The signals are mixed, but the outlook for the U.K economy is uncertain at best, while geopolitical risks add further potential volatility. So why is the U.K. banking sector looking forward to another strong year?Participants:Janet Wilkinson Head of Global Markets Flow Sales EMEAKofi Oteng Head of Flow Rate Sales EMEA Benjamin Toms Director European Banks Equity Research* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this discussion, Blake Gwinn, Head of US Rates Strategy at RBC Capital Markets, and Peter Schaffrik, Head of UK/European Rates & Economics at RBC Capital Markets, dive into pressing economic shifts. They tackle the lingering uncertainties of tariffs and their influence on markets in the U.S., Canada, and Europe. The duo also examines the implications of the recent German elections on fiscal policy and coalition dynamics. With bond market weakness under scrutiny, they ponder the future of asset swaps and the regulatory landscape.

Blake Gwinn, Head of US Rates Strategy at RBC Capital Markets, shares his expertise on the implications of recent US tariffs on Canada, Mexico, and China. The discussion highlights the Fed's cautious stance on monetary policy amidst inflation concerns and economic uncertainties. Gwinn delves into the currency fluctuations resulting from tariffs and the corresponding responses from central banks like the BoC and ECB. The conversation also touches on the delicate balance central bankers must maintain between tackling inflation and fostering economic growth.

The biggest known unknown for economies and financial markets is what will happen with tariffs – are they just being threatened as a bargaining chip for transactional purposes, if they come to fruition what will their breadth, size, and duration be, and will trading partners retaliate. Unfortunately for investors, the matrix of possibilities is endless, and each has a low probability chance. In this edition our asset class experts provide answers to the difficult questions.Participants:Jason Daw (Desk Strategy), Head of North America Rates Strategy Elsa Lignos (Desk Strategy), Head of FX Strategy Lori Calvasina (Research), Head of U.S. Equity Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Will Trump’s bite match his bark on tariffs? If it does, the economic damage could be severe but central bank responses are not clear cut in the short term. While Trump policy is the primary risk factor, there are many other question marks – Is the Fed finished the easing cycle? What happens with Canada politics? Will the ongoing rout in global bond markets continue? Is the USD destined to remain strong? – that are important for asset markets in 2025.Participants:Blake Gwinn (Desk Strategy), Head of US Rates Strategy Jason Daw (Desk Strategy), Head of North America Rates Strategy Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics Elsa Lignos (Desk Strategy), Head of FX Strategy * Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The BoC ended the year with another large rate cut but they are expected to SLOW the pace in 2025, while the Fed has already SLOWed down after an outsized move in September and seems locked in to deliver a regular size move tomorrow. The ECB should take it SLOW and the market is increasingly pricing a SLOW pace for the BoE. Central banks should proceed at a variable and uneven pace reflecting differences in macro fundamentals.Participants:Jason Daw (Desk Strategy), Head of North America Rates StrategyBlake Gwinn (Desk Strategy), Head of US Rates StrategyPeter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsSimon Deeley (Desk Strategy), Canada Rates Strategist* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

We are approaching final central bank decisions of 2024 with uncertainty about ultimate outcomes, but clear differences across jurisdictions on where economies are headed. In Canada, soft growth data has solidified our expectation for a second consecutive 50bp cut despite firmer inflation data last month, while US economic exceptionalism has markets pricing a material possibility of a skip on the 18th. Across the Atlantic, the ECB is debating between 25bp and 50bp, while the BoE looks set to pass at its final meeting of 2024. Meanwhile, FX and equity markets have been impacted by the central bank pricing volatility, incoming Trump administration and the threat of US tariffs.Participants:Simon Deeley (Desk Strategy), Canada Rates StrategistBlake Gwinn (Desk Strategy), Head of US Rates StrategyPeter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsElsa Lignos (Desk Strategy), Head of FX StrategyLori Calvasina (Research), Head of U.S. Equity Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Blake Gwinn, Head of US Rates Strategy at RBC Capital Markets, and Peter Schaffrik, Head of UK/European Rates & Economics, share insights on the evolving macroeconomic landscape. They discuss the high bond yields amidst central bank rate cuts and forecast how the U.S. economy's resilience will shape global fixed income markets in 2025. Key topics include the challenges in Canada's economy due to political shifts, the stagnant euro area's struggles, and Australia's anticipated consumer recovery fueled by fiscal changes.

Peter Schaffrik is the Head of UK/European Rates & Economics at RBC, analyzing the ECB's recent cuts. Blake Gwinn, leading US Rates Strategy, provides insight into labor market trends and Fed policy impacts. Su-Lin Ong, Chief Australia Economist, discusses Australia’s labor stability amid global bank dynamics, while Alvin T. Tan highlights stimulus efforts in China and their implications. The guests examine contrasting approaches to monetary policy across various countries, emphasizing the intricacies of the global economic landscape.

Blake Gwinn, a participant analyzing monetary policy changes, shares his insights on recent significant rate cuts by the Fed and their potential impacts. He discusses the Bank of Canada's strategy, forecasting possible 50 basis point moves ahead. The conversation also covers the cautious approaches of the ECB and Bank of England, balancing inflation control with economic growth. Gwinn highlights how upcoming elections could influence market trends and shares strategies for navigating currency markets in this shifting landscape.