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Monetary

Essentials
On The Underperformance Of Scandinavian Currencies
Scandinavian currencies are bearing the brunt of the recent US dollar strength. The Swedish krona and Norwegian krone are the worst performing G10 currencies since the DXY’s mid-July bottom, losing 8.6% and 7.6% of their value vis-à-vis the USD, respectively.…
3 years ago
Essentials
UK Inflation Surprise Opens The Door To A Less Hawkish BoE
The August UK inflation report produced a large downside surprise. Headline CPI rose +0.3% month-on-month, versus expectations of a +0.7% increase. Year-over-year headline CPI inflation slowed to 6.7% from 6.8%, a sizeable miss versus the consensus forecast…
3 years ago
Essentials
Higher For Longer
According to BCA Research’s US Bond Strategy service, the 2006/07 roadmap remains a good one for bond investors. The Fed held the funds rate steady this afternoon and made no material changes to its policy statement. That said, meeting participants did make…
3 years ago
FICC
A Little Higher For A lot Longer

A discussion of today’s FOMC meeting and its investment implications.

Ryan Swift
3 years ago
CoreMacro
Why 2 Percent Inflation Is NOT ‘Mission Accomplished’

The biggest misunderstanding in the markets right now is that to keep expected inflation well-anchored at 2 percent, inflation must <i>undershoot</i> 2 percent for some time. This implies that interest rate futures curves are mispriced, and that the probability of a ‘soft landing’ is lower than assumed. Plus: we show that the rally in oil has become fractally fragile, and recommend a tactical underweight.

Dhaval Joshi
3 years ago
Essentials
Another BoC Rate Hike?
Tuesday’s release of Canadian CPI in August raised concerns that inflationary pressures are picking up again. Headline CPI inflation rose from 3.3% y/y to 4.0% y/y – above expectations of 3.8% y/y and marking the second consecutive increase after it fell to…
3 years ago
Essentials
Re-Estimating Net Interest Expense
BCA Research’s US Bond Strategy service concludes that recent BEA data are understating corporate net interest expense by a significant amount. Given the recent climb in interest rates, it would be reasonable to expect that corporate interest expense would be…
3 years ago
FICC
Are Higher Interest Rates Hurting Corporate Balance Sheets?

Top-down measures of nonfinancial corporate sector balance sheet health have been flattered in recent quarters by inaccurate data on interest expense. After correcting for the inaccurate data, we see that our best measures of corporate balance sheet health show a persistent steady deterioration.

Ryan Swift
3 years ago
Essentials
Some Upcoming Upside For Small Caps?
Monetary policy is difficult to calibrate: it is hard to get it just right. The Global Investment Strategy (GIS) service has been iterating that while the Fed could temporarily achieve a soft landing, there is much uncertainty surrounding the idea that the…
3 years ago
Essentials
Europe: Inflation Will Come Back
According to BCA Research’s European Investment Strategy service European inflation is likely to remain stubborn through the remainder of the decade, since the working-age population’s decline will keep the labor market tight. European rates have peaked for…
3 years ago

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