mini stagflation’. Plus: a new tactical trade is to underweight global technology (IXN).
Banxico’s dovish stance reinforces our bullish view on Mexican local currency debt. The Mexican central bank cut interest rates by another 50 basis points to 8%. The central bank will continue easing monetary policy well into next year. Slower US…