Some notable research snippets of the week
Key economic trends (Elara Capital) · Deflationary impulses seem entrenched in the global economy. We believe global inflation may surprise on the downside through rest of CY23E. · We see the Fed pausing even in July 2023 meet – Expect the first rate cut by the Fed in Dec-23. · Historically, equities perform better in a hike cycle than a cut cycle. Bonds are a better bet in run up to rate cut cycle. Gold is the preferred commodity asset through both hike and cut cycles. The USD-INR usually fails to capitalize on the overall EM FX risk on sentiment in the run-up to a rate cut by the Fed. · Deflationary producer prices in China suggest weakening growth in G4 – the US, the EU, the UK and Japan. We do not rule out a sub 5% GDP growth in China in 2023E. (base case 5.2%) · ...