Business Cycles
Citigroup’s economic surprise index for the Euro Area has been on a steady ascent since mid-2023. Its continued increase after breaking into positive territory at the start of February indicates that the region’s economic data are generating positive…
According to BCA Research’s China Investment Strategy service, the adjustment in China’s real estate sector is not over. Odds are that the property market will contract for the fourth year in a row. The property market indicators continue to paint a grim…
Canada’s CPI release for February shows price pressures continue to ebb with the various measures of inflation all falling below consensus estimates. In particular, headline inflation decelerated from 2.9% y/y to 2.8% y/y – its lowest since March 2021 and…
Various indicators of Eurozone wage growth have cooled off in recent months. Notably, the labor costs index eased sharply from a downwardly revised 5.2% y/y to 3.4% y/y in 2023Q4 – the slowest pace of increase since Q3 2022. Alternative measures such as…
Indicators continue to point to resilient US housing market dynamics. The NAHB Housing Market Index increased for the fourth consecutive month to an 8-month high of 51 in March, beating expectations it would remain unchanged at 48. Increases across all three…
Singapore non-oil exports (NODX) largely disappointed in February, contracting by 4.8% m/m following a 2.3% m/m expansion in January, and falling below expectations of a milder 0.5% m/m decline. In a similar vein, the 0.1% y/y decline in February fell below…
In a recent Insight we highlighted that the selloff in the price of iron ore – which is down 25.4% year-to-date – is sending a pessimistic signal on China’s economy, suggesting that the current rally in Chinese stocks is unlikely to persist over a cyclical…
According to BCA Research’s Global Asset Allocation service, the impact of the global savings glut is among the four structural trends that will drive EM debt going forward. As an asset traditionally further out on the risk curve, EMD is sensitive to…
We assess where emerging markets debt is on a strategic and cyclical basis. We find it has benefited from local central banks boosting their inflation-fighting credentials and governments improving financial stability. As a result, EM debt is behaving less like a risk-on asset, changing the role it plays in a global portfolio. We also expand our asset allocation playbook by assessing how the asset class behaves across the business cycle. While EM debt is more than a risk-on play, we suggest investors stay cautious on a cyclical horizon.
US Investment grade and high yield spreads have tightened 39 and 133 bps since their October 2023 highs, resulting in the outperformance of both fixed income sectors relative to equivalent-duration Treasuries. Still robust economic growth in the US…