Recent economic reports have cast doubts about the strength and durability of the recovery. Many concerns center on disappointing reports from the nation’s beleaguered housing sector, which has seen home sales tumble following a spurt fueled by the tax incentives. Sales of new and existing homes have fallen sharply in…

As widely predicted, financial markets have been volatile as the end of the period of extraordinary monetary and fiscal loosening draws nearer. Economic growth is picking up and becoming more entrenched in most countries. As a result of this, some central banks, like Australia and Norway, have raised rates a…

The economic recovery is on track with ongoing, but gradual, signs of progress among consumers and businesses, but with some more erratic developments in housing. In Q4 09, the economy delivered its second positive quarter on growth following the recession, with GDP expanding at 5.9% q/q AR. Indeed this turned…

Greek debt concerns intensified during the past month, leaving the euro with a heightened risk premium. While an unsustainable Greek fiscal policy should not be a major concern for the eurozone as a whole (Greece only constitutes some 2-3% of total eurozone GDP) the situation has escalated to a point…

In mid December, the Australian dollar was sitting at around 90.5¢. Since that time the AUD has moved in a 93¢ to 86¢ range. We are now sitting at the extreme lowpoint of that area after a run of negative sentiment accumulated in the early part of February. Indeed, the…

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World economic recovery is underway, led by the emerging markets. When the data for Q4 2009 are in, they will show that all of the G20 economies - which together account for over 90% of world gdp - are expanding. This recovery has three main implications for financial markets in…

Our estimate for fourth quarter real GDP has been raised significantly as a result of October and November’s stronger inventory numbers. We are still expecting a $20 billion drop in inventories, so there is some upside risk. The slower pace of inventory liquidations is expected to add around 4 percentage…

Data over the past month largely produced upside surprises relative to market forecasts resulting in a sustained pickup in equity markets and a relatively sharp rise in government bond yields. Since our last publication on December 4, 2009, 10-year rates in the markets that we cover were up as much…

For most of 2009 the USD traded weaker pressured by low yields and improving risk appetite. USD in ending the year near a three and half month high supported by a shift in focus to improving US economic outlook and Fed rate hike speculation. We expect the USD to rally…