Executive Snapshot – Dhaval Joshi, Chief Strategist at BCA Research
Picture this: the United States, already the biggest consumer of goods in the world, slaps a monstrous tariff on China, the planet’s leading exporter. The textbook outcome? Global prices dip. While these chops push the US up the inflation ladder, they actually ease the price loads over in Europe.
Strategic Playbook
- Euro Rates vs. US Rates – Jump on June 2026 contracts, backing the EONIA futures while leaving the Fed‑fund futures behind.
- Fixed Income – Go heavy on European sovereign bonds, especially UK gilts, and sideline US Treasuries.
- Equities – Stick to a European tilt until that hefty US valuation premium (currently at 50%) pulls back to a fair 25% split.
Currency Focus (6‑12‑Month Horizon)
- Underweight – Emerging‑Market currencies.
- Neutral – USD, EUR, GBP.
- Overweight – JPY and CHF.
Bottom line: With Taipei’s tariffs rattling the world’s trade, Europe stands to enjoy a softer price climate – a sweet spot for investors who’re savvy about where the money is heading.