US Economics Focus What to expect from QT We expect the Fed to reduce its asset holdings by more than $3trn over the next couple of years, enough to bring the balance sheet back in line with its pre-pandemic level as a share of GDP. That... 10th May 2022 · 12 mins read
Canada Economics Focus Will a housing downturn crash the economy? We expect higher interest rates to cause a 10% fall in house prices over the next 12 months and an even steeper fall in residential investment. With the rest of the economy still recovering from the... 9th May 2022 · 12 mins read
US Commercial Property Update Forecast downgrades, but the sky is not about to fall Rises in short-and-long interest rates and the likelihood of further increases over the next 12 months pose a threat to real estate prices. While some have suggested that this will not derail market... 6th May 2022 · 5 mins read
Canada Economics Weekly Cracks in housing market risk turning into chasms The slump in home sales in April, combined with the unexpected fall in hours worked, point to downside risks to GDP last month. While hours worked are set to rebound in May, there is likely to be much... 6th May 2022 · 4 mins read
US Economics Weekly Fed hikes as acute shortages drive up costs The latest weakness in equities isn't going to stop the Fed from continuing to hike its policy rate by 50bp in June and July, not when labour market conditions remain unusually tight and, in an... 6th May 2022 · 6 mins read
Canada Data Response Labour Force Survey (Apr.) The sharp slowdown in employment growth and large decline in hours worked in April present downside risks to GDP growth but, as temporary factors seem to explain much of the weakness, there is likely... 6th May 2022 · 2 mins read
US Data Response Employment Report (Apr.) The solid 428,000 gain in non-farm payroll employment in April illustrates that the Fed was right to ignore the misleading contraction in first-quarter GDP, with the economy still on a firm footing... 6th May 2022 · 2 mins read
Europe Economics EUR/USD: The case for parity We think the euro will eventually weaken further, falling to parity against the US dollar, as the euro-zone economy falters, the terms of trade shock from higher energy prices feeds through, and the... 6th May 2022 · 5 mins read
Asset Allocation Update Lessons for markets from the rapid 1994/95 rate hikes The struggles of both bonds and equities during the Fed’s rapid hiking cycle of 1994/95 may provide a warning to investors today. Markets Drop-In (11 th May, 10:00 EDT/15:00 BST): We’re discussing our... 6th May 2022 · 4 mins read
US Housing Market Update Rise in rates to bring more vacant homes to market Homebuyers looking for more space were contending with low numbers of larger homes for sale in the first quarter, not helped by an apparent rise in investor demand for bigger properties. But rising... 5th May 2022 · 3 mins read
US Commercial Property Update ULI Consensus Forecast (Spring 2022) Consensus forecasts for rents and total returns in 2022 and 2023 have been upgraded in all four sectors since the last survey. But those changes come with property pricing looking more stretched than... 4th May 2022 · 2 mins read
Energy Data Response US Weekly Petroleum Status Report Commercial crude oil stocks rose last week on higher imports, lower exports and less crude oil being used by refineries. Implied product demand, meanwhile, was little changed and towards the lower end... 4th May 2022 · 2 mins read
Canada Economics Update Spring market brings deep freeze for home sales The steep declines in home sales across Canada’s major cities reinforces our view that a downturn in residential investment will prevent the Bank of Canada from raising interest rates by as much as... 4th May 2022 · 2 mins read
US Data Response International Trade (Mar.) The surge in the trade deficit to a record high of $109.8bn in March, from $89.8bn, was driven by a huge rise in imports as port congestion cleared. We suspect imports will fall back over the coming... 4th May 2022 · 2 mins read
Canada Data Response International Trade (Mar.) The trade surplus unexpectedly fell in March, despite the surge in commodity prices, but it is likely to rise in the second quarter, as export volumes recover while import volumes drop back. Canada... 4th May 2022 · 3 mins read
US Housing Market Data Response Mortgage Applications (Apr.) The sharp rise in mortgage rates over the past couple of months, to a 12-year high of 5.37% in the middle of April, is now weighing on mortgage demand. Home purchase applications dropped to their... 4th May 2022 · 2 mins read
