Latest from BCA Research

We believe the PBoC’s recent policy stimulus might bolster investor confidence, potentially stabilize onshore Chinese equity prices, and provide modest support to offshore stocks. However, they are unlikely to significantly boost economic growth in the mainland.

We believe the PBoC’s recent policy stimulus might bolster investor confidence, potentially stabilize onshore Chinese equity prices, and provide modest support to offshore stocks. However, they are unlikely to significantly boost economic growth in the mainland.

This insight parses through the RBA’s latest policy decision, and makes recommendations on whether to expect any rate cuts in 2024, and beyond.

Two days ago, I flagged how the number of people in the US who are working part time but would rather be working full time is rising, which usually only happens in the early stages of recessions.

Special Report

As we head into a more turbulent macroeconomic and geopolitical period, investors should favor countries with newly elected government, small government size, and ample room to cut policy rate. Ideally, they should also be in a stable region, and not so dependent on the US or China. Hence, we are introducing the Global Political Capital Index as a way to integrate these factors into a score that can help narrow down the countries with the best and worst abilities to deal with the incoming challenges.

We update our corporate default rate model and consider the implications for corporate bond spreads.

Bank Credit Analyst

We believe the PBoC’s recent policy stimulus might bolster investor confidence, potentially stabilize onshore Chinese equity prices, and provide modest support to offshore stocks. However, they are unlikely to significantly boost economic growth in the mainland.

The S&P Global flash PMIs released yesterday showed that the contraction in manufacturing activity accelerated on both sides of the Atlantic in September. The forward-looking new orders component fell to a 9-month low of 42.3 in the euro area and a 21-month low of 42.7 in the US.

The September Euro Area Flash PMI release confirms that the region's economic outlook is deteriorating. Manufacturing activity is now fully contracting, and the new orders-to-inventory ratio is deteriorating anew. Services activity is losing some of its shine, especially in France, now that the Olympics are over.

The Central Bank of Brazil (BCB) raised interest rates last week. Is this the commencement of a major tightening cycle that will persist well into next year? Despite this move, we maintain that the BCB will cut interest rates substantially next year. We believe the Lula-nominated board members are playing the long game: voting to hike rates until year-end to establish credibility with financial markets in order to get a pass at easing monetary policy in early 2025.