The August UK inflation report produced a large downside surprise. Headline CPI rose +0.3% month-on-month, versus expectations of a +0.7% increase. Year-over-year headline CPI inflation slowed to 6.7% from 6.8%, a sizeable miss…
Scandinavian currencies are bearing the brunt of the recent US dollar strength. The Swedish krona and Norwegian krone are the worst performing G10 currencies since the DXY’s mid-July bottom, losing 8.6% and 7.6% of their…
Collapsing German producer prices continue to indicate that inflationary pressures are moderating in the Eurozone. Total PPI declined by a record 12.6% y/y in August following a 6.0% y/y drop in July. While the annual decline…
A discussion of today’s FOMC meeting and its investment implications.
The biggest misunderstanding in the markets right now is that to keep expected inflation well-anchored at 2 percent, inflation must undershoot 2 percent for some time. This implies that interest rate futures curves are mispriced, and…
China’s reopening faltered and now it is applying moderate stimulus. OPEC 2.0’s production discipline is getting results, with oil prices climbing. The Fed will not be able to deliver dovish surprises in Q4 2023. Investors should…
BCA Research’s US Bond Strategy service concludes that recent BEA data are understating corporate net interest expense by a significant amount. Given the recent climb in interest rates, it would be reasonable to expect…
The German auto and components sector is under stress. Year-to-date, the sector’s equity prices have declined by 3.5% relative to the broader German market, and multiple indicators suggest that further challenges lie ahead…
Coffee prices have surged in recent days and have now gained 8.5% over the past week. Two main forces are behind this rally. First, the recent pause in the US dollar strength is a tailwind for coffee prices. In particular, the…
Tuesday’s release of Canadian CPI in August raised concerns that inflationary pressures are picking up again. Headline CPI inflation rose from 3.3% y/y to 4.0% y/y – above expectations of 3.8% y/y and marking the…