Economy
At BCA Research, fundamentals drive our analysis and we use indicators and quantitative metrics as guides to inform our views further. It is our fundamental assessment of the US labor market that underpins our view that softer labor demand and decelerating…
Our Global Investment strategists highlighted back in November 2022 that structural deflationary forces in Japan were weakening, thus setting the stage for inflation to make a historic comeback in Japan. About a year later, they highlighted that 2024…
According to BCA Research’s European Investment Strategy service, the money sloshing around the financial system from pandemic-era stimulus measures disconnects near-term prospects for growth from risk asset prices. As a result, we are witnessing an odd…
Sentiment among German companies stalled in May, after having firmed for 3 consecutive months. The IFO Business Climate came in at 89.3, unchanged from April, disappointing expectations of further strengthening to 90.4. Although respondents’ assessment of…
Chinese industrial profits rose by 4.0% y/y in April, from a 3.5% y/y contraction in March. They grew by 4.3% in the first four months of the year, compared to the same period in 2023. In March, the central government pledged funds to incentivize…
The greenback typically moves in the opposite direction of global growth. The US economy is indeed more highly geared towards services than manufacturing, compared with the rest of the world. Therefore, when global growth reaccelerates, capital typically…
The US manufacturing cycle has followed a surprisingly stable pattern for over seven decades. History suggests that this cycle tends to last for about 36 months, with a down leg spanning 18 months, followed by an up leg approximately spanning another 18…
According to BCA Research’s Global Investment Strategy service, there is only a narrow path to a soft landing. Our colleagues estimate a mere 20% chance that the US will avoid a recession before the end of 2025. The US unemployment rate is a highly…
The signs of an approaching recession are starting to emerge. We will turn tactically defensive once they all fall into place.
Looking at economic activity, global monetary policy seems restrictive, however, the behavior of financial markets tells a different story. What gives?