CoreMacro

The debt ceiling game’s endpoint will avoid default only if it implies economic pain. For the Republicans, the best strategy is not to lift the debt ceiling unless the Democrats cut spending a lot, or unless the economy starts to tank. Plus: there are signs that the mania in ‘AI’ stocks has gone too far too fast.

China’s recovery is losing steam. Its industrial segments will disappoint, while the pace of consumer spending will be moderate. Overall, the Chinese economic recovery will underwhelm in the months ahead. Odds are that interest rate expectations in China will drop even lower, which will weigh on the RMB.

The consumption outlook remains solid thanks to households’ sizable excess savings, incomes that will be boosted by a tight labor market and ample capacity to add debt to augment their buying power.

Informe especial

The outlook is downbeat for the share prices of both onshore and offshore Chinese property developers in absolute terms, and relative to China’s overall equity benchmark. A marginal increase in housing construction activities in the rest of this year implies that there will be not a meaningful recovery in the demand for commodities, such as iron ore, steel, cement and glass.

Informe especial

Consumer discretionary shares have led European markets higher this year. While long-term drivers remain positive, can the same be said for the remainder of 2023?

Informe especial

In this *Special Report*, we analyze the dollar’s reserve status within the context of geopolitical crosscurrents. In our view, there is more than meets the eye when betting on the end of the dollar’s reserve status.

Global growth will weaken in the coming months, yet monetary authorities worldwide will be reluctant to ease policy. This state of affairs foreshadows a clash between markets and policymakers in the months ahead. China’s recovery is losing steam. The latest divergence between Emerging Asian and LATAM currencies will not last.

A restrictive policy by the ECB and a weak manufacturing sector will create headwinds for European stocks this summer. How should investors position their portfolios in this context?

Informe especial

The conventional economic thinking about the likely impact of AI is misguided because it extrapolates linearly from what AI can do today to what it can do tomorrow. Just as the investment community and the broader public were blindsided by the exponential rise in Covid cases during the early days of the pandemic, they will be blindsided by how quickly AI transforms society and the economy.

An unprecedented trade surplus has given Indonesia a rare opportunity to transition into a lower real rates regime. The sustainability of Indonesian stocks outperformance is contingent upon whether the authorities can do so.