Economy
Our Private Markets & Alternatives team’s latest update to return expectations for Global Buyout yields a modest increase in projected returns, including the expectation of a greater multiple expansion tailwind in the Large+ segment. The team…
Swiss National Bank will have to resort to negative interest rates and FX intervention before year-end. Swiss inflation fell to 0% year-over-year in April, or the lower end of the SNB’s 0%-2% target range, and the continued strength in the Swiss Franc…
UK inflation surprised to the upside in April. Headline inflation rose to a 15-month high of 3.5%, from 2.6% the month before. Core inflation also surprised above estimates, printing 3.8% vs. 3.4% in March. Services inflation climbed to 5.4% from 4.7%. Higher…
Japan’s export growth slowed materially in April as shipments to the US, Japan’s largest export destination, fell 1.8% from a year earlier. Japan has yet to make a trade deal with the US. Japanese export growth slowed to 2% from 4% in March, which aligns…
A strong Australian labor market is limiting the scope for RBA easing, reinforcing our underweight on Australian government bonds. Our Chart Of The Week comes from Robert Timper, strategist in our Global Fixed Income Strategy team. The April NAB business…
Our EM strategists warn that China’s overinvestment problem has no quick fix, keeping deflationary pressures in place and limiting upside for Chinese equities. Excessive domestic investment, driven by aggressive credit creation, is at the heart of China’s…
Deteriorating US consumer sentiment and surging inflation expectations add to growth concerns and reinforce our long-duration bond stance. The preliminary May University of Michigan Consumer Sentiment Index missed expectations, falling to 50.8 from 52.2. The…
Weak April housing data and deteriorating builder sentiment reinforce our defensive stance, as recession risks remain underpriced. Housing starts rose at a 1.6% m/m annualized rate, missing expectations. Similarly, building permits, a leading indicator of…
The prevailing narrative around the world is that Chinese households are not spending enough and that China has overly relied on exports for economic growth. Some parts of this conjecture are incorrect. The primary economic imbalance in China is neither inadequate consumption nor outsized exports. The main economic excess is overinvestment.
April retail sales slowed, but signs of resilience in discretionary spending and labor data suggest US consumers are holding up. Headline retail sales rose 0.1% m/m, above expectations but decelerating from the upwardly revised 1.7% March gain. Core sales…