Europe
The consensus soft-landing narrative is wrong. The US will fall into a recession in late 2024 or early 2025. We were tactically bullish on stocks most of last year, turned neutral earlier this year, and are going underweight today. We conservatively expect the S&P 500 to drop to 3750 during the coming recession.
According to BCA Research’s European Investment Strategy service, the BoE will start cutting rates in September, but the pace of subsequent rate cuts will be modest until a recession engulfs Western economies in early 2025. The UK’s monetary policy remains…
According to the results of the latest German IFO survey, overall sentiment deteriorated slightly in June. The IFO Business Climate index declined from 89.3 in May to 88.6 in June, disappointing expectations of a modest amelioration to 89.6. The IFO current…
Is the BoE making a mistake moving toward rate cuts before the end of the summer? What would such a move mean for UK asset prices?
According to BCA Research’s Foreign Exchange Strategy service, the Norges Bank will be one of the last central banks to cut rates. The Swiss National Bank, Bank of England, and Norges Bank all held policy meetings on Thursday. The SNB continued its dovish…
We look at the implications a various European central bank meetings this week, for currency strategy.
In a widely expected move, the Bank of England (BoE) kept its policy rate unchanged at 5.25% in June. Although MPC members voted seven-to-two in favor of not cutting rates, a tweak in communication noting that the decision was “finely balanced”, hinted at the…
The Swiss National Bank (SNB) was the first major central bank to embark on a dovish pivot back in March. It lowered borrowing costs Thursday for a second consecutive meeting, from 1.5% to 1.25%, despite expectations that it would hold the policy rate steady.…
On the surface, UK inflation appears to be on the right track. The May CPI release came in broadly within expectations. Headline inflation eased from 2.3%y/y to 2.0%y/y – directly on the BoE’s target for the first time since July 2021. Core CPI (excluding…
The ECB delivered its first rate cut in June, moderating the degree of restriction rather than pivoting outright to easy monetary policy settings. Indeed, the rate cut was accompanied by an upward revision of inflation and growth forecasts. Since then, final…