FICC

Speculative froth has built up across all precious metals, yet gold’s structural tailwinds will allow it to weather corrections better than its peers.

Silver’s short squeeze and stretched technicals warn of a potential tactical pullback.

Special Report

This week’s Special Report evaluates the reward and risk in corporate bonds. We address the question of whether low expected excess returns today are justified by low risk or an example of overvaluation.

Treasury yields are generally following the pattern of past interest rate cycles, but with a larger term premium keeping the curve steeper than usual.

The dollar’s early 2025 decline was a reflection of a global rush to hedge accumulated USD exposure, not a mass exodus from US assets. With most hedging now complete, currency moves should again follow fundamentals, setting the stage for a tactical USD rebound in the months ahead.

Commodity market breadth would need to improve for it to signal bullish conditions for the aggregate commodity complex. We maintain a defensive tilt within commodities, favoring precious metals over the more cyclically sensitive energy and industrial metals.

Despite concerns about fiscal sustainability, a rise in term premia, and attacks on central bank independence, monetary policy remains the primary driver of bond markets. In our Q3 Review & Outlook, we update our views and identify opportunities in government bonds, short-term interest rate futures, global yield curves, inflation-linked bonds, and credit.

Our Portfolio Allocation Summary for October 2025.

We remain cyclically short Brent but are tightening the stop loss to $73/bbl to guard against a geopolitics-driven upside break.

Monetary policy divergences are re-emerging. We rely on BCA’s Central Bank Monitor to assess the current policy stance of major central banks, and highlight the tactical opportunities across bond markets and currencies.