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U.S. Economic Outlook under Trump
November 11, 2024 7:23 PM UTC
Uncertainty over how the U.S. election results will impact the economic outlook remains very high, but the evidence at present suggests that incoming President Donald Trump, assuming Republican control of the House is confirmed, will attempt to implement a substantial part of his campaign promises.
China Yuan10trn Package: Shifting Debt Not Stimulus
November 11, 2024 10:06 AM UTC
Details of the Yuan10trn fiscal package show that it is all directed at a debt swap for LGFV’s and repackaging hidden local government debt. This will have little net fiscal stimulus. True fiscal stimulus will be seen for 2025 GDP growth, but it could be delayed until further details are seen
FX Weekly Strategy: November 11th-15th
November 8, 2024 3:54 PM UTC
Market unlikely to move sharply without more detail of Trump plans
USD still likely to remain well supported
GBP strength to be sustained unless labour market data is weak
Little reason for a significant EUR recovery
JPY could benefit further if we see solid Japanese Q3 GDP data
U.S. October Employment - Special factors add to weakness, but trend looks less strong after revisions
November 1, 2024 1:27 PM UTC
October’s non-farm payroll is well below consensus with a 12k increase with weakness impacted by a strike at Boeing and hurricanes, though probably also in part due to a correction from an above trend September, and negative revisions make the trend going into this report less strong than it was.
FX Weekly Strategy: October 28th - November 1st
October 25, 2024 2:46 PM UTC
BoJ may not hike but is likely to sound hawkish
US employment report may be weak but weather affected
USD/JPY downside risks as yield spreads should shift in JPY’s favour
GBP may benefit even though the budget is likely to be looser than previously thought
China Big Banking System: Lessons from Japan/GFC
October 24, 2024 10:50 AM UTC
The proposed Yuan1trn capital injection for the six largest banks would be pre-emptive, while China is also quick to merge weaker/failing small to mid-sized banks. However, rising NPL’s; plus, low net interest margins with low policy rates; low nominal GDP and pressure to rollover LGFV/SOE debt wi
German Data Preview (Nov 28): Services Inflation Persists?
November 20, 2024 3:58 PM UTC
As we have repeatedly underlined, Germany’s disinflation process continues but unevenly. After July saw the headline HICP rate rise and unexpected 0.1 ppt to 2.6%, unwinding a third of fall seen in June, it plummeted to a 41-month low of 2.0% in August, and then down to 1.8% last month, below th
Preview: Due November 21 - U.S. October Existing Home Sales - Pending home sales suggest a rise
November 20, 2024 2:00 PM UTC
We expect a 2.3% increase in October existing home sales to 3.93m, a moderate rise after declines of 1.0% in September and 2.0% in August, but sufficient to move yr/yr data above zero at 2.1% for the first time since July 2021.
Eurozone: ECB Stability Review Broadens the Case for Easier Policy
November 20, 2024 11:30 AM UTC
It seems that worries about weaker growth are reverberating more discernibly and more broadly within the ECB. Indeed, the worries may now be at least twofold. Clearly, weaker growth risks possible (added) downside risks to inflation, with BoI Governor Panetta yesterday warning that restrictive mon
U.S. Equities: Exceptionalism v Valuations
November 20, 2024 10:05 AM UTC
Bottom Line: Momentum towards further deregulation, tech optimism, and the prospect of aggressive tax cuts could help the U.S. equity market in H1 2025 before the fear of higher yields and Fed Funds hurts in H2. 6100 could be seen H1 2025, before a softening to 5850 for end 2025 S&P500. We see
UK CPI Review: Inflation Back Above Target & Core Pressures Higher
November 20, 2024 7:42 AM UTC
Coming in higher than expected and a notch above BoE thinking, CPI inflation jumped to 2.3% in October. Helped by a fall in fuel prices and airfares, amplified by base effects, alongside some belated broader softening in services costs, UK inflation had dropped to 1.7% in the September CPI (from 2.2