Financial Markets
Our Global Asset Allocation Strategy colleagues argue in their monthly report that while a soft landing is a possibility, it is already reflected in asset pricing. A Trump victory would be a threat to this scenario. Inflation pressures are abating, and the…
China’s Caixin Manufacturing PMI rebounded one point in October to 50.3. This was in line with the NBS PMIs from earlier this week, which also showed a modest rebound. We are looking for a turning point in China as the government unrolls stimulus measures.…
The Fed’s preferred measure of inflation, core PCE, met expectations of a reacceleration to 0.3% month-on-month, and reached 2.7% year-over-year. The rest of the Personal Income and Outlays report showed solid consumption growth, although supported by a…
Speculators have supported copper prices as demand growth slowed below the pace of supply growth. Our Commodity and Energy Strategy colleagues believe this does not bode well for the metal. The copper market faces a situation where demand growth will be…
EM credit markets have recently defied the selloffs in EM equities, currencies, local currency bonds, and commodity prices. Such a decoupling is unusual. Resilient US growth and Fed easing are not sufficient to justify very low EM credit spreads.
Advanced Q3 GDP for the US met expectations, showing 2.8% quarterly annualized growth and a small deceleration from 3.0% in Q2. Importantly, growth remains above trend. The report was strong across the board except for housing. It also highlights that US…
Germany’s economy has lagged that of the rest of Europe for nearly 10 years. So have German stocks. Investors are extrapolating these trends to bet on the country’s deindustrialization. Could Germany manage to beat dismal expectations?
For the past two weeks, oil has sold off amid a global spike in yields. Oil prices and Treasury yields tend to be positively correlated, as oil prices are a fast-moving component of inflation, driving the inflation expectations component of bond yields. …
While moving in the right direction, China’s latest stimulus measures are falling short of the mark to reflate the economy. The latest rumors extend this trend. News agencies reported discussions of a CNY 10 trillion bond issuance over three years. Six…
Germany’s problems are well known: Demographics, Chinese competition, underinvestment, energy dependence, and constrained fiscal policy. Our European Investment Strategy colleagues believe this bad news is priced in. More optimism is warranted as…