Canada Economics Focus Lower Canadian dollar points to rebound in inflation Although inflation has been uncomfortably low for some time now, the risk of a slide into deflation is still fairly modest. Long-term inflation expectations remain well anchored and the Canadian... 3rd March 2014 · 1 min read
US Data Response ISM Manufacturing Index (Feb.) While the ISM manufacturing index rebounded to 53.2 in February, from 51.3, the extent of the increase was limited because of the ongoing severe winter weather. We expect a further improvement in... 3rd March 2014 · 1 min read
Canada Economics Weekly Rebalancing still a distant pipe dream The Bank of Canada admitted in January's monetary policy statement that "there have been few signs of the anticipated rebalancing towards exports and business investment." Not much has changed since... 3rd March 2014 · 1 min read
US Economics Weekly Fed needs to revise forward guidance soon There is a strong possibility that February's labour market figures, due out this Friday, will only make the Fed's job even harder. There is a chance that the unemployment rate could have hit the 6.5%... 3rd March 2014 · 1 min read
Canada Data Response GDP (Q4 2013) At first glance, the 2.9% annualised gain in fourth-quarter GDP suggests that the economy is on the right track. Unfortunately, growth was once again dependent on spending by heavily-indebted... 28th February 2014 · 1 min read
US Economics Weekly Congress finally gives the economy some breathing room Most of the recent weakness in housing activity is due to the unusually bad weather rather than the lagged effects of last year’s rise in mortgage rates. While higher mortgage rates have clearly taken... 28th February 2014 · 1 min read
US Employment Report Preview Payrolls once again hit by bad weather A third consecutive month of weak payroll growth in February would raise speculation that the Fed will pause the tapering of its asset purchases. But because any weakness this month was probably due... 27th February 2014 · 1 min read
US Data Response Durable Goods (Jan.) The 1.0% m/m decline in durable goods orders was mainly due to a drop back in the notoriously volatile commercial aircraft component. More generally, there is some evidence that the growth rate of... 27th February 2014 · 1 min read
Bank of Canada Watch Bank to maintain neutral stance The Bank of Canada's key policy rate has been on hold at 1.0% for more than three years now. With inflation still uncomfortably low and economic growth still overly-dependent on debt-fuelled housing... 26th February 2014 · 1 min read
Canada Economics Update Investment intentions remain muted The 2014 annual investment intentions survey, which points to another very modest gain in business investment this year, will come as a blow to the Bank of Canada. The Bank is still hoping for a... 26th February 2014 · 1 min read
US Housing Market Data Response New Home Sales (Jan 14.) The strong rise in new home sales in January means that the recovery in housing market activity looks to be back on track. There is considerable scope for new home sales to rise further in 2014. 26th February 2014 · 1 min read
US Data Response Conf. Board Consumer Confidence (Feb.) The drop in the Conference Board consumer confidence index to 78.1 in February, from 79.4, was probably weather-related, with a massive storm hitting the eastern seaboard during the sample period. Now... 25th February 2014 · 1 min read
US Housing Market Data Response Case-Shiller Home Prices (Q4) House prices rose by a strong 11.4% during 2013 as a whole. However, prices are a lagging indicator of the health of the housing market. The more recent weakness of home sales will weigh on price... 25th February 2014 · 1 min read
US Chart Pack Falling unemployment rate forces Fed into rethink With the unemployment rate falling to 6.6% in January, leaving it only trivially above the 6.5% threshold, the Fed will soon need to update its forward guidance on when it might begin to raise the fed... 24th February 2014 · 1 min read
Global Markets Update Will a shift in Fed policy send profits into a tailspin? A rise in borrowing costs triggered by less accommodative monetary policy is likely to have an adverse effect on the profits of increasingly-indebted US companies. But we doubt margins will collapse. 24th February 2014 · 1 min read
Canada Economics Weekly Fourth-quarter economic performance won't be sustained Canada's economic performance over the final quarter of last year was probably the best in more than two years. The breakdown, however, is likely to show that the economy is still heavily dependent on... 24th February 2014 · 1 min read
