Macro Minutes

In this European episode of Macro Minutes, Peter is joined by Marc Sanchez who is RBC’s Head of European Financials Sector Strategy and recently wrote a detailed note about the private credit market and the potential pitfalls. Marc and Peter recap why markets have recently become wary of private credit, explore where the problems might lie and what potential contagion channels into the public markets exist.Peter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsMarc Sanchez (Desk Strategy), Head of European Financials Sector Strategy*Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this episode, we examine how the Middle East conflict transmits economic shocks beyond energy markets, focusing on supply chain disruptions in Asia-Pacific and global inflationary pressures. Join us when we explore why commodity exporters like Australia are feeling the pinch, how central banks will respond to stagflation, and why US equities have remained resilient , though caution is warranted as more significant market headwinds may be emerging.Participants:Peter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsRobert Thompson (Research), Australian Macro Rates StrategistIzaac Brook (Desk Strategy), US Rates StrategyLori Calvasina (Research), Head of U.S. Equity Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The episode examines the Iran conflict through an emerging markets lens, analyzing recent developments and exploring two primary scenarios that could unfold in the coming weeks. The first scenario envisions rapid de-escalation that would allow oil prices to retreat toward $80 per barrel, providing relief to EM economies and supporting risk assets. The second scenario contemplates further escalation, potentially including boots-on-the-ground military intervention, which would keep oil prices elevated for an extended period. This sustained pressure would create headwinds for EM growth, inflation dynamics, and external balances. We assess the implications of each path for emerging market currencies.Participants:Luis Estrada(Desk Strategy), LATAM FX Strategist Daria Parkhomenko (Desk Strategy), FX StrategistAbbas Keshvani (Desk Strategy), Asia Macro Strategist * Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this European edition of Macro Minutes, we discuss the rise in energy prices in the wake of the Middle East conflict brings back painful memories of the 2022 energy shock for Europe. We dissect what is similar and what is different, quantify some impacts on inflation and growth estimates, and map a path forward for the ECB and BoE.Peter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsCathal Kennedy (Desk Strategy), Senior UK EconomistGeorge Moran (Desk Strategy), European Macro Strategist* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Concerns over the spending and investment circularity of the AI Ecosystem between chip makers, hyperscalers and data centers has shifted to a New Circularity, driving credit spreads wider. The New Circularity was initiated by new AI apps hitting software equity valuations and credit spreads, which in turn is feeding into concerns over vehicles exposed to that widening, namely the Broadly Syndicated loan market, the Private Credit market, BDCs and even Insurance Companies. Valuation declines have in turn driven redemption requests which has placed more pressure on credit spreadsParticipants:Jason Mandel (Desk Strategy), Head of Leveraged Finance Desk StrategyJason Daw (Desk Strategy), Head of North America Rates StrategySteven Denny (Desk Strategy), Head of US IG Credit Strategy* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The US Tariff framework is changing. China is preparing for its National People’s Congress. Latin America is entering a period of political volatility. We give our take on the current EM environment.Participants:Richard Cochinos (Desk Strategy), FX StrategistAbbas Keshvani (Desk Strategy), Asia Macro StrategistDaria Parkhomenko (Desk Strategy), FX StrategistLuis Estrada (Desk Strategy), LATAM FX Strategist* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

Over the past 6-12 months Treasury yields are rangebound, gold surged, but the USD has weakened. Despite the de-dollarization narrative, investors have continued to accumulate USD denominated assets, but with a cautious bias (i.e. hedging). To unpack these complexities you will hear insights from Blake Gwinn (Head of US Rates Strategy), Richard Cochinos (FX Strategy), and Chris Louney (Natural Gas and Gold Strategist).Participants:Peter Schaffrik (Desk Strategy), Head of UK/European Rates & EconomicsCathal Kennedy (Desk Strategy), Senior UK EconomistMegum Muhic (Desk Strategy), UK Rates Strategist* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts