Monetary
The DXY will continue to have near-term upside, as economic growth holds up in the US, while it deteriorates in other parts of the world. Remain constructive on the DXY at current levels, but pivot to a short position on evidence US growth is boosting the rest of the world.
A look at recent US data on economic growth and inflation, with an update on the implications for monetary policy and bond yields.
On the surface, US economic data delivered strong upside surprises on Thursday. The advance estimate of GDP growth shows economic activity accelerated from 2.0% to 2.4% in Q2 – surprising expectations of a slowdown to 1.8%. Similarly, durable goods orders…
As expected, the ECB delivered a 25 basis point rate increase on Thursday, raising the policy rate to its 2001 record high of 3.75% and marking its ninth consecutive rate increase. The most important takeaway from the meeting is the absence of forward…
Looking at the complete picture of GDP growth, inflation, and unemployment, it is understandable to assume the Fed is doing much better than it expected. GDP growth is tracking to exceed the Fed's forecast, while the outlook for both inflation and…
Australia’s June monthly CPI release shows inflationary pressures continue to moderate. Headline CPI inflation receded to 5.4% y/y -- in line with expectations – following a downwardly revised 5.5% y/y in May. To the extent that the monthly release includes…
The July FOMC meeting proceeded pretty much as expected. The Fed hiked by 25 basis points, bringing the target range for the funds rate up to 5.25%-5.50%. The forward rate guidance included in the post-meeting statement was also unchanged from June. It…
A brief recap of the July FOMC meeting and its investment implications.
According to BCA Research’s US Bond Strategy service, inflation will fall during the next 12 months, but not by as much as markets expect. Investors should take advantage of this valuation opportunity by entering 2-year/10-year TIPS breakeven slope…
Tuesday’s German IFO survey corroborates the downbeat message from Monday’s flash PMI estimate highlighting weak economic conditions. The headline Business Climate Index dropped 1.3 points to 87.3 in July – its weakest level since November, and below…