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Thematic Research

Excerpts of selected reports as well as fundamental analyses which were originally published on Client Research Portal. 
 
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May 2, 2018
With trillions in currencies exchanging hands every day, foreign exchange is indisputably the world’s largest and most liquid financial market. Yet in spite of its size, this report argues that it is also likely to be the least "efficient" compared to other asset classes. [more]
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April 19, 2018
When will the next major default cycle occur? We assess lead indicators of previous default cycles in an attempt to predict the timing of the next one. Most indicators with a relatively short lead time suggest no imminent concerns of rising defaults through 2018. But some longer-term lead time indicators are starting to issue warning signs. Much can change over the next 12-24 months to shift the outlook, but H1 2020 looks a realistic start of the next major default cycle based on our analysis at this stage. [more]
62
March 7, 2018
Inflation data over the past year – and especially over the past week – have highlighted a critical point. Fluctuations in inflation rates for items that are typically insensitive to the busi-ness cycle — which we refer to as acyclical, such as health care and apparel — can drive the overall inflation trajectory and lead to regime shifts in the market’s inflation narrative. The plunge in wireless telephone services prices last March, followed by a string of downside surprises to other acyclical items, spawned a narrative that structural disinflationary forces would prevent inflation from rising. In the same way, recent stronger inflation data led by acyclical items may have revived the narrative that the Phillips curve is, in fact, alive and well and that risks are tilted toward inflation overshooting the Fed’s target. [more]
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