Emerging Markets Economics Update Fed balance sheet confusion rears its head again Fears that a reduction in the size of the Fed’s balance sheet will somehow reduce the amount of dollars available to EMs to finance their external liabilities is grounded in a fundamental... 6th June 2018 · 1 min read
Energy Data Response US Weekly Petroleum Status Report Inventories of crude oil increased last week due to higher net imports and strong growth in US crude production. Indeed, we expect the rapid rise in US output to weigh on crude prices later in the... 6th June 2018 · 1 min read
US Fed Watch Recent market turmoil will not derail the Fed Despite political tensions in Europe and the uncertainty over trade policy, we expect the Fed to press ahead and raise interest rates at next week’s FOMC meeting. With second quarter GDP growth... 6th June 2018 · 1 min read
US Data Response International Trade (Apr.) The April trade data suggest that net exports are on track to provide a sizeable boost to second quarter GDP growth, which we now expect to be as high as 4% annualised. 6th June 2018 · 1 min read
US Housing Market Data Response Mortgage Applications (May) A 2.7% m/m drop in mortgage applications for home purchase left this measure of active housing demand unchanged compared to this time last year. A rise in mortgage interest rates, to a seven-year high... 6th June 2018 · 1 min read
Energy Update Brent-WTI spread to narrow again The dramatic surge in US oil output so far this year has weighed on the price of WTI and widened the Brent-WTI spread. But we still expect US production to grow strongly in 2018-19. An increase in... 5th June 2018 · 1 min read
Latin America Economics Update Mexico tariffs raise tensions The direct effect of Mexico’s new tariffs on imports from the US will be moderate. But the move will make the process of renegotiating Nafta even more difficult. The peso has fallen sharply in... 5th June 2018 · 3 mins read
Commodities Update Divergence with the dollar unlikely to last In the last month, commodity prices have risen or held steady, despite a sharp appreciation of the US dollar. We think that the long-run inverse relationship will be restored in the second half of... 5th June 2018 · 1 min read
US Economics Weekly Will the Fed let inflation overshoot? Despite the sharp rebound in core inflation this year, there seems to be a growing belief in the markets that the Fed is now prepared to allow inflation to rise above the 2% target without stepping up... 1st June 2018 · 1 min read
US Data Response ISM Manufacturing Index (May) The rebound in the ISM manufacturing index in May provides further evidence to suggest that GDP growth is set for a decent rebound in the second quarter. On past form, the ISM index is at a level... 1st June 2018 · 1 min read
US Data Response Employment Report (May) May’s employment report had everything needed to support a June rate hike by the Fed; including a solid 223,000 gain in payrolls, a decline in the unemployment rate to an 18-year low of 3.8% and a... 1st June 2018 · 1 min read
Global Central Bank Watch Geopolitics more likely to affect ECB than the Fed For now, we don’t expect the geopolitical developments to alter the behaviour of the major central banks. Provided that the political crisis in Italy does not flare up again, we think the ECB is... 1st June 2018 · 1 min read
Energy Data Response US Weekly Petroleum Status Report Inventories of crude oil fell last week due to a dip in net imports and strong demand from refineries. But the pick-up in crude production is more than sufficient to meet the increase in demand, which... 31st May 2018 · 1 min read
Metals Watch Rally in US steel prices to prove self-defeating President Trump’s decision to impose a 25% tariff on US steel imports has sent the price of US hot-rolled coiled steel skyrocketing. But how sustainable is the rally in prices? In this Metals Watch we... 31st May 2018 · 1 min read
Middle East & North Africa Economics Update Markets drop as Trump pulls out of Iran’s nuclear deal The US administration’s decision to pull out of the Iran nuclear deal, coming alongside the recent EM sell-off, means that it has been a terrible month for financial markets across the Middle East and... 30th May 2018 · 1 min read
US Economics Update Are markets right to reassess the Fed rate outlook? We still expect that domestic economic conditions will prompt the Fed to hike its policy rate a further three times this year and twice in the first half of next year. But that view is based on the... 30th May 2018 · 1 min read
