Euro Area
Euro area wage and inflation data reinforce the view that today’s labor dynamics differ from the 2022 energy shock, favoring Bunds over Treasuries. The ECB wage tracker points to continued deceleration in wage growth pressures in 2027, with wage growth…
MacroQuant recommends a slight underweight to equities and an overweight to bonds and cash. The model is bullish on the US dollar, negative on gold, very negative on copper, and neutral on oil.
Stronger Q3 euro area growth was likely AI-driven and obscures underlying weakness. Real Q3 euro area GDP came in stronger than consensus expectations. Real GDP grew 1.7% q/q annualized, which was slower than Q2 but meaningfully higher than expectations.…
AI equity performance has replaced oil as the main driver of US Treasury yields, setting up a rotation out of AI stocks into the rest of the market. Our Chart Of The Week comes from Ryan Swift, our Chief US Bonds Strategist. Bond yields now track AI stocks…
The ECB is unlikely to take interest rates above neutral unless energy prices move meaningfully higher from here. The European Central Bank kept its policy rates unchanged on Thursday, in line with expectations. Compared with June and September, the statement…
The euro area economic surprise index has declined significantly over the past month. This contrasts with China, where it has improved meaningfully. In the US, the surprise index was mostly unchanged in October but remained solidly in net positive territory.…
October S&P Global Flash PMIs signal that the US economy continues to show solid momentum, while the euro area growth outlook is softening. The US composite index eased to 57.6 from 58.4, in line with estimates. The manufacturing component surprised on the…
We review our Model Bond Portfolio performance for Q3 and look ahead as energy prices continue to drive fixed income markets. Balanced labor markets point to a mild tightening cycle, creating opportunities in government bonds and credit, while inflation-linked bonds continue offering protection against persistent energy risks.
German factory orders plunged in August, continuing a trend of weaker hard data indicators against the backdrop of improving business sentiment measures. Germany factor orders fell 10.6% m/m against an expected 1% decline, following an upwardly revised 3.2%…
MacroQuant recommends an underweight to equities and bonds, counterbalanced by a significant overweight to cash. The model is very bullish on the US dollar, slightly negative on gold and copper, and positive on oil.