Economy
We expect the divergence between resilient growth and weakening employment to be resolved by lower growth estimates, supporting long duration and steepeners. Economic activity and employment usually move together in a circular relationship: spending drives…
Recent Canadian data confirm slowing growth, reinforcing support for government bonds and steepeners. The October CFIB Business Barometer fell to 46.3 from 50.2, indicating contraction and underscoring the risk posed by small business weakness given their…
The October Philadelphia Fed manufacturing survey was mixed, showing weak headline data but steadier underlying components. The headline index fell to -12.8 from 23.2, the lowest level since April 2025. Underlying details were not as dire: shipments moderated…
This week’s Special Report evaluates the reward and risk in corporate bonds. We address the question of whether low expected excess returns today are justified by low risk or an example of overvaluation.
The October Empire Manufacturing survey beat estimates, but weak investment and hiring intentions temper its positive signal. The index rose to 10.7 from -8.7, indicating modest activity growth. New orders ticked up, and shipments increased after plunging…
UK labor data weakened in August and September, reinforcing downside inflation risks and supporting overweight Gilts with 2s10s steepeners. Payrolls fell by 10k in September, while job vacancies continued to slide to cyclical lows as unemployment reached…
The October Fed Beige Book points to slowing growth as uncertainty continues to weigh on activity. Fed contacts reported consumer spending recently decreased, though auto sales were supported by EV purchases ahead of the expiration of tax credits. Lower- and…
The September NFIB Small Business Optimism Index missed estimates, falling to 98.8 from 100.8. The decrease was driven by expectations, as fewer small businesses expect the economy to improve or real sales to rise. Firms also reported inventories as too high,…
The October ZEW survey sent a mixed signal on near-term European growth, confirming limited growth momentum. Euro area growth expectations fell to 22.7 from 26.1, while German expectations missed estimates but rose slightly to 39.3 from 37.3. Current…
Japan’s September machine tool orders rose 9.9% year-on-year to a six-month high, led by a 13% jump in foreign exports, reinforcing the growing tailwind for Japan’s industrial sector and supporting a structural overweight yen position. Foreign demand remains…