Economy
Export dynamics from small open economies are bellwethers for global trade and recent export data out of Taiwan and South Korea suggested robust global growth momentum in March. In April, Singapore’s electronics exports, which are particularly sensitive to…
Several economic releases out of China disappointed in April. Retail sales decelerated from 3.1% y/y to 2.3% y/y and fixed asset investment growth slowed from 4.5% YTD y/y to 4.2% YTD y/y. Both were expected to accelerate. Although industrial production…
The Conference Board US Leading Economic Index (LEI) declined by a larger-than-expected 0.6% m/m in April from 0.3% m/m. Deteriorating consumer sentiment and manufacturing new orders led the overall decline. Contractions in the year-on-year changes in this…
An adverse shock is not a recession prerequisite. The empirical record shows that the US economy regularly evolves its way into a contraction with little fanfare. If current cooling trends continue, we project a recession will begin in late 2024/early 2025.…
According to BCA Research’s Global Investment Strategy service, the BoC should have sufficient evidence of Canadian disinflation to cut rates this summer. The market is pricing in a similar amount of rate cuts for the BoC and the Fed over the next 12 months.…
US industrial production stalled in April against expectations of a moderate pace of growth (0.1% m/m) and March’s growth rate was revised lower from 0.4% m/m to 0.1% m/m. Notably, pro-cyclical manufacturing production unexpectedly contracted 0.3% m/m from a…
Credit spreads continue to price in a Goldilocks scenario. US investment grade and high-yield OAS have tightened 41 and 137 bps from their October peaks, resulting in handsome outperformance by both sectors relative to duration-equivalent Treasuries.…
According to BCA Research’s Commodity & Energy Strategy service, among the commodity groups, industrial metals provide the most reliable leading signal that the US economy is heading toward recession. Industrial metals’ greater exposure to the very cyclical…
The stock market will suffer a setback from the weakening labor market and a rebound in US and global policy uncertainty.
US headline CPI inflation decelerated to a softer-than-expected 0.3% m/m (3.4% y/y) in April, from 0.4% m/m (3.5% y/y). Core CPI eased from 0.4% m/m (3.5% y/y) to 0.3% m/m (3.4% y/y). Declines in new (-0.4% m/m) and used vehicles (-1.4% m/m) prices largely…