Feature Chinese stocks remain in limbo despite robust economic data in April and early May (Chart 1). Onshore equities are pricing in policy tightening risks and a peak in the domestic economic cycle. Meanwhile, a regulatory…
Highlights Global Tapering: The Bank of England has joined the Bank of Canada as central banks tapering the pace of bond buying. Markets are now trying to sort out who is next and concluding that it will not be the Federal Reserve,…
Highlights Duration: Despite last month’s weak employment growth, we continue to expect the economy to reach maximum employment in time for the Fed to lift rates in 2022. Maintain below-benchmark portfolio duration. TIPS: Long-…
Highlights Important leading indicators of Eurozone activity point to record growth in the coming quarters. Progress on the vaccination front, global pent-up demand, and easing fiscal policy will fuel the Euro Area recovery. Consensus…
US Market moves have been interesting this week. On Tuesday, comments by Treasury Secretary Janet Yellen that “interest rates will have to rise somewhat to make sure that our economy doesn’t overheat” were…
As expected, the Bank of England maintained the bank rate at 0.1% and kept the total target stock of asset purchases unchanged at its Thursday meeting. However, the central bank upgraded its growth outlook and now forecasts GDP…
Highlights Massive slack in the US labour market means that the current uplift in US inflation is highly likely to fade by the end of the year. On a long-term horizon, investors should own US T-bonds. Equity investors should fade the…
Highlights Global Reflation: Commodity prices have exploded higher of late, with surging global growth exacerbating demand/supply imbalances in important industrial commodities like copper and iron ore. These trends are likely to…
Commodity prices have been on a tear recently and evidence of rising inflation continues to pop up. On the surface, rising commodity prices and mounting inflationary pressures are a recipe for higher bond yields. But puzzlingly,…
Highlights A slower money and credit growth in China will eventually generate disinflationary pressures by weighing on demand for commodities. The PBoC has shifted its inflation anchor and policy framework to target core CPI and the…