The global mid-cycle slowdown that we introduced in our previous Forecast Update has materialised further, but without pushing the pro-cyclical currencies lower. The slowdown is already priced in markets and if the outlook doesn’t deteriorate further, we don’t think the ’smaller’ G10 currencies will lose ground against the ‘larger’ ones.

Second-quarter 2010 growth in Canada and the US was markedly weaker than in the preceding quarters with Canada’s economy expanding at a 2.0% pace and the U.S. economy at 1.6%. These weak readings are deceiving because they mask strong growth in private domestic demand. The strengthening in private demand has

A flow of disappointing news particularly in the US has led us to revise down our global growth expectations. Focus will probably continue to be on the US where the economy is expected to balance on a knife’s edge between recovery and another downturn. Double-dip fears are likely

The U.S. economy is proving more resilient than many had feared, even following the massive downward revision to second-quarter real GDP to just a 1.6 percent pace. Worries that real GDP growth would slow even further and possibly slip into negative territory have subsided now that much of the July

In an environment with historically low interest rates, fixed income investors have been pouring money into longer-duration securities, substituting 3 and 6 month T-Bills with 10-year Treasures or bond funds. To an extent, this should not be so surprising: the Federal Reserve’s (the Fed) extraordinary monetary policies have resulted in