Category: Daily Instagraph

Economic trends in the manufacturing and service sectors have been improving worldwide in 2023 and are now solidly in expansion territory (index above 50). This is a positive sign for economic growth to come but creates a dilemma for central banks who need to tighten financial conditions in order to fight inflation. For as long … Continued

We cannot avoid writing about inflation again after the hawkish comments from the Fed Chair yesterday before Congress. The Fed has managed to shift market expectations for future Fed policy rates over the last weeks and bond investors are no longer hoping for a decrease in the magnitude of interest rate increases this year. They … Continued

Today’s graph compares the today’s US government yield curve to the one of the end of 2021. In 14 months, the world has profoundly changed for investors with major implications. First and foremost, there is a risk free rate again giving a nominal yield and providing a juicy alternative to investors who preferred for years … Continued

Inflation has many faces and the overall CPI figures are made up of many different constituents. Since 2000, the biggest increase in US consumer goods and services prices has been hospital services, followed by college tuition, fees and text books. On the other side of the spectrum, prices of TVs, toys, software and cellphone services … Continued

“If we don’t get clear signals that core inflation is going down, we will have to do more,” Belgium central bank chief and European Central Bank Governing Council member Pierre Wunsch told journalists in Brussels yesterday. Core inflation reached an all-time high in the Eurozone in February and currently shows no sign of easing. We … Continued

Time in the stock market is superior to timing the stock market. This graph from Julius Baer impressively demonstrates the power of being a long term investor. Missing out on the 10 best days of the S&P 500 over the past 25 years would have cost the investor half of his return compared to the … Continued

Both French and Spanish inflation figures came in higher than estimated in February and show that the CPI trend is again to the upside in Europe. In France, price increases were driven by an faster growth in food and services. We believe that this will leave the ECB no choice but to continue on their … Continued

6 months T-Bills currently yield approximatively the same than the US aggregate bond market and the US equity market. This raises the question why investors should take the risk of investing in either bonds or equities. For bonds investors are indeed currently not being remunerated on an aggregate basis for duration or credit risk. For … Continued

Global high-grade government and corporate bonds had the best start ever in January with their index up 4%. Investors rushed back into bonds after a dreadful 2022 due to expectations that inflation was peaking and an end of central bank tightening was in sight. In February, bond markets worldwide gave back most of their gains … Continued

The Eurozone economies are expanding again according to the leading indicators. The Purchase Manufacturing Index ( PMI ) published yesterday is in expansion territory ( above 50 ) and rising at the fastest pace since May 2022. This confirms again that Europe is economically more resilient than many sell-side strategists had feared. The energy crisis … Continued