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China PMIs jump in March

Chinese PMI readings moved back into expansion territory in March. The official Chinese manufacturing PMI rose to 50.5, up from 49.2 in February, and beating the Bloomberg consensus of 49.6, while the Caixin manufacturing PMI came in at 50.8, also up from 49.9 in February and beating the consensus expectation of 50.0. Details of the PMI survey report generally point […]

Weekly View – Cautious steps forward

Good news came from the world’s second-largest economy after China’s manufacturing sector resumed growth in March, following three consecutive months of contraction. Employment in the sector also grew and new export orders even managed to move back into expansion territory, despite continued uncertainty around the outcome of trade talks between China and the US. We […]

Oil prices supported by OPEC+ cuts…before market risks being flooded again

After last year’s collapse, oil prices have found support since the beginning of this year for several reasons. At this stage, the main question is whether the recent surge in prices is sustainable or whether we will see renewed oil price volatility, with the possibility of a repeat of 2018. The recent release of the […]

Germany: signs of rebound?

Germany’s leading indicator, the Ifo index, rose in March, driven by an increase in both sub-components: current assessment and expectations. The Ifo index differs in make-up from Markit’s purchasing manager indices, but at the sector level, the story is the same: the more domestically-driven services sector is showing signs of resilience, while the most export-oriented […]

Weekly View – Yields inverted!

Last week, the 10-year US Treasury yield dipped below the yield on the 3-month bill for the first time since 2007, a year before the last recession. Should we be worried? Not excessively. Yes, the Federal Reserve has lowered its rates and growth forecast (just like the European Central Bank – ECB – before it), […]

Fed meeting review: a strong dovish undertone

The Fed confirmed the end of balance sheet reduction for September 2019. Meanwhile, the dot plot showed an overwhelming majority of members expected no rate hike at all this year (versus two rate increases expected at the December meeting). As expected, Powell took his ‘central banker to the world’ hat, expressed concern about the global […]

Data remains soft in China

The latest economic indicators show that Chinese growth momentum remained soft in January and February, consistent with our expectations. Industrial activity was especially weak, weighed down by the mining and utility sectors. Growth in fixed asset investment improved slightly, mainly driven by the acceleration in property investment, but investment in the manufacturing sector declined. However, […]

Brazil pension reform: Bolsonaro’s moment of truth

The sharp deterioration of Brazil’s public debt in recent years, triggered by a deep recession in 2014-2016, now requires the imminent restoration of fiscal balance in order to bring public finances back on to a more sustainable path. In this regard, pension reform is widely seen as the single largest source of long-term fiscal savings, […]

Jerome Powell, central banker to the world

We believe the Fed will wear its ‘central banker to the world’ hat during the Federal Open Market Committee meeting on March 19-20. Expressions of continued confidence in the US economy may prove secondary to concerns about Europe (including Brexit ) and China, meaning we expect the Fed to send a dovish message. Meanwhile, the […]

Weekly View – Third time lucky?

Last week, “Brextension” was confirmed by the UK Parliament, which voted in favour of a Brexit delay by 413 to 202. However, we are far from out of the woods yet as the EU must next approve the request, for which the UK must offer a satisfactory justification as to why they need it and […]

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