Economy
Europe is sliding from stagflation toward recession as prolonged disruptions in the Strait of Hormuz weaken growth, labor markets, and supply chains while keeping inflation elevated. Even if a US-Iran deal is reached, limited fiscal support and rising food inflation leave the Euro Area increasingly vulnerable to a deeper economic downturn.
May flash PMIs point to US growth holding up better than the rest of the world. The US composite PMI held steady at 51.7, in line with expectations. Manufacturing rose to 55.3, beating expectations, while services moderated slightly to 50.9. Eurozone PMIs…
The US and Canada face increasingly different macro backdrops, and that divergence should support Canadian bonds versus Treasuries. US data has stayed resilient, surprising positively and showing growth momentum. Meanwhile, Canadian data has increasingly…
Canadian April inflation came in cooler than estimates, giving the Bank of Canada some reassurance even as headline CPI accelerated. Headline inflation rose to 2.8% y/y from 2.4%, but came in below the 3.1% consensus. Both of the Bank of Canada’s preferred…
Canada’s data keep disappointing, and stable but still-restrictive financial conditions point to subdued growth ahead. As we recently highlighted, Canadian economic surprises turned negative earlier this year and have kept falling. Canada also faces several…
The April NAB survey points to a worsening growth-inflation mix in Australia. Business conditions moderated to +3 from +6, a fourth consecutive decline that left the index firmly below its long-term average. Business confidence, the more forward-looking…
The April NFIB survey pointed to weaker growth, even as labor-market signals firmed at the margin. The index came in at 95.9, up slightly from 95.8 in March, but expectations deteriorated to 4% from 11%. More importantly, firms’ reported sales and employment…
The April CPI report showed clear evidence of the direct effect of higher oil prices on inflation but, so far, limited evidence of passthrough to core.
Canada’s growth outlook is deteriorating, with labor-market slack rising and economic surprises turning lower. Canadian economic surprises have turned negative and continue to fall. The April jobs report disappointed, with employment contracting for the third…
The April US employment report points to a goldilocks labor market. Nonfarm payrolls rose 115k, beating estimates, after a strong upwardly revised 185k in March. Two-month revisions removed 16k jobs, leaving the 3-month moving average at 48k, above our 30k…