Higher Volatility and Credit Spreads Ahead

All of our leading indicators for credit spreads and volatility point to wider volatility and higher credit spreads over the next two years.  The credit cycle is long in the tooth, and the best predictor of future credit spreads is the lagged growth in lending. For a...

Manufacturing and Services PMIs Diverge

There has been a sharp divergence between ISM services and non-services in the US. Many of our leading indicators for manufacturing have pointed to weakness. This suggests demand is tilting away from manufacturing and towards the service sector.  The breakdown of the...

Eurozone Periphery Still at Risk

Variant Perception has been writing about positive leading indicators in Europe for the past 6 months and, in this light, the recent improvement in the data is coming in as expected. The cyclical recovery in Europe is real and will likely have further to go in the...
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