Canada Data Response Monthly Survey of Manufacturing (Oct.) Manufacturing sales increased a tad stronger than we expected, though not enough to change our view on fourth-quarter GDP growth in the range of 1.5% to 2%. Indeed, looking through the monthly... 15th December 2010 · 1 min read
US Data Response Consumer Prices & Industrial Production (Nov.) Consumer price inflation remained unusually weak in November and, given the large amount of excess capacity in America's economy, we expect it to continue trending gradually lower over the next couple... 15th December 2010 · 1 min read
US Economics Update Monetary Indicators Monitor (Nov.) The rate of decline in our Capital Economics' measure of M3 has eased, while the growth rates of M1 and M2 have picked up again slightly. However, there is nothing here to suggest that inflation is... 14th December 2010 · 1 min read
Global Markets Update 2011 looks less promising for the US equity market The US equity market is ending the year with a flourish. The S&P 500 has risen by about 5% so far in December, and is not far shy of our year-end target of 1250. Nonetheless, we are sceptical the... 14th December 2010 · 1 min read
US Data Response Retail Sales & Producer Prices (Nov.) The Holiday shopping season appears to have got off to a very good start, suggesting that fourth-quarter consumption growth will be strong. But without a meaningful acceleration in real income growth... 14th December 2010 · 1 min read
Global Markets Update Is this is the beginning of the end for low US yields? We do not believe that the recent jump in Treasury yields marks the start of a prolonged bear market. Provided, as we expect, the economic recovery ultimately disappoints and the Fed keeps short-term... 13th December 2010 · 1 min read
US Data Response Negative Equity (Q3) The fall in the proportion of homeowners in negative equity in the third quarter offers little comfort since it was driven by foreclosures rather than a rise in prices. The second downward leg in... 13th December 2010 · 1 min read
US Economics Weekly Businesses to the rescue? The proposed favourable change to the tax treatment of capital expenditure raises the question of whether it will actually be businesses, rather than consumers, that rescue the economy from a number... 13th December 2010 · 1 min read
Canada Data Response International Merchandise Trade (Oct.) While a restart in crude oil pipeline activity helped lift energy exports to the US, today's news was really about the surprise jump in non-oil exports to countries further abroad. Indeed, with the... 10th December 2010 · 1 min read
US Data Response International Trade (Oct.) The sharp decline in the international trade deficit to a nine-month low of $38.7bn in October, from $44.6bn, suggests that our 2.5% forecast for annualised fourth-quarter GDP growth will need to be... 10th December 2010 · 1 min read
US Data Response Flow of Funds (Q3) The latest Flow of Funds accounts from the Fed show that the public sector is now accumulating debt at a faster pace than the private sector is paying it down. 10th December 2010 · 1 min read
Global Markets Update Are Treasuries overvalued compared to US equities? Aside from this week’s fiscal stimulus proposals, one explanation being provided for the sell-off in US government bonds is that they look expensive relative to US equities. We agree, but we don’t... 9th December 2010 · 1 min read
US Economics Update Stimulus proposals could provide sizeable boost to growth The package of tax proposals agreed by the Obama administration and Republican leaders constitutes an additional fiscal stimulus worth slightly less than $300bn, or 2% of GDP, above and beyond what we... 8th December 2010 · 1 min read
Canada Economics Update Bank of Canada in no hurry to raise rates The Bank of Canada sat on the fence today, careful not to say too much until it has updated its economic outlook. The Bank acknowledged economic growth in the second half of this year has been weaker... 7th December 2010 · 1 min read
US Fed Watch Fed needs to give QE2 time before making adjustments After announcing it would purchase an additional $600bn of Treasury securities at the last FOMC meeting in early November, it is very unlikely that the Fed will change course at next Tuesday's meeting... 7th December 2010 · 1 min read
US Economics Weekly Consumers to the rescue? "Never bet against the US consumer" proved to be a valuable maxim during the last decade. The latest data suggest that the US consumer might be slipping the superhero cape back on, ready to save the... 6th December 2010 · 1 min read
