US

The bar for more Fed QE just gets higher

In sharp contrast to the deteriorating situation in Europe, the recent signals coming out of the US generally have been encouraging. Buoyed by strengthening demand for autos and decent growth in export orders, the American manufacturing sector is remarkably robust. The consumer is spending (albeit cautiously), the economy has recorded positive growth in each quarter since mid-2009 and monthly payrolls growth has averaged nearly 150K over the past two years. It may not be exciting growth, but it certainly looks much steadier than many other advanced economies. Read more

02/05/2012 @ 13:46 GMT

A trans-Atlantic good-news story

Genuinely positive stories on the economic front are relatively rare these days, with no fewer than ten of the EU’s 27 economies in recession and Australia’s central bank forced to cut rates by 50bp yesterday in part because the non-mining economy is contracting. Thankfully, both Germany and America continue to defy the global gloom. In the US, the manufacturing sector is expanding at a respectable pace, propelled by solid growth of both domestic and export orders. Read more

02/05/2012 @ 07:42 GMT

China’s grim warning

In what can only be described as a remarkably candid assessment, China’s Ministry of Industry and Information Technology overnight claimed that both domestic and external conditions were still ‘grim’ and that the economy was likely to endure further downward pressure. Companies in China are confronting growing operational difficulties, including much higher prices for energy and substantially higher wages. Interestingly, there has been little response in Asia overnight to this report, with equities becalmed ahead of tonight’s FOMC decision and Friday’s BoJ meeting. Read more

25/04/2012 @ 07:44 GMT

A missing link in the US recovery

Notwithstanding the justifiable optimism regarding the US recovery these days, one critical missing link remains, namely house prices. Read more

24/04/2012 @ 14:13 GMT

If not for America...

Last month’s disappointing payrolls report aside, there is a growing body of evidence that the US recovery is looking both more durable and broad-based these days. For instance, JP Morgan Chase Chief Executive, Jamie Dimon, suggested on Friday when announcing his firm’s stellar quarterly earnings results, that the US housing market was “very close to the bottom” and that the debt-service ratio for US households was the lowest in twenty years. Read more

17/04/2012 @ 07:17 GMT

Growing optimism on US recovery

Last month’s disappointing payrolls report aside, there is a growing body of evidence that the US recovery is looking both more durable and broader-based these days. For instance, JP Morgan Chase Chief Executive Jamie Dimon suggested on Friday, when announcing his firm’s stellar quarterly earnings results, that the US housing market was “very close to the bottom” and that the debt-service ratio for US households was the lowest in twenty years. Read more

16/04/2012 @ 08:33 GMT

China’s juggling act

The big question this morning for markets is whether to meet the latest Chinese GDP data with concern that it was lower than expected, or relief that the economy is slowing in an orderly fashion and will be supported by the largest increase in yuan-lending for a year. The initial reaction, as suggested by the Aussie’s movement, is that concerns are more about the slower than expected pace of growth, AUD down around 0.5% in the wake of the release. The yen is also the only leader vs. the dollar after the numbers. Read more

13/04/2012 @ 07:06 GMT

Housing still a big headwind for the US

Amid the optimism regarding the US economy that is reasonably commonplace these days, it is worth highlighting one sector that will continue to represent a headwind for some time to come, namely housing. Read more

12/04/2012 @ 14:49 GMT

The modest dollar adjustment

In the wake of the US jobs numbers on Friday, which saw the dollar softer as QE3 talk was once again re-ignited, the dollar has continued south, although only modestly so, the dollar index down around a further 0.2% in the aftermath of the release. In sum, the weaker headline payrolls data should be put in the context of what has been very strong labour market data over the past six months, above and beyond the messages from elsewhere in the economy. So if last week’s release went some way to narrowing this gap, perhaps that is not such a bad thing after all? Read more

10/04/2012 @ 07:34 GMT

Anecdotal evidence supports US-recovery thesis

More encouragement overnight from various anecdotals for the thesis that the US recovery is becoming more robust. Auto sales last month remained buoyant although down from the strong sales pace recorded in February. Domestic auto sales were above 11m units (at a seasonally-adjusted annual rate) in each month during Q1, for the first time in four years. That said, back in 2006 and 2007, domestic sales were regularly around 12.5-13.0m. Read more

04/04/2012 @ 10:54 GMT

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