The economic schism in the world economy, between the non-US developed economy in recession and the US in strong growth, is unprecedented during our lifetimes. Now the schism will continue in reverse, as the non-US developed economy…
According to BCA Research’s European Investment Strategy service, the domestic picture indicates that Bund yields will stay rangebound over the next few months due to the tug-of-war between bond bullish and bond bearish…
Investor and business sentiment continues to improve in the Eurozone. The ZEW Expectations series for the Eurozone (+3.1 to 47 in May) and Germany (+4.2 to 47.1, above expectations) strengthened to 27-month highs. Moreover, the…
Preliminary GDP estimates suggest that the UK economy started growing again in Q1, thus exiting a technical recession in the past two quarters. Q1 growth came in at 0.6%, improving from a 0.3% contraction last quarter,…
In a widely expected move, the Bank of England (BoE) maintained its policy rate at 5.25% in May. Nevertheless, two Committee Members voted in favor of cutting rates, one more than was anticipated. The tone of the report was…
An update to our views on UK rates and currency following today’s Bank of England meeting.
In a widely expected move, the Riksbank cut its policy rate by 25 basis points on Wednesday from 4% to 3.75%. The policy statement highlighted that inflation is approaching its 2% target, that leading indicators are pointing to…
European retail sales were stronger-than-expected in March. They grew by 0.7% y/y from an upwardly revised 0.5% contraction in February, upending expectations that they would continue to decline. Improved sales in food…
The final estimates of Spain's and France’s services PMIs were revised upwards of expectations in April, increasing from 56.1 to 56.2 and from 50.5 to 51.3 respectively. The services European harmonized PMI also…
The cyclical outlook is gloomy for EUR/USD. We subscribe to neither the soft-landing nor the no-landing view and expect a recession to occur in late 2024/early 2025. The pro-cyclical euro would suffer in a global downturn while a…