Financial market volatility has risen in August. This has come amid the ongoing US-China trade conflict (along with other geopolitical risks), and some weak economic data releases. Risk assets such as equities have sold off, while safe-haven assets have rallied
The U.S. economy grew at an annualized rate of 3.1% during Q1 2019 and is on track to grow around 2.9% in Q2 2019.1 We expect GDP growth to slow in the 2nd half of 2019 as the effects of
It is all relative in the global capital markets. Over the last year or so, the high currency-hedging cost has made US dollar corporate bonds less attractive for international investors despite the relatively high level of US yields. This is
On Thursday 1 August, US President Trump unexpectedly announced a plan to move forward with an additional 10% tariff on USD300bn worth of imported Chinese goods. The move is in addition to the USD250bn of Chinese products already subject to
The plunge in U.S. Treasury yields, down 35 basis points over the past two weeks, indicates growing investor unease about the resilience of the economy to seemingly unrelenting policy shocks. Those concerns are not irrational. Although we have argued on
Recent escalation: Donald Trump proposed additional 10% tariffs on a further US$300 billion worth of Chinese imports from 1 September. This is surprising, given that the two countries appeared to have found some common ground at the G20 meeting in
Weekly Commentary Key points 1 We see the dovish pivot by global central banks supporting the economic expansion and risk assets, with rising protectionism the key risk.b 2 We see a wider range of Brexit outcomes—including no-deal, a snap election
Strategy Espresso Theme of the week: Finding Value in US Financials What Rate Cut? On the day the Federal Reserve announced its first rate cut since 2008, the US Financials sector outperformed the S&P 500 despite what is traditionally assumed as a negative
As expected, the US Fed's interest rate decision-making body (FOMC) lowered the range of its key interest rate by 25 basis points to between 2% and 2.25%. The assessment of the economy has not changed significantly. The labor market and
A tug-of-war is currently going on in equity markets, between deteriorating earnings fundamentals on one side and expanding valuations—what investors are willing to pay for those earnings—on the other. For the time being, valuations are winning and markets are grinding
Next week's meeting of the Federal Reserve's interest rate setting body (FOMC) will be the main focus of markets. In line with the majority of market participants, we expect a rate cut of 25 basis points. Fed Chairman Jerome Powell's
US economic vulnerability in need of modest support The US economy has unsurprisingly kept slowing down following 2018’s fiscal-fuelled 12-year record-high growth. With US/China trade tensions easing a notch at the Osaka G20 Summit in late June, monthly “hard” data
Macro Weekly Recent US economic data paints a picture of an economy that is unlikely to fall into recession any time soon. The current expansion is easily going to be the longest on record (records going back to the second
Executive Summary Over the secular (three- to five-year) horizon, growth in China will likely slow somewhat, and we expect some form of resolution of the current U.S.– China trade conflict. Longer-term, though, tensions will remain, as the two nations compete
Week Ahead The US labor market data for June was better than expected. 224,000 new jobs were created, well above market expectations of 160,000. The unemployment rate rose slightly, from 3.6% to 3.7%. The market had expected this figure to
US Watch Core inflation continues to disappoint to the downside, despite an apparently tight labour market While some transitory factors are at work, and base effects should push core PCE back near the Fed’s 2% target by year-end…
The Federal Reserve left policy unchanged The US Federal Reserve (Fed) left the target range for the fed funds rate at 2.25-2.50% at its June meeting; the market had been pricing a 20-25% chance of a rate cut. One of
Fixed Income Perspectives President Trump threw monkey wrenches into the global financial markets by suddenly escalating trade frictions with China, and then unexpectedly weaponizing tariffs against Mexico. As the hyenas advanced, the lion roared: Fed Chair Jerome Powell said that
The U.S. labor market has shown sustained strength in the years since the global financial crisis. In assessing this performance, however, it is also important to consider the quality of the jobs that have been created. Have the new jobs
The US remains the centre of attention Last week President Donald Trump made an unprecedented intervention, following the European Central Bank’s monetary policy meeting, where he accused it of currency manipulation, as the value of the dollar fell against the
As had been widely expected, the FOMC, the US Fed's monetary policy decision-making body, left key interest rates unchanged at Wednesday’s meeting. In the statement, the FOMC confirmed the panel's baseline scenario of sustained economic growth, a strong labor market
Cio views Increased risk requires a cautious attitude This month’s topic: the 2020 us presidential election: another close race?
The outcome of the FOMC's upcoming meeting is uncertain and will therefor receive a lot of attention. The crucial question will be how the Federal Reserve will react to the escalation of the trade war with China and thus to
Investment Strategy Insights Most emerging countries are economically fragile when entering the World Trade Organization (WTO) and are granted leniencies not available to developed countries. As China grew within the WTO to an economic superpower, it became clear that the
Politieke risico’s domineren Geopolitieke risico’s eisten de afgelopen maanden weer een hoofdrol op. Het handelsconflict tussen de Verenigde Staten en China escaleerde, terwijl een oplossing juist binnen handbereik leek. Het geschil tussen beide landen draait om meer dan handel alleen.
