US Fed Watch Patient Fed now unlikely to raise rates until mid-year While the strength of real economic growth and employment suggest that the Fed should begin to raise rates very soon, the mixed news on wages, the lack of any pick-up in core inflation and recent... 21st January 2015 · 1 min read
Global Economic Outlook Oiling the wheels Global growth has slowed in recent months, but we still expect world GDP to expand by just over 3% this year and next. The slump in oil prices should have a positive impact overall, even though it... 21st January 2015 · 1 min read
Canada Data Response Survey of Manufacturing (Nov.) The larger than expected decline in November's manufacturing sales suggests that the economy lost some momentum in the final quarter of last year. We estimate the economy grew by close to 2.5%... 20th January 2015 · 1 min read
US Housing Market Update What next for mortgage interest rates? The decline in long-term Treasury yields almost certainly means that 30-year mortgage interest rates have further to fall and that any subsequent rises will be more gradual than we previously... 20th January 2015 · 1 min read
US Economics Update Monetary indicators Monitor (Dec. 14) The growth rates of the various measures of broad money have remained robust even after the Fed halted its large-scale asset purchases late last year. For 2014 as a whole, M3*, our estimate of the... 20th January 2015 · 1 min read
US Economics Update Drop in gasoline prices will help drive vehicle sales The drop in gasoline prices is adding to the already-favourable outlook for vehicle sales, which we expect to hit all-time highs soon. 20th January 2015 · 1 min read
Global Markets Update Has the Fed driven down the term premium on US Treasuries? We think the Fed has been instrumental in the collapse of term premiums on long-dated Treasuries and that the effect of its actions will not be unwound soon. If we are right, and other depressing... 20th January 2015 · 1 min read
Canada Economics Weekly Is there a bright side to the collapse in oil prices? The bright side of the recent collapse in oil prices is the sinking Canadian dollar, which will encourage stronger US demand for cheaper Canadian goods and services. More generally, the collapse in... 19th January 2015 · 1 min read
DM Valuations Monitor Swiss franc most overvalued DM currency after surge? The surge in the Swiss franc that followed the abandonment of the Swiss National Bank’s exchange rate ceiling against the euro means it is now the most overvalued of all the developed market (DM)... 16th January 2015 · 1 min read
US Data Response Uni. of Mich. Consumer Confidence (Jan.) The rise in the University of Michigan measure of consumer confidence to an 11-year high in January supports our view that the fall in retail sales in December was nothing to worry about. Fed... 16th January 2015 · 1 min read
US Data Response Consumer Prices & Industrial Production (Dec.) Even though headline inflation will spend most of this year in negative territory, if we’re right in thinking that core inflation is unlikely to fall much further, the Fed will still raise interest... 16th January 2015 · 1 min read
US Economics Weekly How hard will the oil price slump hit mining investment? Following the collapse in crude oil prices, a sizable drop in mining investment is inevitable. Nevertheless, the shale oil boom, which has been going for less than a decade, is so new that it’s hard... 16th January 2015 · 1 min read
Canada Data Response Teranet-National Bank House Prices (Dec.) Although the Teranet-National Bank measure shows house price inflation slowing slightly to 4.9% in December, from 5.2%, price gains are still outpacing growth in household incomes. The upshot is that... 14th January 2015 · 1 min read
Bank of Canada Watch Oil price slump unlikely changes neutral rate outlook As a large net oil exporter, the slump in the price of oil is a worrisome downside risk to Canada's economic outlook, which will be offset only partially by the sinking Canadian dollar. For the time... 14th January 2015 · 1 min read
US Data Response Retail Sales (Dec.) Despite the 0.9% m/m fall in the value of retail sales in December, it still looks as though real consumption growth in the fourth quarter was a decent 3.5% annualized and GDP growth was close to 3.0%... 14th January 2015 · 1 min read
Global Markets Update What next for US government bonds? We still expect the 10-year US Treasury yield to rise this year from its current level of around 1.9% as the Fed begins to tighten policy, but have decided to lower our end-2015 forecast significantly... 13th January 2015 · 1 min read
