Monetary
Consumer sentiment improved modestly in July, but remains at levels that still point to subdued spending, reinforcing our defensive stance. The preliminary University of Michigan index rose to 61.8 from 60.7 in June. Expectations edged up to 58.6, while…
Despite macro headwinds, the OBBBA clearly favors Industrials, Financials, and Consumer Discretionary equity sectors. A carefully constructed, factor-aware basket in these sectors is well positioned to outperform in a fiscal-driven, uncertain environment.
Canada’s inflation re-acceleration makes a BoC July cut unlikely, but softening growth and tight financial conditions keep easing on the table. June headline inflation rose to 1.9% y/y from 1.7%, roughly in line with expectations. Core trim and median…
Equities have retraced sharply from Liberation Day lows, but renewed policy risk and mispriced volatility keep us tactically cautious. The Trump administration softened its trade stance as equities neared bear market territory in early April, but has now…
June’s strong Canadian jobs data does not argue against further easing and a CGBs overweight. Employment rose by 83.1k versus expectations for no growth, the first increase since January. The unemployment rate fell to 6.9% from 7.0%. However, gains were…
Canada’s stronger currency and tightening financial conditions point to further BoC easing and support long Canadian bond positions. The CAD has appreciated this year alongside the global push to diversify away from USD assets, which has weakened the US…
Investors should modestly underweight equities in their portfolios and look to turn more aggressively defensive once the whites of the recession’s eyes are visible. We think that will happen within the next few months.
Deflationary pressures and weak core Europe growth support CE3 bond longs as rate cuts loom. The Czech and Hungarian central banks held rates steady at 3.5% and 6.5% this week, following Poland’s earlier decision to keep rates unchanged at 5.25%. While citing…
Contained Canadian inflation and soft macro conditions support our overweight on Canadian government bonds. May CPI was in line with expectations, with headline inflation holding at 1.7% y/y and core measures slowing to 3.0%, the upper bound of the BoC’s…
Fed Governor Pivots Raise Risk of July Cut, But Focus On Labor
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