US Housing Market Outlook Shortage of labour and materials will thwart builders Developments in the housing market continue to be dominated by record low levels of inventory. A scarcity of labour and high lumber prices are preventing builders from responding to that shortage... 22nd June 2018 · 1 min read
US Economics Update Drop in airfares inflation a measurement problem The recent drop in airfare inflation has been a small drag on core inflation and, unlike last year’s fall in wireless telephone service prices, appears to be a genuine measurement problem. Underlying... 21st June 2018 · 1 min read
US Economic Outlook When will boom turn to bust? Fuelled by the fiscal stimulus, we expect GDP growth to be 2.9% this year but, as the stimulus fades and higher interest rates become a bigger drag on the economy, growth should slow to 2.0% in 2019... 21st June 2018 · 1 min read
US Housing Market Data Response FHFA House Prices (Apr.) The FHFA reported that house prices rose by a marginal 0.1% m/m in April, the second month in a row of small monthly gains. Even as inventory levels have stayed close to record lows, house price... 21st June 2018 · 1 min read
US Housing Market Data Response Existing Home Sales (May) Existing home sales dropped for the second month in a row in May, as record low levels of inventory have continued to constrain activity. With little chance of an improvement in the supply situation... 20th June 2018 · 1 min read
Global Economics Update Wage growth generally still subdued Given the strength of their labour markets, wage inflation is likely to pick up a bit in the US, UK and, to a lesser extent, the euro-zone and Japan over the coming quarters. But as Jerome Powell... 20th June 2018 · 1 min read
Energy Data Response US Weekly Petroleum Status Report Inventories of crude oil fell last week due to a jump in exports and higher demand from refineries. However, if China acts on its threat to reduce its purchases of US crude, it will be difficult to... 20th June 2018 · 1 min read
US Housing Market Data Response Housing Starts (May) Both single and multifamily housing starts rose in May, meaning total housing starts were up 20.3% compared to a year earlier, close to a two-year high. However, the building permit data show that... 19th June 2018 · 1 min read
Asia Economics Update What would a US-China trade war mean for Asia? Trade tensions between the US and China have been ratcheted up another notch after US President Donald Trump yesterday threatened to impose a 10% tariff on a further US$200bn of Chinese imports... 19th June 2018 · 1 min read
Energy Update Will tariffs dampen oil demand? The retaliatory tariffs which China has threatened to impose on oil imports from the US would not in themselves change the balance of supply and demand in global oil markets. But if China chooses to... 18th June 2018 · 1 min read
Europe Economics Update Could the ECB still hike if the Fed started cutting? We expect the ECB to start raising interest rates in September 2019, not long before we judge that the US Fed will start to cut. Such divergence between the two central banks would be almost... 18th June 2018 · 1 min read
US Economics Weekly Stronger growth not generating major imbalances After the Fed’s decision to raise interest rates by another 25bp, Fed Chair Jerome Powell claimed in the post-meeting press conference that “the economy is doing very well” – we couldn’t agree more... 15th June 2018 · 1 min read
US Data Response Industrial Production (May) The strong survey evidence suggests that the drop in manufacturing output in May was a blip, but the tariffs imposed on Chinese imports, if reciprocated, could weigh on the factory sector later this... 15th June 2018 · 1 min read
Global Markets Update Will Fed and ECB policy keep driving dollar/euro? The movements in dollar/euro over the past few days are a reminder that Fed and ECB policy are still important drivers of the exchange rate. Our view remains that their policies will provide ongoing... 15th June 2018 · 1 min read
US Housing Market Update Banks report rise in demand from riskier borrowers We doubt the rise in mortgage demand from higher risk borrowers reported in the latest Fannie Mae survey will lead to a surge in mortgage lending. Cautious lenders and regulations mean that this... 14th June 2018 · 1 min read
US Data Response Retail Sales (May) Households are back to their free spending ways, with the strength of May’s retail sales figures implying that second-quarter real consumption growth (and GDP growth for that matter) will now be more... 14th June 2018 · 1 min read
