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Inflation/Deflation

Deflationary Forces Remain In China
Chinese December CPI and PPI releases show deflationary pressures are not abating. CPI slowed to a 0.1% y/y pace from 0.2% in November, while producer prices fell 2.3%. The Chinese economy has not meaningfully changed course since Beijing unveiled…
Daily Insights by Felix-Antoine Vezina-Poirier
Higher Yields Risk Breaking The Stock-Bond Correlation
The post-COVID inflation impacted the most important cross-asset relationship: the stock-bond correlation. Higher inflation expectations pushed yields higher, leading to a correction in bond and stock prices. As price pressures receded, bond yields fell and…
Daily Insights by Felix-Antoine Vezina-Poirier
On Value And Timing

Our Portfolio Allocation Summary for January 2025. 

US Bond Strategy by Ryan Swift
Euro Area: Inflation Is A Lagging Variable
December euro area inflation met expectations, with headline HICP printing at 2.4% y/y from 2.2% in November, and core steady at 2.7%, above the ECB’s target. Services inflation remains elevated at 4.0% y/y, up from 3.9% a month prior. While services…
Daily Insights by Felix-Antoine Vezina-Poirier
The Fed In 2025
Our US Bond Strategy team published their outlook for the Fed in 2025. They expect more cuts than the 50 bps signaled by the Fed at its December meeting. Core PCE inflation is tracking well below the Fed’s 2.5% forecast, while unemployment could exceed…
Daily Insights by Felix-Antoine Vezina-Poirier
Monthly TAA Report: WARNING. Animal Spirits On Premises. Enter At Own Risk

Paradoxically, raging optimism on the US economy is making a reacceleration in growth less likely in 2025. The reaction of the bond market has made the Fed rethink its cutting campaign. Markets are also constraining Trump’s agenda. US manufacturing will not recover with a surging dollar. Fears of inflation and debt sustainability have made moderate House Republicans push back against the President Elect’s wishes. Given the sky-high optimism embedded in asset prices, we believe a defensive portfolio stance is warranted on a 12-month horizon. Overweight gold to hedge the risk of a fiscal crisis.

Global Asset Allocation by Juan Manuel Correa
The Fed In 2025

Our outlook for Fed policy in 2025 discusses our expectations for interest rates, the Fed’s balance sheet and the 2025 strategic review. 

US Bond Strategy by Ryan Swift
US: Disinflation Trends Continues, Consumer Spending Shows Cracks
The Fed’s preferred measure of inflation, core PCE, came in below expectations at 0.1% m/m in November, remaining steady at 2.8% y/y. The monthly advance was the lowest since May. The inflation deceleration was broad-based. Core services inflation increased…
Daily Insights by Felix-Antoine Vezina-Poirier
What To Watch… When Returning From The Holidays
Daily Insights by Felix-Antoine Vezina-Poirier
US Housing Remains Weak
US November housing data was mixed, but still reflected a weak picture. Housing starts were down 1.8% m/m, below expectations of a 2.6% increase. However, building permits were stronger than expected, increasing 6.1%. Units under construction remain in free…
Daily Insights

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