Economic Growth
AI equity performance has replaced oil as the main driver of US Treasury yields, setting up a rotation out of AI stocks into the rest of the market. Our Chart Of The Week comes from Ryan Swift, our Chief US Bonds Strategist. Bond yields now track AI stocks…
Stronger Q3 euro area growth was likely AI-driven and obscures underlying weakness. Real Q3 euro area GDP came in stronger than consensus expectations. Real GDP grew 1.7% q/q annualized, which was slower than Q2 but meaningfully higher than expectations.…
China's domestic demand remains weak, despite positive Q3 data surprises. China’s Q3 GDP modestly beat expectations, accelerating from 0.9% to 1.2% q/q (4.3% to 4.5% y/y). September industrial production growth picked up, and retail sales accelerated from…
The Bank of Canada’s Q3 Business Outlook Survey improved but still points to weak momentum. The headline BOS indicator edged up to -0.33 from -0.38, and firms’ assessment of business conditions improved. However, most responses predate the August 21 collapse…
Credit spreads have widened as bond risks intensified, pressuring weak-balance-sheet companies. But the stress is narrow and valuations have already compressed, so equity risks look manageable. Rather than de-risk, we would lean into quality: large over small caps, quality capex, and defensible Tech margins, and look to Q3 earnings for confirmation.
Our EM strategists are closing long positions in Argentine assets, as the creative destruction promised by President Milei’s shock therapy has arrived without the creation that was meant to follow. Tight monetary and fiscal settings, an uncompetitive peso,…
If President Milei does not ease policy immediately to contain the disinflationary squeeze, he is likely to lose next year's election. This means neoliberal structural reforms will suffer a setback in subsequent years. Close long positions in Argentine assets.
September's flash PMIs show the US economy remains resilient to persistently high energy prices and higher rates. The composite index rose to 58.4 from 56, its highest level since 2021. Manufacturing and services both came in well above consensus.…
Sweden's economy is sending an ominous signal. GDP contracted 0.8% m/m, dragging the three-month moving average to zero, with industrial output as the primary drag. As our European and FICC teams have noted, the Swedish industrial cycle has been slowing down.…
The latest Fed Beige Book confirms US growth remains decent, while showing no evidence of broad overheating or second-round inflation effects. The Beige Book draws on the Fed’s network of contacts across all districts to gather evidence on economic…