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United States

Waiting For "Godots"

Provided that US inflation is due to excess demand rather than supply constraints, demand destruction will likely be needed to bring core inflation below 3.5%. Such growth contraction is positive for counter-cyclical currencies like the US dollar. In China, the Party's focus is to alleviate structural inequality and a long-term confrontation with the US; and authorities are not yet panicking about the cyclical state of the economy. Hence, an economic recovery is unlikely in the coming months.

Emerging Markets Strategy by Arthur Budaghyan
Europe Will Beat The US To The ‘Pivot’

Older workers have deserted the labour force in the US and the UK, but not so in the Euro area and Japan. The result is that wage inflation is red hot in the US and the UK, but not so in the Euro area and Japan. Hence, the Bank of Japan is right to remain a lone dove, the ECB must pivot from its uber-hawkish stance quite soon, but the Fed and the BoE must not pivot from their uber-hawkish stance too soon. We go through the major investment implications.

Counterpoint by Dhaval Joshi
ISM Manufacturing PMI Deteriorates In October
The ISM Manufacturing index declined from 50.9 to 50.2 in October, nearing stagnation and the lowest level since May 2020. The details of the report highlight conflicting dynamics at play in the US manufacturing sector. Although production growth…
Daily Insights
Global Manufacturing PMI Has Further To Fall
The Global PMI suggests that factory activity deteriorated at a faster rate in October. The Manufacturing index declined from 49.8 to 49.4, marking the third consecutive monthly contraction. Notably, all seven subindexes either declined or remained below 50…
Daily Insights
The Fed Still Has “A Ways To Go” On Rate Hikes
As expected, the Fed delivered a 75bp rate hike on Wednesday, bringing the cumulative increase in the Fed funds rate to 375bps since the start of the tightening cycle in March. The FOMC statement was amended from September to include a new sentence…
Daily Insights
How Much Is Priced In?
BCA Research’s Global Asset Allocation service recommends investors stay cautiously positioned. The Fed, along with most other major central banks, will keep on hiking rates until the beginning of next year, at which point interest rates will clearly be in…
Daily Insights
US Job Openings Unexpectedly Rise In September
After plummeting 8% m/m in August, US job openings increased by 4.3% to 10.7 million in September, surprising expectations of another monthly decline. Accommodation & food services, healthcare as well as transportation and warehousing drove the bulk of…
Daily Insights
Taking The Pulse Of The Q3 Earnings Season
More than 60% of S&P 500 companies have reported Q3 results so far, with 72.3% of companies beating consensus analyst expectations, above the long-term average of 66%. Furthermore, 67% have posted Q3 revenues that exceed expectations. The surprise factor…
Daily Insights
Does It Matter That The Fed Is No Longer Profitable?
According to BCA Research’s US Bond Strategy service, from an investment standpoint, the issue of Fed profitability is nothing more than an entertaining sideshow. This year, for the first time ever, the Fed will spend more money than it takes in. This…
Daily Insights
The Global Tightening Cycle Is At An Inflection Point

This week’s report examines the state of the global monetary tightening cycle and addresses some frequently asked questions about the Fed’s QT program. New yield curve trades are recommended for the US and German yield curves.

US Bond Strategy, Global Fixed Income Strategy by Ryan Swift

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