Canada Chart Pack Labour market slack remains high Despite recent signs of a pick up, the economy is still not growing rapidly enough to drive the unemployment significantly lower. In addition, average hours worked remains well below normal levels... 8th April 2011 · 1 min read
Canada Data Response Labour Force Survey (Mar.) March's employment report was disappointing to everyone, with net employment edging lower by 1,500 jobs. Although the unemployment rate nudged lower, from 7.8% to 7.7%, this came about by way of fewer... 8th April 2011 · 1 min read
US Housing Market Chart Pack Still in the doldrums The further fall in house prices at the end of last year has made housing look more under-valued relative to income than ever before. (See Chart below.) This appears to be attracting cash buyers and... 7th April 2011 · 1 min read
Bank of Canada Watch Difficult decisions lie ahead for the Bank of Canada It is almost a foregone conclusion that the Bank of Canada will hold its key policy interest rate at 1% next week. More importantly, we think the Bank will refrain from offering material hints of... 7th April 2011 · 1 min read
US Economics Update Budget fight: Round 2 The possibility of a Federal government shutdown is back on the front pages, with concern growing that no agreement will be reached before the current continuing spending resolution expires this... 6th April 2011 · 1 min read
US Housing Market Data Response Mortgage Applications (Mar.) Continued low mortgage rates and favourable housing valuations are still failing to stimulate mortgage demand, with mortgage applications for home purchase in March still close to record lows. 6th April 2011 · 1 min read
US Economics Weekly What will the end of QE2 mean for the markets? In contrast to the widespread view that Treasury yields will jump once the Fed concludes its second round of asset purchases, we think that yields could actually fall. It is even possible that the end... 4th April 2011 · 1 min read
US Data Response Employment Report (Mar.) Conditions in the labour market are finally starting to show signs of meaningful improvement. Non-farm payrolls increased by a healthy 216,000 last month, slightly above the consensus forecast for a... 1st April 2011 · 1 min read
US Data Response ISM Manufacturing Index (Mar.) The trivial drop back in the ISM manufacturing index to 61.2 in March, from 61.4, still leaves it at a level consistent with GDP growth of more than 5% annualised. Actual growth will be lower than... 1st April 2011 · 1 min read
Global Markets Focus US municipal bonds - the next domino to fall? Investors have become increasingly concerned about the outlook for the $3trn US municipal bond market. Although issuers of US municipal bonds are faced with many challenges, we think investors’ worst... 31st March 2011 · 1 min read
Canada Data Response GDP by Industry (Jan.) The recent acceleration in monthly GDP growth is being driven principally by a rebound in manufacturing output, as the temporary disruptions that hit autos production last fall start to ease. We still... 31st March 2011 · 1 min read
US Housing Market Data Response House Prices (Jan.) The housing market began 2011 in the same vein as it ended 2010, with prices heading south. Moreover, while the latest risk retention housing reform proposals are good for the long-term health of the... 29th March 2011 · 1 min read
Canada Economics Weekly Consensus forecast for GDP growth is too high In our opinion, current consensus forecasts that real GDP growth will better 3% annualised over the first half of this year are too optimistic. Admittedly, the monthly GDP data present a fairly solid... 28th March 2011 · 1 min read
US Economics Weekly First-quarter growth flagging We had originally expected first-quarter GDP growth to be pretty strong, possibly even as high as 4% at an annualised pace. The more incoming data we see, however, the more we suspect that growth will... 28th March 2011 · 1 min read
US Employment Report Preview Conditions gradually improving Labour market conditions are still improving and our econometric model, which is based on a range of monthly indicators, points to a 175,000 increase in non-farm payrolls in March. After the rapid... 24th March 2011 · 1 min read
US Housing Market Data Response New Home Sales (Feb.) The 16.9% m/m decline in new home sales to a record low of only 250,000 annualised in February, from 301,000 the month before, underlines just how bad conditions in the housing market still are. 23rd March 2011 · 1 min read
