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Inflation

Declining Producer Prices Foreshadow Lower Eurozone CPI Inflation
Eurozone producer prices fell by more than anticipated in May. The -1.5% y/y decrease – which marked the first annual drop since December 2020 – was more pronounced than expectations of a -1.3% y/y decline and followed a downwardly revised 0.9% y/y increase…
Daily Insights
Not Much In The Minutes, Wait For Payrolls And CPI
The minutes from the June FOMC meeting didn’t reveal anything that wasn’t already known. They did explicitly say that “some” participants would have preferred a 25 basis point rate hike instead of a pause at the last meeting, but this was already evident from…
Daily Insights
World Economy Already In Recession

The world economy is likely already in recession, defined as world growth dipping to sub-2 percent. So far, the world recession has been China-led, but in the coming months it will change to being developed economy-led. Hence, while metals and industrial commodities may get some brief respite, high yield credit and stocks will underperform government bonds. New tactical recommendations are to overweight French luxury goods versus US tech, and to overweight USD/COP.

Counterpoint by Dhaval Joshi
ISM Signals Further Downward Pressure On Goods Inflation
The ISM PMI sent a pessimistic signal about US manufacturing conditions in June. The headline index dropped 0.9 points to a 3-year low of 46.0 – it eighth consecutive month below the 50 boom-bust line. This is consistent with the S&P Global PMI which fell…
Daily Insights
Hot Growth, Cold Prices
Our US Bond Strategy service responds to recent data releases which showed that real economic growth and the labor market are surprisingly resilient, while inflation pressures continued to decline. The 10-year Treasury yield broke above its top-end trading…
Daily Insights
European Inflation Is Slowing, But Still Too High For The ECB's Liking
The preliminary inflation prints for June in the major euro area economies highlight a growing divergence in inflation outcomes. There was good news: headline CPI inflation in Italy fell to 6.7% in June from 8.0% in May, while Spanish headline inflation fell…
Daily Insights
The Inflation Expectations Time-Bomb
Our Counterpoint service argues that it is not enough that inflation stabilizes at 3 percent for inflation expectations to be anchored and central banks must make inflation undershoot 2 percent for some time to prevent a repeat of the 1970s. The team…
Daily Insights
Conversations With Ms. Mea: Should Investors Fight The Fed?

The combination of a global manufacturing recession and tight/tightening policy is raising a red flag for global non-TMT stocks. In China, households are entering a liquidity trap, and deflationary pressures are heightening. Authorities need to reduce interest rates considerably and allow the currency to depreciate. By doing so, China will export its deflation to the rest of the world.

Emerging Markets Strategy by Arthur Budaghyan
Interpreting The Message From Inverted Yield Curves
Has the yield curve lost its ability to “predict” recessions? The widely-followed 2-year/10-year US Treasury curve now sits at -100bps, but it has been inverted since April 2022. Investors have seemingly been on “recession watch” ever since, even though the…
Daily Insights
Australia And The Global Disinflation Battle
There have been big downside surprises to inflation over the last few weeks. Today, the May monthly print of Australian inflation (covers 67% of all items), came in at 5.6%, versus 6.8% the previous month. This followed a downside surprise to Canadian…
Daily Insights

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