US Economics Update Powell signals that July rate cut a done deal Chair Jerome Powell’s semi-annual testimony to Congress indicates that, despite the trade truce following the recent G20 meeting and the strength of employment growth in June, the Fed intends to push... 10th July 2019 · 3 mins read
US Economics Update Lower rates failing to boost business investment The latest NFIB and JOLT surveys point to a contraction in business equipment investment and suggest that labour market conditions are starting to soften. 9th July 2019 · 2 mins read
US Economics Update Latest pick-up in productivity growth unlikely to last The recent acceleration in productivity growth to a decade high of more than 2% y/y has renewed hopes that we could finally be seeing a structural pick-up linked to a new wave of technological... 9th July 2019 · 4 mins read
US Economics Update Currency intervention would fail without Fed’s full support President Donald Trump’s recent tweets have sparked speculation that, as part of an escalation of the trade war, he could order the Treasury to intervene in foreign exchange markets to manipulate the... 8th July 2019 · 6 mins read
US Economics Weekly Powell may temper market expectations of rate cuts The data this week were consistent with a continued slowdown in economic growth, but don’t yet look weak enough to convince the Fed to cut interest rates immediately. We suspect that Chair Jerome... 5th July 2019 · 7 mins read
US Data Response Employment Report (Jun.) The 224,000 gain in non-farm payrolls in June was much stronger than the consensus estimate of 160,000 and would seem to make a mockery of market expectations that the Fed will cut interest rates by... 5th July 2019 · 2 mins read
US Economics Update State & local government investment boom won’t last The unprecedented surge in state & local government investment, which added close to 0.4%pts to annualised GDP growth in both the first and second quarters, is unlikely to be sustained. This is... 3rd July 2019 · 2 mins read
US Economics Update Monetary Indicators Monitor (May) Broad money growth accelerated to a decade high in May, as past increases in interest rates boosted portfolio demand, but the more recent renewed slump in rates will trigger a slowdown in the second... 3rd July 2019 · 3 mins read
Energy Data Response US Weekly Petroleum Status Report A surge in net imports meant that commercial crude oil stocks fell by less-than-expected last week. We expect stocks to continue to drop in the weeks ahead in line with the seasonal uptick in gasoline... 3rd July 2019 · 2 mins read
US Data Response International Trade (May) The sharp widening in the trade deficit to $55.5bn in May, from $51.2bn, suggests that net trade was a slightly bigger drag on second-quarter GDP growth than we had previously anticipated, with the... 3rd July 2019 · 2 mins read
US Housing Market Data Response Mortgage Applications (Jun.) Mortgage applications surged in June, as existing borrowers took advantage of declining mortgage interest rates. Meanwhile, house purchase applications also rose, but only modestly. Looking ahead, we... 3rd July 2019 · 2 mins read
US Economics Update Solid fundamentals will prevent consumer meltdown With the economic slowdown feeding through to weaker job gains, the apparent surge in consumption growth in the second quarter will not be sustained. But the strength of households’ balance sheets and... 1st July 2019 · 3 mins read
US Data Response ISM Manufacturing Index (Jun.) Although the ISM manufacturing index didn’t fall as far as feared in June, the decline in the more forward-looking new orders component suggests the worst is still to come. 1st July 2019 · 2 mins read
US Economics Weekly Any G-20 trade truce unlikely to last If the meeting between Presidents Trump and Xi at the G-20 tomorrow is successful, we would expect both sides to agree to resume negotiations and hold off on imposing new tariffs. But, given the... 28th June 2019 · 7 mins read
US Housing Market Outlook Fall in mortgage interest rates won’t spark recovery The sharp fall in mortgage interest rates seen since the start of the year has not spurred much of a recovery in housing market activity. Home sales and housing starts have more-or-less held their... 28th June 2019 · 17 mins read
US Economic Outlook Downside risks mount We expect GDP growth to slow sharply in the second half of this year, prompting the Fed to cut interest rates by a cumulative 75bp. GDP growth will slow from 2.3% this year to 1.2% in 2020, before... 27th June 2019 · 24 mins read
