Economy

It takes time for wage inflation to die. So, if 2022 was the year that central banks’ monster tightening killed bond and stock market valuations, then 2023 will be the year that it finally reaches the economy and kills profits, jobs, and the wage inflation that has so far refused to die. This means that commodity prices have substantial further downside, while healthcare relative performance has substantial further upside.

3 years ago

Essentials

Q3 Australia CPI Inflation Surprises To The Upside

Australia’s headline CPI inflation accelerated to 7.3% y/y in Q3 from 6.1% y/y, the highest level since 1990. Housing, transportation and food led the year-on-year increase. Trimmed mean CPI, a less volatile measure of core inflation, also firmed from 4.9%…

3 years ago

Essentials

The BoC Delivers A Smaller-Than-Anticipated Rate Hike

The Bank of Canada unexpectedly slowed the pace of its interest rate increases on Wednesday, delivering a 50bp hike against anticipations of another 75bp rise. The decision reflects an attempt to balance between stubbornly elevated inflation and…

3 years ago

Essentials

Takeaways From China’s 20th Party Congress

According to BCA Research’s China Investment Strategy service, messages from the Party Congress suggest that China’s policymakers will continue to balance the trade-offs between short-term economic growth, socio-political stability and the nation's long-term…

3 years ago

CoreMacro

Reflections On The 20th Party Congress

The 20<sup>th</sup> Communist Party Congress concluded on Sunday with President Xi Jinping cementing his third term in office. We are maintaining our cautious stance on Chinese stocks and the exchange rate. The lack of a significant shift away from current macro and regulatory policies means that China’s economic recovery and stock performance remain at risk.

3 years ago

China

Essentials

Deteriorating Consumer Morale in October

The Conference Board’s Consumer Confidence Index fell from 107.8 to 102.5 in October, significantly below anticipations of a milder decrease to 105.9. In particular, the Present Situation Index sunk to 138.9 from 150.2 while the Expectations Index declined…

3 years ago

Essentials

Nearing The Peak In Treasury Yields?

10-year US Treasury yields fell sharply on Tuesday after closing at a 14-year high of 4.25% on Monday. The question facing investors is how much further can bond yields rise? Our US Bond strategists recently analyzed past Fed tightening cycles and found…

3 years ago

Essentials

German Ifo Remains Depressed

The Ifo Business Climate Index for Germany was broadly unchanged at 84.3 in October, beating consensus expectations of a decrease to 83.5. The 0.4-point decline in the Current Assessment index was better than consensus estimates of a 1.6-point drop.…

3 years ago

Essentials

October DM Flash PMIs Indicate Weaker Economic Activity

Preliminary October PMI estimates generally point to a broad-based deterioration in economic activity across DM economies. PMIs across the US, Australia, the Eurozone and the UK all deteriorated from September levels. Notably, services in the UK and…

3 years ago

Essentials

China’s Equity Outlook Remains Bleak

China’s Q3 GDP growth data surprised to the upside. It accelerated to 3.9% y/y from 0.4% y/y in Q2, beating expectations of 3.3% y/y, and returned to growth on a quarter-on-quarter basis following a contraction in Q2. Meanwhile, economic data was mixed in…

3 years ago

Economy

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