Latest from BCA Research

Bessenomics has failed so far. The key pillars of Bessent’s policy mix – achieving lower interest rates and robust economic growth – have been severely jeopardized. The US dollar has depreciated for different reasons than Bessent had envisioned and has pushed up long-term US bond yields. A trade deal between the US and China will likely come too late to preclude a major downshift in global growth.

Amid the storm of global financial uncertainty, Argentina stands out as a free-market safe haven. The lifting of currency controls was the last step taken by this country to embrace market mechanisms. We recommend that investors buy Argentine equities, sovereign credit, and domestic bonds, and overweight Argentina within EM equity and fixed-income portfolios.

Special Report

Following the escalation of the US-China trade war, the Reserve Bank of Australia is priced to cut rates most aggressively among its G10 peers. Across the Tasman Sea, the Reserve Bank of New Zealand has already cut rates aggressively, but the economy has yet to respond to this policy easing. This Special Report will examine the prospects of monetary policy for both of these central banks.

The European economies are facing a major deflationary shock. We recommend that investors stay long a basket of Central European (CE3) domestic bonds. They should also upgrade CE3 bonds and stocks in their respective EM portfolios.

Bank Credit Analyst

As high-stakes US-Iran negotiations begin, investors face yet another geopolitical risk, on top of tariffs and trade war. In this collaborative project, we combined BCA’s scenario analysis, probabilities, and financial market impacts with Axioma/Simcorp’s advanced risk analytics platform to produce a valuable contribution to risk management.

The policy-induced decline in consumer confidence has spread to businesses and investors, increasing the probability of a recession even if the administration reverses field on its aggressive tariff measures. We reiterate our defensive asset allocation recommendations.

Special Report

Upgrade the odds of a full-scale war in the Taiwan Strait from 5% to 10%. Rapid escalation of US-China economic war raises the probability of tensions spilling into the military-strategic domain. Investors should buy insurance against this tail risk while it is cheap. Meanwhile, use this year’s trade shock and equity volatility to increase allocation to EM manufacturing states.

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.

This week, our three screeners cover equity plays in: Canadian Consumer Staples, high-beta Swedish equities, and factor plays across global equities.