US Economics Weekly Markets coming round to our view on rate cuts The partial inversion of the Treasury yield curve has attracted a lot of attention over the past week, but we have been more surprised by the speed at which markets have started to price in rate cuts... 29th March 2019 · 1 min read
US Economics Update Yield curve not the only recession indicator For all the focus on the Treasury yield curve, other leading indicators of activity are not yet signalling that a recession is imminent. But their recent deterioration does suggest that the risks are... 28th March 2019 · 1 min read
US Housing Market Update Closing rate hits record high, but not for long The share of mortgage applications that are approved has reached its highest since records began in 2011. With mortgage lending standards essentially unchanged, that implies borrower quality has... 28th March 2019 · 1 min read
US Employment Report Preview Payroll growth shifting down the gears We expect payroll growth to rebound to 150,000 in March, from 20,000 the month before, but that would still imply employment gains are now beginning to trend lower. 28th March 2019 · 1 min read
Energy Data Response US Weekly Petroleum Status Report US crude stocks rose this week as the refinery rate ticked down and net imports picked up. We don’t think that this trend will continue as we believe that OPEC exports to the US will continue to fall. 27th March 2019 · 1 min read
US Economics Update Monetary Indicators Monitor (Feb.) The pick-up in broad money growth to a six-year high in February is not necessarily a positive for the economy because it is a lagging indicator. But it does at least suggest the Fed’s balance sheet... 27th March 2019 · 1 min read
US Data Response International Trade (Jan.) The sharp fall in the trade deficit in January was mainly due to a larger than expected drop in imports, which is hardly a positive sign for the economy. Nonetheless, with imports likely to have been... 27th March 2019 · 1 min read
Global Markets Update What bonds are telling us about equities in the US We think that the recent inversion of parts of the US Treasury yield curve is a bad sign for the S&P 500, which we expect to fall sharply over the rest of this year as growth in the US economy... 26th March 2019 · 1 min read
Global Economics Update Inverted yield curve another signal of weaker growth Some have warned that the recent inversion of the US yield curve signals that a recession is coming, while others have warned against reading too much into the inversion. Our view is that the answer... 26th March 2019 · 1 min read
US Housing Market Data Response Case-Shiller/FHFA Prices & Housing Starts (Jan./Feb.) The sharp fall in single-family starts in February was expected given the surge recorded the previous month, and leaves starts close to where they were towards the end of 2018. But even with house... 26th March 2019 · 1 min read
Global Markets Update Prospects for government bonds remain brightest in US Given the prospects for monetary policy, we forecast that that the rally in government bonds will continue in the US; run out of steam in Germany and Japan; and reverse in the UK if a “no-deal” Brexit... 25th March 2019 · 1 min read
US Housing Market Data Response Existing Home Sales (Feb.) The surge in existing home sales in February is likely to prove short-lived. Concerns over the health of the economy will act to offset the positive impact of lower interest rates, and coupled with... 22nd March 2019 · 1 min read
US Economics Weekly Fed too late to prevent slowdown By making it clear that interest rates will not be raised this year and that quantitative tightening will start to wind down earlier than previously suggested, the Fed was even more dovish this week... 22nd March 2019 · 1 min read
Global Markets Update US market implications of the Fed’s policy shift Although investors have become more dovish about the outlook for US monetary policy in the wake of this week’s FOMC meeting, we think that they are underestimating future rate cuts given the grim... 21st March 2019 · 1 min read
US Economics Update Fed signals extended patience & announces end of QT The Fed’s revised economic projections, which now imply no rate hikes this year, together with the announcement that it will halt its balance sheet run-down in September, came as a positive surprise... 20th March 2019 · 1 min read
Energy Data Response US Weekly Petroleum Status Report US stocks slumped again. The drivers were an increase in the refinery rate and a huge jump in exports. What’s more, this occurred despite production rising. We expect that as refineries come out of... 20th March 2019 · 1 min read
