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German producer prices indicate that inflationary pressures continue to moderate. The producer price index’s 6.0% y/y drop in July is more pronounced than the anticipated 5.1% y/y decline and marks the first annual decrease since November 2020 and the…
Chinese banks surprised markets with a more modest-than-anticipated rate cut on Monday. The one-year loan prime rate (LPR) was reduced by 10 basis points to 3.45% – slightly above expectations of a bigger cut to 3.40%. Moreover, the five-year LPR – which is…
In an Insight last month, we noted that the Global Investment Strategy service increased its subjective odds for the resurgence of US inflation later this year or early next year from 20% to 30%. Here are some of the data points that they track and that point…
According to BCA Research’s European Investment Strategy service, German yields are unlikely to experience a decisive break out that would carry them to 3%. Five economic forces suggest that German yields are unlikely to move meaningfully higher in the…
The next six-to-nine months hold a crucial test of whether the equity market will ratify the soft landing and the Biden administration or not. If so, then markets will rally on policy continuity and likely gridlock. If not, then markets will struggle until the election is over and again in 2025-26.
The chief question of the 2024 election is whether US anti-establishment or populist politics is a viable electoral strategy, according to BCA’s US Political Strategy. That will have domestic and global effects not only in 2024-28 but potentially…
Before doctors prescribe treatments to a patient, they first make a diagnosis. The success of the treatment is contingent upon the accuracy of the diagnosis. The same is true for a country’s economy. Many commentators use notions like debt deflation,…
Despite the underwhelming economic recovery, Chinese authorities remain reluctant to open wide stimulus taps as much as they have in past economic downturns. This is corroborated by the PBoC’s marginal interest rate cut last Tuesday. The one-year medium-term…
According to BCA Research’s Foreign Exchange Strategy and Global Investment Strategy services, most indications of Japanese inflation are pointing to upside surprises. This will boost interest-rate differentials in favor of the yen. Core-core CPI came…
While the bearish bond trade currently has a lot of momentum, we continue to think that Treasury yields are close to a cyclical peak and will be lower on a 6-12 month horizon.