US Economics Weekly Surge in trade deficit will soon be reversed This week we expect to learn that, rather than edging up by 0.2% annualised as the first estimate indicated, first-quarter GDP contracted by 0.7%. The principal reason for the revision is that net... 22nd May 2015 · 1 min read
US Data Response Consumer Prices (Apr.) The 0.3% m/m increase in core consumer prices in April, which pushed the three-month annualised rate of core inflation up to a four-year high of 2.6%, leaves the Fed with less scope to delay raising... 22nd May 2015 · 1 min read
DM Valuations Monitor Will the yen remain undervalued? On several metrics, the yen appears to be the most undervalued major developed market currency: on a purchasing power parity basis and when its real effective exchange rate (REER) is compared to both... 22nd May 2015 · 1 min read
US Housing Market Data Response Existing Home Sales (Apr.) The drop in existing home sales in April was probably just payback for a strong rise in March rather than a sign the market is faltering again. The strengthening labour market and favourable... 21st May 2015 · 1 min read
US Economics Focus Did the US recovery just die without warning? We still believe that the unseasonably cold winter in the Northeast together with some strange seasonal quirks can explain a lot of the weakness in first-quarter GDP growth. It is true that the... 21st May 2015 · 1 min read
Bank of Canada Watch January interest rate cut likely not enough At next week's policy meeting we expect the Bank of Canada to keep its policy rate at 0.75%. Tighter financial conditions over the past month, however, may have it second guessing whether or not the... 20th May 2015 · 1 min read
Energy Data Response US Weekly Petroleum Status Report Last week’s fall in US weekly oil stocks all but confirms that April’s highs marked the peak. What’s more, US oil production declined by the most significant amount in almost a year and demand picked... 20th May 2015 · 1 min read
Energy Update US natural gas prices to continue to rally We think that the recent surge in US natural gas prices is set to persist, driven by higher demand from power plants, lower production and the first gas exports from the US to Asia and Europe. 19th May 2015 · 1 min read
US Housing Market Data Response Housing Starts (Apr.) Housing starts soared to a seven-year high in April, as homebuilding activity finally rebounded after the weak start to the year. Looking ahead, this should provide a platform for further steady... 19th May 2015 · 1 min read
Canada Economics Weekly Construction employment losses likely only beginning The recent job losses in the construction sector are likely only a precursor of what's in store for the year ahead. Falling energy investment and cooling housing demand could form the perfect storm... 18th May 2015 · 1 min read
EM Markets Chart Pack How will EM corporate spreads react to higher US rates? Although underlying Treasury yields have risen since the end of March, dollar-denominated corporate bond yields have fallen in all emerging market regions, owing to a sharp fall in credit spreads. We... 15th May 2015 · 1 min read
US Economics Weekly Weakness of consumption not due to new health care rules The introduction of Obamacare doesn't appear to have had any lasting downward impact on medical care consumption. Spending did decline in the first few months of last year, but it has rebounded... 15th May 2015 · 1 min read
Commodities Weekly Dovish US data support commodity prices Commodity prices have generally had a good week, helped by further soft economic data from theUS and a renewed decline in the value of the dollar against other major currencies. Thestabilisation in... 15th May 2015 · 1 min read
US Data Response Industrial Prod'n (Apr.) & Consumer Conf. (May) The weakness in industrial production underlines the negative impact that lower oil prices and the stronger dollar are having on the mining and manufacturing sectors. At the same time, the drop back... 15th May 2015 · 1 min read
Canada Data Response Survey of Manufacturing (Mar.) Although the rebound in manufacturing sales in March was stronger than expected, this mainly reflected volatility in transportation, with little evidence of any underlying improvement. Accordingly... 15th May 2015 · 1 min read
Commodities Update Is there any hope for the price of US lumber? Weak US housing starts and high lumber imports are likely to be behind the large fall in the price of US lumber this year. But a rebound in starts over the coming months should support the price. 15th May 2015 · 1 min read