Asset Allocation Update We doubt US equities will underperform across the board We forecast that equities in other developed markets (DMs) will outperform US equities over the next couple of years. By contrast, we expect equities in many emerging markets (EMs) to underperform... 21st January 2022 · 6 mins read
Canada Data Response Retail Sales (Nov.) The rise in retail sales in November was not as strong as it looks, and the preliminary estimate suggests that sales fell sharply in December amid the Omicron wave. They are likely to fall further... 21st January 2022 · 2 mins read
US Economics Weekly Omicron reaches plateau, leaving Fed free to hike We expect the Fed to deliver some heavy hints at next week’s FOMC that it is planning an interest rate hike in March. With the Omicron wave now past its peak nationally, there is little to hold the... 21st January 2022 · 7 mins read
US Housing Market Data Response Existing Home Sales (Dec.) Despite a 6% m/m fall in existing home sales in December, 2021 marked an impressive year for existing home sales, with sales 11% higher compared to 2020. But looking ahead, a backdrop of rising... 20th January 2022 · 2 mins read
US Economic Outlook Inflation to remain elevated as GDP growth slows We expect underlying inflation to remain well above the 2% target this year, which means the Fed will push ahead with four rate hikes even though real GDP growth is likely to disappoint. Core... 20th January 2022 · 22 mins read
US Commercial Property Update Surging incentives reveal weakness in the office market Office incentives packages rose to unprecedented levels in 2021, which supports our view that market conditions are weaker than asking rents suggest. Given our expectation that vacancy will remain... 19th January 2022 · 3 mins read
US Housing Market Update Key US Housing Market Calls for 2022 A rise in mortgage rates to 4.0% by end-2022, coupled with the 25% rise in house prices seen since mid-2020, will boost mortgage payments as a share of earnings to their highest since mid-2008. That... 19th January 2022 · 3 mins read
Canada Data Response Consumer Prices (Dec.) Inflation rose to a 30-year high of 4.8% in December but is now close to a peak. We expect it to remain near its current level in the first quarter, before it falls sharply over the remainder of the... 19th January 2022 · 2 mins read
US Housing Market Data Response Housing Starts (Dec.) Single-family starts edged back in December, but they saw a 12.1% y/y rise in 2021 overall as strong housing demand and a lack of existing homes for sale supported new home sales. Rising mortgage... 19th January 2022 · 2 mins read
US Fed Watch Will Fed signal that March rate hike is coming? With many Fed officials now either explicitly supporting, or at least “open to”, an interest rate hike in March, we would expect to see some acknowledgement of that in the statement issued after the... 19th January 2022 · 10 mins read
Canada Data Response Business Outlook & Consumer Expect. Surveys (Q4) The Bank of Canada’s latest business and consumer surveys suggest the upside risks to inflation over the next couple of years have increased, and raise the chance that the Bank will hike as soon as... 17th January 2022 · 2 mins read
Canada Data Response Manufacturing Sales (Nov.) Manufacturing sales rose strongly for the second month running in November, but the disruption to labour supply from the Omicron wave presents a clear downside risk to output in December and January. 17th January 2022 · 2 mins read
US Commercial Property Data Response Commercial Property Lending (Dec.) Commercial real estate debt ended 2021 with its largest monthly increase since the onset of the pandemic. Against a backdrop of strong investment activity, we expect commercial property lending to... 17th January 2022 · 2 mins read
FX Markets Weekly Wrap We do not expect the recent dollar weakness to last Despite several events in the US this week which would usually point to a stronger dollar – the highest US inflation print since the early 1980s, hawkish comments from both Chair Powell and Vice Chair... 14th January 2022 · 9 mins read
Canada Economics Weekly Ivey PMI suggests widespread Omicron disruption The various reports this week of intense labour shortages and the slump in the Ivey PMI in December suggest that the Omicron variant is causing widespread economic disruption. 14th January 2022 · 6 mins read
US Economics Weekly Fed becoming more hawkish by the day The continued surge in Omicron infections suggests that the disappointing December activity data will be followed by further weakness in January, but there are no signs that it will delay the Fed’s... 14th January 2022 · 5 mins read
