Economy
UK financial conditions have tightened just as economic surprises have turned negative, an uncomfortable combination that reinforces our tactical positioning. We remain overweight UK gilts within a global bond portfolio and are tactically short GBP/USD from…
The US economy has never entered a demand-driven recession without labour demand running below labour supply and without the job vacancy rate running below the unemployment rate. Right now though, US labour demand is still running 1.7 million workers above labour supply, and the job vacancy rate is running comfortably above the unemployment rate. This suggests that the labour market is still supply-constrained, and that a demand-driven recession is not imminent. We discuss the investment implications. Plus, more about our ‘trade of the century’: long cotton versus coffee.
This report is a quick take on our views on UK bonds and FX, given the recent budget.
Our US Investment Strategy team recommends investors remain defensively positioned. Stay underweight US equities and overweight Treasuries and cash, on both a tactical and cyclical horizon, as the likelihood of a midyear recession continues to rise. With key…
UK inflation came in cooler than expected in February, but lingering price pressures and a still-firm labor market keep the BoE sidelined, for now. Our Global Fixed-Income strategists view the BoE as the most likely DM central bank to surprise on the dovish…
A drop in core capex orders points to slowing business spending and softening global growth. Businesses appear to have front-loaded shipments ahead of potential tariffs while deferring new orders amid policy uncertainty. With hiring and capex plans softening…
A sharp drop in consumer confidence adds to signs that a consumption slowdown is coming, threatening both US and global growth. Yet rising short-term inflation expectations will keep central banks cautious, weighing on long-term yields even as growth weakens.…
The years ahead will be more complex for investors. Inflation expectations and its leading indicators will matter as much as realized inflation, and rates volatility is likely to remain structurally higher. This calls for increasing strategic allocations to…
Our Emerging Market strategists downgraded Brazilian equities as public debt dynamics deteriorate and macro fundamentals weaken. While they previously maintained a neutral stance despite being bearish on the Bovespa, the risks have become too pronounced to…
East Asian trade data has been disappointing. Preliminary February data for Japanese machine tool orders showed a slowdown to 3.5% y/y from 4.7% in January. Broader machinery orders were down 3.5% m/m in January. Taiwanese exports orders were up an abnormal…