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FOMC Preview For May 1: Signaling Concern on Inflation, Tapering Quantitative Tightening
April 25, 2024 7:04 PM UTC
Bottom Line: The FOMC meets on May 1 and rates look sure to remain at the current 5.25%-5.50% target range. The statement is likely to see some adjustments to reflect recent disappointment on inflation while repeating that more confidence on inflation moving towards target is needed before easing. I
Bank of Canada Minutes Look to Gradual Easing, Divided on When to Start
April 24, 2024 6:44 PM UTC
Bank of Canada minutes from the April 10 meeting confirm a greater confidence on inflation falling, though there is disagreement within the Governing Council over when policy easing will become appropriate. There was agreement that easing would probably be gradual given the risks to the outlook and
U.S. March Retail Sales allow Q1 to come in marginally positive despite a weak start in January
April 15, 2024 12:56 PM UTC
March retail sales with a 0.7% increase have exceeded expectations despite an expected negative contribution from autos, with sales up by 1.1% both ex autos and in the control group that contributes to GDP, and by 1.0% ex autos and gasoline. This suggest continued consumer momentum entering Q2.
Banxico Minutes: Hawkish Cut and Different Views
April 5, 2024 2:18 PM UTC
Banxico's recent meeting minutes reveal a split among board members regarding monetary policy, with a 25bps rate cut to 11.0%. Despite progress in curbing inflation, differing views on policy direction persist. Inflation expectations deviate from targets, with potential risks in fiscal policy and wa
Canada March Employment - A weak month after two solid ones
April 5, 2024 1:35 PM UTC
Canada’s 2.2k decline in March employment is weaker than expected though needs to be seen alongside strong gains of 40.7k in February and 37.7k in January. The 3-month average of 25k is above the 6-month average of 22k. However with the labor force rising unemployment is trending higher, March’s
Asset Allocation: Pausing for Breath
April 2, 2024 9:00 AM UTC
Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to
Preview: Due April 16 - Canada March CPI - Correction after two soft months
April 15, 2024 1:22 PM UTC
We expect March Canadian CPI to move higher to 3.0% yr/yr from 2.8% in February and 2.9% in January, with the monthly data likely to look quite firm after two soft months. However we do expect some modest progress lower in two of the three BoC’s core rates.
FX Daily Strategy: Asia, May 3rd
May 2, 2024 9:00 PM UTC
USD to get support from US employment report
ISM services should be neutral, but some downside risks
JPY strength to continue long run, but some consolidation may be seen near term
NOK has upside scope despite recent weakness with Norges Bank likely to remain steady
FX Daily Strategy: APAC, May 3rd
May 2, 2024 3:12 PM UTC
USD to get support from US employment report
ISM services should be neutral, but some downside risks
JPY strength to continue long run, but some consolidation may be seen near term
NOK has upside scope despite recent weakness with Norges Bank likely to remain steady
Moody’s Improves Outlook Perspective Due to Higher Growth
May 2, 2024 2:27 PM UTC
Moody’s upgraded Brazil's outlook to positive from stable, maintaining its Ba2 rating, signaling a potential move to Ba1 soon. Strong growth prospects, attributed to institutional reforms, drove this shift. Despite lingering doubts, improved fiscal conditions and anticipated tax reform are bolster
Preview: Due May 3 - U.S. April ISM Services - A correction after two straight slowings
May 2, 2024 2:14 PM UTC
We expect April’s ISM services index to see a modest increase to 52.0 from 51.6, pausing after two straight declines, leaving the index with no clear trend, and continuing to imply modest expansion.
Preview: Due May 3 - U.S. April Employment (Non-Farm Payrolls) - Still strong if a little less so, earnings may be above trend
May 2, 2024 2:03 PM UTC
We expect a 255k increase in April’s non-farm payroll, still strong if the slowest since November, with a 195k increase in the private sector. We expect an unchanged unemployment rate of 3.8% and a slightly above trend 0.4% increase in average hourly earnings, lifted by a minimum wage hike in Cali
U.S. March trade balance little changed, Canada's moves into deficit
May 2, 2024 1:33 PM UTC
March’s US trade deficit of $69.4bn was marginally down from $69.5bn in February as a deterioration on the goods deficit was offset by a correction higher in the services surplus. Canada’s trade data was more surprising, a C$2.23bn deficit, and the largest deficit since June 2023.
U.S. Unit Labor Costs and Initial Claims suggest inflationary risk from labor market strength
May 2, 2024 12:56 PM UTC
Initial claims at 208k are unchanged at a very low level while continued claims at 1774k are also unchanged, the preceding data revised from 207k and 1781k respectively. The labor market remains tight while unit labor costs saw a significant bounce to 4.7% annualized in Q1.
BoE Preview (May 9): Easing Bias Clearer?
May 2, 2024 11:06 AM UTC
In flagging no need to be dominated by Fed policy, we think that the BoE is not only moving towards rate cuts but the MPC majority may be overtly advertising such a likelihood. But we do not see any move at the looming May 9 verdict, with Bank Rate again likely to remain at 5.25%. But the accompan
China Politburo: Help for Housing, But No Game changers
May 2, 2024 10:50 AM UTC
Politburo statement in late April suggests extra support for residential property. However, we see this as being incremental rather than any game changers and we still see residential investment remaining a negative drag on 2024 GDP growth.