Matthew Tibble
Summary US growth is beating euro-area growth. However, the divergence may have peaked, with recent US data weaker than consensus expected. Chinese companies are struggling to make money, but a new securities regulator is providing hope for investors. The odds of Joe Biden quitting the presidential race have increased markedly in the last few weeks. […]
Matthew Tibble
Summary The Fed has r-star around 0.5% in real terms, but markets are pricing it around 2%. We think this could be a return to the pre-GFC ‘normal’. US disinflation could be entering its ‘last mile’ phase, implying slower price increases ahead. Asian trade data corroborates the recent pick-up in global manufacturing, but a lack […]
Matthew Tibble
Summary Saudi Arabia’s oil production market share is at multi-decade lows, putting their ‘lollipop’ cuts at risk of an unwind. The VIX is at a post-Covid low and supporting credit. EZ inflation is returning to the ECB’s forecasted path following the November miss. US yields are strongly correlated with the dollar, and we think yields […]
Matthew Tibble
Summary Two factors support our bullish USD/JPY call: weak Q1 seasonals for JPY, and Japan’s cyclical downturn. China faces a supply-demand imbalance preventing inflation from returning to positive territory. UK inflation remains below BoE forecasts despite the recent beat. Equities are trading at historically high P/E valuations, which could depress returns in 2024. Market Implications […]
Matthew Tibble
Summary Rather than rate spreads, risk markets have driven recent EUR/USD performance. Given we expect risk to struggle ahead, we are bearish the euro. Should the Fed’s SEP scenario for core PCE materialize in 2024, we could enter a ‘lowflation’ regime – and the Fed will cut aggressively to prevent that. Hedge funds have added […]
Matthew Tibble
Summary The peak of the Fed hiking cycle has historically been a good time to buy bonds, but is that true today? A shift in consumer behaviour towards specific durable goods may reflect long-term lifestyle changes in the post-pandemic world. Despite headline declines, the US still has an inflation problem – core and services are […]
Matthew Tibble
Summary Strikes may be behind Friday’s low US payroll data, suggesting the Fed may discount the print and keep a December hike in play. The BoE may be overestimating future wage growth due to reliance on problematic ONS data. We position for a more dovish outlook. Japan’s Ministry of Finance typically succeeds in supporting the […]
Matthew Tibble
Summary A more balanced inflation outlook means the ECB will likely hold the deposit rate at 4% this week. Our EUR/SEK short indicator remains low, meaning it is not time to short the pair. Passing Beige Book peak pessimism suggests being long Antipodean vs major European FX. High-yielding cash has created a high bar for […]
Matthew Tibble
US equities exhibit strong seasonal patterns. Q4 typically sees stocks rally, especially over October and November.
Matthew Tibble
Summary Investors are in risk aversion mode due to the Israel-Hamas conflict, but the dollar may not benefit. September’s bumper NFP print is likely an outlier. CHF bearishness is building among real money and hedge funds. Despite suggestions otherwise, US and EU gasoline demand remains robust. Is Risk Aversion Good for the Dollar? It’s Complicated… […]
Matthew Tibble
Energy price passthrough to core inflation is a key issue for the Fed. Long EUR/SEK? We see two reasons to wait.
Matthew Tibble
The BoE’s recent suggestion that ONS wage growth data was inaccurate implies a dovish revision of the bank’s inflation forecasts. The USD/JPY rally may be smaller than previous ones.
Matthew Tibble
The contrarian trade is to be bullish China, but we find good reason to remain on the sidelines. Oil could hit $100/bbl, but we would fade any move higher.
Matthew Tibble
Small businesses may be about to start reversing disinflation. UK unemployment is rising much faster than the BoE expected.
Matthew Tibble
The US is moving away from China imports. SPX and NDX earnings growth stalls – a warning for equities. US unemployment rises on increased participation, especially from young workers.
Matthew Tibble
Core inflation and wage growth remain an issue for the ECB ahead of the September meeting. Rapid growth acceleration in the US could explain why Powell feels less confident the Fed’s policy stance is restrictive.
Matthew Tibble
The credit intensity of China’s economy is surging, helping to explain why Chinese policymakers have struggled to boost growth this year.
Matthew Tibble
UK core inflation came in stronger than expected thanks to rental prices. Likewise, EZ core inflation remains significantly above typical levels. Oil markets have entered an unstable equilibrium following recent inventory drops.
Matthew Tibble
With labour demand still growing faster than labour supply, the US labour market remains very tight. Oil rig counts implies US oil production has peaked for 2023.
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