China’s energy crunch is spilling over into metal markets. Chinese steelmakers – which already face seasonal production curbs to curtail emissions during the winter months – are now being forced to lower output amid the…
Highlights Recommended Allocation The global economy will continue to grow at an above-trend rate over the next 12 months and central banks will remove accommodation only slowly.But the second year of a bull market is often…
Highlights The fourth quarter will be volatile as China still poses a risk of overtightening policy and undermining the global recovery. US political risks are also elevated. A debt default is likely to be averted in the end. Fiscal…
China’s NBS and Caixin Manufacturing PMIs sent a contradictory signal for September. The official manufacturing index slipped into contractionary territory after declining 0.5 points to 49.6. Consensus estimates anticipated a…
The performance of USD/CNY can often be explained by relative rates. The widening of the China-US yield differential in the second half of last year coincided with a sharp appreciation in the CNY vis-à-vis the USD. However, this…
HighlightsThe power shortage in China due to depleted coal inventories and low hydro availability will push copper and aluminum inventories lower, as refineries there – which account for roughly one-half of global capacity – are shut to…
Highlights Evergrande has not only crossed regulatory gridlines but also regulators’ bottom lines; the government will use the example of Evergrande to impose discipline on real estate developers. The policy response will likely…
According to BCA Research’s European Investment Strategy service, the tactical environment is dangerous for European cyclicals in general, and materials in particular. The fallout from Evergrande’s problem will extend to the…
Power shortages are the latest source of risk clouding the Chinese economic outlook. An intensification of electricity supply issues is forcing factories in several key manufacturing hubs to curtail production. To reduce…
Highlights The Evergrande crisis is not China’s Lehman moment. Nonetheless, Chinese construction activity will decelerate further in response to this shock. Global equities are frothy enough that a weaker-than-expected Chinese…