In today’s briefing:
- BoE Survey Says Stagflation Survives
- Activity Thaws Into Winter
- Late-Cycle Tension: Rising Volatility Signals a Critical Market Inflection into 2026
- 2026 High Conviction Idea: Our Basket of Commodity Equities Will Outperform Broad Equity Indices
- CX Daily: Shenzhen Gorged on Skyscrapers, Now It Faces a Commercial Property Glut
- Oil futures: Crude touches weekly highs on geopolitical tensions
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 5 Dec 2025
BoE Survey Says Stagflation Survives
- CFOs keep telling the BoE their prices will rise by 3.5% in 2026, with wage increases similarly substantial. There has been no significant break lower in over 18 months.
- Employment plans have also deteriorated, lending some support to the dovish case as well. But this side is an unreliable signal, while inflation has proved brutally accurate.
- Doves need the employment aspect to be true, but the transmission to prices not to be. This survey signals upside inflation risks that should discourage rate cuts in 2026.
Activity Thaws Into Winter
- The worst services PMIs thawed in November, broadening growth even as averages held steady. Activity in the US services ISM has trended up to exceed the PMI data now.
- A slight fading of stagflationary pressures in the latest US surveys probably balances out in the Fed’s policy trade-off. We still fear that it is easing excessively.
- Rising unemployment rates in the US and UK are concerns not experienced in most of the world. This theme feeds their recent divergence from the global surprise tendency.
Late-Cycle Tension: Rising Volatility Signals a Critical Market Inflection into 2026
- US equities triggered key reversal signals as market breadth deteriorated, crowded AI leaders unwound, and indexes broke trend support, elevating near-term downside risk.
- Macro uncertainty, tighter liquidity, and shifting investor psychology are pressuring high-liquidity growth assets, while gold and quality balance-sheet exposures provide relative resilience.
- Multiple late-cycle timing models align into early 2026, raising the probability of episodic volatility and making disciplined positioning, selective risk-taking, and tactical hedging essential.
2026 High Conviction Idea: Our Basket of Commodity Equities Will Outperform Broad Equity Indices
- The current macro environment has elements of both the 1970’s and mid-2000s commodity bull market
- Investor interest and allocation to this asset class is still minimal
- A rising cost of capital globally favours a move out of long duration into real assets
CX Daily: Shenzhen Gorged on Skyscrapers, Now It Faces a Commercial Property Glut
- In Depth: Shenzhen Gorged on Skyscrapers, Now It Faces a Commercial Property Glut
- ICBC Executives Taken Away as Concerns Mount Over China’s Biggest Bank
- PBOC Injects 50 Billion Yuan in November to Steady Year-End Liquidity
Oil futures: Crude touches weekly highs on geopolitical tensions
- Crude oil futures on Thursday were climbing higher, as benchmarks maintained the firmer start to December, albeit amid conflicting signals.
- Front-month Feb26 ICE Brent futures were trading at $63.31/b (2033 GMT) versus Wednesday’s settle of $62.67/b, while Jan26 NYMEX WTI was at $ 59.72/b against a previous close of $58.95/b.
- Prices have found some support this week from the fading prospects of a ceasefire in the Russia-Ukraine conflict and the broader rise in geopolitical tensions, but it has not been enough to shake off the gloom around a growing surplus.
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 5 Dec 2025
United States shows deepening slowdown with weak ISM manufacturing, falling employment, and declining private payrolls, signaling rising recession risk.
India and China exhibit relatively constructive economic prospects, contrasting with softness in advanced economies.
Asian indicators are mixed, with Indonesia struggling on trade and Hong Kong retail sales recovering gradually but remaining below pre-COVID levels.
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