US Economics Update Fed action will do little to boost economy Operation Twist is a go, albeit with a small twist on the twist. The Fed's announcement today that it will act to extend the average maturity of its Treasury holdings, by buying $400bn of securities... 22nd September 2011 · 1 min read
US Housing Market Data Response Existing Home Sales (Aug.) Given the recent sharp falls in equity prices and consumer confidence, there is a real risk that the 7.7% m/m rise in existing home sales in August will not be sustained. Without a significant surge... 22nd September 2011 · 1 min read
Global Markets Update Corporate bonds vs. corporate equities US credit spreads have widened significantly since the end of July. However, corporate bonds have outperformed equities during this period – something we expect to continue over our forecast horizon... 22nd September 2011 · 1 min read
Canada Data Response Consumer Price Index (Aug.) The stronger than expected increase in headline CPI inflation, from 2.7% to 3.1% in August, primarily reflects transitory factors and therefore is of little consequence for the Bank of Canada. More... 22nd September 2011 · 1 min read
US Housing Market Data Response Housing Starts (Aug.) The further fall in housing starts in August adds to other evidence, such as the recent drop in consumer confidence and fall in mortgage approvals, suggesting that demand for new homes remains close... 21st September 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (Aug.) The most recent acceleration in the annual growth rates of M1 and M2 has been dramatic, but the latest moves largely reflect a rise in the precautionary demand for money. The pick-up in the growth... 21st September 2011 · 1 min read
Canada Economic Outlook Further policy stimulus increasingly likely As the outlook for global economic growth deteriorates markedly, there is a growing likelihood that more policy stimulus will eventually be required in Canada. The limited scope for further monetary... 21st September 2011 · 1 min read
Canada Economics Weekly Policymakers stand ready As the outlook for global economic growth deteriorates markedly, there is a growing likelihood that more policy stimulus will eventually be required in Canada. With its key short-term rate at 1.0%... 20th September 2011 · 1 min read
US Economics Weekly Rebound in core inflation makes Fed's life difficult The marked rebound in the rate of core inflation since late last year is one of the key reasons why Fed officials are more wary of implementing further quantitative easing now. Some of the recent... 20th September 2011 · 1 min read
US Housing Market Update Widening refinancing scheme won't help much Any changes to the Administration's current program that would allow more households to refinance their mortgage at a lower rate would be welcome. But such moves won't provide a major boost to the... 16th September 2011 · 1 min read
US Data Response CPI & IP (Aug.), Philly Fed & Empire State (Sep.) The continued rise in inflation in August, which saw both headline and core CPI inflation hit two-year highs, is another reason to suspect that the Fed will shy away from a further round of full-blown... 16th September 2011 · 1 min read
Canada Data Response Survey of Manufacturing (Jul.) July's survey of manufacturers showed that sales outpaced market expectations by a wide margin. Most encouragingly, stronger volumes were behind this increase, reflecting the ongoing recovery in auto... 16th September 2011 · 1 min read
Commodities Update What would “Operation Twist” mean for commodities? Any further easing from the US Fed will probably be limited to lengthening the maturity of its existing holdings of Treasury securities (“Operation Twist”) rather than a third round of outright... 15th September 2011 · 1 min read
US Housing Market Chart Pack Cash buyers and investors take fright Even though mortgage rates have fallen to record lows and housing has become more undervalued relative to incomes than ever before, the number of home sales has continued to decline. More striking is... 15th September 2011 · 1 min read
US Fed Watch Operation Twist offers best hope among limited options Given the weakness of the incoming economic data, the Fed is now almost certain to do something at next week's FOMC meeting, but exactly what is still not entirely clear. The proposal to lengthen the... 15th September 2011 · 1 min read
US Data Response Retail Sales & Producer Prices (Aug.) The stagnation in retail sales in August suggests that households became more cautious after the plunge in equity prices towards the start of the month. Sales may also have been dampened by Hurricane... 15th September 2011 · 1 min read
