Developed Countries
The Labour Party won the UK election, just as BCA Research’s Geopolitical Strategy service predicted back in 2022. However, this win is unlikely to rock the proverbial geopolitical boat. Popular enthusiasm for Sir Keir Starmer and his party is muted, and…
June nonfarm payrolls expanded by 206,000 workers, topping the 190,000 consensus expectation, but downward revisions of 111,000 jobs in April and May pulled the three-month moving average down to 177 thousand, its lowest level since January 2021. The…
The latest release of the Canadian Labour Force Survey indicated further softening of the labor market in the Great White North. The economy experienced a net loss in total employment, shedding 1,400 jobs compared to market expectations of a net creation of…
In this week's report, we review the impact of political developments, as well as incoming fundamental data, on our positioning.
Our labor market indicators have softened meaningfully during the past month but aren’t yet signaling an imminent recession. That said, the Fed can no longer ignore the labor market with the unemployment rate above 4% and rising.
The new Labour government will have flexibility to respond to macro shocks, which is positive for the UK in general, namely GBP-EUR, and also gilts in absolute terms. But over the long run, tax hikes will likely surprise to the upside, which poses a risk to corporate earnings.
Eurozone headline inflation slowed from 2.6% y/y to 2.5% in June. Germany, its largest economy, saw price pressures ease from 2.4% to 2.2%, below expectations of 2.3% (or from 2.8% to 2.5% on an EU-Harmonized basis). However, Euro Area core inflation remained…
The stabilization in global growth continued in June. The JPM Global Manufacturing PMI came in at 50.9, nearly in line with May’s 22-month high. However, international trade flows deteriorated notably. The new export orders component started contracting in…
The US unemployment rate stands at just 4.0% today following 27 consecutive sub-4% readings. Does this low unemployment rate guarantee a soft landing in the US economy? Our Global Investment Strategy (GIS) team’s base case is that the US economy will fall…
The ISM Services PMI largely disappointed in June. The headline index plunged from 53.8 to 48.8, its fastest pace of contraction since May 2020, far below expectations of 52.7. This series can be noisy and the June update merely reversed a surprise surge in…