Time is running out on the Bank of England’s tightening cycle. UK economic growth is flirting with recession, unemployment is rising, house prices are contracting and inflation is decelerating. Markets are overestimating the eventual…
As expected, the Bank of England delivered another 25 basis point rate increase at its Thursday meeting, lifting the policy rate to 5.25%. Going forward, Bailey – not unlike his counterparts at the Fed and ECB –…
The DXY will continue to have near-term upside, as economic growth holds up in the US, while it deteriorates in other parts of the world. Remain constructive on the DXY at current levels, but pivot to a short position on evidence US…
Flash PMIs sent a mixed signal about manufacturing and service sector conditions across DM economies in July. The Euro Area release was particularly weak. An unexpected 0.7-point decline in the Manufacturing PMI and a 0.9…
In this report, we present our performance review of the BCA Research Global Fixed Income Strategy (GFIS) model bond portfolio for the Q2/2023, and the outlook and scenario analysis for the next six months. The portfolio return…
Softer-than-anticipated CPI inflation caused UK Gilts to rally and the British pound to weaken on Wednesday. Headline CPI inflation fell from 8.7% y/y to a 15-month low of 7.9% y/y in June – a greater decline than…
Hot UK wage data focused investors’ attention on the Bank of England’s battle against sticky inflationary pressures on Tuesday. The 7.3% y/y increase in weekly earnings (excluding bonuses) in the three months to May…
Our Counterpoint service argues that it is not enough that inflation stabilizes at 3 percent for inflation expectations to be anchored and central banks must make inflation undershoot 2 percent for some time to prevent a repeat…
Has the yield curve lost its ability to “predict” recessions? The widely-followed 2-year/10-year US Treasury curve now sits at -100bps, but it has been inverted since April 2022. Investors have seemingly been on…
The Bank of England surprised markets with a larger-than-anticipated 50bps rate hike on Thursday, raising its policy rate to 5% versus expectations of 4.75%. Seven of the nine MPC members voted in favor of the rate increase.…