Global Markets Update War, sanctions, and the resilience of the S&P 500 The US stock market has so far held up fairly well despite the Russia-Ukraine war. We think it will probably manage to make small gains over the rest of the year, although there are clear downside... 9th March 2022 · 3 mins read
US Fed Watch Fed to proceed cautiously despite war in Ukraine We expect the Fed to hike interest rates by 25bp at next week’s FOMC meeting and, despite the war in Ukraine, to unveil new projections showing five interest rate hikes for this year in total. We also... 9th March 2022 · 8 mins read
Asset Allocation Update What to make of the recent outperformance of US equities The war in Ukraine has challenged our view that US equities will underperform those in other developed markets over the next few years. We are not yet ready to abandon this view while the outlook is... 8th March 2022 · 5 mins read
US Data Response International Trade (Jan.) The increase in the trade deficit to a record $89.7bn in January, from $82.0bn, means that net trade is on track to subtract close to 2%-pts from annualised first-quarter GDP growth, which we expect... 8th March 2022 · 2 mins read
Canada Data Response International Trade (Jan.) The goods trade balance moved back to a surplus of more than $2bn in January and, based on the recent broad gains in commodity prices, it is likely to hit close to $5bn this month. If that were... 8th March 2022 · 3 mins read
US Economics Weekly Surging energy prices will add to inflation Surging energy prices will push inflation even higher in the next month or two but, unlike in Europe, the fallout on the real economy should be relatively modest, allowing the Fed to push ahead with... 4th March 2022 · 6 mins read
Canada Economics Weekly Following first rate hike, QT will be “next step” We expect the Bank of Canada to follow its interest rate hike this week with another one in April, when the Bank also seems likely to begin quantitative tightening. Drop-In (8 March, 10:00 EST/15:00... 4th March 2022 · 6 mins read
US Data Response Employment Report (Feb.) The stronger than expected 678,000 gain in non-farm payrolls in February and upward revisions to previous months gains is another sign that the real economy has considerable momentum, with the Omicron... 4th March 2022 · 2 mins read
US Housing Market Focus Will rental growth continue to boom? Rental growth hit record highs last year as a wave of pent-up demand, plenty of savings, the need for more space and lack of homes for sale all drove rental household formation higher. But some of... 4th March 2022 · 16 mins read
US Commercial Property Update Introducing our new metro employment forecasts Our new metro employment forecasts point to underperformance by the six major metros in the next five years, both in terms of total and office-type employment. In contrast, Austin, Dallas and Phoenix... 3rd March 2022 · 4 mins read
Bonds & Equities War-induced rally in DM bonds may not be sustained While the war in Ukraine may well push down the yields of long-dated developed market government bonds further in the near term, we think that a sustained rally in bonds is unlikely unless the war... 2nd March 2022 · 4 mins read
Energy Data Response US Weekly Petroleum Status Report US commercial oil stocks fell last week on the back of higher exports, lower imports and greater refinery use of crude oil. Strategic reserves also fell to their lowest since August 2002 and will... 2nd March 2022 · 2 mins read
Canada Economics Update Assessing the impact of the war in Ukraine for Canada Higher commodity prices and stronger immigration from Ukraine are potential benefits for Canada’s economy from the war in Ukraine, but there is a risk that near-term real GDP growth disappoints due to... 2nd March 2022 · 3 mins read
US Economics Update Powell keeps the Fed’s options open Chair (pro tempore) Jerome Powell indicated in his congressional testimony today that, with Russia's attacks on Ukraine roiling markets and creating additional uncertainty, he was inclined to support... 2nd March 2022 · 3 mins read
Canada Economics Update Bank hikes by 25bp but holds off from QT The Bank of Canada’s decision to raise interest rates by 25bp today was widely expected and the statement supports our view that it will follow up with another hike next month, but there was little... 2nd March 2022 · 3 mins read
US Housing Market Data Response Mortgage Applications (Feb.) Mortgage rates rose further in February, reaching their highest since May 2019. That weighed on mortgage demand, with applications for home purchase falling to their lowest level since the spring of... 2nd March 2022 · 4 mins read
