Viresh Kanabar
Summary Inference-time scaling is the New Frontier: AI progress is shifting to focus more on inference-time scaling techniques that refine responses after initial training. Deeper Reasoning, Longer Waits: Enabling models to break complex tasks into smaller steps during inference results in longer waiting times but better responses. Better Cost-Outcome Alignment: This approach better aligns cost […]
Richard Jones
Summary The USD index (DXY) is rising this week, for only the second week in seven. DXY technicals were oversold, but the Relative Strength Index (RSI) has partly unwound. Room exists for RSIs to unwind slightly higher in the coming days. Long and short USD exposures are not crowded. This clean positioning means chances of […]
Richard Jones
Summary The USD Index (DXY) traded 3.5% lower last week – its worst week since November 2022. DXY is trading slightly higher this week, with the index down for six of the past nine weeks. A key DXY technical indicator, the RSI, is turning from being oversold. Market Implications With the technicals turning, we think […]
Bilal Hafeez
Assessing and Alleviating State Anxiety in LLMs: Finds that trauma prompts can change the ‘state’ anxiety of LLMs, while relaxation ones reduce anxiety! Structured Outputs Enable General-Purpose LLMs to Be Medical Experts: The paper does away with fine-tuning an LLM on medical data and instead introduces a seven-step cognitive process (chain-of-thought) to answer questions. E.g., […]
Viresh Kanabar
Summary Despite significant strides in speed, cost, intelligence, and multi-modal capabilities, AI has yet to move from testing to widespread adoption. Key barriers to adoption include hallucinations, limited memory, reliance on good prompts, and poor real-world adaptability. For AI to deliver real business value, there must be a shift in focus from just improving models […]
Richard Jones
Summary President Donald Trump imposed 25% tariffs on all Canadian goods this week, although a one-month exemption has been granted for the auto industry. USD/CAD rose on the news but is now lower on the week. This is partly because of the prospect of the auto exemption, but also on broader USD weakness. The US-Canada […]
Richard Jones
Summary USD/CAD has been on a roller coaster ride so far this month, peaking just below 1.4800 on 3 February, and troughing at 1.4150 on 14 February (both intraday). The pair now trades at ~1.4440, near the middle of its year-to-date (YTD) range. After a one-month deferral on 4 February, President Donald Trump says 25% […]
Richard Jones
Summary UK gilt yields have risen across the curve in the past two weeks. Bank of England (BoE) Governor Andrew Bailey downplayed any inflation rise, instead focusing on the UK’s weak growth environment and accelerating disinflation. Momentum players have increased UK gilts bearishness. Market Implications We think the rise in gilt yields presents an opportunity […]
Bilal Hafeez
If you spend time on X or Twitter, you would think the release of Grok 3.0 and ChatGPT’s DeepResearch models marks the dawn of superintelligence (AGI). In reality, these advances highlight the limitations of large language models (LLMs) and how far we still are from AGI. At their core, these models are only as good […]
Richard Jones
Summary Roughly seven weeks into 2025, and the US treasury (UST) market has already established decent, tradable year-to-date (YTD) ranges. For 2-year, 10-year and 30-year UST yields, trade has been choppy but should now churn around within the YTD ranges into March. With tariffs set to start next month (or, for Canada and Mexico, additional […]
Richard Jones
Summary Over the past week, USD/CAD has been a roller coaster, rallying to a 20+-year intraday high near 1.4800, closing yesterday at a low just above 1.4300 (where it trades now). President Donald Trump’s removal of 25% tariffs on Canada this Monday caused the whipsaw CAD price action. The tariff question will be revisited early […]
Bilal Hafeez
Everyone has a take on DeepSeek. In most cases, it simply re-affirms their prior views (US is weak and China is winning; US is strong, and China is cheating, etc.). But here are three things that most people are missing (well, two things really): 1). Lower Costs DeepSeek has delivered way lower inference costs for […]
Richard Jones
Summary Since the US election on 5 November, USD/CAD has rallied about 4.75%, and closed 2024 at the highest level since Q1 2003 (quarterly). President Donald Trump’s threatened 25% tariffs on Canada, with tomorrow (1 February) as a likely imposition date, has partly driven CAD weakness. However, the tariffs might not include oil, which should […]
Bilal Hafeez
Listen to an AI-generated audio summary of this article: New Kid on the Block The AI world is abuzz with the Chinese DeepSeek LLM model that apparently costs much less to build than OpenAI’s ChatGPT, performs better than the OpenAI o1 model and is cheaper for users to run. That is at least what […]
Richard Jones
Summary The USD Index (DXY) is about 0.75% lower over the past week, dropping with US yields after slightly softer US core CPI. The DXY is about 1.5% off its recent closing peak (which printed on 13 January). Amid a flurry of executive orders from President Donald Trump, the USD has this week closed at […]
Richard Jones
Summary Beginning in Q4 2024, the US dollar index (DXY) ascent has impressively climbed over 9% since troughing in late September. DXY upside accelerated after Trump’s election victory, with roughly two-thirds of the gain from Q4 occurring since the US election. As Trump takes power next week, we think the USD could be topping out […]
Bilal Hafeez
I recently gave a Harvard lecture weighing up private and public markets. You can find the slides below!
Dominique Dwor-Frecaut
Summary Despite the downside surprise in December’s core CPI, inflation risks are tilted to the upside: Survey based inflation expectations are rising or stable but high. Inflation trends are stable and high. Evidence exists of cost pressures. Domestic demand pressures are pulling up inflation, though this seems offset, so far, by weak worker bargaining power. […]
Dominique Dwor-Frecaut
Summary Net hiring, a better indicator of labour market tightness than hiring or quit rates, remains at the average of 2019. The unemployment increase reflects labour market normalization and a surge in migrants, who take longer to find a job. The recent employment growth slowdown likely reflects a slower increase in migrants (i.e., labour supply). […]
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