Developed Countries
Could a second wave of global inflation be underway? The latest inflation prints in the US and UK showed upside surprises, while there is evidence of increased price pressures in global manufacturing. Combined with the improvements seen in economic sentiment measures and leading economic indicators in the US and Europe, and potential upside risks to oil prices, we see a strong case for owning more inflation protection in global bond portfolios. Inflation-linked bonds look attractive in this environment, especially in the US.
According to the latest figures from FactSet, 59 of the 85 S&P 500 companies that have issued EPS guidance for Q1 2024 have guided lower. At 69%, the share of companies issuing negative EPS guidance is above both the 5-year and 10-year averages of 59% and…
The Global Manufacturing PMI clocked in at 50 in January – exactly on the boom-bust line. The index has been on a general uptrend since mid-2023 with the January figure marking the first non-contractionary reading since August 2022. The headline index…
Energy security is a focus of many governments, especially since the onset of the Russia-Ukraine conflict. One producer that is benefitting from diversification away from Russian oil and gas is Norway. This is buffeting the trade account and will provide…
According to BCA Research’s Global Investment Strategy service, although the next recession is likely to be mild-to-moderate, the ensuing financial avalanche will be more severe. Valuations are highly stretched and hopes that today’s tech leaders will…
The hotter-than-anticipated US PPI report for January prompted a selloff in Treasuries on Friday. The monthly and annual changes in both the headline as well as the core measures of final demand PPI came in above expectations. Core PPI’s 0.5% m/m increase…
The US retail sales report for January delivered a disappointing message about consumer spending. The 0.8% m/m drop in overall retail sales was worse than expectations of a 0.2% m/m decline and marked the most severe monthly contraction since last March. The…
The first two regional fed manufacturing surveys for February delivered strong upside surprises. The New York Fed’s Empire Index surged from -43.7 to -2.4, unwinding its January slump. Similarly, the Philly Fed current activity index jumped by 15.8 points to…
Our Commodity & Energy colleagues see oil markets balanced in the short run, which keeps their Brent price forecasts at $95/bbl and $105/bbl for 2024 and 2025. That said, they note the odds are increasing demand growth could surprise to the…