Economy
A decisive risk-off mood dominated markets at the end of last week, amid disappointing payrolls, tech earnings and manufacturing PMIs. The Nasdaq and other tech-heavy stock markets such as Japan, Korea and Taiwan led the equity declines. Other pro-cyclical…
According to BCA Research’s Commodity & Energy Strategy service, robust iron ore imports are sending a false signal about steel demand. Instead, these supplies are being used to restock inventories. By the end of last year, iron ore stocks at Chinese ports…
July nonfarm payrolls expanded by 114 thousand workers, a sharp slowdown from June’s downwardly revised 179 thousand, and significantly disappointing expectations of 175 thousand. The unemployment rate unexpectedly edged 0.2ppt higher to 4.3% in July, rising…
The ISM Manufacturing PMI disappointed in July. The headline index declined at a faster pace, from 48.5 to 46.8, disappointing expectations and extending a four-month contraction streak. Details were uninspiring. New orders dipped to 47.4 from 49.3,…
The Bank of England (BoE) lowered its policy rate by 25 basis points to 5% at its meeting on Thursday. While the move was expected, the governing board was split, voting 5 – 4 in favor of reducing the key interest rate. The BoE cut its policy rate despite its…
Sweden’s manufacturing PMI started contracting in July, plummeting from 53 to 49.2, falling far short of expectations that growth would broaden. Weakness was broad-based. Notably, new orders and new export orders plunged a whopping 15.1 and 8.7 points in…
No clear risk-on/risk-off pattern emerged from July’s market performance data. On the one hand, consistent with a risk-off environment, US bonds ranked highest in the monthly return distribution, while pro-cyclical industrial metals and oil lagged. However,…
According to BCA Research’s Global Asset Allocation service, there are clear signs that growth is weakening. BCA’s Global Nowcast has been slowing for three months. Behind this slowdown is the fact that the US consumer – the biggest factor keeping growth…
The market is pricing in a soft landing, but we see growing signs that the global economy is faltering. Investors should be defensively positioned.
We assess the investment implications of the BoJ and Fed meetings, and give our take on the next policy moves. We also assess the impact on asset markets.