Monetary
The August employment report showed a modest increase in labor market slack, enough to cement a 25-basis-point rate cut this month.
Canada’s Q2 GDP contraction underscores a fragile backdrop where growth risks will outweigh inflation, supporting further BoC easing. Real GDP contracted at an annualized 1.6% after expanding 2.2% in Q1, consistent with survey data showing weaker confidence…
Euro area August flash HICP was slightly hotter than expected, reinforcing the case for the ECB to stay put in September. Headline inflation rose to 2.1% y/y from 2.0%, with the monthly print surprising at 0.2% m/m. Core inflation held at 2.3% y/y despite…
Monetary policy surprises shape curve trade returns. We show where steepeners and flatteners offer the best risk-reward in today’s market.
July income and spending data confirmed resilient consumption and sticky inflation, however, slowing labor momentum keeps us defensive. Real personal spending increased 0.3% m/m. Personal income rose 0.4% m/m, with real income ex-transfer payments…
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…
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…
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…
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%…