The US economy is in the “Overheating” phase, so stronger growth brings higher inflation. Tight monetary policy means recession is still likely over the next 12 months. Stay defensive.
Euro Area CPI accelerated for the first time this year from 2.4% y/y to a faster-than-expected 2.6% y/y in May. Preliminary estimates also suggest that core CPI accelerated from 2.7% y/y to 2.9% y/y, against expectations of a…
In Section I, we argue that global investors have been lulled into a false sense of security concerning the resiliency of the US economy. Tight monetary policy means that something must change for a recession to be avoided, and…
According to BCA Research’s European Investment Strategy service, the money sloshing around the financial system from pandemic-era stimulus measures disconnects near-term prospects for growth from risk asset prices. As a…
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…
Looking at economic activity, global monetary policy seems restrictive, however, the behavior of financial markets tells a different story. What gives?
UK retail sales plunged 2.3% m/m in April from a downwardly revised 0.2% m/m contraction in March, significantly undershooting expectations of a 0.5% m/m decline. Household goods as well as clothing and footwear stores led 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…
The UK CPI release surprised markets to the upside across the board on Wednesday. Headline CPI increased 2.3% year-on-year, above expectations of 2.1%. Core surprised to the upside as well, moderating from 4.2% to 3.9%y/y, less…