Economy
Today’s report recaps last week’s webcast and elaborates on its themes, delving into the empirical evidence underpinning our conviction that asset allocators should underweight equities sparingly and fleetingly. We remain tactically neutral and cyclically bearish.
Is the BoE making a mistake moving toward rate cuts before the end of the summer? What would such a move mean for UK asset prices?
Preliminary PMI estimates suggest that US economic leadership remained intact in June, despite previous signs that it was passing the global growth baton to the rest of the world. US manufacturing, services and composite PMIs all surpassed expectations as…
The Bank of Canada (BoC) cut interest rates from 5% to 4.75% in June and another rate cut in July would be warranted. Tight monetary policy is impacting the labor market. The unemployment rate (6.1%) has been on an uptrend since April 2023 and surging…
The Conference Board’s US Leading Economic Index (LEI) disappointed in May, contracting 0.5% m/m from a 0.6% decline in April. However, the Coincident Economic Index (CEI) grew 0.4% m/m in May. Year-on-year contractions in the LEI have reliably predicted…
Gold spot prices have returned a whopping 25% YTD, with the bulk of this performance having occurred in the last three months. Interestingly, these gains have occurred despite the rise in real yields, with which they are usually strongly inversely…
According to BCA Research’s Foreign Exchange Strategy service, the Norges Bank will be one of the last central banks to cut rates. The Swiss National Bank, Bank of England, and Norges Bank all held policy meetings on Thursday. The SNB continued its dovish…
Japanese exports in JPY increased from 8.3% y/y to 13.5% in May, surpassing expectations of 12.7%. 23.9% and 17.8% y/y growth in exports to the US and China, respectively, led the overall surge. Trade data from Asian export-oriented economies are generally…
In a widely expected move, the Bank of England (BoE) kept its policy rate unchanged at 5.25% in June. Although MPC members voted seven-to-two in favor of not cutting rates, a tweak in communication noting that the decision was “finely balanced”, hinted at the…
In its latest Special Report, BCA Research’s US Bond Strategy service considers the relative merits of four different fixed income investments in the current economic environment: 2-year Treasuries, 10-year Treasuries, Baa-rated corporate bonds and current…