Business Cycles
Export dynamics from small open economies are bellwethers for global trade and recent export data out of Taiwan and South Korea suggested robust global growth momentum in March. In April, Singapore’s electronics exports, which are particularly sensitive to…
Several economic releases out of China disappointed in April. Retail sales decelerated from 3.1% y/y to 2.3% y/y and fixed asset investment growth slowed from 4.5% YTD y/y to 4.2% YTD y/y. Both were expected to accelerate. Although industrial production…
An adverse shock is not a recession prerequisite. The empirical record shows that the US economy regularly evolves its way into a contraction with little fanfare. If current cooling trends continue, we project a recession will begin in late 2024/early 2025. …
US industrial production stalled in April against expectations of a moderate pace of growth (0.1% m/m) and March’s growth rate was revised lower from 0.4% m/m to 0.1% m/m. Notably, pro-cyclical manufacturing production unexpectedly contracted 0.3% m/m from a…
Credit spreads continue to price in a Goldilocks scenario. US investment grade and high-yield OAS have tightened 41 and 137 bps from their October peaks, resulting in handsome outperformance by both sectors relative to duration-equivalent Treasuries. …
According to BCA Research’s Commodity & Energy Strategy service, among the commodity groups, industrial metals provide the most reliable leading signal that the US economy is heading toward recession. Industrial metals’ greater exposure to the very…
Investor and business sentiment continues to improve in the Eurozone. The ZEW Expectations series for the Eurozone (+3.1 to 47 in May) and Germany (+4.2 to 47.1, above expectations) strengthened to 27-month highs. Moreover, the spread between the expectations…
The Bank of Japan’s Economy Watchers Survey – a gauge of sentiment among business owners – disappointed in April. The Current Conditions and the Outlook indices deteriorated from 49.8 to 47.4 (20-month low) and from 51.2 to 48.5 (16-month low), below…
Emergency pandemic policies elongated the lag between Fed rate hikes and an observable slowdown in the economy. Notably, fiscal transfers and constrained consumption options endowed households with more than $2 trillion of savings they would not otherwise…
The US Citi Economic Surprise Index has recently dipped below zero, indicating that US economic data releases have been disappointing expectations. Most notably, the ISM Services PMI started contracting in April against anticipation of a faster pace of…