Inflation/Deflation
Euro Area inflation data surprised to the upside on Wednesday. According to preliminary data, although Germany’s harmonized headline CPI inflation rate fell from 6.5% y/y to 6.4% y/y in August, it nevertheless came in above consensus estimates calling for…
We comment on Jay Powell’s Jackson Hole speech and recommend shifting to a barbelled allocation along the Treasury curve.
On Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) indicated that the US labor market continues to cool. It showed job openings fell to 8.827 million in July following a downwardly revised 9.165 million in June (down from the earlier estimate of…
Eurozone money supply data reflect the impact of the ECB’s aggressive tightening campaign on the region’s economy. Data released on Monday showed the July M3 measure of broad money (the sum of M2, repurchase agreements, money market fund shares/units and…
The ongoing profit contraction among Chinese industrial firms underscores that deflationary headwinds dominate the domestic economy. Although the annual pace of decline of industrial profits slowed from 8.3% y/y in June to 6.7% y/y in July (a 15.5% y/y drop…
Tokyo’s headline CPI inflation fell below expectations in August, easing from 3.2% y/y to 2.9% y/y – slightly below anticipations of 3.0% y/y and the first dip below 3% in nearly one year. Similarly, the slowdown in the ex-fresh food measure from 3.0% y/y to…
Today’s Strategy Report chartbook presents the data underpinning our view that both inflation and growth are slowing, likely pointing to a recession beginning sometime in the first half of next year. We are tactically equal weight across asset classes after being stopped out of our equity overweight on August 17th and expect our next move will be to underweight equities and overweight fixed income, in line with our twelve-month view.
The Treasury market’s reaction to Fed Chair Jermone Powell’s Jackson Hole speech was relatively tame on Friday. Although there was some volatility during the speech, the 10-year yield ended the day broadly unchanged. Meanwhile, the 2-year yield rose by 5.5…
The final release of the University of Michigan’s gauge of US consumer inflation expectations unexpectedly rose in August. It shows 1-year ahead inflation expectations increased by a tenth of a percentage point to 3.5% (an upwards revision from the…
According to BCA Research’s Emerging Markets Strategy service, even though mainstream EM equities are cheap, their cyclical and structural growth prospects are poor. Equities of mainstream EM economies (excluding China, India, Korea and Taiwan) are…