Last month, our carry trade observations were taking place just as risk was trying to bounce back from what many have now dubbed the “Flash Crash” because the crash in risk leading into and culminating on May 6 was so ephemeral and because the real “crash” part of the decline
The extended homebuyer tax credit fooled the US housing market into another high, pushing a new home sales rally of 42% in 2010, while sales of existing homes have increased 6%. The latter reacted more forcefully to the first homebuyer tax credit than has so far been the case in
The uncertainty created by Europe’s sovereign debt crisis caused ripples in financial markets in the past month but, outside the region, had little effect on the pace of economic growth. Data from Canada and the US confirmed that the recoveries are underway with Canada overshooting expectations while the U.S. economy
Volatility has crept back into financial markets due to concerns that the sovereign debt crisis in the Euro-zone may lead to another recession there. At a minimum, fiscal tightening over the next few years will create powerful headwinds on growth in many individual economies in the Euro-zone. If another downturn
The global recovery has remained on track this year and been even stronger than expected in most regions. In the US the consumer revival has been very robust and investment spending has gathered pace, as recently witnessed by strong durable goods orders. As we highlighted in Global Scenarios in March
In several issues of FX Forecast Update we have written about the risk related to the debt situation in the PIIGS countries. Admittedly however, we did underestimate the impact on the FX market not least on EUR/USD. We revised our 3M EUR/USD forecast lower on 28 April to 1.27,
Severe volatility returned to financial markets this month. Central banks had to step in once again to be the lender of last resort, with plentiful liquidity on offer to those borrowers that need it. Worries about the solvency of Greece was the proximate cause for the renewal of uncertainty and
Well, let me begin my answer with a quote from a national financial magazine dated October 1977. “Over the last few years, the Wave Principle has gathered too much of a following and, therefore, it has less value today. Almost invariably, you can write off a technique when it gets
Economic data during the past month has largely surprised to the upside confirming that the recovery is firmly entrenched. The global purchasing managers’ index for both the manufacturing and services sectors moved further into expansionary territory in April. Labour reports out of North America have swung from a heavy weight
Most major economic indicators, including employment, retail sales and industrial production, improved notably over the past month, which raises the upside risks to our forecast. We continue to believe economic growth will moderate during the second half of the year, as the boost from inventory restocking fades and various stimulus
