US Economics Weekly May rate hike likely to be the last We now expect the Fed to press ahead with another 25bp rate hike at the FOMC meeting early next month but, with the economic data softening and the risks of a debt ceiling crisis rising, we still... 21st April 2023 · 8 mins read
Canada Data Response Retail Sales (Feb.) After a strong start to the year, retail sales volumes dropped back in February and the preliminary estimate implies they fell again in March. While consumption probably still rose at a healthy pace... 21st April 2023 · 2 mins read
FX Markets Update We think the global growth backdrop stills favours the US dollar While stronger-than-expected data out of Europe and China have weighed on the dollar over the past two quarters, our view is that the current global backdrop points to a rebound in the greenback... 21st April 2023 · 5 mins read
Asset Allocation Update Growth stock valuations still look unsustainably high We would not be surprised if US “growth” stocks outperformed their “value” peers by a bit more in the near term. But we still suspect that growth will underperform value substantially over the longer... 21st April 2023 · 8 mins read
Capital Daily Bad news for risky assets: financial conditions really are tight We think Fed Chair Powell was right to suggest last month that financial conditions have probably tightened by more than the traditional indices imply. That spells bad news for risky assets. We are... 20th April 2023 · 5 mins read
US Housing Market Data Response Existing Home Sales (Mar.) Existing home sales edged lower in March rounding off the weakest start to the year in over a decade. While the lending data point to further declines in April, we expect mortgage rates will fall back... 20th April 2023 · 2 mins read
US Chart Pack Direct economic effects of CRE rout will be limited We expect rising interest rates and structural headwinds to trigger a deep rout in commercial real estate. The impacts on the real economy will be mostly indirect via the impact on small bank lending... 20th April 2023 · 10 mins read
Canada Economics Update Canada Housing Watch (Apr.) House prices edged up in March and the jump in the sales-to-new listing ratio implies they will rise further this quarter. With affordability still very stretched, we assume that there will be a... 19th April 2023 · 4 mins read
Capital Daily Persistent UK inflation unlikely to preclude lower Gilt yields While we think investors are correct to price in more persistent UK inflation, we think a sharp decline in core inflation next year will allow the Bank of England to cut rates by more than most expect... 19th April 2023 · 5 mins read
US Economics Update Falling margins to help bring inflation down The recent undershooting of CPI used vehicle prices relative to wholesale auction prices appears, at least partly, to reflect a squeeze on dealer margins as demand has cooled. The upshot is that we... 19th April 2023 · 4 mins read
UK Economics Update Why is inflation higher in the UK? Inflation in the UK has stayed higher than elsewhere as the UK has endured the worst of both worlds – a big energy shock (like the euro-zone) and labour shortages (even worse than the US). Admittedly... 19th April 2023 · 3 mins read
Global Markets Update Taking stock of our Treasury and S&P 500 forecasts We think investors’ expectations for the Fed funds rate will fall a little by the end of this year, which will push the 10-year Treasury yield a bit lower by end-2023. But we doubt lower “risk-free”... 19th April 2023 · 5 mins read
Canada Data Response Consumer Prices (Mar.) Base effects helped to pull headline inflation lower in March, but there were also encouraging signs in core inflation, as the average three-month annualised gain in CPI-trim and CPI-median fell to a... 18th April 2023 · 3 mins read
Asset Allocation Update A tale of two listed real estate markets While US equity REITs are a long way from discounting the “best of times” for US commercial real estate (CRE) over the coming quarters, listed real estate stocks in Europe appear braced for something... 17th April 2023 · 8 mins read
Canada Economics Weekly Macklem pushes back against rate cut expectations Bank of Canada Governor Tiff Macklem used his press conference this week to push back against expectations for interest rate cuts later this year. That partly reflects the Bank’s less downbeat... 14th April 2023 · 6 mins read
