Fixed Income
The market got excited by the 50 bps Fed cut and China stimulus. But these are a recognition that economies are slowing significantly. Stocks often rally after the first Fed cut, before falling sharply. Investors should stay defensive.
US nominal personal income growth decelerated to a 0.2% pace in August, from 0.3% in July, missing expectations that it would accelerate. Nominal personal spending also disappointed, growing at a slower 0.2% pace from 0.5%. In real terms, spending barely…
France’s and Spain’s preliminary September CPI readings declined on a month-on-month basis, clocking in at 1.5% and 1.7% y/y respectively, and undershooting consensus expectations. Germany’s and Italy’s updates are due on Monday and the Eurozone CPI will be…
Annual BEA data revisions resulted in a significant upward revision in GDP growth since Q2 2020, led by stronger consumption growth and more robust real disposable income growth than previously believed. Revisions also show that the savings rate has been…
According to BCA Research’s European Investment Strategy service, the surprise fiscal announcement from China’s Politburo is a very different animal from previous stimulus attempts. Although the details are still vague, it adopts a much more pragmatic tone…
We consider the possibility that lower interest rates could lead to an increase in household borrowing, prolonging the economic recovery.
This week has not been short of developments on Chinese policy. After unleashing a monetary policy blitz, the authorities held an unscheduled Politburo meeting resulting in a pledge to take actions towards stabilizing the housing market and to support fiscal…
In a widely expected move, the Swiss National Bank (SNB) cut its policy rate for a third consecutive meeting on Thursday, from 1.25% to 1.00%. The move marked President Thomas Jordan’s final policy decision and his incoming successor Martin Schlegel…
China’s Politburo announcement is likely to lead to a repricing of China’s growth in the near-term. Read how investors can hedge against this potent threat to our defensive investment stance.
US investment grade and high yield spreads have tightened 22 and 75 bps since their August highs. Risk assets have cheered the outsized Fed rate cut as the narrative in markets aligns with the Fed’s conviction it can deliver a soft landing. Our US Bond…