The Biden administration reached out to China to try to reduce tensions over the month of May, attracting interest from the investment community, though our Geopolitical Strategists believe the US and China cannot agree to a…
The Global Manufacturing PMI was unchanged at 49.6 in May – below the 50 boom-bust line for the ninth consecutive month. The details of the release were mixed. On the one hand, the Production sub-component rose to an 11-…
Our colleagues in BCA's Commodity & Energy Strategy (CES) service expect the Chinese Communist Party (CCP) to announce a new round of policy stimulus to re-boot the economy, in an effort to escape a prolonged liquidity…
Global financial markets relapsed in May. After a relatively strong start to Q2, most of the major financial assets we track generated below average returns last month. A shift in investor expectations for the path of the Fed…
Symptoms of a liquidity trap for Chinese households are appearing. Our proprietary indicators for the marginal propensity to spend among households and enterprises continue falling. There has been a paradigm shift in Beijing’s…
The CCP is poised to roll out a re-boot of China’s economy that will focus on its comparative advantage in the processing of base metals – particularly copper – and the export of metals-intensive products like EVs. The re-boot will…
Risk assets would perform well over 12 months only if inflation falls to 2% without triggering a recession. That would be unprecedented. We recommend investors stay defensive.
Chinese economic data releases continue to disappoint. Wednesday’s NBS PMI release showed the composite PMI dropped from 54.4 to 52.9 in May – the lowest since January. Importantly, the Manufacturing PMI unexpectedly…
The Chinese currency has underperformed most of its emerging market peers so far this year, depreciating by 2.5% vis-à-vis the US dollar. RMB weakness is consistent with the signal from other Chinese risk assets including…
Profits of Chinese industrial firms dropped by 20.6% y/y in the first four months of 2023, extending the contraction that began in the second half of last year. Notably, the weakness remains particularly pronounced across the…