Bank of Canada Watch Bank to call time on QE We expect the Bank of Canada to call time on its net asset purchases next week by transitioning to the “reinvestment phase” of QE. Widespread labour shortages suggest economic slack is being rapidly... 21st October 2021 · 7 mins read
US Chart Pack Uncertainty over Fed’s reaction function We are confident in our new forecasts that GDP growth will be a disappointing 2.7% in 2022 and 2.0% in 2023, while core inflation remains elevated at close to 3%, but we are less confident in our... 21st October 2021 · 9 mins read
Global Markets Update China’s economic slowdown and US Treasury yields Although slowing growth in China has probably weighed on US Treasury yields in the past, we don’t expect it to prevent them from rising over the next couple of years. 21st October 2021 · 5 mins read
Energy Data Response US Weekly Petroleum Status Report Strong exports contributed to the first drawdown in stocks in four weeks last week, supporting already-high crude prices. What’s more, stocks at the hub of Cushing, Oklahoma, also fell and they are... 20th October 2021 · 2 mins read
Canada Economic Outlook Supply shortages limiting economic growth We now expect GDP growth to be 4.8% in 2021, rather than 5.0%, and 3.5% in 2022, down from 4.0%. Worsening labour shortages imply that spare capacity has been rapidly absorbed and point to a sharp... 20th October 2021 · 19 mins read
Canada Data Response Consumer Prices (Sep.) Inflation rose further to 4.4% in September due to both renewed supply disruptions and the easing of travel restrictions. We do not expect the various supply disruptions that are pushing up goods... 20th October 2021 · 2 mins read
US Housing Market Data Response Housing Starts (Sep.) Single-family starts and building permits have been stable over the past three months at around 1.1m annualised, as strong new home demand has run up against shortages of materials and labour. We... 19th October 2021 · 2 mins read
Canada Data Response Business Outlook & Consumer Expect. Surveys (Q3) The Bank of Canada’s quarterly surveys point to significant upside risks to wage growth. That said, as wage growth was still low in September and the surveys suggest that longer-term inflation... 18th October 2021 · 2 mins read
US Commercial Property Update Downtown offices not losing out everywhere National office data suggest that suburban office markets have significantly outperformed downtown offices since the onset of the pandemic. But metro-level data point to a more nuanced picture in... 18th October 2021 · 3 mins read
US Data Response Industrial Production (Sep.) The 1.3% fall in industrial production in September partly reflects a temporary hit to mining and chemicals output from Hurricane Ida and a drop in cooling demand, as the weather returned to seasonal... 18th October 2021 · 2 mins read
US Economic Outlook Whiff of stagflation gets stronger The whiff of stagflation is getting stronger as shortages worsen, leading to surging prices and weaker real GDP growth. Shortages of goods and intermediate inputs will eventually ease, although not... 18th October 2021 · 23 mins read
US Housing Market Chart Pack Rising mortgage rates will help cool booming prices Mortgage rates are on the rise and we expect they will see further gains to end the year at around 3.5%. That, alongside relatively tight credit conditions, will help cool rampant house price... 15th October 2021 · 9 mins read
Commodities Weekly Energy price rally may spill over to other commodities Most commodity prices increased this week. Optimism over electrification, which was a hot topic during LME Week, seemed to feed through into higher industrial metals prices. But the prices of energy... 15th October 2021 · 6 mins read
US Economics Weekly Labour force exodus shows no sign of reversing This week brought more news that acute labour shortages and the resulting surge in wages are rapidly feeding through into the most cyclically sensitive components of the consumer price index. 15th October 2021 · 6 mins read
Canada Economics Weekly Higher oil prices not a game-changer for the Bank We are not convinced that the further rise in oil prices this week will be sustained. Even if we are wrong, we doubt that higher oil prices will cause the Bank of Canada to become much more hawkish. 15th October 2021 · 5 mins read
US Data Response Retail Sales (Sep.) The 0.7% m/m rise in retail sales in September suggests goods spending held up a little better than we had anticipated, but real consumption growth still slowed sharply in the third quarter. 15th October 2021 · 2 mins read
