The Next Commodity Supercycle

Feb 17, 2021 | Featured, Global Economy, Leading Indicators, Whitepaper

We are on the cusp of a new commodity supercycle (from a report we issued in October 2020) Main Themes There are three big drivers of the commodity supercycle: The long era of monetary-policy dominance is over, leading to a heightening of inflation risks not seen...

Fed Efforts to Stem Rises in Yields Back on the Table in 2021

Feb 4, 2021 | US Economy

Rising yields – driven by increasing inflation expectations after the Democrats’ unexpected clean sweep – are a risk for equities. If yields keep rising then the Fed will be forced to intervene to keep longer-term yields lower At the end of last year we...

Pandemic a Potential Trigger for QE in EM

Jun 4, 2020 | Emerging Markets

The unparalleled nature of the response to the COVID-19 crisis – indiscriminately triggering sudden-stops across economies – suggest that some emerging markets could be closer to crossing the Rubicon into full-blown QE. Many EM central banks already purchase...

Yields suggest Monetary policy is close to its limits

Nov 1, 2019 | Monetary Policy

This post was taken from our weekly report, dated October 15, 2019. In the last month yields have since then done a round trip, falling and then rising again, but crucially term premium (TP) has not fallen. It was TP’s relentless fall through 2019 that meant the...

G3 Central Banks set Tone

Oct 18, 2019 | Monetary Policy

The divergence in monetary policy across developed markets since the beginning of 2018 is starting to breakdown as Fed and ECB easing makes it increasingly difficult for the hawkish hold-outs to tighten. Above-target inflation in 2018/early 2019 provided cover for the...

Market Pricing Restart of ECB QE

Jul 8, 2019 | European Economy

The apparent de-anchoring of market-based inflation expectations has started to rattle the ECB and has raised the spectre of a return to monetary easing, mirroring the abrupt shift in marketimplied policy rate expectations in the US where 65 bps of cuts are now...

US Dollar: Still Tactically Bullish into Year End

Nov 18, 2017 | Global Economy, US Economy

We continue to see a higher dollar as the path of least resistance into year end. In addition to extreme short positioning and some buy signals that we have flagged over the past few weeks, a number of other supportive factors are starting to come into play. The...

ECB QE: Inflation to Start Surprising to the Upside

Apr 24, 2015 | European Economy, Monetary Policy

The sharp devaluation in the euro and the rapid acceleration in economic activity will mean short-term inflation dynamics in the eurozone will soon start surprising to the upside.  In this context it is important to remember that the only justification for ECB...

Growing number of lower paid workers in US

Feb 5, 2015 | US Economy

The participation rate in the US has declined much less for those at lower levels of education: Source: Macrobond That the lower educated are disproportionately supporting employment growth, through lower paid jobs, may help explain why, so far, we have not seen...