Asset Allocation 2024: Tricky Seven Months Remaining

May 10, 2024 1:06 PM UTC

Fed easing expectations for 2025 and 2026 can shift from a terminal 4% Fed Funds rate towards 3%, as the U.S. economy slows due to lagged tightening effects.  Combined with Fed easing starting in September this should mean a consistent decline in 2yr yields.  However, 10yr U.S. Treasury yields wil

UK GDP Review: Clearer Growth Momentum But Mainly Import Led?

May 10, 2024 6:26 AM UTC

The economy may have been in only mild recession in H2 last year, but the ‘recovery’ now evident is much clearer than any expected with GDP growth notably positive.  Indeed, coming in more than expected, and despite industrial action, GDP rose by 0.4% m/m in March accentuating the upgraded boun

Mexico CPI Review: 0.2% Growth in April

May 9, 2024 6:11 PM UTC

April's CPI data, despite a 0.2% m/m growth, reveals a significant y/y uptick to 4.6% from March's 4.4%, challenging norms due to electricity tariff adjustments. Core CPI maintained stability with a 0.2% increase, while Core Goods CPI rose by 0.3% and Services CPI by 0.1%, accumulating a 5.2% y/y gr

FX Daily Strategy: APAC, May 10th

May 9, 2024 3:15 PM UTC

GBP unlikely to extend losses on UK GDP
More risk of NOK gains than losses on CPI
CAD may start to underperform on the crosses
USD strength to start to wane

BoE Review: Data Dependent Easing Bias Clearer?

May 9, 2024 12:52 PM UTC

There was little surprise that Bank Rate was kept at 5.25% for the sixth successive MPC meeting, nor that the dissent in favor of an immediate rate cut doubled to two as a result of Dep Gov Ramsden confirming more dovish leanings.  The updated projections at least validated the rate path discounted

CBRT Lifts End-Year Inflation Forecast to 38%

May 9, 2024 10:22 AM UTC

Bottom Line: Central Bank of Turkiye (CBRT) released the second quarterly inflation report of the year on May 9, and lifted end-year inflation prediction from 36% to 38% citing that the rebalancing process for demand will be more delayed compared to what was projected that in the first inflation rep

FX Daily Strategy: Europe, May 9th

May 9, 2024 5:53 AM UTC

Some risk of more dovish BoE stance
EUR/GBP risks to the upside
JPY weakness looks unlikely to persist
US jobless claims the US data focus

FX Daily Strategy: APAC, May 9th

May 8, 2024 3:11 PM UTC

Some risk of more dovish BoE stance
EUR/GBP risks to the upside
JPY weakness looks unlikely to persist
US jobless claims the US data focus

China Equities: A Tactical Play

May 8, 2024 2:20 PM UTC

China equities can see a tactical bounce of 5-10% in the coming months.  Cheap valuations and  underweight global fund positions means that the scale of pessimism only has to get less bad on the economy and China authorities attitude towards businesses.  While we see a tactical opportunity, we do

Ukraine War Update: Major Russian Offensive is Expected This Summer Despite U.S. Military Aid

May 8, 2024 12:06 PM UTC

Bottom Line: The offensives at the front lines started to pick up steam after March/April as the Russian forces plan for their larger summer 2024 offensive operation, aiming to seize more territory before the U.S. presidential elections in November. In the meantime, U.S. approved a $61 billion warti

Sweden Riksbank Review: Biting the Bullet

May 8, 2024 8:24 AM UTC

It very much seemed to be a question of when, not if, as far as policy easing is concerned for the Riksbank.  In this regard, albeit surprising in terms of timing, the Riksbank delivered, cutting its policy rate by 25 bp (to 3.75%), despite clear concerns it has flagged about recent and continued k

FX Daily Strategy: Europe, May 8th

May 8, 2024 5:20 AM UTC

SEK upside risks on Riksbank
German production data may underpin EUR
JPY still struggling to show general strength
AUD may test upside, but break higher still looks unlikely at this stage

FX Daily Strategy: APAC, May 8th

May 7, 2024 3:08 PM UTC

SEK upside risks on Riksbank
German production data may underpin EUR
JPY still struggling to show general strength
AUD may test upside, but break higher still looks unlikely at this stage

U.S. Fiscal Problems: 2025 More Than 2024

May 7, 2024 1:10 PM UTC

Current real yields in the U.S. government bond market already large reflect the large government deficit trajectory.  Even so, H1 2025 could see some extra fiscal tensions that add 30-40bps to 10yr U.S. Treasury yields as the post president election environment will either see a reelected Joe Bide

IMM Commitment of Traders Reports w/e Apr 30th

May 7, 2024 7:16 AM UTC

Modest reducion in CHF and JPY shorts - still extended.

RBA Review: Change in wordings, no change in heart

May 7, 2024 6:11 AM UTC

The RBA meeting on May 7th has kept rates on hold and see a change wordings in forward guidance but not the meaning.

Asia Summary and Highlights 7 May

May 7, 2024 6:09 AM UTC

RBA leaves cash rate unchanged at 4.35%

Fed SLOOS on Bank Lending mostly resilient

May 6, 2024 6:27 PM UTC

The Fed’s Q2 Senior Loan Officer Opinion Survey on bank lending practices generally sustains a less negative tone seen in the last survey for Q1, and does not suggest that the Fed need to have any serious concerns about the business investment outlook. 

BCB Preview: 25bps or 50bps cut?

May 6, 2024 1:02 PM UTC

The Brazilian Central Bank (BCB) convenes on May 8 to set the policy rate. Previous forward guidance hinted at a 50bps cut in May, but recent statements from BCB President Roberto and some weakness in the BRL have shifted expectations to a 25bps cut. However, we anticipate the BCB maintaining a 50bp