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Business Cycles

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New Zealand: The Rising Case For A Rate Cut

In this Insight, we revisit our "higher for longer" theme for the Reserve Bank of New Zealand, in light of the latest central bank meeting. In conclusion, we are inching towards a more dovish RBNZ ahead. Ergo, we recommend some fixed income and currency trades.

Foreign Exchange Strategy, Global Fixed Income Strategy by Chester Ntonifor
Hot UK CPI Pushes Back On Summer Rate Cut
The UK CPI release surprised markets to the upside across the board on Wednesday. Headline CPI increased 2.3% year-on-year, above expectations of 2.1%. Core surprised to the upside as well, moderating from 4.2% to 3.9%y/y, less than the moderation embedded in…
Daily Insights
Do Not Heed The Signal From Industrial Metals
Industrial metals have outperformed the broad commodity complex this year and raced above the broad commodity complex even more meaningfully since the beginning of April. Our Commodity and Energy strategists have highlighted that the overrepresentation of…
Daily Insights
Earnings Guidance Leaves Room For Downward Surprises
The Q1 2024 earnings season is drawing to a close with 93% of S&P 500 companies having reported results as we go to press. Three-quarters (two-thirds) of companies have topped earnings (sales) expectations in Q1, according to Factset. Next quarter’s…
Daily Insights
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Recap Of Q1-24 Earnings: Looking Ahead

Q1 Earnings and sales growth were strong, but the devil is in the details: Without the Magnificent Five, earnings growth for the index would have been negative. On a positive note, margins have stabilized, and earnings growth is expected to broaden into yearend. Companies are optimistic about the economy. Development of AI applications is in full swing, but few companies are monetizing them yet. Consumer spending is strong but is slowing. We reiterate our underweight of consumer sectors, and overweight of Software and Services as the “don’t fight AI” adage holds.

US Equity Strategy by Irene Tunkel
Mixed Messages From Global Growth Bellwethers
Export dynamics from small open economies are bellwethers for global trade and recent export data out of Taiwan and South Korea suggested robust global growth momentum in March. In April, Singapore’s electronics exports, which are particularly sensitive to…
Daily Insights
China's Property Rescue Package Is No Game Changer
Several economic releases out of China disappointed in April. Retail sales decelerated from 3.1% y/y to 2.3% y/y and fixed asset investment growth slowed from 4.5% YTD y/y to 4.2% YTD y/y. Both were expected to accelerate. Although industrial production…
Daily Insights
Even Mild Recessions Lead To Bear Markets
An adverse shock is not a recession prerequisite. The empirical record shows that the US economy regularly evolves its way into a contraction with little fanfare. If current cooling trends continue, we project a recession will begin in late 2024/early 2025. …
Daily Insights
Manufacturing Activity Is Not At An Inflection Point
US industrial production stalled in April against expectations of a moderate pace of growth (0.1% m/m) and March’s growth rate was revised lower from 0.4% m/m to 0.1% m/m. Notably, pro-cyclical manufacturing production unexpectedly contracted 0.3% m/m from a…
Daily Insights
Junk Bonds Are Ignoring The Rise In Unemployment
Credit spreads continue to price in a Goldilocks scenario. US investment grade and high-yield OAS have tightened 41 and 137 bps from their October peaks, resulting in handsome outperformance by both sectors relative to duration-equivalent Treasuries. …
Daily Insights

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