Latest from BCA Research

In this Insight, we discuss the currency and bond market implications of last week’s ECB and Bank of Japan policy meetings. The conclusion: the ECB is on a path to an overly hawkish policy mistake, while the Bank of Japan’s dovish stance is growing more unsustainable.

In this Insight, we discuss the currency and bond market implications of last week’s ECB and Bank of Japan policy meetings. The conclusion: the ECB is on a path to an overly hawkish policy mistake, while the Bank of Japan’s dovish stance is growing more unsustainable.

Investors are still cautious and have significant cash that needs to be put to work. Trickle-down of it into the US equity market may extend the rally. Overly bearish futures positioning is also a strong contrarian indicator. Disinflation is good for real earnings growth, and imminent earnings rebound may add support for equities.

As the S&P 500 nears our 4,500 target, we review the rationale behind the call to assess its merit.

Special Report

In this follow-up report on global stock-bond correlations, first, we investigate stock-bond correlations in 19 major DM and EM countries, then we use a systematic approach to identify the key macro drivers that impact the stock-bond correlations globally. Finally, we present how correlations will evolve by year end based on our model forecast and implications for asset allocators globally.

Special Report

The Eurozone just experienced two consecutive quarters of GDP contraction. For the remainder of the year, can growth pick up or will the ECB decimate activity?

Bank Credit Analyst

We are overweight Private Credit. Improvements in yield, negotiating leverage, and structuring upside are major tailwinds over the coming years. The business cycle provides an attractive backdrop for all Private Credit sub-asset classes. In this Special Report we examine Private Credit as a whole, but with more emphasis on the income-focused sub-categories of Senior and Mezzanine Debt.

The normalization of oil storage markets in the Northern Hemisphere; strong demand, aided by China stimulus this year; and continued production discipline supports our view Brent prices likely have bottomed, and will move higher from here. We raised our 2023 Brent forecast $2/bbl to $92/bbl. Our forecast for next year is revised upward by $5/bbl to $120/bbl. Price risk remains to the upside, particularly if KSA exercises its option to extend production cuts of 1mm b/d.

Malaysian central bank raised policy rates last month. What will it do to Malaysian bank stocks and the overall share market? How about fixed income market?

This Strategy Insight discusses the bond market and currency implications of the Fed’s “hawkish pause”.