Monetary
Investors have taken comfort in the fact that unemployment has remained low in the major economies. But underneath the surface, there are clear signs that labor demand is weakening. The clock keeps ticking towards our H2 2024 recession call. After being bullish on risk assets last year, we are slowly turning more defensive.
Inflation cooled for the second consecutive month in Japan with annual headline CPI inflation falling from 2.8% y/y to 2.6% y/y in December. Underlying inflation gauges also cooled, with the December prints of core and “core core” (excluding fresh food and…
The Central Bank of Brazil (BCB) has cut the Selic rate by 50 basis points in each of the past four meetings and has alluded to maintaining this size of cuts for the coming meetings. Governor Roberto Campos Neto stated last month that he aims to bring…
BCA Research’s US Bond Strategy service expects the Fed to slow the pace of QT starting at the May FOMC meeting, the same time that it starts cutting rates. QT will likely end altogether later in 2024 if the economy enters a recession. However, if recession…
An update to our outlooks for the Fed’s interest rate and balance sheet policies following this week’s remarks from Fed Governor Waller.
Recent data suggest that the US housing market is resilient. In particular, a strong rebound in homebuilder sentiment is sending a positive signal. The NAHB Housing Market Index jumped from 37 to 44 in January – handily beating expectations of 39 on the back…
The Fed’s latest Beige Book delivered a lukewarm message on the US economy. Growth, employment, and prices were all relatively stable since the previous release in late-November. Eight districts reported little or no change in activity, three districts…
The US retail sales release delivered a positive signal about the US economy in December. The 0.6% m/m increase in overall retail sales beat expectations of a more muted acceleration from 0.3% m/m to 0.4% m/m. Importantly, the improvement was broad-based with…
The British pound was the best performing G10 currency on Wednesday as UK gilts sold off meaningfully with the 10-year yield ending the day nearly 19 basis points higher. An unexpected acceleration in CPI inflation in December prompted the move. Notably,…
The performance of the Industrials sector tends to lag the business cycle, as companies invest in capex on the heels of economic expansion. But demand is not entirely cyclical, as the need to replace obsolete or aging equipment or machines is relatively…