US Data Response Industrial Production (Jan.) The 1.4% m/m rebound in industrial production in January appears to confirm that the Omicron wave has had surprisingly little impact on the economy. That said, the weakening global backdrop suggests... 16th February 2022 · 2 mins read
US Data Response Retail Sales (Jan.) The strong 3.8% rebound in retail sales in January is not quite as good as it looks, since it is mainly a recovery from the revised 2.5% drop in December. But with the modest decline in food and drink... 16th February 2022 · 2 mins read
Canada Data Response Consumer Prices (Jan.) Consumer price inflation rose by more than expected at the start of 2022 and the breakdown suggests that inflationary pressures are broadening, which adds to the pressure for the Bank of Canada to... 16th February 2022 · 2 mins read
Industrial Metals Update US steel prices still have room to fall The recent agreement between the US and Japan will allow the majority of Japan’s steel exports to enter the US without levies. We expect this increased supply will combine with slower growth in demand... 15th February 2022 · 2 mins read
US Commercial Property Data Response Commercial Property Lending (Jan.) Commercial real estate debt growth slowed in January, although that still left it at a decent level. At this stage it is difficult to be sure whether slowing growth indicates a slower pace of... 14th February 2022 · 2 mins read
FX Markets Update Revisiting the case for a stronger dollar Although last week’s hawkish surprises from the ECB and the Bank of England weaken the case for further US dollar appreciation against the euro, sterling, and other European currencies, we are... 11th February 2022 · 4 mins read
Asset Allocation Update Commodities & US equities: 1970s or mid-2010s? We suspect that the pattern of returns from commodities and US equities over the next few years will more closely resemble that in 2014-15 – positive from the US stock market, negative from... 11th February 2022 · 4 mins read
US Economics Weekly Rising inflation adds to pressure on the Fed The news this week that CPI inflation climbed to a new high of 7.5% in January prompted another surge in interest rate expectations. 11th February 2022 · 8 mins read
Canada Economics Weekly Macklem betting on productivity rebound Bank of Canada Governor Tiff Macklem made the case this week that productivity growth should rebound strongly this year and next. While we agree that a rebound is on the cards, we judge that the Bank... 11th February 2022 · 6 mins read
Europe Commercial Property Update Global property returns not expected to defy gravity The exceptionally strong rebound in commercial property returns has been clear from the middle of last year. While this came earlier than most expected, we think it reflected special conditions and... 11th February 2022 · 3 mins read
FX Markets Update Relative equity performance and the US dollar Although a major drop in US equities poses a key downside risk to our view that the US dollar will rise, we doubt the slight underperformance of US equities relative to global equities that we... 10th February 2022 · 4 mins read
US Economics Update Labour market shortages stabilising The upward revision to household employment and the labour force imply that the labour market recovery has been a little stronger than we previously believed, but measures of slack suggest that labour... 10th February 2022 · 4 mins read
US Housing Market Update Do not conflate real assets with inflation hedges We believe the link between real estate cashflows and inflation to be overplayed, a view that is backed up by the evidence of the last 44 years. But there are exceptions. One of which is low vacancy... 10th February 2022 · 4 mins read
US Housing Market Update Ballooning mortgage size not a risk to the market The average home purchase mortgage size has ballooned over the past couple of years, but a concurrent rise in down payments will protect lenders from all but the most severe of house price shocks... 10th February 2022 · 3 mins read
Global Markets Update Quantitative tightening and Treasury term premia We think upcoming “quantitative tightening” by the Fed will contribute to further increases in the yields of long-dated Treasuries this year and next. 10th February 2022 · 4 mins read
US Data Response Consumer Prices (Jan.) The 0.6% m/m rise in consumer prices in January was slightly stronger than we had expected and illustrates that, even as the earlier upward pressure from rising energy prices and goods shortages fades... 10th February 2022 · 3 mins read
