Economy
After moderating in August, UK CPI inflation firmed again in September, rising back up to its 40-year high of 10.1% y/y – slightly above expectations. Food and goods prices (particularly clothing and furniture & household goods) led the broad-based increase.…
Is the US in a wage-price inflation spiral that could lead to more aggressive Fed rate hikes? Is it time to buy UK Gilts after a wild month of volatility? We answer "no" to both questions, as we discuss in this week’s report.
The Bank of Canada’s Q3 Business Outlook Survey reveals that weaker sales growth expectations are dampening confidence among Canadian businesses. The BOS indicator dropped from 4.87 in Q2 to 1.69 in Q3 – the weakest level since Q1 2021. Notably, the survey…
US industrial production surpassed consensus expectations and grew 0.4% m/m in September from an upwardly revised 0.1% m/m decline in August. Notably, manufacturing output also positively surprised, expanding by 0.4% m/m and the prior month’s figure was…
The Reserve Bank of Australia was the first among major DM economies to slow its pace of rate hikes. Even though both the inflation and labor market backdrops supported a 50bp rate hike at its most recent policy meeting, the RBA surprised the consensus by…
The ZEW survey of investor sentiment is signaling that economic conditions in the Eurozone are likely to deteriorate further. The spread between the expectations and current conditions components typically leads trends in the Euro Area manufacturing PMI. It…
Favor US and Southeast Asian stocks over global stocks. Stay underweight China, Hong Kong, and Taiwan.
The Fed’s tone has taken a decidedly dovish turn during the past week and, despite September’s hot CPI print, there is mounting evidence that a period of disinflation is coming. This makes the case for a pause in the Fed’s tightening cycle in Q1 or Q2 of next year.
The Empire State Manufacturing index decreased by 7.6 points to -9.1 in October, below expectations of a milder decline. The diffusion index has been in negative territory for five out of the past six months. Notably, shipments fell 19.9 points to -0.3, new…
The latest reading from the Atlanta Fed’s Wage Growth Tracker suggests that inflationary pressures in the US economy may be starting to ease. Median wage growth decelerated to 6.3% in September on a three-month moving average basis, following three…