Inflation/Deflation
Egypt’s surprise 200 bps rate cut raises risks of re-accelerating inflation and currency pressure. The Central Bank of Egypt lowered the overnight lending rate to 23%, a larger-than-expected move. Our Emerging Markets strategists however expect inflation to…
July US durable goods orders rebounded, but investment signals remain subdued and favor duration and tech. Orders fell 2.8% m/m after a 9.4% June drop, better than expected. Core measures excluding volatile components were stronger, with nondefense…
Australia’s July CPI surprise does not justify the aggressive easing priced, keeping us underweight ACGBs. Headline inflation accelerated to 2.8% y/y from 1.9% in June, with trimmed mean rising to 2.7% from 2.1%. Despite the rebound, inflation remains…
Trump’s firing of Fed Governor Cook raises Fed-independence risks, reinforcing steepener trades. The announcement, aimed at expanding presidential control over the central bank, saw equities fall and bonds initially rally on the prospect of more cuts…
The post-Liberation Day rally has broadened, reducing skepticism and strengthening the case for US outperformance versus Europe. The S&P 500’s climb to all-time highs has been unusually smooth, compressing realized volatility and pulling the VIX…
Canada’s fragile growth backdrop reinforces the case for more BoC easing than markets price. June retail sales rose 1.5% m/m, in line with expectations. Excluding autos, sales were stronger at 1.9%. However, the advance estimate for July points to a 0.8%…
Powell’s Jackson Hole speech was misread, and points to cautious dovishness. Some commentators called it hawkish, others suggested the Fed abandoned its 2% target. Neither is accurate. Central bank communication is rarely binary; it operates across…
Powell’s final Jackson Hole speech signaled a dovish tilt, opening the door to a September cut. The Fed is under pressure to balance unemployment and inflation risks, with the FOMC split between “proactive” doves and “reactive” hawks. Recent data have not…
Indonesia’s surprise rate cut signals a dovish turn that will weigh on the rupiah. Bank Indonesia cut its policy rate by 25 bps to 5%, with low inflation and weak activity pointing to more easing ahead. Our Emerging Markets team’s proprietary super core…
The Philly Fed’s August dip confirms persistent US manufacturing weakness and sends a disinflationary impulse. The index fell to -0.3 from 15.9 in July, with shipments, employment, and new orders all declining, the latter slipping into contraction.…