Which Rate Cuts Will Stick? - June EM/DM Leading Indicator Watch

New Ideas: Long Mexico bonds (yields lower)

Update: SNB cuts=> long EURCHF, Canada credit stress =>long AUDCAD, more dovish BoE => SONIA vs SOFR convergence (SFRZ4Z5 vs SFIZ4Z5)

• UK: Service inflation to keep falling => BoE more dovish 
• Switzerland: SNB cuts again, inflation/growth still weak => long EURCHF
• Canada: Same story of credit stress + weak inflation => long AUDCAD 
• Japan: FX hedging costs still too high, capping JGB yields
• Mexico: Election over + inflation under control => long bonds
• Brazil: BCB on pause, BRL pressures make equities a bumpy ride
• India: Growth strong + inflation tame, election causing outflows
• Indonesia: Fundamentals solid despite fiscal concern, long IDR LPPL signal
• Appendix: Outliers in Global Equity, Fixed Income and FX

Link to Top Global Macro Ideas dashboard.