The US manufacturing cycle has followed a surprisingly stable pattern for over seven decades. History suggests that this cycle tends to last for about 36 months, with a down leg spanning 18 months, followed by an up leg…
The greenback typically moves in the opposite direction of global growth. The US economy is indeed more highly geared towards services than manufacturing, compared with the rest of the world. Therefore, when global growth…
Chinese industrial profits rose by 4.0% y/y in April, from a 3.5% y/y contraction in March. They grew by 4.3% in the first four months of the year, compared to the same period in 2023. In March, the central government pledged…
Sentiment among German companies stalled in May, after having firmed for 3 consecutive months. The IFO Business Climate came in at 89.3, unchanged from April, disappointing expectations of further strengthening to 90.4. Although…
The signs of an approaching recession are starting to emerge. We will turn tactically defensive once they all fall into place.
Looking at economic activity, global monetary policy seems restrictive, however, the behavior of financial markets tells a different story. What gives?
There is a path to a soft landing, but it is a narrow one. We estimate that there is only a 20% chance that the US will avoid a recession before the end of 2025. We are currently neutral on global equities, but expect to downgrade…
According to BCA Research’s Counterpoint service, the non-US developed economy is “demand-constrained” whereas the US economy is “supply-constrained”. This schism will continue but in reverse. The…
Negotiated wages rose 4.7% y/y in Q1, from 4.5% y/y in Q4 in the Eurozone. Meanwhile, preliminary estimates for the Eurozone Composite PMI surprised to the upside in May. Although wage growth is the main driver of services…