Global
In a widely expected move, the Riksbank lowered its policy rate from 3.5% to 3.25% in September, marking its third cut this year. It embarked on its easing cycle in May, leading many other DM central banks, and has been sending increasingly dovish messages…
A US recession remains our base case over a cyclical investment horizon. We expect the ongoing labor market deterioration to eventually tip the economy into a recession. We therefore continue to expect the disinflationary forces to dominate the US economy…
BCA Research’s Geopolitical Strategy service introduced a Global Political Capital Index. Investors should favor countries with newly elected government, small government size, and ample room to cut policy rate. Ideally, they should also be in a stable…
As we head into a more turbulent macroeconomic and geopolitical period, investors should favor countries with newly elected government, small government size, and ample room to cut policy rate. Ideally, they should also be in a stable region, and not so dependent on the US or China. Hence, we are introducing the Global Political Capital Index as a way to integrate these factors into a score that can help narrow down the countries with the best and worst abilities to deal with the incoming challenges.
Export dynamics from small open economies are a good bellwether for global growth conditions. Taiwan export orders accelerated from 4.8% y/y to a faster-than-anticipated 9.1% in August. The faster pace of growth was also broad-based among the country’s…
The PBoC announced further measures to stimulate the economy on Tuesday. It lowered the reserve requirement ratio from 10% to 9.5%, cut the 7-day reverse repo rate by 20 bps (following Monday’s 10 bps cut to the 14-day reverse repo rate), lowered borrowing…
Preliminary estimates suggest that activity continued to slow across DM economies in September. Manufacturing PMIs contracted at a faster pace in the US, Eurozone, Germany, France and Australia, and grew at a slower pace in the UK. Services PMIs continued…
The Draghi report highlights sensible reforms that would address many of Europe’s productivity shortcomings. Whether European capitals heed Mario Draghi’s advices remains to be seen.
The Bank of Japan kept its policy rate unchanged at 0.25% in September and signaled it was in no rush to lift rates further. This move follows two hikes this year, one of them unanticipated. The signaling is consistent with dovish comments in August…
The Bank of Japan’s policy normalization has been accompanied by exceptional outperformance by Japanese banks. Japanese banks have outperformed both the country’s broader market as well as the MSCI ACW Banks index by 10.3% and 2.6%, respectively, so far this…