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Economy

Why Is Expected Inflation So Low?

Inflation is hot, but inflation expectations are not. We explain the answer to this apparent puzzle and discuss the investment implications. Plus we identify two commodities that are at imminent risk of reversal.

Counterpoint by Dhaval Joshi
A Primer On China’s Local Government Debt
Special Report

Government financing vehicles (LGFVs) are a key component of China’s credit system. LGFV bonds make up a 40% share of the onshore corporate bond market, and loans to LGFVs make up 20% of total loans. LGFV debt-servicing capacity is very weak. What are the ramifications of all of these for Chinese economic growth and financial markets?

China Investment Strategy by Qingyun Xu, Arthur Budaghyan
Deteriorating Outlook Weighs On US Consumer Sentiment
The US Conference Board’s Consumer Sentiment survey disappointed on Tuesday. The headline gauge unexpectedly fell to 101.3, below expectations it would remain unchanged at 104.0. The deterioration came on the back of a 5.8-point decline in the Expectations…
Daily Insights
Europe: Hedging Market Risk
According to BCA Research’s European Investment Strategy service, the downside in earnings over the remainder of the year creates a dangerous risk that can catalyze a sharp pullback at any moment. To protect themselves, investors can separate the alpha and…
Daily Insights
US Debt Ceiling: Taking It To The Limit
Special Report

This Special Report discusses why there is a non-negligible risk that the US Congress will not reach a timely agreement to lift the debt ceiling this summer. It also discusses what will happen in bond markets in the lead up to the debt limit and in the case where a deal is not reached in time.

US Bond Strategy, Global Fixed Income Strategy, US Political Strategy by Ryan Swift, Matt Gertken
German Business Morale Improves Slightly
Germany’s Ifo Business Climate Index inched up from 93.2 to 93.6 in April, slightly above anticipations of a more muted rise to 93.4. Interestingly, a 1.2-point increase in the Expectations components drove the improvement in the headline index and surprised…
Daily Insights
French Consumer Discretionary Equities Benefit From China’s Reopening
French MSCI consumer discretionary shares have performed strongly over the past year, booking a gain of 31%. Consequently, they have outperformed global consumer discretionary by 42%, and the Eurozone stock market by 24%. As a result, French consumer…
Daily Insights
Flash PMIs Signal Uneven Growth Dynamics
Flash PMIs for April indicate that an ongoing improvement in the service sector continues to drive economic activity across major developed economies. Composite PMIs in the US, Eurozone, and the UK are all firming on the back of an acceleration in…
Daily Insights
Will Economic Developments Favor Stocks Over Bonds?
China’s economic reopening, the abating European energy crisis, and rising real income growth amid a moderation in inflation have led to a pickup in economic activity over the past few months. The JP Morgan Global Composite PMI has been on an uptrend since…
Daily Insights
What The US Banks See
According to BCA Research’s US Investment Strategy service, the SIFI banks’ first quarter earnings confirm that an inflection in the business cycle is not just around the corner. The SIFI banks (BAC, C, JPM and WFC) reported their first quarter earnings…
Daily Insights

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