Inflation/Deflation
As expected, the Bank of Canada raised interest rates for the second consecutive month after restarting its tightening campaign last month. At 5.0%, the policy rate now stands 4.75 percentage points above where it was at the start of the tightening cycle last…
An outlook for inflation and Fed policy following this morning’s CPI report.
Hot UK wage data focused investors’ attention on the Bank of England’s battle against sticky inflationary pressures on Tuesday. The 7.3% y/y increase in weekly earnings (excluding bonuses) in the three months to May surpassed expectations of a 7.1% y/y rise…
The NFIB survey provided a slightly positive signal about the US economy in June. Small business optimism improved from 89.4 to a 7-month high of 91.0 – beating expectations of a more muted increase to 89.9. Details of the report corroborate the signal…
The latest update of the Manheim Used Vehicle Price Index provides a positive signal for US goods inflation. It shows used car prices fell by -4.2% m/m (-10.1% y/y) in June – its third consecutive monthly decline following a brief pickup in…
China’s CPI and PPI inflation updates indicate that deflationary pressures continue to dominate the domestic economy in June. Producer prices declined at a faster pace than in the prior month, falling by -5.4% y/y following a -4.6% y/y decrease in May, and…
Last week’s labor market data signal that US employment conditions remain strong – solidifying the case for a 25 bps rate hike at the Fed’s next meeting later this month (see The Numbers). Yet in order for the Fed to continue tightening beyond July,…
On the surface, the lower-than-anticipated job gains suggest that US labor market conditions softened last month. Friday’s jobs report revealed that the increase in nonfarm payrolls slowed from a downwardly revised 306 thousand to 209 thousand in June – below…
Canadian hiring surprised to the upside in June. The 60 thousand increase in employment last month – the highest since January – came in triple expectations of a 20 thousand rise and follows a 17 thousand decline in May. The increase mainly reflects a sharp…
Positive economic surprises have delayed the onset of recession in the United States. But tighter monetary and fiscal policy, slowing global growth, and a looming rebound in policy uncertainty and geopolitical risk suggest that investors should buy insurance while it is cheap.