Financial Markets
Last week, the Central Bank of Brazil (BCB) announced another 50bp rate hike, which is smaller than previous 75-150bp increments. In addition, the BCB stated that “the Committee will assess if maintaining the Selic rate by itself for a sufficiently long…
Although Chinese headline CPI inflation increased from 2.5% to a 2-year high of 2.7% in July, the details of the release suggest that the PBoC (unlike many of its global peers) does not face pressure to tighten policy. In particular, a 6.3% y/y…
US headline CPI eased to a lower-than-expected 8.5% y/y in July, from a four-decade high of 9.1% in June. The index was flat on a month-on-month basis amid lower gasoline prices (which fell by 7.7% m/m). This follows a 1.3% m/m jump in headline inflation in…
The latest update from the Atlanta Fed’s GDPNow model estimates US real GDP growth of 2.5% in Q3 – up from last week’s 1.4%. The robust July employment report and, to a lesser extent, the July CPI release (see The Numbers) boosted the model’s forecasts for…
According to our China Investment strategists, the following factors will weigh on China’s corporate profitability in the long term: 1. Demographics and rising labor costs: A shrinking workforce since mid-2010s has led to higher wages . This dynamic is…
Results from the NFIB survey suggest that optimism among small business owners improved slightly in July. However, at 89.9 the Optimism Index remains extremely depressed (below its long-term average of 98.0) and the details of the report underscore that…
Recent data releases suggest that Japan’s domestic recovery remains lackluster. Japanese machine tool orders decelerated from 17.1% y/y to 5.5% y/y in July, prolonging the past years’ downtrend. The slowdown has been particularly pronounced among foreign…
Nonfarm productivity contracted by 4.6% on an annualized q/q basis in Q2, following a downwardly revised 7.4% decline in the previous quarter, and marking the largest two-quarter contraction in productivity on record. Meanwhile, Unit Labor Costs (ULC) grew by…
Results from the New York Fed’s latest Consumer Survey suggest that the Fed’s credibility is improving. Inflation expectations declined across the board. Median one- and three-year-ahead inflation expectations dropped 0.6 percentage points to 6.2% and 0.4…
BCA Research’s Global Fixed Income Strategy service recommends increasing exposure to yield curve flattening in the US, UK, and core Europe (Germany and France). Bond markets were getting way ahead of themselves in pricing in aggressive rate cuts in 2023,…