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Fixed Income

China PMIs: A Rebound From Low Levels
China’s Caixin Manufacturing PMI rebounded one point in October to 50.3. This was in line with the NBS PMIs from earlier this week, which also showed a modest rebound. We are looking for a turning point in China as the government unrolls stimulus measures.…
Daily Insights
ISM Manufacturing: A Whiff Of Stagflation?
The October ISM Manufacturing missed expectations, decreasing to 46.5 from 47.2 in September. The Prices Paid component jumped, rising to 54.8 from 48.3 the month prior. New Orders showed a small upside surprise at 47.1, up 1 point on the month, pushing the…
Daily Insights
EM Credit Markets: Nirvana Or A Mirage?
EM credit markets have recently defied the selloffs in EM equities, currencies, local currency bonds, and commodities. According to our Emerging Markets Strategy colleagues, such a decoupling is unusual. A potential Trump re-election could weigh heavily on…
Daily Insights
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The Critical Question For Bond Investors

A reaction to this morning’s employment report and a preview of the potential bond market implications of next week’s US election and FOMC meeting.

US Bond Strategy by Ryan Swift
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Monthly TAA Report: Can Powell Stick The Landing Before the Trump Storm?

Can Powell achieve a soft landing? There are some indications he is doing it. We examine why our negative stance was wrong and analyze the four growth engines that kept recession at bay. Half of these forces remain while the other half have run out of juice. While this might be enough to keep the economy going, we maintain our defensive positioning. Equities have priced a very benign outcome. Meanwhile, rising rates in anticipation of a Trump win are pushing the economy away from the soft-landing path. We hedge the possibility of further upside in yields in case Trump gets elected by downgrading duration to neutral.

Global Asset Allocation
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Bank Of Japan: Hawkish Hold

The latest Bank of Japan meeting did not alter our high-conviction views of being long the yen and underweight JGBs.

Foreign Exchange Strategy, Global Fixed Income Strategy by Chester Ntonifor
UK: Fade The Gilts Selloff
We recently pointed to the UK Budget announcement as a pivotal event for UK assets. Following an initially positive reception, the market has turned and priced in further fiscal premia in UK assets, with both gilts and the pound selling off. While the…
Daily Insights
US: The Disinflationary Trend Is Intact
The Fed’s preferred measure of inflation, core PCE, met expectations of a reacceleration to 0.3% month-on-month, and reached 2.7% year-over-year. The rest of the Personal Income and Outlays report showed solid consumption growth, although supported by a…
Daily Insights
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EM Credit Markets: Nirvana Or A Mirage?

EM credit markets have recently defied the selloffs in EM equities, currencies, local currency bonds, and commodity prices. Such a decoupling is unusual. Resilient US growth and Fed easing are not sufficient to justify very low EM credit spreads.

Emerging Markets Strategy by Ziyuan Huang, Arthur Budaghyan
Euro Area: Growth Accelerates, But Beware Global Manufacturing
Flash Q3 GDP estimates for the Euro Area beat expectations, accelerating to 0.4% quarterly growth from 0.2% last quarter. The momentum was spread across major countries, except for Italy. Meanwhile, the European Commission’s Economic Sentiment Index for…
Daily Insights

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