Latest from BCA Research

Bank Credit Analyst

The Russian mutiny reveals the underlying trend of domestic instability. Russian instability is negative for global stability. The endgame of the war in Ukraine is exacerbating the problem, likely pushing up the equity risk premium.

Find out the latest updates of our CMVI and Rotation Maps equity frameworks.

The Bank of England delivered another outsized rate hike this week, as the central bank remains focused on overshooting inflation and not the weakening economy. The BoE now knows that it must push the UK into a deep recession to cool off inflation, which should now be considered the base case scenario for the next 6-12 months. A major cyclical buying opportunity for UK Gilts is approaching for patient investors.

Assuming yesterday’s policy rate hike is a sign that Turkey is finally veering towards orthodox economic policies; should investors rush in?

Machine learning has made significant progress in the physical sciences, although it has some ways to go in the social sciences. When asked to make predictions on oil markets, ChatGPT's responses lack in-depth analysis given its inability to understand the language and think critically. While in its current form, AI cannot replace forecasters, its wide breadth of 'knowledge' makes it useful in developing forecasting frameworks in unfamiliar domains.

Special Report

We are strategically bullish on the outlook of the energy sector. Domestic and external political constraints asserted themselves, restraining the most negative impulse against this sector by the Biden administration. Go long energy versus cyclicals (ex-tech).

This week’s report examines three potential catalysts that could push Treasury yields meaningfully higher within the next few months. We also consider the rebuild of the Treasury’s cash holdings and its implications for the Fed’s balance sheet policy and financial markets.

China is facing a risk of deflation. Marginal interest rate cuts and targeted stimulus will be insufficient to boost China’s growth given the current deflationary mindset and the danger is that the economy may be entering a liquidity trap. Deflation is bullish for government bonds, but negative for equity prices. Chinese share prices will continue to decline.

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.