Sweden goes to the polls this weekend in a general election – expect another populist uprising. For decades, Sweden has been highlighted by many as a shining example of utopian society. High taxes, but above-average educational and very generous welfare systems combined with a low crime rate, have made Sweden… Read More »
The ISM index for the manufacturing sector is, in August, at its highest since May 2004. It was then at 61.3 versus 61.4 in May 2004. The reading of this index is puzzling for different reasons: Since 2011, the average growth in the US is 2.2% but the trend was… Read More »
Though China’s activity data have been slowing in the second quarter, we remain positive on the outlook for the second semester. Outflows have been limited despite the depreciation of the yuan, which should compensate for the implementation of trade tariffs. The 25% duties on an additional $16bn of Chinese exports… Read More »
July survey data point to a weaker start into the third quarter, with lower readings in main PMI surveys suggesting softer activity in services, but also in the industrial sector. Though a positive is that house building activity expands more solidly, consumer confidence (according to GfK) fell to below its… Read More »
Though latest inflation readings add some uncertainty, we continue to believe that the Bank of England is going to rise rates during this week’s August 2 meeting. We still expect a Bank move despite the June inflation reading being a tenth below the Bank’s forecast, as economic growth has strengthened… Read More »
Despite recent comments regarding a possible tapering of asset purchases by the ECB, we do not believe that this is likely to be announced at this week’s policy meeting. We think that the ECB will want to wait further reports regarding current economic activity, with most recent surveys pointing clearly… Read More »
After a positive reaction following the agreement on a government between the League, the Five Stars Movement and the president, the market has started to take into account the lack of fiscal space of Italy with spreads rising again. It looks like there will not be any leniency from bond… Read More »
State Street Global Exchange released the results of the State Street Investor Confidence Index® (ICI) for May 2018. The Global Investor Confidence Index decreased to 103.5, down nearly 12 points from April’s revised reading of 115.3. Investors across all regions expressed a weakening in risk appetite, with the North American… Read More »
After weeks of negotiations, the anti-establishment 5Star Movement (M5S) and the far-right League reached a deal on a government platform and common candidate for prime minister, which will likely put a populist alliance in charge of the third-largest economy in the eurozone. On the 23rd May, Giuseppe Conte – a… Read More »
Rising yields in the US are not primarily due to rising inflation or an over-heating economy. They are due to a major shift in the balance of supply and demand. The US Treasury needs to refinance massive amounts of short term Bills, the rising budget deficit pushes up issues of… Read More »