In today’s briefing:
- 5 Things We Watch – US CPI, Japan, Positioning, Fed Borrowing and Oil
- Brief Inflation Watch: Smack dab at our soft forecast!
- Spending Watch: Short note on Eurozone savings
- Sri Lanka’s Stock Market Rallies on an Improving Outlook – June 2023 Update
5 Things We Watch – US CPI, Japan, Positioning, Fed Borrowing and Oil
- Another Wednesday, another edition of 5 Things We Watch, where we run through 5 topics in global macro that we think are essential in order to determine your allocation and stay on top of the moves we are currently observing in global markets.
- The big thing today is of course the CPI report, where markets expect headline inflation to drop to 3.1% since last year (mainly due to basis effects).
- We see an increasing chance that we will get a print BELOW the median survey expectations, which would send both equities and bonds further north.
Brief Inflation Watch: Smack dab at our soft forecast!
- Moments ago we had June CPI printing almost spot on our forecasts! 3.0% and 4.8% YoY for headline and core respectively.
- Let’s briefly touch down upon some of the figures.
- Here is a full overview of the developments in subcomponents of the report.
Spending Watch: Short note on Eurozone savings
- Spending Watch: Short note on Eurozone savingsTake aways: Just as in the US European households left the pandemic resilient due to savings.
- Instead of a spending bonanza coming out of the pandemic it seems like 2023 has made Spain, France and Germany continue their trend of saving with Italy being the odd one out Households’ propensity to save is very strong according to our model and taking the illiquidity of households’ assets into account, don’t expect cash to splash around.
- Welcome back to another Spending Watch – our consumer-centered article series – where we keep you updated on the state of the consumer and what to expect next.
Sri Lanka’s Stock Market Rallies on an Improving Outlook – June 2023 Update
- We have added Sri Lanka to our top country picks after our recent visit to the country in June 2023.
- The country’s macroeconomic position has stabilised, and this is a turnaround story as extremely cheap valuations get re-rated by declining interest rates which we expect will fall significantly as inflation drops.
- Furthermore, a strong rebound in tourism and remittance earnings will support an improving macroeconomic position and, more importantly, help build foreign exchange reserves.
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