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Fixed Income

August In Review
The risk-on soft-landing narrative dominated investors’ psyche last month and pro-cyclical assets topped the August return ranking. Asian currencies led the pack by a wide margin, while the dollar was the largest laggard. Markets pricing in an upcoming Fed…
Daily Insights
Fade Any 2Y/10Y Un-Inversion
The 2Y/10Y segment of the yield curve is flirting with un-inversion. Aggressive rate cut expectations have largely driven its steepening, with the 2-year Treasury yields falling nearly 100 bps over the past couple of months. Our colleagues at the Bank…
Daily Insights
Euro Area Balance Sheet Health: Time to Call 911
According to BCA Research’s European Investment Strategy service, an increase in borrowing costs will further weaken vulnerable corporate balance sheets. As suggested by their Corporate Health Monitors (CHMs), the health of High-Yield corporate balance sheets…
Daily Insights
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Monthly Portfolio Update: Is The Fed Right To Declare Mission Accomplished?

Even after the Fed cuts rates, policy will remain restrictive for some time. Moreover, in history, stocks have tended to fall around the first rate cut. We remain cautious on the outlook for the economy and risk assets.

Global Asset Allocation by Garry Evans
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Chartbook

Our annual end-of-summer chartbook report traces the labor market deterioration that led us to downgrade equities at the beginning of August. It also highlights the soft-landing expectations that the credit and equity markets are discounting. We like the risk-reward profile of our newly defensive stance.

US Investment Strategy by Doug Peta
Upward Revisions To GDP Forecasts Are Too Optimistic
Last week, economists polled by Bloomberg revised their consensus 2024 US GDP forecasts upwards, from 2.3% to 2.5%. Government spending and private investment were both revised 0.3 ppts higher to 3.0% and 3.9%, respectively, while consumption growth forecasts…
Daily Insights
What Will The Pace And Magnitude Of Fed Rate Cuts Be?
The market is currently expecting the Fed to cut rates by 100 bps over the course of 2024 and by another 120 bps throughout the first eight months of 2025. However, our Global Investment strategists expect the extent of 2024 rate cuts to undershoot…
Daily Insights
Market Breadth Remains Poor Despite Equal-weighted S&P 500’s Record High
Market Breadth Remains Poor Despite Equal-weighted S&P 500’s Record High …
Daily Insights
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Sweden Will Cut The Gordian Knot

Our negative stance on European growth and assets is not devoid of risks. To gauge whether these risks warrant upgrading our growth outlook, we monitor Sweden closely. So, what is the current message from this Nordic economy?

European Investment Strategy by Mathieu Savary
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China’s Trade Pivot And Its Implications

China has become less reliant on exports to advanced economies, and its products have successfully penetrated developing economies. Exports to the US make up 3% of Chinese GDP, while exports to all developing economies account for 10% of its GDP. China’s trade pivot from advanced to developing economies has economic, political, and geopolitical ramifications.

Emerging Markets Strategy by Ziyuan Huang, Arthur Budaghyan

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