At Any Rate

Explore the fascinating tug-of-war between US economic signals and tariff impacts on inflation and the dollar. The hosts discuss how moderating US rates and shifting business sentiment challenge the Federal Reserve's outlook. Delve into market yields and labor dynamics as they shape expectations for future rate cuts. Additionally, examine tariff implications on the Eurozone following Germany's elections, highlighting potential fiscal reforms and their effects on the EUR/USD exchange rate. It's a riveting look at global financial interplay!

The discussion dives into the dynamics of the copper market, highlighting limited supply growth amidst resilient global demand. Current slack in China's economy poses risks for near-term price pulls, but a tightening forecast looms for 2025 and 2026. The potential for inventory buildups in the U.S. adds complexity, hinting at a world short on copper. The hosts project prices could reach $10,400/mt as demand pressures intensify, setting the stage for exciting developments in the commodity landscape.

Explore the intriguing dynamics of global inflation as experts analyze recent CPI data and the narrowing of break-even rates. Gain insights into how shifts in market sentiment and tariff uncertainties influence economic resilience. Discover the contrasting inflation trends in Europe, particularly in the UK and Euro area, alongside predictions shaped by energy prices. Finally, dive into a comparative look at breakeven inflation rates between Australia and the US, shedding light on differing economic policies and investor implications.

Dive into the intriguing effects of recent U.S. policy changes on emerging market fixed income. Discover how emerging market currencies are holding strong even as U.S. equities dip. The dialogue also addresses the complexities of evolving tariff strategies and their muted market responses. Geopolitical influences, especially from the Russia-Ukraine conflict, reveal a mixed bag for Central Asian markets. Finally, explore how investors are navigating the tension between fundamentals and valuations in countries like Turkey and Venezuela.

Khagendra Gupta and Matteo Mamprin delve into the nuances of Eurex futures, particularly the March and June bond contracts. They break down the pivotal role of the cheapest to deliver bonds in pricing and explore the impact of funding rates on futures rolls. As they analyze market dynamics, they discuss macro influences and short positions affecting yield spreads. The conversation also covers trading strategies for the 10-year BTP and the significant open interest in OIT futures as roll dates approach.

Gisela Brant, a LatAm Local Markets Strategy Analyst at J.P. Morgan, and Alejandra Andrade, a LatAm Corporate Credit Strategy Analyst at J.P. Morgan, share insights on Argentina's economic landscape. They discuss recent reforms, the impact of fiscal policies, and the path towards recovery post-recession. The evolving fixed income market is examined, along with the dynamics of capital controls and potential shifts in the exchange rate regime. They also highlight the rally in corporate bonds, driven by high yields and strong credit fundamentals, uncovering new investment opportunities.

In this discussion, Greg Fuzesi, J.P. Morgan's Eurozone head economist and an expert on German politics, dives into the recent German elections. He highlights the implications of coalition stability for economic sentiment. The dilemmas surrounding Germany's debt restrictions come to light, alongside its critical role in EU fiscal rules. Fuzesi balances optimism and caution about the euro's future, acknowledging the complexities of global economic trends and the dollar's dynamics. A fascinating insight into navigating fiscal challenges!

Jay Barry, the Head of Global Rates Strategy at J.P. Morgan, shares insightful perspectives on the Treasury and TIPS market. He examines recent modifications in the U.S. Treasury yield curve and the Federal Reserve's dovish stance. Jay discusses potential changes in monetary policy and how these influence inflation expectations and the treasury market. The conversation also dives into tariff risks, CPI dynamics, and the implications of economic indicators on inflation and growth amidst political polarization.

James Nelligan, a Global FX Strategist at J.P. Morgan, joins fellow experts Arindam Sandilya and Junya Tanase to navigate the complexities of foreign exchange dynamics. They delve into how shifting tariff risks are impacting the dollar and the promising outperformance of European equities. Nelligan discusses the surprising strength of the yen despite economic hurdles, while also predicting the implications of upcoming German elections on currency markets. The interplay of Chinese equities with regional currencies adds another layer to this intriguing analysis.

The looming expiration of the JCPOA in 2025 could lead to either negotiations for a new nuclear agreement or a restoration of the old one. Geopolitical shifts may influence Iran's oil production, remaining steady at 3.1 mbd. The Gulf states are engaging with Iran, reflecting a shift away from aggressive U.S. policies. Additionally, rising inflation and its political fallout may reshape strategies as the 2025 elections draw near. These dynamics create a complex backdrop for U.S.-Iran relations and economic stability.