Economy
Following today’s US jobs data release, the Joshi rule real-time US recession indicator inched up to 0.18 and is now just a whisker from its recession event-horizon of 0.20.
A soft landing can be achieved but not maintained. We are cutting our tactical recommendation on stocks from overweight to neutral and scaling back our long-duration stance.
China’s Caixin PMI delivered a positive signal on Thursday. The Services index climbed from 51.5 to 52.9 in December, beating expectations it would remain more or less unchanged. The improvement in the Services PMI lifted the Composite index by 1 point to a…
The market is pricing in that the Fed will cut rates by around 175 BPs this year, with the first rate cut coming as early as March. We think it unlikely that the Fed will cut that quickly – unless a deterioration in the labor market points to an imminent…
According to BCA Research’s Commodity & Energy Strategy service, attacks on commercial tankers transiting the Bab el-Mandeb Strait by Iran’s proxies in Yemen, the Houthis, are an inflation risk. Just under 9% of global oil and refined product flows…
Results of the November JOLTS survey indicate that the US labor market is softening. The number of job openings slowed from 8.85 million to 8.79 million – the lowest since March 2021 and slightly below expectations of 8.82 million. This brings the ratio of…
Minutes from the Fed’s December 12-13 FOMC meeting suggest that policymakers are more confident that inflation is on track to return to target. While they continued to note that inflation remains elevated and that they are highly attentive to inflation risks,…
China’s equity market stands out as a major underperformer vis-à-vis its global peers in 2023. The 13% drawdown in China’s investable stock price contrasts with the 20% rally in the MSCI ACW Index. It reflects the country’s disappointing recovery as…
According to BCA Research’s European Investment Strategy service, the euro has ample attractive features that justify a positive long-term outlook. However, its pro-cyclicality and the dollar’s negative correlation to risk assets constitute important…
The market is excited by the idea that the Fed will cut rates early this year, even without a recession. But is that likely, with inflation still set to be around 2.8% mid-year?