UK
The equity bull market is getting long in the tooth. Bonds should perform well once economic growth begins to slow. The dollar will strengthen over the coming months before resuming its downtrend. While crude has likely found a near-term floor, we favor metals over energy in the long run.
Stay overweight gilts despite renewed political turmoil in the UK.
The Bank of England held rates at 3.75%, as expected; we remain overweight UK gilts on a 12-month horizon. The hold was a 7-2 decision, with the two dissenters favoring a hike. Those MPC members were concerned about second-round effects and pointed to…
The latest UK employment and inflation data came in cooler than expected, reinforcing the case for weaker growth ahead. Payrolls fell by 100k in April after a 28k decline in March. The unemployment rate also rose 0.1pp to 5.0%. Average weekly earnings ticked…
Volatility is high, but the path for yields is clearer than it looks. Across three oil scenarios, we show how policy responses shape fixed income markets and why the balance of risks still points to lower yields.
UK February inflation was broadly in line with expectations, but the report is already stale in the face of the energy shock. Headline CPI was unchanged at 3.0% y/y, while core CPI rose slightly to 3.2% from 3.1%. Services inflation ticked down to 4.3% from…
March flash PMIs point to rising inflation pressures, with the US more resilient than its DM peers. Input costs rose and delivery times lengthened across developed markets. Manufacturing was resilient, but services PMIs declined. The US PMIs pointed to…
The Bank of England held rates, adopting a wait-and-see stance amid cooling growth and fragile inflation expectations. The BoE voted unanimously to keep rates at 3.75%. Prior to the geopolitical escalation, a cut had been expected as both growth and inflation…
Interest rate volatility is very low across developed market fixed income. Investors should maximize the carry in their portfolios to outperform in a low rate vol environment.
February flash PMIs edged higher, pointing to gradual improvement in global growth. After moving mostly sideways through 2025, developed markets PMIs are picking up. Manufacturing is showing decent momentum, rebounding after being weighed down by trade…