Weekly Assessments

Consolidation

Week ending Friday October 13th 2017 Market indicators took a breather last week after a few weeks of sustained optimism had modestly lit up growth expectations and our NGDP Forecast. The Fed questioning its understanding of the economy, especially the drivers of inflation, is perversely positive for the inflation outlook. If markets do not believe

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Week ending Friday October 6th 2017 A strong week for markets with equities, USD, copper and bond yields all moving up. Markets are very much looking through any weather-related damage to the economy in 2017Q3. Markets Equity markets are still excited by the prospect of a juicy 2017Q3 earnings season starting next week, as most

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Week ending Friday September 29th 2017 The last week in September capped one of the most stable months on record for US-focused markets, with the S&P 500 posting the lowest volatility on record by some measures. Intuitively, our nominal GDP forecast was steady through September, reflecting both the importance of equity prices in the forecast

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Week ending Friday September 22nd 2017 The FOMC meeting dominated the week. Although the market felt that policy had been tightened a little more than expected as bond yields and the USD rose, it wasn’t a big deal. Equities were flat. The bigger story was really quite dovish for monetary policy. As well as lowering

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Week Ending September 15 2017 Data Releases Retail sales and industrial production data releases were so bad that markets wrote them off. The reports might have contained a downward signal for the outlook, but it was overwhelmed by some exogenous factor. Both headline retail sales and industrial production were the worst in years, on a

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Week ending Friday September 8 2017 A mostly slow week, dominated by impressive hurricane news updates, still there were some happenings on the macro-monetary front. Fischer out at the Fed, Trump and the Dems play nice, and a tug of war between yields and the USD in our forecast model. NGDP forecast marches higher There’s been

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Week ending Friday September 1st 2017 An uneventful week in markets bar US equities, which enjoyed some secular support from Trump raising the prospect of corporate tax cuts, again. FX and bond markets were quiet, although the ramifications of the USD weakness since the start of 2017 continue to rumble on. Our NGDP forecast rises

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Week ending Friday August 18th 2017 Two weeks ago here we suggested that the ECB would have to follow the Bank of England in calling a halt to the weakness in the USD. Last week they did. All western central banks need easier monetary policy, not by beggar-thy-neighbour currency weakness, but by altering their targets

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Week ending Friday August 11th 2017 War talk, especially from the opposition, sends the USD up and bond yields and equities down. It is undoubtedly a bad thing for growth expectations. War itself tends to cause rapid recoveries in bond yields and equities and send the USD down, most famously on the actual outbreak of

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