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As expected, the ECB kept policy on hold on Thursday. In a unanimous decision, it maintained the deposit rate at an all-time high of 4% following 10 consecutive increases. Ultimately, the tone of the communication was on the dovish side. True, the ECB…
Results of the October German IFO survey corroborate the positive signal from the latest ZEW survey. The headline Business Climate Index increased for the first time since April, rising from 85.8 to 86.9, above expectations of 86.0. This was driven by…
In this Special Report, we introduce two strategies that use our Central Bank Monitors for global fixed income country allocations and currency trades. We find that using the Monitors in country selection helps improve the performance of a developed markets government bond portfolio. The CBMs can also help substantially minimize the drawdowns on a standard FX carry strategy.
The flash PMI estimates from S&P Global delivered a mixed message about economic conditions across DM economies in October. The Eurozone composite index unexpectedly fell from 47.2 to a nearly three-year low of 46.5 on the back of surprise declines in…
Results of the ECB's Q3 Bank Lending Survey indicate that the impact of tight monetary policy is weighing down on lending conditions and loan demand in the Euro Area. In terms of credit standards, the survey results reveal that the broad-based tightening…
The European Commission's preliminary release for Consumer Confidence painted a murky picture for consumer sentiment on Monday. The headline print of -17.9 was largely unchanged from the previous month's print of -17.8, but beat expectations of -18.3.…
Europe’s weak patch is not about the ECB’s policy tightening, at least not yet. 2024 is another story, and the ECB’s policy will prompt a Eurozone’s recession around the summer.
German producer prices declined by a new record 14.7% y/y in September, broadly in line with expectations of -14.1% y/y and a steeper pace of contraction than August's -12.6% y/y. Meanwhile, the monthly rate of change returned to contraction (-0.2% m/m)…
There is a high probability that the global economy will tip into recession in the second half of 2024. A long yen position is an excellent hedge against that risk.
The data releases this week in the UK were disappointing for those that have been looking for a major downshift in UK inflation – most importantly, the Bank of England (BoE). The CPI report for September came in above expectations at 0.5% month-on-month…