Economy
The cyclical outlook is gloomy for EUR/USD. We subscribe to neither the soft-landing nor the no-landing view and expect a recession to occur in late 2024/early 2025. The pro-cyclical euro would suffer in a global downturn while a recession would support the…
According to BCA Research’s Commodity & Energy Strategy service, commodity prices typically rally toward the end of the business cycle. In the past six recessions, the S&P 500 peaked before commodity prices. While there is significant variability…
Some thoughts on this morning’s employment report and recent trends in US economic data.
Mainland residents’ investments in gold, other metals, and Hong Kong-traded stocks are a form of capital outflow. Chinese authorities will counter any excessive capital flight with stricter administrative controls. Thus, markets benefiting from these flows will likely be hurt.
Investors should prepare for economic data to weaken even as policy uncertainty and geopolitical risk skyrocket ahead of the US election.
The preliminary nonfarm labor productivity estimate increased by an annualized 0.3% in Q1, below both the previous quarter’s 3.5% rate and expectations of 0.5%. Meanwhile unit labor costs increased by 4.7% annualized in Q1, a sharp acceleration from 0.4% in…
The Fed left the policy rate unchanged following its May FOMC meeting. It also announced it would slow the pace of quantitative tightening starting on June 1, from the current $60 billion per month to $25 billion per month for Treasuries redemptions, while…
After underperforming in 2022, I.T., Consumer Discretionary and Communication Services – the three sectors encompassing America’s largest tech companies – have rallied by 61.3%, 41.4% and 73.7%, respectively, since the beginning of 2023. Crucially, their…
According to BCA Research’s European Investment Strategy service, US and Euro Area growth will likely converge in the next 12 months. Fiscal policy differences were the most visible headwind to Eurozone growth last year. The IMF estimates that the…
Updated views on US Treasury yields and the dollar following today’s FOMC meeting.