Investment Rating - The report does not provide a specific investment rating for the RMB or related assets Core Insights - The RMB is unlikely to appreciate significantly due to persistent deflationary pressures and the need for accommodative monetary policy [6][9] - Historical parallels between Japan's currency appreciation in the 1980s and the current situation in China are drawn, but the report argues that the RMB will not follow the same path [3][6] - Significant RMB appreciation would exacerbate deflation rather than alleviate it, and sustainable economic rebalancing requires more than just currency appreciation [6][10] Summary by Sections Currency Appreciation and Trade Tensions - Currency appreciation alone is insufficient to resolve complex trade tensions between the US and China, which involve multiple issues beyond currency [10][11] - Historical instances of RMB appreciation did not lead to a narrowing of China's trade surplus with the US [12][13] Deflationary Pressures - China is currently facing intense deflationary pressures, and significant currency appreciation would further harm corporate profits and aggregate demand [23][25] - The report highlights that exporters, particularly SMEs, would suffer from translation losses due to currency appreciation [24][25] Economic Rebalancing - Achieving sustainable economic rebalancing in China requires structural changes in growth models rather than just currency appreciation [41][42] - Policymakers in China prefer investment-driven growth, which complicates the shift towards consumption-led growth [41][42] Historical Context - Japan's experience with currency appreciation in the 1980s led to a loss of export competitiveness and did not result in sustainable economic rebalancing [32][46] - The report emphasizes that Japan's currency appreciation did not lead to a significant increase in private consumption as a share of GDP [54][53]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - Overall demand for US equities has declined, but there is no significant selling observed, with net flows feeling lower due to unusually high flows in the second half of 2024 [4][6] - Europe has emerged as the primary destination for equity fund flows, with a notable increase in flows to European equity funds while flows to US stocks have decreased [9][10][12] - European investors hold €2.6 trillion of US debt, representing over 10% of fixed income assets in the euro area, indicating a significant cross-border investment [21] - Strong inflows to European fixed income funds have been observed since 'Liberation Day', although this has not yet translated into increased demand for European debt securities [24][29] - The EUR/USD exchange rate is expected to rise to 1.27 by the end of 2026, driven by both fundamental and technical factors, with increased hedging incentives due to rising volatility [34][42] - European equities are projected to show a consensus EPS growth of 1.3% in local currency terms for 2025, but in USD terms, this growth is expected to be 7.6%, indicating a favorable outlook for European stocks [63][65] - The European securitized market, currently valued at approximately €550 billion, has potential for growth due to ongoing regulatory reforms, which could lead to substantial market expansion [69][81] Summary by Sections Fund Flows - Demand for US stocks has decreased, but there is no evidence of significant selling; net flows to US equities are lower due to high previous flows [4][6] - Europe is now the leading destination for equity fund flows, with minimal spillover to other regions [9][10][12] European Debt Holdings - Euro area investors own €2.6 trillion of US debt, which is over 10% of their fixed income assets [21] - Evidence of stronger inflows to European fixed income funds has emerged, but this has not yet impacted demand for European debt securities [24][29] Currency and Hedging - The EUR/USD exchange rate is forecasted to reach 1.27 by the end of 2026, influenced by fundamental and technical factors [34] - Increased volatility and uncertainty are raising hedging incentives, with approximately $4 trillion in unhedged US assets potentially needing hedging [42] European Equities - European consensus EPS growth for 2025 is projected at 1.3% in local currency, but 7.6% in USD terms, indicating a positive outlook for European stocks [63][65] Securitized Market - The European securitized market is valued at around €550 billion and has potential for growth due to regulatory reforms [69][81]

Goldman Sachs named Raghav Maliah global chairman of investment banking, in addition to his regional roles in Asia https://t.co/pv38YTw0ia ...

Citigroup hires veteran investment banker Akira Kiyota from Nomura, the latest sign of competition for talent among global financial firms as they seek to benefit from Japan’s dealmaking boom https://t.co/jaSA8hLJiL ...

Core Insights - CBHH focuses on sourcing and executing infrastructure financing and M&A opportunities across the UK and continental Europe, particularly in next-generation infrastructure businesses [1][2] - The firm operates in the "core+ or value-add infrastructure" space, which includes sectors like data centers, EV charging, energy generation, and smart city technologies [1][2] Core+ Infrastructure - CBHH targets "next-generation infrastructure" assets that are too small for large-cap investors but too capital-intensive for early-stage funds, emphasizing their importance in driving mission-critical infrastructure [2] Operational Insights - Companies in this sector are described as capital-hungry and operationally intense, but understanding unit economics allows for effective growth underwriting [3] Market Dynamics - The merger with Herbst Hilgenfeldt Partners enhances CBHH's coverage in two active European infrastructure markets, aligning with public priorities of decarbonization and digital infrastructure [4] Advisory Approach - CBHH maintains strong relationships with clients, advising them from early institutional rounds to large-scale exits, and has co-invested in past clients, blending traditional banking principles with modern M&A execution [5][6] Competitive Positioning - Despite being a boutique firm, CBHH competes effectively with global investment banks due to the senior team's banking heritage, deep sector knowledge, and agility in complex transactions [6] Institutional Knowledge - CBHH utilizes Navatar's CRM platform to enhance firmwide institutional knowledge, allowing for better relationship management and deal execution [7][8][9] Team Background - The firm is composed of former bankers from major institutions like Goldman Sachs and UBS, bringing a distinct discipline and empathy to client relationships [10][11]

Investment Rating - The report indicates a positive outlook for US equities, with expectations for net buying in various scenarios over the next month [2][5]. Core Insights - The report highlights that professional investors have driven equities higher, with macro investor optimism significantly influenced by Fed policy [80]. - Global equities experienced the largest net buying in five weeks, primarily driven by long buys and some short covering [38]. - The report notes that 6 out of 11 global sectors were net bought, with Financials, Info Tech, and Industrials leading, while Energy, Comm Svcs, and Real Estate saw the most net selling [40]. Summary by Relevant Sections CTA Corner - CTAs are long $67 billion in global equities, with a significant portion in the US, and are expected to shift from selling to buying in the coming month [2][5]. - In the past week, there was a net selling of $9.2 billion, but future estimates suggest a reversal in buying trends [2]. Market Flows - The report details expected flows in different market scenarios, indicating a potential for significant buying in flat and up scenarios over the next month [7]. - Notably, the S&P 500 E-mini is projected to see varied flows, with net buying expected in flat and up scenarios [7]. Sector Performance - The report indicates that the Financial sector saw the largest net buying since December 2016, driven by hedge funds [40]. - Energy stocks faced the largest net selling since September 2024, attributed to increased short positions amid geopolitical tensions and declining oil prices [41]. Trading Activity - Trading volumes were light due to corporate blackout periods ahead of earnings, with a significant portion of trading focused on Financials, Tech, and Health Care [54]. - The report anticipates a slow trading week ahead due to the Independence Day holiday in the US [54].

Investment Rating - The report indicates a positive outlook for the S&P 500, suggesting a continuation of the recent rally in the short term, with expectations of a peak around mid-July before a potential decline in August [2][11]. Core Insights - The S&P 500 has experienced a 10% increase since the end of March, marking the fastest recovery from a sell-off exceeding 15% in history [2]. - The report highlights that July is historically the strongest month for the S&P, with an average return of 1.67% since 1928, and the first half of July is projected to yield an even higher average return of 2.43% [6][11]. - The Russell 2000 index is noted to be trading 11.5% below its high, indicating a divergence in performance compared to the S&P and NDX [5]. - Systematic positioning in equity demand is expected to increase, with an estimated $80 billion of global equity demand over the next month, including $44 billion from U.S. markets [26]. Summary by Sections Market Performance - The S&P 500 reached another all-time high last week, the first since February 19, indicating strong market performance despite narrow market breadth [47]. Volatility - The report discusses a decrease in market panic as indicated by lower volatility levels, with a shift in investor preference towards "wingier" options for exposure to extreme risks [20][21]. Liquidity - S&P top of book liquidity stands at $12.48 million, up 21% from the one-year average, indicating improved trading conditions [41]. Retail Sector - Dips in retail demand have been correlated with declines in the S&P, suggesting that retail performance is a significant factor to monitor [54].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies covered. Core Insights - The timing of tariff impacts on the economy will depend on the actual application of tariffs and the outcomes of ongoing negotiations [4] - Trade negotiations typically take years rather than months, indicating that any near-term outcomes may be limited to framework agreements or narrow deals [8] - The interaction between country-specific tariffs and sector-based tariffs remains uncertain, with upcoming deadlines in July and August expected to provide clarity [9][11] Summary by Sections Trade Negotiations and Tariffs - A series of tariff deadlines are approaching, with significant negotiations involving the US, Japan, India, Mexico, and Canada in July, followed by China in August [9] - Historical experiences suggest that trade negotiations can span several years, with the UK-US trade agreement serving as a reference point for future deals [12][22] - The report anticipates that the administration may seek to extend the July 9 deadline, citing progress in trade discussions [11] Economic Implications - Opinion polling indicates that voters do not currently perceive a negative impact from tariffs, which may reduce political risks associated with tariff escalations [13] - The economic effects of tariffs have not yet manifested in hard data, with delays expected in the transmission of price changes due to tariffs [30][31] - The report highlights that the effective tariff rate is expected to stabilize around mid-teens percentages, with ongoing legal challenges and negotiations influencing final levels [11][33] Sector and Country Tariffs - The report discusses the complexity of how country and sector tariffs will interact, particularly in the context of the USMCA and ongoing bilateral negotiations [15][16] - The categorization of trade with Canada and Mexico will significantly affect tariff levels, with a mix of Most Favored Nation (MFN) and USMCA compliance currently in place [20] - The transition from country to sector tariffs is a key focus, with implications for supply chains and revenue generation from tariffs [21][34]

Key takeaways from our recent client conversations around the world. June 30, 2025 04:01 AM GMT Global Economic Briefing | North America M Idea The Weekly Worldview: The Hardest Questions: From Beijing to Berlin M A good friend of mine likes to say that the main reason that he forecasts is to find out why he was wrong. Our view of a meaningful deceleration in the US and the global economy from tariffs and other policies has yet to play out. We find ourselves waiting. So, while we wait, we take stock of the ...

Investment Rating - The report maintains a bullish outlook on U.S. Treasuries (USTs) and a bearish stance on the U.S. Dollar (USD) [1] Core Insights - Tariffs are significant, with U.S. government revenue from tariffs annualizing over 1% of U.S. GDP, indicating that they do not represent a zero-sum game [1] - U.S. importers paid tariffs equivalent to 65% of corporate income taxes in 2024, and these tariffs represented 15% of non-financial corporate profits after tax in Q1 2025 [10][11] - If corporations absorbed all tariff expenses, profit margins would have fallen to 11.7% from 13.8%, below the 15-year moving average of 12.2% [10][26] Summary by Sections Tariff Impact - U.S. importers' tariff payments in June annualized to $327 billion, or 1.1% of Q1 2025 nominal GDP [12][16] - The analysis suggests that tariffs act as a significant tax burden on corporations, impacting profit margins and overall economic growth [11][29] Corporate Profit Margins - In Q1 2025, non-financial corporations reported $2.127 trillion in profit after tax, with profit margins sitting at 13.8% [22] - The report highlights that if tariffs were fully absorbed, profit margins would drop significantly, indicating potential economic stress [26][34] Economic Outlook - The report suggests that the economic backdrop is skewed to the downside, with airline passenger traffic slowing and potential impacts from tariffs expected to manifest in inflation data [30] - The recommendation is to stay long U.S. Treasuries and short the USD, reflecting a cautious economic outlook [1][30]