Gov Sovereigns/Treasurys

We investigate the recent increase in unemployment with the goal of determining whether it is flagging an imminent US recession.

Poland’s inflation will stay elevated. And yet, its return to the European mainstream has improved its financial market outlook. Accordingly, we are recommending new trades on Polish equity, fixed income, and currency.

Our thoughts on this morning’s CPI print and the bond market’s reaction.

In this Insight, we review the performance and rationale for our current set of tactical fixed income trade recommendations. Our highest conviction positions also happen to be our most successful trades: positioning for a narrowing of the German bund-JGB spread and wider Japanese inflation breakevens.

Labor markets are softening in most developed economies, as is usually the case in the lead-up to recessions. Our base case is that the global recession will begin in the second half of 2024, but we will be monitoring our MacroQuant model on a daily basis for confirmation.

The recent rate hike by the Philippines central bank cannot control food inflation. Nor can it stem the currency slide.

Despite very low inflation, Bank Indonesia raised its policy rates last month to support the currency. The strategy did not work before and will not work now. Stay short the rupiah.

Our Portfolio Allocation Summary for November 2023.

The Eurozone’s inflation will continue to slow over the coming months. While this trend will help Bund prices, will it boost the appeal of European equities?

We are approaching another phase transition from boom to bust. Stocks should rally into year-end, but investors should look to reduce equity exposure early next year while increasing bond exposure.