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Fixed Income

Stocks Are Anti-Fragile For Now, But The Dollar Selloff Is Fragile

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.

Counterpoint by Dhaval Joshi
UK: Jump In Inflation Transitory Too?
UK inflation surprised to the upside in April. Headline inflation rose to a 15-month high of 3.5%, from 2.6% the month before. Core inflation also surprised above estimates, printing 3.8% vs. 3.4% in March. Services inflation climbed to 5.4% from 4.7%. Higher…
Daily Insights by Jeremie Peloso
Don’t Chase Narrower BTP-Bund Spreads
The European bond market is pricing in a more optimistic outlook. The BTP-Bund spreads have narrowed 30bps since April 9 and are now within reach of their pre-Ukraine war level. BCA’s European strategists do not share this optimism, at least not in the…
Daily Insights by Jeremie Peloso
The RBA Moves Cautiously
Overnight, the Reserve Bank of Australia (RBA) cut the cash rate target by 25bps to 3.85%, as widely expected. After this cut, the market still prices in about 50bps of easing over the next six months. According to our Global Fixed-Income strategists,…
Daily Insights by Jeremie Peloso
Mexico: Monetary Easing Continues
Banxico’s 50 bps rate cut reinforces our bullish view on Mexican bonds, with easing likely to continue as inflation falls and growth slows. The central bank unanimously lowered its policy rate to 8.5%, and we expect further cuts ahead as Mexico heads toward a…
Daily Insights by Felix-Antoine Vezina-Poirier
The Shifting Stock/Bond Correlation

Tariff front-running behavior makes the April hard economic data difficult to interpret, but we take the strong reading from Food Services spending as a signal that the US consumer has not yet buckled.

US Bond Strategy by Ryan Swift
Credit Numbers Show Beijing Aiming For Stability, Not Recovery
China’s weak April credit data reinforces the case for defensive positioning, with policy aimed at stability, not recovery. New yuan loans and aggregate financing both rose less than expected. While credit growth may have bottomed, it remains public-sector…
Daily Insights by Felix-Antoine Vezina-Poirier
Dovish Surprises Are Coming
Expect broad-based dovish surprises from major central banks, and stay overweight UK and euro area government bonds. Our Global Fixed Income, European, and FX strategists published a joint update of BCA’s Central Bank Monitors. They expect the Bank of…
Daily Insights by Felix-Antoine Vezina-Poirier
The Stock-Bond Correlation Finds Its Footing Amid Fiscal Risks
The stock-bond yield correlation is stabilizing after months of jitters, setting the stage for renewed Treasury demand as recession risks build. A negative correlation typically points to inflation concerns, while a positive one reflects growth optimism. In…
Daily Insights by Felix-Antoine Vezina-Poirier
The Curve Steepener Is The Trade For 2025

A weakening economy will apply downward pressure to Treasury yields, but the Trump term premium will keep long-dated yields higher than they would otherwise be. This makes Treasury curve steepeners the most attractive trade in US fixed income.

US Bond Strategy by Ryan Swift

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