UK Markets Chart Pack Yields on Gilts and Treasuries continue to decouple Over the last two months, yields on UK and US government bonds have decoupled, with 10-year yields in the UK now about 30bp lower than those across the Atlantic. Whereas strong US economic data and... 23rd December 2014 · 1 min read
Global Economics Update Fall in oil prices will radically alter global imbalances The collapse in oil prices looks set to wipe out the Gulf’s external surpluses next year, leaving China and the euro-zone as the world’s major surplus economies. At the same time, the US deficit looks... 23rd December 2014 · 1 min read
US Housing Market Data Response New Home Sales (Nov.) The new homes market continues to be very subdued, with a further drop in sales in November pushing the stock of new homes up for the ninth month in a row. But a number of factors, including strong... 23rd December 2014 · 1 min read
EM Valuations Monitor Oil price collapse lowers Russian ruble’s fair value Last week, the Russian finance ministry claimed that the ruble was “extremely undervalued”. Admittedly, it made the claim when the currency was around 70 to the dollar, and the exchange rate has since... 23rd December 2014 · 1 min read
US Data Response GDP (Q3), Durable Goods/Consumption (Nov.) The clear strengthening in activity towards the end of 2014 may prompt some Fed officials to consider whether they need to raise rates before the middle of 2015. 23rd December 2014 · 1 min read
Canada Data Response GDP by Industry (Oct.) October's stronger-than-expected GDP growth reflected more broad-based economic activity and has probably set the stage for stronger fourth-quarter annualised GDP growth than the 2.5% forecast by the... 23rd December 2014 · 1 min read
Commodities Update Fall in US natural gas prices likely to be temporary Despite the recent weather-related fall in the price of US natural gas, we still expect prices to trend upwards over the next few years due to higher demand both at home and from overseas. 23rd December 2014 · 1 min read
Global Economics Update A selection of key calls for 2015 and beyond We expect 2015 to be another year of large divergences in the performances of the advanced economies, with the US and the UK leading the pack and the euro-zone and Japan continuing to struggle. But... 23rd December 2014 · 1 min read
UK Economics Update Outlook remains bright for consumer recovery Whilst the latest figures on households’ finances painted a fairly discouraging picture of the third quarter of 2014, we are optimistic that rising real wages will ensure that the consumer recovery... 23rd December 2014 · 1 min read
Global Economics Update Policy to diverge further in 2015 Although the Fed and BoE are likely to start raising rates by the middle of 2015, global monetary conditions should remain very loose next year. The ECB is gearing up to announce a “full-blown” QE... 23rd December 2014 · 1 min read
UK Data Response National Accounts & Balance of Payments (Q3) The latest set of national accounts leave the economic recovery looking more fragile than it appeared before. Nonetheless, there are compelling reasons to be optimistic about the growth outlook. 23rd December 2014 · 1 min read
Europe Economics Update Could the ECB finance a euro-zone investment fund? The idea that the ECB should finance a euro-zone investment fund instead of buying assets through a conventional quantitative easing programme has several potential benefits. But the scheme probably... 23rd December 2014 · 1 min read
Global Markets Update Oil price slide prompts withdrawal from emerging markets Investors’ retreat from emerging markets over the past month has reflected growing concerns about the implications of the collapse in the price of oil. Admittedly, most countries (and the world as a... 23rd December 2014 · 1 min read
UK Housing Market Data Response BBA Mortgage Lending (Nov.) The BBA reported a further drop in mortgage approvals for house purchase in November, which are now down almost 20% compared to last year. However, the reforms to stamp duty and lifting of regulatory... 23rd December 2014 · 1 min read
US Housing Market Data Response Existing home sale (Nov.) Ignore the usual suspects who will claim that the unexpected 6.1% m/m decline in existing home sales in November is a sign that the housing or wider economic recovery just fell off the rails. They... 22nd December 2014 · 1 min read
US Housing Market Outlook The acceleration in house price growth is temporary House prices have regained fresh upward momentum in recent months. But as existing homeowners and homebuilders respond to higher prices by increasing supply, price gains will stabilise at 4% per annum... 22nd December 2014 · 1 min read
