Developed Countries
The latest equity rally and dollar selloff drove the recent easing in the Goldman Sachs Financial Conditions Indexes for both the US and Euro Area. To the extent that financial conditions gauge the availability of funding in an economy, this is a positive…
The US equity rally over the past month has been broad-based across nearly all sectors – with just over half of them posting double digit gains. The Consumer Discretionary Sector is the main outlier. It is the only S&P 500 sector that has not benefitted…
The narrative that the US can tolerate much higher interest rates, compared to the rest of the world has helped the dollar in 2022. In this report, we examine the sustainability of this thesis, from our holistic assessment of global growth indicators.
Japan’s economy unexpectedly contracted by 0.3% q/q in Q3 (annualized decline of 1.2%), following 1.1% q/q growth in Q2 (annualized 4.6%) and disappointing expectations of a lower yet still positive growth rate. However, this figure understates the health…
Although the Canadian dollar has been underperforming its G10 peers since the greenback’s September 27 peak, it has held up relatively well on a year-to-date basis. Going forward, both the outlook for BoC policy vis-à-vis the Fed, as well as oil price…
Our 4Q22 and 2023 Brent forecasts remain at $100/bbl and $116/bbl. Upside price risk continues to dominate oil markets. We remain long the XOP and COMT ETFs to retain exposure to oil and gas producers’ equities, and higher commodity prices and further backwardation, particularly in copper.
US Retail sales increased by a higher-than-expected 1.3% m/m in October, marking the highest monthly increase since January. Gasoline station sales were by far the largest contributor, though the control group (excluding gasoline stations, food services, auto…
Price pressures remain intense in the UK. Headline CPI inflation jumped from 10.1% y/y to a 41-year high of 11.1% in October – surpassing expectations of a milder acceleration to 10.7%. Similarly, the month-on-month rate surged from 0.5% to 2.0%. Meanwhile,…
US industrial production contracted by 0.1% m/m in October, following a downwardly revised 0.1% m/m increase. Notably, manufacturing output inched up by only 0.1% m/m and the previous three months of expansion have all been revised significantly lower. …
The Reserve Bank of Australia is among the global central banks that are leading the dovish shift in the monetary tightening cycle. Specifically, elevated private sector debt raises the economy’s sensitivity to higher interest rates, ultimately limiting the…