Macro Global macro remained characterized by resilient growth but increasingly divergent monetary-policy paths. US activity strengthened materially, with economists raising Q3 GDP expectations to 2.5% annualized from 2.0%, while the NY Fed nowcast increased to 2.27%. August flash PMIs reinforced the message: the US Composite PMI rose to 56.0, its strongest reading since April 2022, driven by services at 56.8, while manufacturing remained expansionary at 53.2. Importantly for the Fed,…

Macro The US data mix turned materially less hawkish. July payrolls fell 23k vs +80k expected, compounded by 103k of downward revisions to May/June; unemployment nevertheless fell to 4.1% vs 4.2% expected, partly reflecting weaker participation, while initial claims rose to 209k. Inflation simultaneously moderated as the energy shock faded: headline CPI slowed to 3.4% YoY from 3.5%, core CPI to 2.5% from 2.6%, with core +0.2% MoM, matching its…

Rates Treasuries rallied across the curve, partially reversing the previous week’s post-FOMC selloff. The 2Y fell 9.6 bps to 4.20%, 5Y −9.7 bps to 4.354%, 10Y −9.0 bps to 4.65%, and 30Y −7.3 bps to 5.20%. The curve bull-steepened modestly, with 2s10s widening by 0.6 bps to 45.0 bps, 5s30s by 2.4 bps to 84.9 bps, and 2s30s by 2.5 bps to 100.6 bps. More important than the direction was…

Macro US growth slowed further but continued to point to a late-cycle expansion rather than recession. Q2 GDP expanded 1.5% annualised, down from 2.1% in Q1 and below consensus, but the underlying composition remained considerably stronger than the headline. Consumer spending rose 3.2%; real personal consumption increased 0.4% MoM in June; initial jobless claims fell to 197k; and unemployment edged down to 4.2%, indicating labour-market conditions remained inconsistent with a…

Macro The macro backdrop shifted towards a more stagflationary regime during the week as renewed Middle East tensions, higher energy prices and additional US tariffs reversed the recent disinflation narrative. Headline growth remains resilient, but increasingly concentrated in AI investment and higher-income consumption, while rising inflation risks have shifted the focus of central banks from easing towards preserving inflation-fighting credibility. A temporary 48-hour pause in US military action against Iran…

Macro The macro narrative became increasingly bifurcated this week. June inflation data reinforced the disinflation trend and pushed markets toward a less hawkish Fed outlook, while the sharp escalation in the US-Iran conflict and surge in energy prices materially increased the risk of renewed inflationary pressure over the coming months. Disruption across the Gulf and continued uncertainty around the Strait of Hormuz prompted markets to rebuild a geopolitical risk premium,…