Inflation/Deflation
Powell’s Jackson Hole speech was misread, and points to cautious dovishness. Some commentators called it hawkish, others suggested the Fed abandoned its 2% target. Neither is accurate. Central bank communication is rarely binary; it operates across…
The post-Liberation Day rally has broadened, reducing skepticism and strengthening the case for US outperformance versus Europe. The S&P 500’s climb to all-time highs has been unusually smooth, compressing realized volatility and pulling the VIX…
Canada’s fragile growth backdrop reinforces the case for more BoC easing than markets price. June retail sales rose 1.5% m/m, in line with expectations. Excluding autos, sales were stronger at 1.9%. However, the advance estimate for July points to a 0.8%…
Powell’s final Jackson Hole speech signaled a dovish tilt, opening the door to a September cut. The Fed is under pressure to balance unemployment and inflation risks, with the FOMC split between “proactive” doves and “reactive” hawks. Recent data have not…
Flash August PMIs show tentative global momentum yet growth remains weak. The composite PMI improved in both the US (55.4 vs. 55.1) and euro area (51.1 vs. 50.9), with manufacturing moving into expansion for the first time in 18 months. US manufacturing…
The Philly Fed’s August dip confirms persistent US manufacturing weakness and sends a disinflationary impulse. The index fell to -0.3 from 15.9 in July, with shipments, employment, and new orders all declining, the latter slipping into contraction.…
Indonesia’s surprise rate cut signals a dovish turn that will weigh on the rupiah. Bank Indonesia cut its policy rate by 25 bps to 5%, with low inflation and weak activity pointing to more easing ahead. Our Emerging Markets team’s proprietary super core…
The Riksbank held at 2.0% as core inflation remains above target, though easing pressures are building. July headline inflation had slightly cooled, but core remains above both the bank’s forecast and the 1-3% target band. Inflation drivers point to…
South African inflation will remain at the bottom of the SARB target range, allowing further easing. July CPI came in line with expectations at 3.5% y/y, with core at 3.0%. Our Emerging Markets strategists expect the central bank to keep cutting in…
Hot July inflation does not alter the weakening UK backdrop, keeping Gilts attractive and GBP vulnerable. Headline CPI rose 0.1% m/m, lifting y/y inflation to 3.8% from 3.6%, while core ticked up to 3.8% from 3.7%. Services inflation remained sticky,…