Economy
In a widely expected move, the Riksbank lowered its policy rate from 3.75% to 3.5% in August. It had kept rates on hold in June, after having led many other major DM central banks in easing policy in May. The Riksbank also signaled it could cut as many as…
Back in May, our Commodity and Energy strategists argued that OPEC, EIA, and IEA oil demand forecasts were likely too optimistic. Indeed, while all three major oil price forecasters projected a moderation in demand this year, none of them anticipated weak…
It didn't take long for markets to utterly shrug off the surprise rise in July's unemployment rate. On Tuesday, the S&P 500 closed higher than it was the day before the July Employment Situation report was released. The Russell 2000 gained 5.2% since…
According to BCA Research’s US Investment Strategy and US Bond Strategy services, the drivers of the structural downtrend in real interest rates include: demographic trends (declining fertility rates, longer life expectancy and a rising dependency…
The Conference Board’s US Leading Economic Index (LEI) disappointed in July, contracting 0.6% m/m from a 0.2% decline in June, below expectations of -0.4%. Meanwhile, the Coincident Economic Index (CEI) was flat. Year-on-year contractions in the LEI have…
The ZEW survey of Eurozone business expectations decreased by a whopping 25.8 points to 17.9 in August. Notably, expectations for Germany’s current situation disappointed, worsening from an already depressed -68.9 level to -77.3, and expectations of future…
EM equities have dramatically underperformed their US and Eurozone peers in USD terms over the past 15 years. The inability of EM and EM Asia companies to grow their EPS largely explains EM equities “lost decade” (and a half). Since 2010, US EPS have grown…
Markets have recouped some of the losses incurred in the aftermath of the July US Employment Situation report. Was the surprise rise in the unemployment rate a false alarm? Supply-side dynamics alone cannot explain the overall rise in the unemployment…
According to BCA Research’s Commodity and Energy Strategy service, soft oil demand growth raises the likelihood that OPEC+ will back down from its plan to begin unwinding some of its production cuts later this year. However, investors should not read this as…
The US fiscal outlook is more unappetizing than it was before the pandemic, but we are not convinced that a difficult day of reckoning awaits. A Treasury market crisis is conceivable, but it is far from inevitable.