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Inflation

Is The Fed About To Make A Mistake?

An outlook for inflation and Fed policy following this morning’s CPI report.

US Bond Strategy by Ryan Swift
Further US Goods Disinflation Ahead
The latest update of the Manheim Used Vehicle Price Index provides a positive signal for US goods inflation. It shows used car prices fell by -4.2% m/m (-10.1% y/y) in June – its third consecutive monthly decline following a brief pickup in…
Daily Insights
Deflationary Pressures In China
China’s CPI and PPI inflation updates indicate that deflationary pressures continue to dominate the domestic economy in June. Producer prices declined at a faster pace than in the prior month, falling by -5.4% y/y following a -4.6% y/y decrease in May, and…
Daily Insights
US Hiring Slows, Yet Wage Growth Remains Strong
On the surface, the lower-than-anticipated job gains suggest that US labor market conditions softened last month. Friday’s jobs report revealed that the increase in nonfarm payrolls slowed from a downwardly revised 306 thousand to 209 thousand in June – below…
Daily Insights
Another BoC Rate Hike?
Canadian hiring surprised to the upside in June. The 60 thousand increase in employment last month – the highest since January – came in triple expectations of a 20 thousand rise and follows a 17 thousand decline in May. The increase mainly reflects a sharp…
Daily Insights
Inflation Nowcast Points To A Moderation In June
Last week’s labor market data signal that US employment conditions remain strong – solidifying the case for a 25 bps rate hike at the Fed’s next meeting later this month (see The Numbers). Yet in order for the Fed to continue tightening beyond July,…
Daily Insights
World Economy Already In Recession
According to our Counterpoint strategy service, latest nowcasts indicate that world growth has likely slowed to sub-2 percent, thereby passing the threshold of a typical world recession as experienced in the early 1970s, early 1980s, early 1990s and early…
Daily Insights
Resilient US Labor Market Prompts Equity And Bond Selloff
Global stocks fell and sovereign bond yields surged on Thursday following the release of stronger-than-anticipated US labor market data. Data released by Challenger, Gray, & Christmas showed job cuts declined to 40,709 last month from 80,089 in May.…
Daily Insights
A Toxic Mix

On one hand, China will be exporting deflation to the rest of the world. On the other hand, core inflation is sticky in the US, making the Fed err on the hawkish side. Altogether, these crosscurrents are creating a toxic mix for risk asset prices.

Emerging Markets Strategy by Arthur Budaghyan
Fed’s Inflation Battle Risks EM Recessions

Markets continue to be tossed to and fro by central-bank policy, and risks of higher commodity prices. These are due to fiscal stimulus and exogenous weather and war-related risk, which could send food and energy prices higher this winter. We remain long gold outright, energy and metals producers via the XOP, XME and PICK ETFs, direct commodity exposure via the COMT ETF, and futures exposure to backwardation in copper (long 4Q23 copper futures vs. short 4Q24 copper futures).

Commodity & Energy Strategy

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