In financial systems, cracks typically begin on the periphery and then expand to the center. Hence, the ruptures on the fringes often act as an early warning. These fissures tend to widen and spread to the core, causing a breakdown…
The broad-based selloff continued in October. Fixed income markets performed particularly poorly as stronger-than-anticipated US economic data generated upside pressure on long-dated bond yields in the US and, to a lesser…
The fundamental component of long-term inflation expectations has climbed to its highest level since 2008 in both the US and the euro area. This means that both the Fed and the ECB will need to engineer inflation to undershoot 2…
High interest rates will eventually cause growth to slow. Signs of stress are already starting to show. Stay cautiously positioned.
Tuesday’s China PMI release delivered a negative update on economic activity in October. The NBS’ Manufacturing PMI fell from 50.2 to 49.5 while the Non-manufacturing PMI declined from 51.7 to 50.6. Both measures fell…
The Bank of Japan adjusted the language of its Monetary Policy Statement on Tuesday to indicate that it will allow greater flexibility it its yield curve control policy (YCC). It indicated that although the target level of 10-…
The Eurozone's October inflation release confirmed the signal from the German and Spanish reports that price pressures are moderating. CPI inflation softened from 4.3% y/y to 2.9% y/y (below expectations of 3.1% y/y) while…
What will the next manufacturing cycle look like in Europe and how will risk assets perform? Lessons from the recent past.
BCA Research’s Emerging Markets Strategy service remains overweight Mexican financial markets relative to their EM counterparts on a cyclical and structural basis. While Mexican markets will suffer in absolute terms with…
China’s economic growth will stagnate, at best, rather than revive. Lower valuations of Chinese equities are justified, and share prices have more downside. The RMB will continue to depreciate versus the US dollar.