Views & Analysissee more…

  1. Rates PCA Model: Curves Dominated by Dovish Fed Pricing

    Henry Occleston

    Our last PCA report switched to flat across the UK curve, a view which it retains. Last week, we noted that there should be room for short-end strength...

  2. Iron Ore Price Bounces Higher on Aid for Property Sector

    John Tierney

    Iron ore price volatility continued after China announced important steps to aid the troubled property sector.

  3. Fed Cuts Mispriced Vs BoC and RBNZ!

    Ben Ford

    Historic precedent suggests markets are right to expect the Federal Reserve (Fed) to eventually cut interest rates. But, where and how they have priced them looks wrong.

  1. Health Care Costs To Trend Higher

    Dominique Dwor-Frecaut

    Due to the BLS’s CPI methodology, health insurance costs will likely fall sharply over the next 11 months...

  2. Rates PCA Model: Models Looking More Neutral

    Henry Occleston

    Our last PCA report looked for 2s10s steepening, which aligned with our fundamental view. The curve moved in line with the model initially...

  3. October 2022 CPI: Short-Term Noise Rather Than Lower Trend

    Dominique Dwor-Frecaut

    October CPI was lower than expected, mainly due to an oversized decline in the price of used cars and trucks.

Faster Wage Growth Ahead

Dominique Dwor-Frecaut

The consensus view is that increased participation should lead to slower wage inflation. I disagree. One of the reasons I still expect a terminal federal funds rate...

Iron Ore Price Recovery Likely Temporary

John Tierney

Iron ore plunged to less than $79/MT after China’s Party Congress due to disappointment that no relief is in store for the troubled property sector.

  1. Five Risks to the European Gas Outlook

    Henry Occleston and Justin Yeung

    European gas prices have collapsed on the back of a glut in LNG supply. The near-term outlook looks more positive than it did, but there are still risks ahead.

  2. How to Extract Implied Probabilities from Bitcoin Option Prices

    Dalvir Mandara

    We investigate the probability distribution of bitcoin returns that is implied by observed market prices of (call) options.

  3. October 2022 NFP Review: On Track For 75bp December Fed Hike

    Dominique Dwor-Frecaut

    October NFP surprised on the upside but continued to show slowing trend growth.

Rates PCA Model: PCA Agrees With Fundamentals on 2s10s UK Steepening

Henry Occleston

The BoE yesterday provided the dovish pivot we have been long expecting. Unlike with the ECB and Fed however, we expect this pivot will last...

Implications of Fed on G10 FX

Ben Ford

The Federal Reserve (Fed) hiked by 75bp yesterday (2 November), as Dominique and consensus had expected – read Dominique’s review here.

  1. How to Better Measure Volatility

    Dalvir Mandara

    The most common measure of realised volatility is the close-to-close volatility (also referred to as historical volatility).

  2. Rates PCA Model: 2s10s UK and German 15s30s Steepening

    Henry Occleston

    The political situation in the UK has normalized with the appointment of PM Sunak. The delayed release of the medium term fiscal plan takes it beyond the BoE’s November meeting...

  3. Party Congress Appears to Signal Further Iron Ore Weakness

    John Tierney

    Since mid-September, iron ore prices have dropped from $100 to a close of $88.79 on October 25 in a jagged but decidedly downward trend.

Fed Underpriced vs BoC, USD/CAD to Trade to 1.45

Ben Ford

At its last meeting, the Bank of Canada (BoC) hiked the overnight rate to 3.25% (+75bp), as widely expected.

EGB Issuance: Updated Government Estimates For 2022 Supply

Henry Occleston

Our previous estimates for German and French 2022 supply look relatively consistent with updated government ones. Our estimates for Italian and Spanish supply now appear to have overshot.

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