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United States: growth in consumption disappointing so far in the first quarter

Real disposable income surged in January-February but, impacted by particularly inclement weather, growth in consumption was much less upbeat. It probably slowed from 4.4% in Q4 to around 2.0% in Q1. However, with solid fundamentals and a likely decline in the saving rate, we remain quite optimistic on US consumption. Surge in real disposable income, […]

United States: the FOMC has given itself more flexibility

Overall, the FOMC's meeting was clearly dovish. We expect the first hike to take place in September 2015, followed by a pause until early next year. Calendar guidance abandoned Admittedly, the most important question mark regarding last week’s FOMC meeting was what the FOMC would do with the wording saying that the Committee judges that it can […]

United States: another month of disappointing retail sales data

Today’s retail sales report was disappointing. Nevertheless, this set of data was a poor indicator of overall consumption recently and fundamentals are very upbeat. We therefore remain quite optimistic on consumption growth in Q1. Nominal retail sales were surprisingly weak, for the second month in a row. They fell by a heavy 0.8% m-o-m in […]

USA: ISM indices still pointing to healthy growth overall in January

The ISM manufacturing index dropped further m-o-m in January, whilst its non-manufacturing counterpart bounced back slightly. Together they continue to point to healthy economic growth. We remain quite optimistic on the US economy. The ISM manufacturing index fell further in January The ISM manufacturing survey for January 2015 was published on Monday. The headline reading […]

Switzerland: dangerous move by the Swiss National Bank

The Swiss National Bank took nearly everyone by surprise by abandoning the floor on the Swiss franc yesterday. The franc is now some 18% stronger against the euro than it was yesterday morning. We think this way of exiting its policy was inappropriate and actually a rather dangerous move for the Swiss economy. SNB: shock […]

US growth underpinned by a more solid platform

At a time when China’s economy is lacking impetus, Japan’s has relapsed technically into recession yet again and the spectre of deflation is looming menacingly over the eurozone, the impression is that all the eggs of economic hope are seemingly being placed in just the one American basket. Our projection that the US economy looks […]

Switzerland: the SNB introduces negative interest rates

Following renewed upward pressure on the Swiss franc, the Swiss National Bank (SNB) decided to introduce negative interest rates on sight deposits. Although this should help to ease pressure on the franc, the main weapon to defend the floor remains FX interventions. Nevertheless, we continue to believe that the SNB will succeed in ensuring that the […]

US Federal Reserve: a first hike by mid-2015 remains the most likely scenario

The Fed was able to phase out the “considerable time” phrase, while also giving a rather neutral signal. Nevertheless, there was actually not much change in the guidance for the timing of the first rate hike. We continue to expect this first move to take place by mid-2015. A carefully managed change in guidance The […]

United States: ISM indices quite strong once again in November

The ISM manufacturing index eased slightly m-o-m in November, while its non-manufacturing counterpart bounced back sharply. Together they continue to point to strong economic growth. We remain quite optimistic on the US economy. The ISM manufacturing survey for November was published last Monday. The headline reading remained surprisingly high. Admittedly, it eased back from 59.0 in […]

US employment report: strong job creation bullish for economic growth

In November, job creation was at its highest since January 2012, while the unemployment rate remained stable and m-o-m increases in wages picked up. This further endorses our bullish view on the US economy. However, we do not believe that it will alter significantly the FOMC’s analysis of the economic situation. Non-farm payroll employment rose […]

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