US Housing Market Outlook Mortgage interest rates set for steady decline The drop in 10-year Treasury yields seen in recent weeks has led to lower mortgage interest rates. We now think the 5.17% the 30-year fixed rate reached in November represents the peak of the current... 21st December 2018 · 1 min read
Energy Data Response US Weekly Petroleum Status Report A small drop in US stocks coupled with signs of solid growth in products demand suggest that some of the market’s fears about oversupply may be overdone. We continue to expect that the output cuts... 19th December 2018 · 1 min read
US Housing Market Data Response Existing Home Sales (Nov.) Existing home sales rose for the second consecutive month in November, and a recovery in mortgage demand over the past month suggests they will see further gains over the turn of the year. But with... 19th December 2018 · 1 min read
US Economics Update Budget dispute raises risk of debt ceiling crisis in 2019 A partial government shutdown this Friday would probably have only a modest impact on the economy. With the current gridlock only likely to intensify once the Democrats assume control of the House... 19th December 2018 · 1 min read
US Housing Market Data Response Housing Starts (Nov.) Single-family housing starts dropped to an 18-month low in November, but we expect a modest rise in starts over the next couple of years. Builders have scaled back production in response to slowing... 18th December 2018 · 1 min read
US Chart Pack Real consumption boosted by plunging gasoline prices The boost to purchasing power from the recent plunge in gasoline prices has already fed through to stronger real consumption growth. Even assuming a more modest rise in December, control group retail... 17th December 2018 · 1 min read
Commodities Weekly Little festive cheer for commodities The prices of most commodities, including oil, traded in a narrow range this week, at least until Friday when weak economic data out of China prompted a synchronised fall in prices. We suspect that... 14th December 2018 · 1 min read
US Economics Weekly Shutdown will be biggest downside risk in 2019 As the fiscal stimulus fades and the lagged impact of monetary tightening intensifies, we expect GDP growth to slow from 2.9% in 2018 to 2.2% in 2019 and only 1.2% in 2020. Markets apparently believe... 14th December 2018 · 1 min read
US Data Response Industrial Production (Nov.) The 0.6% m/m rise in headline industrial production last month was entirely due to a surge in mining and utilities output, which will be reversed over the coming months. The bigger story is the... 14th December 2018 · 1 min read
US Data Response Retail Sales (Nov.) The 0.9% m/m surge in underlying retail sales in November, which followed an upwardly-revised 0.7% gain in October, suggests that real consumption growth has remained stronger in the fourth quarter... 14th December 2018 · 1 min read
Energy Data Response US Weekly Petroleum Status Report US crude oil stocks edged lower in early December as domestic output fell back and inputs to refineries remained high. Stocks may fall further in the coming weeks, if refinery activity remains strong. 12th December 2018 · 1 min read
US Economic Outlook Fed will need to reverse course in 2020 Our confidence in our long-held view that a shifting policy mix will cause economic growth to slow in 2019 has only strengthened in recent months. The turmoil in markets suggests that others are... 12th December 2018 · 1 min read
US Housing Market Update Lower interest rates not enough to boost home sales We expect home sales will end 2020 only slightly higher than they are today. Admittedly, the drop in mortgage interest rates seen over the past few weeks has given a boost to mortgage applications... 12th December 2018 · 1 min read
US Data Response Consumer Prices (Nov.) The recent plunge in energy prices pushed headline CPI inflation down to 2.2% in November and will exert further downward pressure over the coming months. More important for the Fed is the continued... 12th December 2018 · 1 min read
US Fed Watch Strong economy keeps gradual tightening on track The recent volatility in financial markets will not stop the Fed raising rates at its meeting next week. A bigger concern for the Fed is the renewed weakness in core inflation, which may prompt some... 12th December 2018 · 1 min read
Global Markets Update Don’t bank on the US stock market recovering in 2019 Although the S&P 500 has already fallen by roughly 10% since early October, we don’t expect it to rebound in 2019. Given the outlook for the US economy, we think that it will end next year even lower... 12th December 2018 · 1 min read
