Macro The US economy has demonstrated exceptional resilience in the face of aggressive monetary tightening. This is further underscored by the emergence of increased productivity and the early signs of an economic boost from AI. While the US maintains its supremacy in the long run, driven by innovation, leadership in cutting-edge technologies, control of the world’s reserve currency, energetic independence, private property and the rule of law, and vibrant capital…

Macro US payroll came stronger than expected (272,000 vs 190,000 expected), sending yields up and rate cut expectations further away into December. Also, The unemployment rate derived from the Household Survey conducted by BLS (the Bureau of Labor Statistics) stayed at 4% (6.6m compared to 3.7% and 6.1m unemployed a year earlier) while part-time employment far outpaced full-time positions. However, JOLTS (Job Openings and Labor Turnover Survey) from earlier this…

Macro This week, risk assets came under pressure as Wednesday’s CPI report exceeded expectations, marking 3rd increase in a row. Since the FED is facing three reports now, it will be easier to argue for the rate cuts before the fall if significant CPI improvements are in the upcoming April and May reports. The increases, however, came from the ‘stubborn’ components such as shelter and auto insurance, while the median…

Macro The US labour market remains very strong, with this week’s payroll report reflecting 303,000 jobs added in March (vs 214k estimated), with the unemployment rate and average hourly earnings (MoM) as expected at 3.8% and 0.3%, respectively. Such a report suggested that the economy is still booming and that in this economic environment, the neutral rate of interest is much higher than it used to be in the recent…

Macro The FED evaluates the optimal inflation rate and the policy path to achieve it. It is trying to prioritize the labour market over the noisy inflation data, as it didn’t change its December projections and committed to 3 rate cuts over the remaining 6 meetings this year. This is despite its now forecast of more inflation this year and next year and more growth this year and next year.…

Macro Last week, we discussed hot payroll numbers with cool wages and a strong but perhaps moderating economy. This week, we have received another hotter-than-expected inflation print, but investors still expect three rate cuts this year, with the first one starting in either June or July. As the outlook on the US economy is relatively stable from last week, it’s worth discussing two important but contrasting emerging markets: India and…