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Economy

The ECB Is On A Journey
As anticipated, the ECB downshifted the pace of rate hikes on Thursday, delivering a 25bps increase. Moreover, the central bank announced that it “expects” to end APP reinvestments in July. President Christine Lagarde continued to characterize inflation as…
Daily Insights
Pulling Inflation Lower Means Pulling Profits Sharply Lower
The biggest driver of structural inflation is wage inflation. This is because wages are the main cost in the services that comprise about two-thirds of any developed economy. To be more precise, the biggest component of structural inflation is wage inflation…
Daily Insights
CBAM Likely To Be Inflationary
According to BCA Research’s Commodity & Energy Strategy service, the EU’s Carbon Border Adjustment Mechanism (CBAM) will impart an upward bias to prices in the EU and its trading partners’ economies. Within the EU, the CBAM will have an inflationary…
Daily Insights
Indian Stocks: Is It Time To Upgrade?

Indian EPS growth is set for major disappointments vis-à-vis the lofty expectations. Weak domestic demand amid tight fiscal and monetary policy entails more downside in stock prices. Stay underweight.

Emerging Markets Strategy by Rajeeb Pramanik
May FOMC Meeting Recap

The Fed hiked 25 basis points at yesterday’s FOMC meeting while also signaling that the tightening cycle is now on hold. We discuss the short-run and long-run implications for Treasury yields.

US Bond Strategy by Ryan Swift
Resilient US Services
Data released on Wednesday confirm that the US services sector remains a source of resilience in the US economy. Both the ISM Services Index as well as the final estimate of the alternative S&P Global Services PMI moved further above 50 in April,…
Daily Insights
Pause Ahead?
As expected, the Fed delivered a 25bps rate hike on Wednesday. However, the FOMC statement and Chair Jay Powell’s post-meeting remarks signaled that this increase may mark the end of the tightening cycle. Notably, the sentence indicating that “the…
Daily Insights
Global Small Caps: Value Versus The Cycle
Global small cap stocks have underperformed large caps by roughly 7% since the beginning of March, in response to concerns about the global banking system. Smaller firms are generally less able to access funding through capital markets, and thus are more…
Daily Insights
China’s Politburo: No Helicopter Money
According to BCA Research’s Geopolitical Strategy service, the late April meeting of China’s Politburo suggests that the Chinese government will maintain the accommodative macroeconomic policies outlined in March. Compared to last December’s Central…
Daily Insights
The 2023 Outlook For Consumer Spending In China

China’s reopening, combined with a slew of pro-consumption policy stimuli, will likely boost household consumption by 10% in nominal terms in 2023 from a year ago. Some of the hardest hit service sectors during the pandemic will experience a strong recovery. Within the A-share market, investors should overweight the consumer discretionary sector versus the Chinese CSI300 benchmark.

China Investment Strategy

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