BCA Indicators/Model
After US inflation slowed down markedly, EUR/USD broke out to 1.12, which constitutes a 16-month high. The euro is benefiting from the market expectation that the Fed will soon be done with its hikes while the ECB’s monetary tightening campaign remains more…
Canada’s CPI release showed headline CPI inflation cooled from 3.4% y/y to 2.8% in June – below estimates calling for a less pronounced moderation to 3.0% y/y. This marks inflation’s first return to the Bank of Canada’s 1%-3% percent inflation target range…
Singapore’s trade data continue to send a pessimistic signal about global manufacturing conditions. The year-over-year contraction in non-oil domestic exports (NODX) deepened to -15.5% y/y in June from -14.8% y/y – marking the ninth consecutive month of…
In the first five months of the year, optimism about GAI (generative AI) drove a narrow rally in US equities. The three sectors that contain companies that are most exposed to this dynamic were the only ones that experienced price gains. IT, Communication…
Copper rallied to a two-month high by the end of last week. Importantly, this move did not occur in isolation. It coincides with greater optimism about the prospects of a soft landing. Indeed, the US economic surprise index is solidly in positive territory…
Since the release of softer (than expected) CPI numbers in the US, markets have embraced a soft-landing scenario for the global economy. In the FX space, the DXY has broken down below the psychological level of 100. Will this lead to further downside, or…
Stocks fare best when there is plenty of slack in the economy and growth is strong and getting stronger. The good news is that the economic growth score for the US in our MacroQuant model is above its historic average. The bad news is that US economy is operating with little slack and sentiment is getting complacent. We recommend that investors maintain a modest overweight to equities for the time being but look to get more defensive later this year or in early 2024.
The Fed’s latest Beige Book reveals that economic activity rose slightly in recent weeks. The results are based on surveys and interviews conducted across 12 districts through June 30. In particular, two of the districts experienced “slight and modest…
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…
A range of indicators suggest that the US manufacturing sector is currently under duress. But should this weakness be extrapolated into the rest of the year? The US manufacturing cycle tends to follow a very predictable wave-like pattern. Each cycle tends…