US Economic Outlook Fading fiscal drag to boost GDP growth As the current fiscal tightening fades and the external environment improves, we expect US GDP growth to accelerate from 1.5% this year to 2.5% in 2014 and 3.0%. Despite the recent rise in long-term... 4th September 2013 · 1 min read
Canada Economics Update Bank of Canada turning more dovish Although the Bank of Canada retained its tightening bias word for word, it now admits that the continuing weakness in exports and investment mean hopes of a smooth 'rotation in demand' look less... 4th September 2013 · 1 min read
DM Markets Chart Pack Government bonds decouple, but for how long? The 10-year US Treasury yield increased even further in July despite reassurances from Fed officials that US monetary policy is likely to remain highly accommodative for a long time. By contrast, the... 4th September 2013 · 1 min read
DM Markets Chart Pack Gilt yields surge The formal introduction of forward guidance by the UK MPC failed to anchor rate expectations in August as the economic data showed continued strength. Indeed, the 2-year overnight-indexed swap rate... 4th September 2013 · 1 min read
UK Economics Chart Pack Recovery quickens as productivity rebounds The run of positive economic news has continued, with quarterly GDP growth in Q2 revised up to 0.7% and August’s CIPS/Markit PMIs pointing to even stronger growth in Q3. The divergence between output... 4th September 2013 · 1 min read
Emerging Europe Economics Update Shift towards tighter policy in Poland looks some way off Governor Belka provided few clues at his post-MPC press conference about when the Polish National Bank might shift towards tightening mode. But with the economic recovery unlikely to be accompanied by... 4th September 2013 · 1 min read
Global Markets Update Why is ‘forward guidance’ failing to anchor long-term Gilts? The MPC’s commitment to keep interest rates on hold has failed to prevent the yield on 10-year Gilts rising by more than that on US Treasuries. But we think the difference in monetary policy prospects... 4th September 2013 · 1 min read
US Data Response International Trade (Jul.) The rebound in the monthly trade deficit to $39.1bn in July, from $34.5bn in June, is nothing to worry about. For a start, it didn't even fully reverse the unexpected decline in the deficit in June... 4th September 2013 · 1 min read
Canada Data Response International Merchandise Trade (Jul.) July's discouraging decline in export volumes adds to our concern that Canada is not fully benefitting from the gradually improving US economy. With export competitiveness challenges likely to persist... 4th September 2013 · 1 min read
Japan Chart Pack Business and household prospects diverging The preliminary estimate of Q2 GDP only added to the uncertainty about the planned consumption tax hikes. The latest monthly data have mostly been favourable, notably the buoyancy of business... 4th September 2013 · 1 min read
Europe Economics Update Less could be more when it comes to forward guidance The ECB’s apparent success in verbally influencing the financial markets might reflect the vagueness of the central bank’s communications. But policy actions will always mean more than words. 4th September 2013 · 1 min read
Europe Commercial Property Update Euro-zone retail occupier markets strengthening, but values still at risk The main issue with UK regional indicators published in August was the poor economic performance that the Labour Force Survey ascribed to several regions, including London. Our view is that the LFS... 4th September 2013 · 1 min read
Europe Chart Pack Consumers leading moderate recovery The euro-zone exited its record-long recession in Q2 and recent business surveys suggest that the economy should expand again in the third quarter. An increase in household spending, the first in... 4th September 2013 · 1 min read
US Housing Market Data Response Mortgage Applications (Aug 13.) Higher mortgage interest rates took a further toll on mortgage applications in August. But 30-year rates eased a touch at the end of the month, while applications for home purchase increased. 4th September 2013 · 1 min read
UK Data Response CIPS/Markit Report on Services (Aug.) With August’s CIPS/Markit measure of services activity rising to a six and a half year high, the UK economy’s dominant sector appears to be roaring ahead. But evidence that increased demand is being... 4th September 2013 · 1 min read
Europe Data Response Euro-zone GDP (Q2), Final PMI (Aug.) & Retail Sales (Jul.) The breakdown of Q2 GDP and more timely news on retail sales and the final PMI brought further confirmation that the euro-zone economy has embarked on a recovery. But growth rates look set to remain... 4th September 2013 · 1 min read
