Canada Data Response Consumer Prices (Feb.) & Retail Sales (Jan.) The decline in annual headline inflation to 1.1% in February, from 1.5%, won't concern the Bank of Canada as it mainly reflects base-year effects in transportation and clothing. Meanwhile, the strong... 21st March 2014 · 1 min read
US Housing Market Data Response Existing Home Sales (Feb.14) The slight decline in existing home sales in February was the sixth drop in seven months. However, sales of non-distressed existing homes are doing much better. 20th March 2014 · 1 min read
Global Markets Update US rate expectations have further to rise The adverse market reaction to the slightly more hawkish tone of comments from the Fed yesterday looks justified to us. Indeed, market expectations for US interest rates are likely to rise further... 20th March 2014 · 1 min read
US Economics Update Fed sticks to QE taper, drops unemployment threshold As expected, the Fed continued to taper its asset purchases and dropped its explicit unemployment rate threshold, reverting to a more qualitative form of forward guidance in today's policy statement... 19th March 2014 · 1 min read
US Economics Update Weather adds to upside risks to food inflation As a lot of the surge in food prices in February is due to the extreme weather, it is unlikely to be sustained. Nonetheless, the risks to our forecast that food price inflation will climb from 1.4% in... 19th March 2014 · 1 min read
Canada Economics Update Quebec might do better with its own currency Pauline Marois, leader of the separatist Parti Quebecois (PQ), has suggested that an independent Quebec could hold a seat on the governing council of the Bank of Canada and retain the Canadian dollar... 19th March 2014 · 1 min read
US Economics Update Monetary Indicators Monitor (Feb 14.) The surge in bank lending to businesses in February could be an early sign that small firms are becoming more optimistic. Either way, the growth rate of bank lending will rise further this year as the... 18th March 2014 · 1 min read
US Housing Market Data Response Housing Starts (Feb.14) Continued unseasonably severe weather, as well as a shortage of lots, kept housing starts subdued in February. But the size of the shortfall between starts and household formation means that... 18th March 2014 · 1 min read
Canada Data Response Survey of Manufacturing (Jan.) The partial rebound in manufacturing sales volumes in January can be partly blamed on the bad weather, which continues to constrain activity. Nevertheless, the persistent weakness in unfilled orders... 18th March 2014 · 1 min read
US Data Response Consumer Prices (Feb.) The fall in CPI inflation to only 1.1% in February, from 1.6%, won’t influence tomorrow’s policy decision by the Fed, as it is solely due to base effects that will be reversed in March. Core inflation... 18th March 2014 · 1 min read
US Economics Update There is no hidden rot in the jobs numbers The slump in average weekly hours worked over the past few months is undoubtedly weather-related and we expect to see a bounce back in the spring. 17th March 2014 · 1 min read
US Data Response Industrial Production (Feb.) The rebound in industrial production in February suggests that the economy is waking up after hibernating during the past few months of unusually bad weather. This makes it even more likely that the... 17th March 2014 · 1 min read
Canada Economics Weekly Idle industrial capacity likely to grow further The fall in manufacturing capacity utilisation over the past year casts further doubt over the Bank of Canada's expectation that the external sector can take over from households in driving economic... 17th March 2014 · 1 min read
US Economics Weekly Fed won’t ignore faster wage growth We don’t place much weight on the idea that the Fed would be happy to leave interest rates at near-zero until wage growth returned to 4%. Instead, we believe that a pick-up in wage growth to between 2... 17th March 2014 · 1 min read
US Data Response Uni. of Mich. Consumer Confidence (Mar.) Most of the decline in the University of Michigan's measure of consumer confidence to 79.9 in March, from 81.6, can be attributed to the unseasonably bad weather. After all, the usual determinants of... 14th March 2014 · 1 min read
US Housing Market Update What is the downside scenario for the housing market? The biggest risk facing the US housing market is that higher mortgage interest rates and tight credit conditions prevent a recovery in mortgage demand, meaning that mortgage-dependent buyers do not... 13th March 2014 · 1 min read
