Investors are still cautious and have significant cash that needs to be put to work. Trickle-down of it into the US equity market may extend the rally. Overly bearish futures positioning is also a strong contrarian indicator.…
Preliminary results of the University of Michigan Consumer Sentiment survey sent a positive signal about household morale in June. The Sentiment index rose by a greater-than-anticipated 4.7 points to 63.9 on the back of…
As expected, the European Central Bank (ECB) delivered a 25bps rate hike on Thursday, raising the policy rate to 3.5% — the highest since August 2001. Moreover, the central bank maintained a hawkish bias, signaling…
According to BCA Research’s Counterpoint service, making inflation imperceptible will require making unemployment perceptible, meaning a recession. Our non-linear world often surprises our linear-thinking minds. For…
This Strategy Insight discusses the bond market and currency implications of the Fed’s “hawkish pause”.
The US May PPI report indicates that pipeline inflationary pressures are cooling. Headline PPI inflation fell from 2.3% y/y to 1.1% y/y – below expectations of 1.5% y/y and the lowest since December 2020. PPI for final…
UK gilts have sold off sharply over the past month, particularly at the short end of the yield curve. The two-year yield has risen by over 100bps since mid-May, while 10-year yields have increased by just over 70bps –…
As expected, the Fed kept interest rates unchanged on Wednesday in order to give policymakers time to assess the impact of the aggressive tightening cycle. Chair Powell indicated that the decision to pause is consistent with…
The Chilean economy is entering a recession. After two years of tightening fiscal and monetary policies, real economic growth is beginning to contract and inflation is tumbling. Our Emerging Markets strategists expect the…
As the major central banks once again mull their policy options, they face a daunting task. They must phase-transition inflation back to imperceptible, without phase-transitioning unemployment to perceptible. This report explains why…