Economy
Our kinked Phillips curve framework predicted the immaculate disinflation of 2023. That same framework is now warning that the global economy is heading towards a recession in the second half of 2024.
European flash PMI estimates for November sent a slightly less pessimistic signal on Thursday. The Eurozone composite PMI climbed by 0.6 points to 47.1, beating expectations of a more muted increase to 46.8. Notably, both the manufacturing and services…
Global cyclical sectors are outperforming defensive sectors on a year-to-date basis. The bulk of this outperformance occurred in the first seven months of the year. Relative valuations contributed to this dynamic as last year's selloff was more pronounced…
BCA Research's Commodity & Energy Strategy service concludes that lithium demand will rise over the long run. Lithium prices are continuing the selloff that began earlier this year, which was caused by strong production and mining capex increases. …
Contrary to the prevalent belief in the global investment community, goods/merchandise inventories in the US and East Asia are rather elevated. Financial markets respond to final demand fluctuations, not inventory restocking. Global manufacturing/trade will continue contracting, even though the pace of contraction might moderate in the near run. We recommend that investors fade the current rally.
US durable goods orders delivered a negative surprise on Wednesday. New orders for manufactured durable goods dropped by 5.4% m/m in October, below consensus estimates of a 3.2% m/m decline. Moreover, the September increase was revised down slightly to 4.0%…
In the recently held Polish general elections, the ruling Law & Justice Party (PiS) lost power. Chances are that a coalition led by the Civic Platform party will form a government next month. The new coalition ran on a pro-European Union (EU) platform…
Confidence is on the mend in the Euro Area. The rebounding ZEW growth expectations index reveals that investors are becoming more optimistic. The German IFO's business climate index inched higher in October for the first time since April, suggesting that…
Global equities have had a stellar 2023, rising by 16% year-to-date and outperforming global bonds by roughly the same amount. However, the large concentration of US stocks in the Magnificent Seven has called into question the legitimacy of this rally. There…
According to BCA Research's Emerging Markets Strategy service, the Chilean peso’s depreciation is already quite advanced. Over the next few months, the CLP will remain under downward pressure due to a likely global risk-off move. EM currencies will…