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Economy

Hotter Than Anticipated UK Inflation
UK headline inflation fell by less than expected in April. The decline from 10.1% y/y to 8.7% y/y came above consensus estimates calling for a more pronounced drop to 8.2% y/y. And although the annual figure now stands at its lowest since March 2022, the…
Daily Insights
The RBNZ Signals A Halt
The New Zealand dollar was the worst performing G10 currency on Wednesday, plunging by 2.3% versus the US dollar. The sharp drop in the kiwi came after the Reserve Bank of New Zealand (RBNZ) signaled that it was done tightening monetary policy following a 25…
Daily Insights
The Holds Still Have It
Despite a few Federal Reserve policymakers having recently advocated for a higher funds rate, a broad survey of all recent Fed commentary and the minutes from the May FOMC meeting suggests that the Fed is more likely to keep rates on hold when it meets next…
Daily Insights
Overweight Chinese A Shares Within A Global Portfolio
BCA Research’s China Investment Strategy service recommends investors overweight Chinese onshore stocks within a global equity portfolio.  Authorities are determined to boost the onshore equity market, in general, and share prices of state-owned…
Daily Insights
The Debt Ceiling Game Is Parent-Child With A Bad Nash Equilibrium

The debt ceiling game’s endpoint will avoid default only if it implies economic pain. For the Republicans, the best strategy is not to lift the debt ceiling unless the Democrats cut spending a lot, or unless the economy starts to tank. Plus: there are signs that the mania in ‘AI’ stocks has gone too far too fast.

Counterpoint by Dhaval Joshi
China’s Bumpy Growth Trajectory

China’s recovery is losing steam. Its industrial segments will disappoint, while the pace of consumer spending will be moderate. Overall, the Chinese economic recovery will underwhelm in the months ahead. Odds are that interest rate expectations in China will drop even lower, which will weigh on the RMB.

China Investment Strategy
DM PMIs Reflect Ongoing Spending Shift From Goods To Services
Preliminary PMI releases for May continue to show a divergence in activity across DM economies. On the one hand, the pace of expansion of service sector activity accelerated. The US Services PMI rose from 53.6 to 55.1 – beating expectations of a decline to…
Daily Insights
Asian Export Figures Remain Bleak
Recent Asian trade data do not provide any optimism that the global manufacturing slump is nearing its end. South Korean exports collapsed by 16.1% y/y in the first 20 days of May. While the decline was broad-based, sales to China were particularly weak,…
Daily Insights
American Consumers Are Not Overindebted
According to BCA Research’s US Investment Strategy service, there are no credit obstacles preventing households from sustaining their consumption growth rate at a level that will keep the recession at bay for the rest of the year. Much has been made of…
Daily Insights
The Game Theory Of The US Debt Ceiling Standoff

Investors should expect high volatility and a selloff in US stocks over the short run due to the higher-than-usual risk of technical default. Investors should seek shelter in defensive sectors and large cap stocks. Long-dated Treasuries will see yields fall due to the overall macro and geopolitical context even though short-dated Treasuries will continue to suffer from policy uncertainty.

US Political Strategy by Matt Gertken

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