Accessible version FX and Rates Sentiment Survey Summer doubts Key takeaways Qualifying the short USD thesis Even if now on par with long rates, short USD remains the highest conviction trade for the rest of the year (Exhibit 7). This could reflect survey respondents' expectation of fading US exceptionalism (Exhibit 1) and simmering concerns on Fed independence (Exhibit 16, Exhibit 17) and US fiscal policy (Exhibit 14). It is in line with them preferring to raise their FX hedge ratios (Exhibit 18) and with ...

Jane, does this mean that there is a revival of US exceptionalism. That the dollar is back in vogue and the weakening trend is broken. >> Well, you know, it's really quite interesting because if we look at US equity markets since June, then we could be talking about that then.So, for instance, in the equity markets, you could say, well, this rotation trade away from US assets, which really characterized trading in the first five months of the of the year, it was over. And yet the dollar in in June and then ...

Market Concerns & Tariffs - The market's biggest concern revolves around tariffs due to the uncertainty of their endpoint and potential effects on sectors, market capitalizations, and investment styles [1][2] - The EU tariffs are significant due to the EU being a major trade partner, and the lack of a livable agreement introduces volatility [4] - Europe is considering other trade partners to offset potential losses with the US [4] - A livable agreement between the US and the EU is expected to be reached, potentially at a lower rate than the discussed 15% [5] US Exceptionalism & Economic Resilience - Oppenheimer Asset Management believes US exceptionalism remains intact due to innovation in technology [6][7] - The US is seen as the "cleanest dirty shirt" in a "hamper of dirty shirts," highlighting its relative strength compared to other countries, particularly regarding technology [7] - The US consumer remains remarkably resilient despite multiple interest rate hikes and pauses [3] - No recession is expected [3] Global Market Dynamics - International markets have outperformed the US recently, driven by lower valuations and expectations of tariff agreements [6][7] - The rest of the world feeds into globalization [7] - Technology is deeply embedded in societies, businesses, and consumers worldwide [8]

Let's talk more about the world with Tim Seymour, CIO of Seymour Asset Management. Tim, what's your hot take on on how the whole world has like reinflated this year. Well, first of all, great to be here, Brian.I think it's a combination of this has been a long-term underperformance trade. So, I I kind of believe in mean reversion and I think the technicals tell you maybe we double bottom to August of 22 and then in Thanksgiving of 24. If you look at the charts on the relative underperformance of the MSCI wo ...

M Morgan Stanley Research: Key Forecasts July 14, 2025 09:35 PM GMT Extel Survey: If you've found our research useful, we'd appreciate your support for the Morgan Stanley Cross-Asset Strategy team and our colleagues in the 2025 Extel Global Fixed Income Survey, especially in USA/EMEA/Asia Cross-Asset Strategy categories. Next 12 Months Outlook: Our High-Conviction Calls Skewed to the Downside: In the US, the labor market is holding up, but cooling gradually. Although the recent US inflation data did not sho ...

Investment Rating - The report suggests a shift towards diversification in investment opportunities, particularly favoring European equities over US equities due to historical valuation spreads and changing market dynamics [5][6][9]. Core Insights - The depreciation of the US dollar and a more resilient Chinese economy are challenging the sustainability of US outperformance, prompting a reconsideration of investment strategies [6][7]. - European companies are expected to return approximately 5% of their market capitalization to shareholders through dividends and buybacks, which is significantly higher than the US average of below 4% [8][9]. - The CAPEX-to-Sales ratio in Europe is nearing a 10-year high, indicating a shift towards growth investments, driven by themes such as infrastructure upgrades and artificial intelligence [9][10]. Summary by Sections Market Dynamics - The report highlights a broadening of investor opportunities as the case for US exceptionalism is questioned, with valuation spreads between the US and other regions at historical highs [5][6]. - European corporates are beginning to invest for growth at a faster pace than they return capital to shareholders, with CAPEX expected to grow by 3% in 2025 [9][10]. Shareholder Returns - The total shareholder yield in Europe is close to an all-time high, with companies in the STOXX 600 returning around 5% of their market cap annually [8][142]. - The report notes a growing appetite for buybacks among European companies, despite a slight decline in insider buying activity [146][147]. Sector Performance - All sectors in Europe currently offer higher yields than their US counterparts, making the region particularly attractive for income-focused investors [9]. - The report indicates that cyclical sectors have a higher beta of earnings to world GDP compared to defensive sectors, suggesting a potential for greater returns in a recovering economy [22][23].

Welcome back. NASDAQ hitting a record high today. Nvidia becoming the first company ever to reach $4 trillion in market cap.Question now, should you continue to lean into that trade or diversify elsewhere. Joined now by Elizabeth Burton, chief investment strategist for Goldman Sachs Asset Management. Welcome back.It's good to see you. Good to see you. You're on the diversification train, right.Don't don't just lean into tech or or large cap. We're always on the diversification train. Yeah, but I mean, you k ...

Jim South to the president of Apollo Global Management. Jim, good morning. Good morning, Jonathan, and happy birthday, sir.It's good. Thank you very much. I appreciate it.We will spend too much time on the Federal Reserve, but I do want your reaction to this journal piece overnight. Well, I think I think that the president's already one, it's a great distraction of headlines. I personally don't think he's going to name anybody too early because right now he's in the catbird seat of blaming without accountab ...

Investment Rating - The report maintains a bearish outlook on the US dollar due to moderating US exceptionalism and a more growth-supportive monetary and fiscal mix overseas [6][11][14]. Core Insights - The report highlights that while tariffs remain a headwind for global growth, several currencies such as Antipodeans, NOK, EUR, and JPY are expected to turn the corner on growth [6][11]. - In developed markets (DM), the bearish USD recommendations are barbelled for either a US slowdown (long JPY) or a soft landing scenario (long Scandis, Antipodean, EUR) [6][11]. - In emerging markets (EM), there is a broadening overweight across regions with a preference for Asian creditor currencies (like KRW) and CEE euro-proxies (like CZK) [6][11]. - The report emphasizes that 2025 is different from previous years as no single factor is dominating global FX returns, necessitating a separate analysis of G10 and EM [6][11][24]. - G10 FX forecasts remain unchanged for EUR/USD at 1.22 and USD/JPY at 139, with upgrades for GBP, NZD, and CAD based on improved domestic prospects [6][11][48]. - EM forecasts include a reduction for USD/CNY to 7.15 and USD/ZAR to 17.50, reflecting a more favorable outlook for these currencies [6][11][48]. Summary by Sections Key Currency Drivers - The report identifies several macroeconomic factors influencing FX returns, including US-China trade talks and tariff adjustments [7][8]. - It notes that the reduction of tariffs from 145% to approximately 41% for a 90-day period is a significant development [7][8]. FX Models - The report discusses the performance of various currencies and highlights that the best-performing currencies are often those with current account surpluses [24][25]. - It also notes that the carry-to-value rotation is finally playing out in G10, with surplus countries outperforming [24][25]. G10 FX Short-term Fair Value - The report maintains forecasts for major currency pairs, with a bullish bias on EUR and JPY due to US moderation [56]. - It also highlights that GBP and NZD forecasts have been upgraded based on growth resilience and improved domestic conditions [56]. Technicals - The report indicates that external balances, particularly current account surpluses, have been among the best signals for global FX returns this year [24][25]. - It emphasizes that equity momentum has been a strong strategy for G10 currencies, benefiting from lower policy activity among central banks [24][25]. Trade Recommendations - The report suggests rotating AUD/USD into a long AUD and NZD basket against USD, citing improved domestic prospects for New Zealand [41][56]. - It also recommends an overweight position in EM currencies, particularly in Asia and EMEA, while remaining selective in commodity and frontier markets [23][56].

10 June 2025 | 12:24AM BST GOAL Kickstart US exceptionalism - fundamental shifts and technical headwinds from Section 899 Last week both US Manufacturing and Services ISM came in below consensus, while NFPs growth slightly beat consensus (but still points to slowing US growth) and the unemployment rate remained flat. Key economic data releases this week will be US CPI and UofM reports. The ECB lowered the deposit rate by 25bps and downgraded its 2026 inflation projection to 1.6%. Yield curves flattened acro ...