consumer spending

U.S. Economy Running Below Potential, Takeaways from Earnings Season

In last month’s piece we suggested that the U.S. labour market and economic growth have likely grown at a below-trend rate: “Below the surface, however, we are watching for the crosscurrent in U.S. labour market data that is the Achilles heel of America’s consumer-driven economy. The 3-month moving average of non-farm payroll gains have droppedContinueContinue reading “U.S. Economy Running Below Potential, Takeaways from Earnings Season”

Are We There Yet?

For the past two years, all eyes have been on the timing and pace of policy rate cut. Investors had been whipsawed multiple times as the change in narrative between recession and soft landing translated to high volatility in the fixed income market. With the macroeconomic backdrop in the U.S. still robust while the restContinueContinue reading “Are We There Yet?”

Fiscal Dominance, Softening Employment and Manufacturing Relapse

U.S. 10-year treasury yield rose significantly (+60 bps) in October amid strong Q3/23 GDP, reaching as high as 5%, before abruptly reversing this week following favourable treasury funding plan, lower-than-expected ADP employment and non-farm payrolls, and unexpectedly weak ISM manufacturing PMI. This trifecta of good news for bonds has translated to U.S. 10-year yield fallingContinueContinue reading “Fiscal Dominance, Softening Employment and Manufacturing Relapse”