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Economy

Killing Wage Inflation Is Unlikely To Be Immaculate
The best leading indicator for post-pandemic US wage inflation is the ratio of job vacancies to ‘bad’ unemployment (V/U), where bad unemployment refers to ‘job losers not on temporary layoff’. This ratio has already declined from 6.4 to 4.1 and wage…
Daily Insights
Shrinking Global Trade/Manufacturing Hurts EM Stocks
According to BCA Research’s Emerging Markets Strategy service, the recent improvement in global manufacturing and Asian exports will likely prove to be a mid-cycle amelioration rather than a cyclical recovery. Global trade/manufacturing is the key driver…
Daily Insights
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Rate Cuts Are Still Coming

We update our inflation forecast following this morning’s CPI report.

US Bond Strategy by Ryan Swift
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A Soft Landing Redux

The combined US credit impulse and fiscal thrust indicator will likely relapse in 2024, heralding growth weakness. Stalling US sales volume and falling inflation, combined with sticky labor costs, will herald a non-trivial profit margin compression. The recent increase in Asian exports will likely prove to be a mid-cycle improvement rather than a cyclical recovery.

Emerging Markets Strategy by Arthur Budaghyan
Falling Inflation Supports End Of RBA Hikes
Australian CPI inflation fell from 4.9% y/y to a 22-month low of 4.3% y/y in November – slightly below expectations of 4.4%. Underlying measures of core inflation also indicate that price pressures eased in November. The rate of growth in CPI excluding…
Daily Insights
Will The Surge In Taiwanese Exports Be Sustained?
Taiwan’s December trade data corroborates the signal from other Asian exporters (such as South Korea) that global manufacturing activity is experiencing a mini revival. Taiwanese exports surged by 11.8% y/y last month, surprising expectations of a much tamer…
Daily Insights
Wage Disinflation Intact
The Atlanta Fed’s US Wage Growth Tracker stalled at 5.2% in December, unchanged from November. Notably, after falling from a peak of 7.1% in June 2022, this indicator has stabilized at still-elevated levels in recent months. This dynamic raises the question…
Daily Insights
Will US Shale Oil Output Continue To Surge?
Crude oil prices weakened following the release of the US EIA’s weekly report on Wednesday, reversing gains earlier in the session and ultimately ending the day lower. The data release showed commercial crude inventories unexpectedly rose by 1.3 million…
Daily Insights
Hypo-Globalization
According to BCA Research’s Geopolitical Strategy service, hypo-globalization is the best way to understand the global trade environment. But de-globalization is more likely than re-globalization. A period of “hyper-globalization” occurred after the Cold…
Daily Insights
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The 4 Key Indicators Of The US Jobs Market Challenge The Immaculate Disinflationists

The Fed faces a dilemma. Cut rates early to avoid a recession, but at the risk of not slaying wage inflation. Or, not cut rates early to ensure that wage inflation is slayed, but at the risk of a downturn. Faced with such a dilemma, the lesser evil is to slay wage inflation even at the risk of a downturn. Meaning that the market has overpriced early rate cuts. We discuss some other investment implications, and identify two rebound candidates.

Counterpoint by Dhaval Joshi

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