Economy
The USD has steamrolled both DM and EM currencies since the US election. Among the victims was the Chinese yuan, with USDCNY strengthening towards 7.3, a multi-year resistance level, from 7.11 on the day of the election. The CNY weakened further Wednesday…
The November CPI came in line with expectations, accelerating to 0.3% m/m (2.7% y/y) from 0.2% (2.6% y/y) in October. Core also printed at 0.3% m/m, the same as October and remaining at 3.3% y/y. The acceleration was mainly driven by food and used cars. …
The Bank of Canada cut the overnight rate by 50 bps to 3.25%, a move predicted by economists and roughly priced in. The consecutive supersized cut brings the policy rate in the upper end of the 2.25%-to-3.25% range the BoC considers as neutral. With inflation…
We offer 5 key investment views for US fixed income markets in 2025.
- Congress will pass tax cuts by end of 2025 producing a fiscal thrust of about 0.9% of GDP in 2026.
- Trump will count on that stimulus as a basis for slapping tariffs on leading trade partners.
- China will retaliate against Trump and stimulate its domestic economy, while pursuing stronger trade ties with other countries. Europe will also retaliate.
- Geopolitical risk will shift from Ukraine-Russia to Israel-Iran, where the conflict will continue to escalate until a crisis point is reached within 2025.
China’s November trade balance increased to CNY 692.8 bln on the back of slowing-but-still-growing exports (down to 5.8% y/y from 11.2% in October), and a worsening imports contraction (-4.7% y/y vs. -3.7% in October). In Japan, growth in machine tools orders…
Our Geopolitical Strategy team published their annual outlook, and see three trends shaping 2025. First, Congress is expected to pass tax cuts by the end of 2025, providing a fiscal thrust of 0.9% of GDP in 2026. This stimulus will likely…
The November NFIB Small Business Optimism index beat expectations, jumping to 101.7 from 93.7 in October. Outside of inventory satisfaction, which was flat, all index subcomponents increased, led by measures of expectations. The outlook for general business…
Chinese deflationary pressures intensified in November, with CPI ticking down to 0.2% y/y from 0.3% in October. Producer prices deflation eased, with prices falling 2.5% y/y, less than -2.9% y/y a month prior. The weak data prompted a Politburo statement…
The December Sentix Economic Index for the Euro Area missed expectations, declining to -17.5 vs. -12.8 in November. Both the current situation and expectations components declined. As the first sentiment indicator for December, the Sentix confirms…