Monetary
Preliminary estimates suggest that Eurozone headline and core CPI inflation decelerated from 2.2% to 1.8% y/y and from 2.8% to 2.7%, respectively, in September. The inflation data from individual Euro Area countries earlier last week had already prompted…
The market got excited by the 50 bps Fed cut and China stimulus. But these are a recognition that economies are slowing significantly. Stocks often rally after the first Fed cut, before falling sharply. Investors should stay defensive.
Our expectation that a looming US recession will morph into a global recession remains intact. US monetary easing will only take effect with a lag and current deteriorating economic conditions are the product of past easing. Meanwhile, China’s…
After resisting the consensus narrative in 2022 that a US recession was imminent, and then predicting an immaculate disinflation for 2023, the Global Investment Strategy team has joined the dark side and is now expecting a recession to start in the US within the next six months. Accordingly, we recommend that investors underweight stocks and overweight government bonds.
US nominal personal income growth decelerated to a 0.2% pace in August, from 0.3% in July, missing expectations that it would accelerate. Nominal personal spending also disappointed, growing at a slower 0.2% pace from 0.5%. In real terms, spending barely…
France’s and Spain’s preliminary September CPI readings declined on a month-on-month basis, clocking in at 1.5% and 1.7% y/y respectively, and undershooting consensus expectations. Germany’s and Italy’s updates are due on Monday and the Eurozone CPI will be…
Annual BEA data revisions resulted in a significant upward revision in GDP growth since Q2 2020, led by stronger consumption growth and more robust real disposable income growth than previously believed. Revisions also show that the savings rate has been…
We highlighted last week that while the Politburo policy announcements are unlikely to produce a meaningful business cycle recovery in China, they nevertheless administered a shot of adrenaline to investor sentiment. Chinese equities, China-plays and other…
According to BCA Research’s European Investment Strategy service, the surprise fiscal announcement from China’s Politburo is a very different animal from previous stimulus attempts. Although the details are still vague, it adopts a much more pragmatic tone…
We consider the possibility that lower interest rates could lead to an increase in household borrowing, prolonging the economic recovery.