US Housing Market Update Are house prices gains in some States unsustainable? Concerns have been raised that some States are seeing unsustainable, investor-fuelled house price increases. However, we think that in most of these markets, the fundamentals are supportive of a... 15th February 2013 · 1 min read
US Economics Update Sequestration a secondary issue to budget talks The probability is rising that Congress won't act to prevent the sequestration spending cuts taking effect at the start of next month. On paper, that would reduce spending by $110bn per year... 14th February 2013 · 1 min read
Global Markets Update A squeeze on profit margins could weigh on US equities We suspect that cyclical forces will prompt a further rise in workers’ slice of the US economic pie this year, and that the resulting squeeze on profit margins will weigh on the stock market. 14th February 2013 · 1 min read
US Economic Outlook Fundamentals better, but downside risks remain The outlook for the US economy is improving and, although first-quarter GDP growth will be hit by the expiry of the payroll tax cut, growth should climb back to around 2.5% annualised in the second... 13th February 2013 · 1 min read
US Data Response Retail Sales (Jan.) It is mildly encouraging that consumption in January did not capitulate completely after the recent tax hikes. And while higher taxes and the latest leap in gasoline prices could yet hit sales harder... 13th February 2013 · 1 min read
US Economics Focus State and local governments will partly offset Federal drag State and local governments have sorted out their finances to such an extent that they will soon be in a position to raise spending and, consequently, boost both GDP and job growth. This will offset... 12th February 2013 · 1 min read
Global Markets Update Bank of Japan to continue to lag well behind the Fed The recent slide in the yen against the dollar has mainly been driven by speculation that the Bank of Japan will soon start to loosen monetary policy much more aggressively. However, there is little... 12th February 2013 · 1 min read
Canada Economics Update As housing goes, so goes the economy The latest batch of economic data, particularly the slump in construction activity, supports our view that Canada's economy will expand by only 1.0% in 2013, well below the expectations of most other... 11th February 2013 · 1 min read
US Housing Market Update Should we be concerned that starts are outstripping sales? Housing starts have risen by 37% over the past year, but new home sales have only increased by 9%. Rather than being a sign that speculative overbuilding has returned however, this gap reflects the... 11th February 2013 · 1 min read
Canada Economics Weekly What's the trigger for a house price correction? Those still looking for what might trigger a major house price correction in Canada need look no further than Vancouver's housing bubble, where house prices have already begun to deflate. The sudden... 11th February 2013 · 1 min read
US Economics Weekly Surge in gasoline prices comes at just the wrong time As if households didn't already have enough to worry about with the expiry of the payroll tax cut at the start of this year, they suddenly find themselves having to cope with a sudden spike in... 11th February 2013 · 1 min read
Canada Data Response International Merchandise Trade (Dec.) December's decline in export volumes is a discouraging sign for fourth-quarter GDP growth. Moreover, the widespread drop in imports suggest that the domestic economy slowed quite a bit at the end of... 8th February 2013 · 1 min read
Canada Data Response Labour Force Survey (Jan.) January's weaker than expected 21,900 decline in employment (the consensus estimate was +5,000) can be forgiven, given the unusually strong gains posted in previous months. Nevertheless, with the... 8th February 2013 · 1 min read
US Data Response International Trade (Dec.) The unexpected narrowing of the trade deficit to $38.5bn in December, from $48.6bn the month before, pretty much guarantees that the dip in fourth-quarter GDP will be revised to a small gain in the... 8th February 2013 · 1 min read
US Economics Update Rising wealth will continue to boost GDP Further increases in both house and equity prices would take net household wealth back above prerecession levels later this year, perhaps helping to boost GDP by around 0.7%. This wealth effect should... 7th February 2013 · 1 min read
US Housing Market Data Response Mortgage Applications (Jan. 13) Mortgage applications for home purchase are still low by past standards, but at least they have been rising for five months now. That’s an encouraging sign that mortgage-dependent buyers are starting... 6th February 2013 · 1 min read
