Canada

In this chartbook, we look at the balance of payments across DM and EM countries. The US does not fare well, but neither do a few other countries.

Acute geopolitical risks, like a massive oil shock, may be abating. But structural geopolitical risk remains high and could upset a blithe market. Cyclical economic risks are underrated as the US slows down and China continues to stumble. Investors should book some profits in anticipation of tariff implementation and a downturn in hard economic data.

Investors should modestly underweight equities in their portfolios and look to turn more aggressively defensive once the whites of the recession’s eyes are visible. We think that will happen within the next few months.

In this FX note, we provide a rationale for why it is important to pay attention to technical indicators, while still keeping your eyeball on the structural factors that drive currencies. This report answers the following questions: 1. Should you buy or sell the USD over a three-to-six month period from the pure lens of our proven technical indicators and 2. What are the best tactical cross trades among currencies. 

The Bank of Canada may be on hold for now, but deflationary risks are rising fast. Find out why rate cuts may come sooner than markets expect.