Economy
China’s July inflation data confirmed entrenched deflation, reinforcing our defensive stance on Chinese equities and overweight in onshore bonds. CPI slowed to 0% y/y from 0.1%, while factory-gate prices stayed deeply negative at -3.6% y/y. Weak…
Sweden’s July inflation print came in cooler than expected, but core remains too high for an imminent Riksbank cut. CPI rose 0.8% y/y, while CPIF climbed to 3.0% and core CPIF decelerated to 3.1%, still above the Riksbank’s 2.8% July forecast and outside…
Japan’s Eco Watchers survey suggests growth has troughed, making JGBs vulnerable in both global slowdown and reacceleration scenarios. The July survey showed current conditions ticking up to 45.2 and expectations improving to 47.3. While both remain…
The Q2 earnings season delivered solid earnings and sales growth and resilient margins, reassuring investors that corporate America remains in good health and is capable of navigating economic uncertainty while mitigating the impact of new trade levies. The outlook is generally positive, but with one important caveat: The full effect of tariffs has yet to materialize.
US tariffs will not derail the low-inflation economic recovery underway in the Euro Area. Investors should overweight European equities, focusing on parts of the market more insulated from tariffs.
The BTP-Bund spread has tightened to pre-2010s levels, but with global growth risks we favor Gilts over Bunds and prefer BTPs over credit. While the EURO STOXX 50 remains rangebound since the Liberation Day recovery, European financial stress remains low. The…
Canada’s July jobs report was mixed, but persistent slack and trade headwinds support our overweight in Canadian bonds and preference for 5s10s steepeners. Employment fell by 40.8k, driven by a 51k drop in full-time jobs, yet the unemployment rate held…
Banxico’s latest rate cut reinforces our bullish view on Mexican domestic bonds. Mexico’s central bank eased policy by another 25 basis points to 7.75%. Investors should bet on further easing. Inflation will continue falling within the target range…
Germany’s June factory orders missed expectations, highlighting persistent headwinds reinforcing the case for a cautious tactical outlook on European assets. Orders fell 1.0% m/m, slowing to 0.8% y/y on a calendar-adjusted basis from 6.1% in May. The…
Our Bank Credit Analyst strategists argue that a US fiscal crisis should be treated as a base case over the next decade, not a tail risk. The ballooning US budget deficit reflects higher interest rates, demographic pressures, and the lingering effects of past…