Economy
In a widely expected move, the Bank of England (BoE) maintained its policy rate at 5.25% in May. Nevertheless, two Committee Members voted in favor of cutting rates, one more than was anticipated. The tone of the report was overall dovish. The BoE…
The S&P GSCI broad commodity index has returned 8% year-to-date. Improving investor sentiment has significantly broadened the rally since the beginning of the year. Over 65% of commodities in the index are now trading above their 200-day moving averages,…
According to BCA Research’s Counterpoint service, it is possible that there will be a jobs recession without an economic recession in the US, as happened in 2001. The Fed is “trying to cool demand and work with what’s happening on the supply side”. So how…
An update to our views on UK rates and currency following today’s Bank of England meeting.
In this week’s report, we defend four out-of-consensus claims. Claim #1: Underlying inflation in the US is not reaccelerating. Claim #2: The US labor market is set to weaken abruptly. Claim #3: The S&P 500 will drop to 3700 in 2025. Claim #4: Japan is not in danger of a currency crisis.
Mexico’s election and the US election pose short-term and potentially medium-term risks to Mexican financial assets. But unless the ruling party wins a double supermajority, we remain structurally overweight Mexico relative to global stocks excluding the United States.
The revival in global growth momentum continued in April. The JPM Global Manufacturing PMI came in at 50.3, marking its third consecutive month of expansion. Details underscored solid demand conditions. Output and new orders continued to rise and new…
In a widely expected move, the Riksbank cut its policy rate by 25 basis points on Wednesday from 4% to 3.75%. The policy statement highlighted that inflation is approaching its 2% target, that leading indicators are pointing to further downside in prices and…
Health care stocks have underperformed the US broad market by over 20% since the beginning of 2023. Indeed, vaccination campaigns during the pandemic years had initially boosted health care companies’ earnings. However, this tailwind eventually faded.…
According to BCA Research’s US Bond Strategy service, investors should look to the stock-to-bond ratio to time the breakout in yields. The strong positive correlation between stock and bond returns has been a consistent feature of the inflationary…