China Chart Pack China sneezes, Fed gets cold feet China is growing at a slower rate than a year ago and much slower than five years ago. But the widely-held view that growth has slumped in the past few months – which seems to have been a key factor... 18th September 2015 · 1 min read
Global Markets Update Financial market implications of the Fed’s inertia The FOMC’s decision to leave its target range for the federal funds rate unchanged has triggered a rally in government bonds and weakness in the dollar, which in turn has weighed on equities in the... 18th September 2015 · 1 min read
Commodities Update What should the Fed’s inaction mean for commodities? Commodity markets initially welcomed the US central bank’s decision to keep rates on hold yesterday, but the moves have been small. This makes sense, as rates are still likely to rise soon, and the... 18th September 2015 · 1 min read
US Economics Update Fed delays rate hike yet again Despite raising its GDP growth and core inflation forecasts for this year and lowering its unemployment rate forecast for this year, the Fed opted to leave its key policy rate unchanged at 0.0% to 0... 17th September 2015 · 1 min read
DM Valuations Monitor Are US equities significantly overvalued? Comparing Robert Shiller’s well-known cyclically-adjusted price/earnings ratio(CAPE) to its long-run average suggests the US stock market is currently significantly overvalued. However, we don’t think... 17th September 2015 · 1 min read
US Housing Market Data Response Housing Starts (Aug.) As expected, the disruption caused by the expiry of a tax-break in New York led to a drop in housing starts in August. But with homebuilder confidence elevated and building permits already recovering... 17th September 2015 · 1 min read
US Data Response Consumer Prices (Aug.) The 0.1% m/m decline in headline CPI inflation in August was partly due to the renewed decline in gasoline prices, but even core prices increased by only 0.1% m/m, suggesting that underlying inflation... 16th September 2015 · 1 min read
Global Markets Update What to expect from EM markets when the Fed pushes the button We still think there is a good chance that US interest rates will be raised tomorrow. But whether “liftoff” is this week or later, emerging market assets and currencies are unlikely to go into... 16th September 2015 · 1 min read
Global Markets Update Four reasons not to put much store by Shiller’s CAPE By comparing the current level of Robert Shiller’s well-known cyclically-adjusted price/earnings ratio (CAPE) with its long-run average, the equity bears assert that the US stock market is vastly... 15th September 2015 · 1 min read
US Data Response Retail Sales & Industrial Production (Aug.) The August retail sales and industrial production reports highlight the continued divergence between a strong domestic economy led by healthy consumer spending and weakness in the export-orientated... 15th September 2015 · 1 min read
Global Markets Update Japanese equities to outperform US as monetary policies diverge Provided the panic over China subsides, we expect the yen to slide further and the Nikkei to surge as the Bank of Japan steps up the pace of its asset purchases, perhaps as soon as next month. 15th September 2015 · 1 min read
Metals Data Response US silver imports and exports (Jun.) US silver imports rose in June after a weak May, but exports of semi-manufactured silver slumped, suggesting weak industrial demand from the rest of the world. Meanwhile, retail appetite for physical... 14th September 2015 · 1 min read
US Data Response UoM Consumer Conf. (Sep.) & Producer Prices (Aug.) Although the slump in the University of Michigan consumer confidence index to a 12-month low of 85.7 in September, from 91.9, left it well below the consensus forecast at 91.1 it was almost exactly in... 11th September 2015 · 1 min read
Europe Economics Weekly Will Fed lift-off hit or help the euro-zone? We don’t expect the prospect of higher US interest rates to hit the euro-zone too hard. But the ECB should not take any chances and certainly should not rely on higher US interest rates to lower the... 11th September 2015 · 1 min read
US Economics Weekly Remaining labour market slack rapidly shrinking The decline in the unemployment rate to only 5.1% in August means that the Fed has arguably already achieved the full employment part of its dual mandate. If there is still any slack left in thel... 11th September 2015 · 1 min read
US Housing Market Update Why are home purchase mortgage applications so subdued? The first quarter’s recovery in mortgage applications for home purchase appears to have been derailed by a lack of earnings growth and the resulting deterioration in affordability. While earnings... 10th September 2015 · 1 min read
