OPEC+ discipline will be key for oil prices in 2019

Global oil supply is undergoing a structural shift. The US oil industry is growing in importance relative to the OPEC. As a result increased production from non-OPEC producers more than compensated for the output collapse among important OPEC producers such as Iran and Venezuela in 2018. Slowing global growth, and new US pipelines facilities in […]

Weekly View – Christmas in January

US equities recorded their best January performance in over three decades, with the S&P 500 up close to 8%.  The market has been helped by the decision by Fed chairman Jerome Powell to step back from ‘quantitative tightening’, putting rate hikes on hold and contemplating an early end to balance sheet reduction. A number of […]

US jobs report shows recession risk is limited

US employment rose by a solid 304,000 in January (+1.9% year on year, y-o-y), compared with 222,000 in December. The three-month average was a healthy 241,000/month. Meanwhile, the ISM manufacturing survey rose to a robust 56.6 in January from 54.3 in December. Overall, these two pieces of data suggest that US macro momentum remains strong […]

House View, February 2019

Asset Allocation With expectations for earnings growth continuing to be ratcheted down, the recent rebound in equities owes a lot to the decline in valuations. We therefore remain neutral on equities overall. However, we believe central banks will be inclined to support financial markets this year and help ensure modest gains for risk assets. More […]

Review of the Federal Reserve’s January meeting

Dovishness was on full display at the Fed meeting on 30 January. The Fed removed its rate tightening bias, and emphasised its “patience” until the next rate move. Chairman Powell seemed particularly anxious about the global growth backdrop and explained the more dovish stance is just “common sense risk management”. Another key focus was the […]

Exports save the day for French GDP growth

French GDP rose by 0.3% quarter-on-quarter (q-o-q) in Q4, the same pace as in Q3. The details reveal that Q4 exports surged significantly, while household consumption and investment slowed. This left growth for the year at +1.5%, following +2.3% in 2017. The breakdown of GDP data shows that household consumption growth decelerated significantly, to 0.0% […]

Brexit update – UK Parliament spins its wheels

A series of votes in the British parliament resulted in little new progress on the Brexit front; the outcome being that Theresa May will return to Brussels to attempt to improve her ‘deal’, which a new parliamentary vote scheduled for mid-February. However, Brussels has rejected the idea of reopening negotiations and it is not clear […]

Cycling in the city

While it is an oft-repeated truism that biking is as good for your health as for the environment, only a very small proportion of the population has embraced a two-wheel lifestyle. In the EU for example, on average just 12% of people cycle every day, while 50% go by car and 16% use public transport. […]

Weekly View – Temporary open ahead of a crucial week

President Trump put a temporary end to the shutdown on Friday after signing a funding package that reopens the US government for business until 15 February. Federal workers will receive their back pay, but the president continues to hold firm on his demand for funding for a border wall, threatening to resume the shutdown if […]

Update on euro area economic activity

The big question about the euro area economy is when the bottom of the slowdown will be reached. A rebound was already expected in Q4 2018, but at the start of this year there are still few signs of recovery. Flash composite PMI numbers for the region declined by 0.4 points to 50.7 in January, […]

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