FICC

Our labor market indicators have softened meaningfully during the past month but aren’t yet signaling an imminent recession. That said, the Fed can no longer ignore the labor market with the unemployment rate above 4% and rising.

Special Report

The green energy transition will drive a surge in copper demand over a long-term horizon. However, a better entry point to get long will emerge after the next economic downturn begins.

Our Portfolio Allocation Summary for July 2024.

Special Report

In this report, we try to gauge how long the exceptional performance of the US can last, but from a more nuanced angle – inflows into US assets and the impact on the dollar and bond yields. Our work suggests that investors should not make any huge bets on the dollar today, but should be short over the longer term (3-5 years). Empirical evidence also suggests you want to be long US bonds into any downturn, relative to global-ex-US duration-matched government securities, but that view becomes less certain if the global economy avoids a downturn in the next few months. What is interesting in this report are high some conviction views across currencies, bonds and precious metals.

We look at the implications a various European central bank meetings this week, for currency strategy.

Special Report

We consider the relative merits of four different fixed income investments in the current economic environment: 2-year Treasuries, 10-year Treasuries, Baa-rated corporate bonds and current coupon Agency MBS.

In light of this week’s RBA decision to keep policy on hold, we look at the best possible trades in fixed income markets. In our view, inflation-linked bonds, relative to nominals remain a good bet.

Gold prices might experience a correction or consolidation over the near term. However, cyclical and structural forces will ultimately cause the yellow metal to trend upwards.

In this insight, we update our thinking on the recent BoJ move in terms of positioning for the yen and JGB yields.

Our reaction to this morning’s CPI report and this afternoon’s FOMC meeting.