Economy
European equities have surged on hopes of a low-inflation boom—but the rally has likely gone too far, too fast. With a pullback now likely, how should investors position themselves over the next 3–6 months?
Our Emerging Market strategists reviewed their recommendations on South African assets as economic prospects start fading. South Africa’s fiscal tightening will suppress growth without achieving the necessary 4.2% primary surplus to stabilize public…
Our tactical framework highlights how financial conditions and economic surprises interact, where growth often sows the seeds of its own demise. Markets price expectations efficiently but lack perfect foresight, making data surprises key to price action.…
The March flash estimate for European Consumer Confidence missed estimates, and fell to -14.5 from -13.6 in February. This negative reading is the first European sentiment number missing expectations since January. The sentiment shift between the US and…
Our Chart Of The Week comes from Mathieu Savary, Chief Strategist of our European Investment Strategy service. Mathieu believes the recent outperformance of European over US risk assets is unlikely to last over the next 3-6 months. Markets are…
Brazilian policymakers are stuck between a rock and a hard place. There is no combination of fiscal and monetary policies that can assure decent growth, on-target inflation, a stable exchange rate, and public debt sustainability. We recommend investors maintain an underweight allocation to Brazilian fixed-income markets versus their EM peers and continue shorting BRL versus MXN. We have been bearish on the Bovespa in absolute terms and are now downgrading Brazilian stocks from neutral to underweight within an EM equity portfolio.
The March Philadelphia Fed Manufacturing index beat expectations, but still fell from 18.1 to 12.5, significantly down from January’s lofty 44.3 reading. Most activity components slowed except for current employment and work hours. Price pressure indicators…
The Bank of England held its policy rate at 4.5%, with only one MPC member dissenting to cut 25 bps. The BoE signaled a slower pace of easing, as inflation remains elevated while global growth becomes increasingly uncertain. Like other DM central banks,…
Our China strategists published a quick note on China’s property market following the release of housing data earlier this week. China’s housing market is showing early signs of stabilization after three years of crisis, though a full recovery remains…
After a period of relative stability and progress towards policy orthodoxy, politics are again haunting Turkish assets. President Erdogan jailed Istanbul mayor Ekrem Imamoglu, a political rival from the opposition party gaining ground at the municipal level.…