Author Archive

Switzerland: the gold initiative, the Swiss franc and the SNB

Uncertainty surrounding the upcoming vote on the Swiss gold initiative is putting upward pressure on the franc. The initiative is likely to be rejected. However, even if it is approved, we believe the Swiss National Bank (SNB) would succeed at doing “whatever it takes” for the 1.20 floor to hold, even if it means making […]

United States: Core retail sales enter Q4 on a strong note

Today’s US retail sales report was encouraging. With these data in hand, solid expansion in employment and a sharp fall in gasoline prices, we believe consumption growth may well approach 3% in Q4. And it is likely to remain solid next year. Nominal retail sales rose by 0.3% m-o-m in October, slightly above consensus expectations […]

United States: full employment in sight?

In October, job creation was robust, while the unemployment rate fell further. At the current pace of decline, the unemployment rate will reach the Fed’s estimates of full employment by Q1 2015. However, we don’t believe this will alter the FOMC analysis of the economic situation. Non-farm payroll employment rose by 214,000 m-o-m in October, […]

US GDP growth above expectations in Q3

Q3 GDP growth came in above expectations and prospects appear upbeat for Q4. Our forecasts for GDP growth in 2015 (3.0%) and monetary policy (first hike by mid-year) remain unchanged. In Q3 2014, US real GDP grew by a solid 3.5% q-o-q annualised, above consensus estimates (3.0%). This followed an even stronger growth rate of […]

United States: falling gasoline prices should boost consumer spending

Today’s retail sales report was weaker than expected. Apparently, consumption ended Q3 on a soft note. However, following the recent sharp fall in gasoline prices and its impact on real personal income, we believe growth in consumer spending will prove quite robust over the coming months. Nominal retail sales dropped by 0.3% m-o-m in September, […]

United States: unemployment falls below 6%

Non-farm payroll employment rose by 248,000 m-o-m in September, above consensus expectations (215,000). Moreover, August’s figure was revised up (from +142,000 to +180,000), as was the number for June (from 212,000 to 243,000). Net revisions therefore cumulated to a sizeable +69,000. Overall, employment growth has averaged a robust 224,000 per month in Q3, a reading […]

United States: ISM indices softer in September, but still at very robust levels

Both ISM indices weakened in September. However, they had reached very high levels in August. Overall, findings from these surveys point to strong economic growth. We remain quite optimistic on the US economy. The ISM manufacturing survey for September was published on Tuesday. The headline reading fell back from 59.0 in August to 56.6 in […]

US consumer spending bounced back strongly in August

Real personal consumption expenditure increased by a strong 0.5% m-o-m in August, in line with consensus expectations. Moreover, July’s fall was revised for the better (from -0.2% m-o-m to -0.1%), whilst June’s increase was revised up from +0.2% to +0.3%. As a result, between Q2 and July-August, consumer spending grew by 1.9% annualised, admittedly a […]

USA: very disappointing consumption numbers in July

July consumption data were very disappointing. However, as fundamentals are pointing to robust growth in consumer spending, we are reluctant to cut our Q3 forecasts by too much. Overall, we remain optimistic on consumption and overall GDP growth in H2. Real consumer spending contracted in July Real personal consumption expenditure declined by 0.2% m-o-m in […]

United States: housing market

Following their slump during the winter months, home sales and residential construction bounced back in Q2. Data available are pointing to further progress in Q3. We remain optimistic and believe things will continue to improve progressively in the US housing market. Substantial recovery in existing home sales Following a weather-induced slump in Q1, existing home […]

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