Developed Countries
Our tactical framework highlights how financial conditions and economic surprises interact, where growth often sows the seeds of its own demise. Markets price expectations efficiently but lack perfect foresight, making data surprises key to price action.…
The Bank of England held its policy rate at 4.5%, with only one MPC member dissenting to cut 25 bps. The BoE signaled a slower pace of easing, as inflation remains elevated while global growth becomes increasingly uncertain. Like other DM central banks,…
After a period of relative stability and progress towards policy orthodoxy, politics are again haunting Turkish assets. President Erdogan jailed Istanbul mayor Ekrem Imamoglu, a political rival from the opposition party gaining ground at the municipal level.…
The March Philadelphia Fed Manufacturing index beat expectations, but still fell from 18.1 to 12.5, significantly down from January’s lofty 44.3 reading. Most activity components slowed except for current employment and work hours. Price pressure indicators…
The Bank of Japan left rates unchanged at 0.50%, but maintained a hawkish bias, making it the only G10 central bank in a hiking cycle, as the hot labor market creates sustained domestic price pressures. More rate increases are likely this year as…
Our European strategists looked at the European defense sector after the massive rally following Germany’s fiscal turnaround. The rally in European defense stocks, up over 100% since their March 2023 recommendation, is overextended. While the long-term…
Recent years were marked by US equities rebounding from each drawdown to re-test all-time highs. The best absolute-return strategy has been to “buy the dip” and close your eyes. Is it still the case? The short answer is no, as the US economy and markets…
The Federal Reserve held rates at 4.25%-to-4.5% as expected, and slowed down the pace of quantitative tightening. The FOMC remains comfortable waiting and assessing the impact of recent and upcoming policy changes. The dots reflected a more stagflationary…
The March ZEW index for Germany and the eurozone beat estimates, with the expectations component rising to 51.6 from 26.0 in February. The current situation assessment only marginally improved yet remains deeply negative at -87.6. The March data shows…
US February housing data was relatively strong, with housing starts rising 11.2% m/m after falling 9.8% in January. While they fell less than expected, building permits still declined at a faster pace than in January. The March NAHB Housing Market Index also…