Highlights Monetary Policy: It’s all but certain that tapering will begin next month and conclude by the middle of next year, but the FOMC is currently split right down the middle on whether it will be appropriate to lift rates…
Power shortages are the latest source of risk clouding the Chinese economic outlook. An intensification of electricity supply issues is forcing factories in several key manufacturing hubs to curtail production. To reduce…
According to BCA Research’s European Investment Strategy service, the tactical environment is dangerous for European cyclicals in general, and materials in particular. The fallout from Evergrande’s problem will extend to the…
Highlights The Evergrande crisis is not China’s Lehman moment. Nonetheless, Chinese construction activity will decelerate further in response to this shock. Global equities are frothy enough that a weaker-than-expected Chinese…
The Turkish central bank surprised investors with a 100-basis point rate cut on Thursday, bringing the one-week repo rate down to 18%. The decision comes despite rising inflation. Headline CPI has been steadily climbing since…
Highlights Asian and European natural gas prices will remain well bid as the Northern Hemisphere winter approaches. An upgraded probability of a second La Niña event this winter will keep gas buyers scouring markets for supplies…
Highlights Evergrande is just a canary in the coalmine warning of the vulnerability of global real estate, which is now trading on its highest valuation ever. US house prices are now more extended versus rents than at the peak of the…
The Fed’s policy normalization process is likely to produce a slight hawkish surprise. The central bank will probably raise interest rates earlier and faster than current market expectations (see Country Focus). We do not expect…
The performance of global risk assets improved somewhat on Tuesday following Monday’s tumble on the back of concerns about the potential implications of an Evergrande default. Nevertheless, risks remain elevated. A key…
Chinese residential building starts and sales have been contracting since April and July, respectively. Similarly, the level of aggregate building construction activity appears to be rolling over. The Evergrande debacle presents…