Latest from BCA Research

Political instability across Asia is colliding with the trade war fallout, forcing Southeast Asian economies to ease monetary and fiscal policy, while pushing the Bank of Japan in the opposite direction.

From Treasurys to tokenization, stablecoins are quietly becoming one of the most disruptive forces in global finance, with the power to compress yields, deepen dollar penetration, and shift the balance within crypto markets. Explore BCA’s latest insights on their growing impact.

We are turning more constructive on Chinese internet stocks after several years of caution. We recommend going long offshore internet equities in absolute terms and upgrading MSCI China to overweight in a global equity portfolio.

While it is impossible to know exactly when global equities will peak, there are now enough vulnerabilities to justify keeping one’s finger near the eject button.

The ECB stood pat today, yet the policy path remains fraught with uncertainty as domestic resilience collides with global headwinds. This dichotomy continues to hold important implications for European assets over the coming months.

High US inflation is being driven by tariffs, not domestic inflationary pressure. This argues for Fed easing and a bull-steepening of the Treasury curve.

Russia’s recalcitrance will probably trigger a near-term global stock market correction by prompting larger sanctions and derailing US-China talks. But Israel’s actions do not raise our odds of a major oil shock.

For the next few months at least, inflation risk trumps recession risk for both US markets and world markets. This because, correctly gauged, the US jobs market is still supply-constrained with ‘jobs looking for a worker’ exceeding ‘workers looking for a job’ by 0.4 percent. A still supply-constrained US jobs market cannot enter a demand-driven recession until it flips back to demand-constrained, so bond investors should underweight duration. Plus: a new tactical trade is overweight India (INDA).

Core Europe’s industrial sector will relapse in the coming months due to US tariffs and a strong euro. Investors can play the imminent deflationary shock by being long Central European bonds. They should, however, hedge the currency risk vis-à-vis the euro.

USD-denominated Emerging Market bonds have been outperforming US corporates for the past year. We don’t think the rally is exhausted yet.