Recession-Hard/Soft Landing

The Mel Rule Says A US Recession Is Already Baked In The Cake

Contrary to conventional wisdom, most leading indicators suggest that the US labor market is weakening, including our very own “Mel rule.” After being overweight stocks last year, we moved to neutral at the start of 2024, and are now putting equities on downgrade watch with the expectation of shifting them to underweight later this year.

2 years ago

Global

FICC

The ECB Signals A June Rate Cut

At today’s monetary policy meeting, the ECB gave strong hints that rate cuts will begin as soon as the next meeting in June. In this Insight, we share our thoughts on today’s meeting and discuss the implications for European bond yields and the euro.

2 years ago

Bonds Currencies

Essentials

NFIB Confidence Deteriorates, Wages Expected Higher

The NFIB’s small business optimism index decreased by 0.9 points to 88.5 in March, missing expectations of 89.9, and reaching its lowest level since 2012. A few things stood out from the report: Labor market dynamics continue to slow. The net percent…

2 years ago

Essentials

German Industrial Production Growth Reaches 13-Month High

German industrial production growth accelerated from an upwardly revised 1.3% m/m to 2.1% m/m in February, registering the fastest pace in 13 months and largely beating expectations of a slowdown. A 7.9% m/m increase in the construction sector was the top…

2 years ago

Essentials

The Message From US Inflation Expectations

The recent rise in market-based inflation expectations has caught the attention of market participants. Some investors have begun to worry that the Federal Reserve might be losing control of its inflation mandate by cutting rates sooner than it should. But…

2 years ago

Essentials

Another Blockbuster Employment Report

The 303-thousand increase in nonfarm payrolls in March came in well above consensus expectations of a moderation from 270 thousand to 214 thousand. Healthcare, the public sector and construction were the top contributors to employment growth. Moreover, the…

2 years ago

Essentials

Colombia: Macroeconomic Fundamentals, Public Finances, And Political Uncertainty Warrant Underweight

BCA Research’s Emerging Markets Strategy service argues that Colombia has fallen from grace in terms of its healthy macroeconomic fundamentals, business-friendly government policies, and conservative fiscal stances. Since the election of President Gustavo…

2 years ago

CoreMacro

What Will Spoil The Party?

Climbing US bond yields, alongside higher oil prices, might spoil the party for global risk assets. There are budding cracks in EM domestic bonds, and even though we like this asset class in the long run, investors exposed to it should reduce their positions for now.

2 years ago

Emerging Markets

Essentials

ISM Shows Signs Of A Manufacturing Revival

The ISM Manufacturing PMI came in at 50.3 in March, better than expectations of 48.4 and breaking above the 50 boom-bust line for the first time since September 2022. Notably the new orders component rebounded to 51.4, marking the second expansionary reading…

2 years ago

Essentials

Is The Labor Market Stabilizing?

The number of job openings in the US in February (8.76 million) was little changed from the downwardly revised 8.75 million in January, keeping the job openings rate stable at 5.3%. Similarly, the hiring rate was little changed at 3.7% in February, from 3.6%…

2 years ago

Recession-Hard/Soft Landing

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