In today’s briefing:
- U.S Debt Watch: Do We Need This Conversation Again?
- Transforming the Truck Tonnage Index into a Superior-Performing Investment Strategy
- 5 Things We Watch – Panel Discussion, EU Fragmentation, Riksbank, EU Banks & The EM Rate Cycle
- China Property: Using Weekly Data To Predict Monthly Figures – What To Expect For June 2023
- EUR Inflation Watch: 7 Charts on EUR Inflation Ahead of the June CPI Report
- GBP Crosses, Banks and Rates
U.S Debt Watch: Do We Need This Conversation Again?
- Pheew… close call! The bipartisan debt ceiling bill saved the U.S from economic disarray.
- But is the danger really over? Or could we be looking at another government shutdown risk?
- We take a look at the appropriations conundrum and the potential ramifications
Transforming the Truck Tonnage Index into a Superior-Performing Investment Strategy
- The Truck Tonnage Index (TTI) ‘explains’ up to 95% of the variation in US GDP and explains more than 80% of the levels of US stock markets.
- A strategy that goes 100% long US equities when the TTI-based fair value estimate exceeds the current index level beats a traditional buy-and-hold strategy.
- However, with the current fair value estimate 20% lower than current index levels, this superior strategy would currently be in cash rather than stocks.
5 Things We Watch – Panel Discussion, EU Fragmentation, Riksbank, EU Banks & The EM Rate Cycle
- Central banks likely need to keep the hawkish tone at today’s panel discussion
- Riksbank could surprise markets with another 50bps hike as they follow Norge’s bank
- Emerging Markets have done WAY better than US and Europe in this inflation cycle when it comes to monetary policy
China Property: Using Weekly Data To Predict Monthly Figures – What To Expect For June 2023
- Weekly new home sales data for select cities can serve as a good indicator for the direction of the monthly national-level data – published a few weeks later
- Weekly data for 17 major cities with consistent data to the week ending June 25 shows the YTD y/y growth decelerated to +3% from +7% for the prior week
- National NBS New Home Sales data for June is due mid-July, and the weekly figures suggest the monthly data would show further weakness on a YTD basis
EUR Inflation Watch: 7 Charts on EUR Inflation Ahead of the June CPI Report
- We see increasingly compelling signs of a sharp disinflation in Europe over the next 3-5 months
- Several large sectors now report of deflation in selling prices in Germany
- Here is a chart deck on the trends we find most interesting to watch in EUR-flation
GBP Crosses, Banks and Rates
- The Core Core CPI is currently at 7.1% and persistently high. The Bank of England is facing a difficult situation with no simple solutions.
- Raising rates by 50 bps was a step in the right direction.
- The headline June and July CPI may appear lower due to the base effect of Energy prices.
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