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Economy

Global Growth: No Recovery In Sight Yet

How to play China's reopening? What are the dichotomies in the performance of China's plays in financial markets? Why has the Chinese central bank tightened liquidity since October and what has been the impact on local rates and the RMB? Is global growth about to bottom? What is the outlook for EM stocks, currencies, credit markets as well as the broad-trade weighted US dollar?

Emerging Markets Strategy by Arthur Budaghyan
China’s Recovery: A Two-Tail Story

China's economic recovery will be led by consumer spending on services rather than the industrial sector. The current equity market leadership – outperformance by tech stocks – is unsustainable. Persistent deflationary forces will compel policymakers to inject more liquidity and bring down interest rates to reflate the economy. Hence, the RMB will resume its decline against the USD soon.

China Investment Strategy by Qingyun Xu
US ISM Manufacturing PMI Contracts For Second Consecutive Month
The US ISM Manufacturing PMI fell deeper in contraction territory in December, falling to 48.4 from 49.0. Details of the report highlight that both domestic and foreign demand conditions are deteriorating at a faster pace. Notably, the production index…
Daily Insights
On Declining Mortgage Rates, Housing And Consumption In The US
Most US housing market data remained soft through the end of last year. The NAHB Housing Market index disappointed in December and building permits slumped by 11.2% m/m in November, presaging further declines in housing starts. The contraction in existing…
Daily Insights
Monthly Portfolio Update: Central Banks Will Be As Hawkish As They Say

Slowing growth would be bad for equities, but so would stronger growth since it would mean more rate hikes.

Global Asset Allocation by Garry Evans
Global Manufacturing PMIs Contract Further In December
The JP Morgan Global Manufacturing PMI fell deeper in contraction territory in December, dropping to 48.6 from 48.8. Although global output declined at a slower pace, the deterioration in measures of demand conditions (new orders and new export orders…
Daily Insights
BoJ Unexpectedly Lifts YCC Cap
The BoJ shocked markets on December 20 by doubling its cap on Japan’s 10-year bond yield, now allowing it to rise to 0.5% from 0.25% previously. The December central bank meeting was widely expected to result in no change in monetary policy. The market…
Daily Insights
2022 In Review
2022 was an exceptionally poor year for global financial markets. The US dollar and (to a lesser extent) crude oil were the only major financial assets we track that generated positive abnormal gains. Notably, this outcome deviates from the typically…
Daily Insights
December In Review
The performance of the major financial assets we track was mixed in December amid cross currents from the weak state of the global economy (see The Numbers) and optimism about China’s exit from its zero-Covid policy. Global bonds, global equities, and the…
Daily Insights
Upward Structural Risks To The Equity Risk Premium
According to BCA Research’s Bank Credit Analyst service, there are several risks to economic growth suggesting that the US equity risk premium should be higher than it was on average during the early-to-mid 2000s. Populist Policies And…
Daily Insights

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