Developed Countries
UK headline inflation fell by less than expected in April. The decline from 10.1% y/y to 8.7% y/y came above consensus estimates calling for a more pronounced drop to 8.2% y/y. And although the annual figure now stands at its lowest since March 2022, the…
The New Zealand dollar was the worst performing G10 currency on Wednesday, plunging by 2.3% versus the US dollar. The sharp drop in the kiwi came after the Reserve Bank of New Zealand (RBNZ) signaled that it was done tightening monetary policy following a 25…
One of the features of the Q1 earnings season is that the market response to positive earnings surprises has been relatively muted. According to the latest Earnings Insight from FactSet, the average price increase of 0.5% (during the window two days before…
The debt ceiling game’s endpoint will avoid default only if it implies economic pain. For the Republicans, the best strategy is not to lift the debt ceiling unless the Democrats cut spending a lot, or unless the economy starts to tank. Plus: there are signs that the mania in ‘AI’ stocks has gone too far too fast.
Preliminary PMI releases for May continue to show a divergence in activity across DM economies. On the one hand, the pace of expansion of service sector activity accelerated. The US Services PMI rose from 53.6 to 55.1 – beating expectations of a decline to…
Recent Asian trade data do not provide any optimism that the global manufacturing slump is nearing its end. South Korean exports collapsed by 16.1% y/y in the first 20 days of May. While the decline was broad-based, sales to China were particularly weak,…
Measures of US equity breadth have been deteriorating over the past few months following an improvement in the fourth quarter of 2022. The share of US stocks trading above their 200-day moving average have been trending lower since it peaked in early…
In recent insights we have noted a recent deterioration in European sentiment indicators such as the ZEW and Sentix. Similarly, measures of manufacturing activity are deteriorating. The flash estimate of the HCOB Eurozone Manufacturing PMI fell deeper in…
According to BCA Research’s US Investment Strategy service, there are no credit obstacles preventing households from sustaining their consumption growth rate at a level that will keep the recession at bay for the rest of the year. Much has been made of rising…
Investors should expect high volatility and a selloff in US stocks over the short run due to the higher-than-usual risk of technical default. Investors should seek shelter in defensive sectors and large cap stocks. Long-dated Treasuries will see yields fall due to the overall macro and geopolitical context even though short-dated Treasuries will continue to suffer from policy uncertainty.