Economy
Two of our favorite indicators recently sent important signals. The first one, the short-term stock-bond yield correlation, recently drifted back to neutral territory after being negative. The correlation had been negative since December, reflecting increased…
February’s flash PMIs for the major developed markets showed softening growth, and rising price pressures. The US composite index missed estimates and decreased to 50.4 from 52.7 in January. Services were a big contributor to the decline, with the index…
Eurozone banks have quietly outpaced the Magnificent 7—can they keep winning? With strong balance sheets, rising profitability, and structural tailwinds, European lenders still offer value despite short-term risks. Meanwhile, German equities continue to defy expectations, but is a near-term pullback on the horizon?
A nascent theme in the latest data is the broad improvement in European sentiment. The February Sentix and ZEW surveys both improved, and flash estimates for European consumer confidence beat estimates, ticking up to -13.6%. Confidence remains low, but…
The February Philadelphia Fed Manufacturing index beat expectations, but retreated to 18.1 from last month’s lofty 44.3 reading. All activity subcomponents pulled back, except for delivery times. The Philly Fed index is volatile even in normal times, and…
In this webcast, Dhaval will give an update on his key views for 2025. The discussion will include:
Why the US is heading into ‘mini stagflation’.
Why the BoJ must hike interest rates, and the global consequences.
The outlook for global bond yields and the dollar.
The latest advances to our complexity analysis and indicators.
When the bull market will end.
US January housing data disappointed, with housing starts falling 9.8% m/m after expanding 16.1% in December. The February NAHB Housing Market Index also weakened, falling to 42 from 47 in February. Building permits were the one positive surprise, growing…
The January UK CPI was slightly hotter than expected. Headline inflation beat estimates, rising to 3.0% y/y from 2.5% in December. Core inflation also jumped but was in line with expectations at 3.7%. Services were strong, albeit slightly lower than expected…
We introduce a systematic approach to investing based on the combination of three macroeconomic variables: economic, inflation, and monetary policy surprises.
The February ZEW index for Germany and the eurozone beat estimates, with the expectations component rising to 26.0 from 10.3 a month prior. The current situation assessment also improved, although it remains deeply negative at -88.5. The improvement…