Inflation/Deflation
After cutting three times already since June, the Bank of Canada fulfilled market expectations and cut the overnight rate by 50 bps to 3.75%. The BoC sees risks around inflation as roughly balanced over its projection horizon, and is focused on “sticking the…
The Federal Reserve’s Beige Book, its survey of business contacts, shows an economy that has seen little growth since early September. The Fed’s contacts confirmed the manufacturing recession reflected in other data sources. Loan demand was mixed, as…
Dear client, We are launching a new type of Daily Insight titled “Cross-Asset Focus”, where we delve into the dynamics between multiple asset classes, tying them to the current macro and market regimes. The inaugural entry looks at the dynamics between…
According to the latest estimate of the output gap, the US economy still operates above potential. Continued overheating – a no-landing scenario – would cause a drastic re-pricing across markets which expect a near-perfect soft-landing. The output gap is…
Since the August selloff in risk assets, the main cross-asset driver was the shift from inflation worries to growth worries. Some of that price action has reversed, as TIPS breakeven inflation rates swiftly rebounded since early September. The 2-year…
Yesterday, the ECB solidified its recent dovish tilt in response to weaker growth and decreasing inflationary pressures. It is now set to cut rates 25bps each meeting. How low will the ECB deposit rate ultimately go and what does this imply for yields and the euro?
US retail sales beat expectations in September, rising 0.4% from August when growth was essentially flat. The control group also beat expectations at 0.7% month-on-month, accelerating from 0.3%. Growth was however somehow weak on an annual basis, suggesting a…
Banks reported an increase in loan demand from both firms and households in the European Central Bank’s Bank Lending Survey, marking the first rise since 2022. This demand increase occurred as lending standards for firms remained roughly unchanged after two…
Recent positive US economic surprises drove cross-asset pricing, pushing both equities and Treasury yields higher. What do these yield levels mean for the Treasury market, and what path can we expect looking forward? Our US Bond strategists believe the…
Canadian headline inflation rose 1.6% year-over-year in September, lower than the expected 1.8% and down from 2.0% in August. This was also its slowest pace since February 2021. The decrease was mainly driven by gasoline prices, leaving the core (ex. food and…