Business Cycles

In a recent Special Report, BCA’s Foreign Exchange Strategists update their long-term fair-value models for the real effective exchange rate. The model aims to capture deviations from the long-term drivers of a currency, such as relative productivity trends…

According to BCA Research’s US Investment Strategy service, investors should take care not to read too much into the recent easing in financial conditions. According to Goldman Sachs’ Financial Conditions Index (FCI) financial conditions have become…

Preliminary PMI estimates suggest that service sector activity is expanding across DM economies in February. Most notably, services PMIs are back at or above 50 in Australia and the Eurozone from previously contracting levels. Meanwhile, the services sectors…

According to BCA Research’s Commodity & Energy Strategy service, gold purchases by central banks will continue apace, as they diversify away from USD foreign reserves. Amid elevated geopolitical risk, arising from the Russia-Ukraine war, ongoing…

Japanese exports in JPY increased by 11.9% y/y in January, up from a 9.7% y/y increase in December and surpassing expectations of 9.5% y/y. A 29.2% y/y jump in exports to China led the overall surge. Trade data from Asian export-oriented economies are…

Canada’s January CPI release shows price pressures cooling last month. Headline CPI eased to 2.9%y/y from 3.4%y/y in December, below expectations of 3.3%y/y. Furthermore, month-over-month inflation fell for the first time since May 2020. Headline CPI has…

The minutes of the January FOMC meeting underscore that policymakers are adopting a cautious approach in timing the pivot to policy easing. Although Fed officials acknowledged that inflation and employment risks are “moving into better balance,” and that…

According to BCA Research’s Geopolitical Strategy service, European political risk is turning up again. Increased European political risk is not because of the European parliamentary elections, which will see right-wing populist parties perform well but…

Chinese policymakers surprised on Tuesday with greater-than-anticipated easing for the troubled property market. Although the 1-year loan prime rate (LPR) – the benchmark for most household and corporate loans – was kept unchanged at 3.45%, the 5-year LPR –…

US Treasuries have been selling off over the past two months as investors downgrade the odds of an imminent start to the Fed’s easing cycle. Naturally, a question facing investors is whether current levels constitute a good opportunity to increase duration…