Economy
Weak housing data reinforces our defensive positioning, as recession odds remain underpriced in risk assets. US housing starts fell sharply, declining a larger-than-expected annualized rate of 11.4% in March after a 9.8% rebound in February, which was driven…
April’s Philadelphia Fed survey adds to recent stagflationary signals, reinforcing our defensive commodities positioning. The headline index collapsed to -26.4 from 12.5 in March, missing expectations and confirming the April deterioration seen in the Empire…
The ECB’s latest 25 bps cut and President Lagarde's notably dovish tone amid rising trade uncertainty reinforce our long December 2025 ESTR futures versus SOFR position. The deposit facility rate now stands at 2.25%, and Lagarde reiterated the disinflationary…
Europe’s deflation problem is getting harder to ignore. This week’s ECB cut is just the beginning — tariffs, the euro’s rally, and softening demand all point to more easing ahead. We explain what it means for yields, equities, and EUR/USD.
Fed Chair Jay Powell’s remarks yesterday were in-line with our base case expectation that the Fed will not cut rates proactively in the face of rising tariff-driven inflation.
Soft data continues to deteriorate and hard data will soon follow, reinforcing our defensive asset allocation. Consumer and business confidence have plunged as policy uncertainty and inflation expectations rise, with spending, hiring and capex plans…
Brazil’s deteriorating fiscal dynamics and rising stagflation risks reinforce our negative stance on Brazilian assets, both outright and relative to EM peers. The latest global financial turmoil, combined with President Trump’s disruptive tariffs and China’s…
The NY Fed Empire Manufacturing survey adds to recent stagflationary worries, reinforcing our underweight in risk assets and overweight in government bonds. The general business conditions index rose slightly to -8.1 but remains in contraction, while the…
Eurozone sentiment has sharply deteriorated, reinforcing a cautious stance on European assets over the next 6 to 12 months. The April ZEW expectations index for the eurozone collapsed to -18.5 from 39.8, while Germany’s gauge also plunged and missed…
Cooler inflation will not shift the BoC’s stance, as stagflation limits potential easing, keeping us neutral on Canadian bonds. In March, headline CPI slowed more than expected to 2.3% y/y from 2.6%. However, lower energy prices drove much of the downside…