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…

Macro On Friday, we had the latest US job numbers with a downward revision for February to 275k (ahead of the 200k estimate). However, the unemployment rate jumped to 3.9% (expected 3.7%), a new two-year high. Average hourly earnings increased by just 0.1% MoM or 4.3% YoY. These numbers indicate that the US labour market remains resilient, but it started to moderate and did not fundamentally change the picture of…

Macro The US economy is not slowing down, and most point to the increases in budget deficit and fiscal stimulus from debt overlay, which kept going for the last four years. Some go as far as to say that since the pandemic, the government is spending so much money that it’s hard to have a recession. The US debt to GDP ratio is approaching 125%, and at the current pace,…

Macro After every major economic shock or recession, people tend to become more conservative, more price-sensitive and economically cautious, and they tend to save more. However, after the COVID, it was the opposite. People locked at home increased their good consumption and started speculating in financial markets; later, when they were allowed to socialize and travel again, they went on revenge spending. This increased consumption has fueled high economic growth…

Macro Based on all upcoming macro data, the FED is highly unlikely to cut rates as much as the market expects. CPI and PCE reported this week that they are falling but above expectations. Most of the resilience in inflation comes from the services sector, which is mostly a post-COVID catch-up. The overall mosaic of the data emboldens the FED’s patient stance. It is unlikely that there will be a…

Macro There are worries that “the last mile will be the hardest” in the inflation battle and that, historically, inflation spikes are coming in wavers. We have to be cognizant of the inflation acceleration risks, but the fear that inflation will spike again significantly might be overblown. Except for the “unknown unknowns”, such as unforeseen supply shocks and pressure from new geopolitical developments, there are no apparent drivers to the…