Business Cycles

According to BCA Research’s US Bond Strategy service, while US economic data clearly show that labor demand has slowed from its peak two years ago, it isn’t yet clear whether this slowing represents a re-normalization to pre-pandemic levels or the start of a…

The cyclical outlook is gloomy for EUR/USD. We subscribe to neither the soft-landing nor the no-landing view and expect a recession to occur in late 2024/early 2025. The pro-cyclical euro would suffer in a global downturn while a recession would support the…

According to BCA Research’s Commodity & Energy Strategy service, commodity prices typically rally toward the end of the business cycle. In the past six recessions, the S&P 500 peaked before commodity prices. While there is significant variability…

The Fed left the policy rate unchanged following its May FOMC meeting. It also announced it would slow the pace of quantitative tightening starting on June 1, from the current $60 billion per month to $25 billion per month for Treasuries redemptions, while…

In its latest report, BCA Research’s Global Investment Strategy service provides an update on its MacroQuant model. The overall equity score declined in April, finishing the month at the 29th percentile, which is enough to prompt the model to assign US…

The Chinese NBS non-manufacturing PMI came in at 51.2, below the previous month’s number of 53 and below expectations of 52.2. Moreover, the NBS manufacturing PMI also decreased to (a better-than-expected) 50.4 in April from 50.8 in March. Meanwhile, the…

Euro area inflation and GDP numbers were released on Tuesday. The preliminary harmonized core consumer price index came in at 0.7% on a month-on-month basis, a decrease from 1.1% in March. The preliminary year-on-year core CPI also decreased, clocking in at…

A few preliminary measures of German inflation for April were released on Monday. The month-on-month headline inflation measure came in at 0.5% an increase from last month’s reading of 0.4% but below expectations of 0.6%. Meanwhile the year-on-year version…

According to BCA Research’s Global Fixed Income Strategy service, a hard landing is the only way to solve the UK inflation problem. Sticky inflation and lingering inflation pressures have made the BoE’s job much more challenging. The UK economy weakened in…

The advanced estimates for US real GDP suggest that economic growth slowed meaningfully from 3.4% in Q4 2023 to 1.6% in Q1 2024 on an annualized basis, significantly below expectations of 2.5%. That said, the details of the report were less gloomy. While…