US Economics Update Monetary Indicators Monitor (Feb 14.) The surge in bank lending to businesses in February could be an early sign that small firms are becoming more optimistic. Either way, the growth rate of bank lending will rise further this year as the... 18th March 2014 · 1 min read
US Housing Market Data Response Housing Starts (Feb.14) Continued unseasonably severe weather, as well as a shortage of lots, kept housing starts subdued in February. But the size of the shortfall between starts and household formation means that... 18th March 2014 · 1 min read
Canada Data Response Survey of Manufacturing (Jan.) The partial rebound in manufacturing sales volumes in January can be partly blamed on the bad weather, which continues to constrain activity. Nevertheless, the persistent weakness in unfilled orders... 18th March 2014 · 1 min read
US Data Response Consumer Prices (Feb.) The fall in CPI inflation to only 1.1% in February, from 1.6%, won’t influence tomorrow’s policy decision by the Fed, as it is solely due to base effects that will be reversed in March. Core inflation... 18th March 2014 · 1 min read
US Economics Update There is no hidden rot in the jobs numbers The slump in average weekly hours worked over the past few months is undoubtedly weather-related and we expect to see a bounce back in the spring. 17th March 2014 · 1 min read
US Data Response Industrial Production (Feb.) The rebound in industrial production in February suggests that the economy is waking up after hibernating during the past few months of unusually bad weather. This makes it even more likely that the... 17th March 2014 · 1 min read
Canada Economics Weekly Idle industrial capacity likely to grow further The fall in manufacturing capacity utilisation over the past year casts further doubt over the Bank of Canada's expectation that the external sector can take over from households in driving economic... 17th March 2014 · 1 min read
US Economics Weekly Fed won’t ignore faster wage growth We don’t place much weight on the idea that the Fed would be happy to leave interest rates at near-zero until wage growth returned to 4%. Instead, we believe that a pick-up in wage growth to between 2... 17th March 2014 · 1 min read
US Data Response Uni. of Mich. Consumer Confidence (Mar.) Most of the decline in the University of Michigan's measure of consumer confidence to 79.9 in March, from 81.6, can be attributed to the unseasonably bad weather. After all, the usual determinants of... 14th March 2014 · 1 min read
US Housing Market Update What is the downside scenario for the housing market? The biggest risk facing the US housing market is that higher mortgage interest rates and tight credit conditions prevent a recovery in mortgage demand, meaning that mortgage-dependent buyers do not... 13th March 2014 · 1 min read
US Data Response Retail Sales (Feb.) As the rise in retail sales in February didn’t get anywhere close to reversing all of the drop in the previous two months, the unusually bad weather is still hurting retailers. But since households... 13th March 2014 · 1 min read
Canada Chart Pack Lower Canadian dollar won't cure export blues January's discouraging external trade figures suggest that the economy began the year on a weak footing. Unfortunately, exporters are likely to struggle throughout the year. Although the Canadian... 12th March 2014 · 1 min read
Canada Data Response Teranet-National Bank House Prices (Feb.) The further acceleration in house price inflation to 5.0% in February, from 4.5% in the previous month, mainly reflects tighter supply and demand conditions. The drop in existing home sales since then... 12th March 2014 · 1 min read
US Fed Watch Fed to revamp its forward guidance At the policy meeting due to end on Wednesday 19th March, the Fed will almost certainly reduce the size of its monthly asset purchases by a further $10bn, to $55bn, and will probably abandon the 6.5%... 12th March 2014 · 1 min read
US Housing Market Chart Pack Loosening supply conditions foreshadow price slowdown New home sales shook off earlier weather effects to post a strong gain in January. Although existing home sales fell again, they should also recover before too long. Nevertheless, the bigger picture... 11th March 2014 · 1 min read
Global Markets Update What are the relative prospects for euro-zone and US bonds? The risks of deflation in the euro-zone, particularly in light of the ECB’s continued inaction last Thursday, should keep the yields on ten-year core euro-zone government bonds well below those on US... 11th March 2014 · 1 min read
