US/China de-coupling with broader implications.Our US Onshore vs Offshore pair GSPUSHOR is up +38% since Sept 2021 with a remarkable Sharpe ratio, which illustrate the persistence of this trend. (Goldman Sachs)
We believe that the Fed will follow BoJ buying Japanese bonds and ECB buying Italian bonds. There is no other option left.
Shifting geopolitical forces have forced government policy (IRA, CHIPS, IIJA) and corporates to rethink their capex spending, and our big bet is that this ratio has likely peaked, and a slow, but eventually meaningful reversion is underway. And by the way, this is a Western trend, not a U.S. one.
G-7 practically confiscated Russia’s Forex reserves after Ukraine/Russia war. Since then, G-7 bonds have lost global buyers.
China’s economy has been over reliant on property prices for its growth. That seems to be changing slowly but it is a long-drawn process
The above material is neither investment research, nor investment advice.
This document may contain confidential, proprietary or legally privileged information. It should not be used by anyone who is not the original intended recipient. If you have erroneously received this document, please delete it immediately and notify the sender. The recipient acknowledges that Eastern Financiers Ltd ("Eastern")or its subsidiaries and associated companies, as the case may be, are unable to exercise control or ensure or guarantee the integrity of/over the contents of the information contained in document and further acknowledges that any views expressed in this document are those of the individual sender and no binding nature of this shall be implied or assumed unless the sender does so expressly with due authority of Eastern or its subsidiaries and associated companies, as applicable. This document is not intended as an offer or solicitation for the purchase or sale of any financial instrument / security or as an official confirmation of any transaction.
Investment Products are not obligations of or guaranteed by Eastern Financiers Ltd or any of its affiliates or subsidiaries, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal.
This document does not constitute the distribution of any information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom it is unlawful to distribute such a document or make such an offer or solicitation
Login
Login