US Manufacturing – More Weakness to Come

US manufacturing has slowed in recent months, and we expect more to come.  We had noted the discrepancy between the PMI and ISM surveys earlier this year as it looked like the ISM was outputting data inconsistent with our leading…


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Downside Data Surprises Continue in Canada

First Published in 24th March Tactical For the past 6 months, we have been alerting clients to the persistent decline in our Canada leading indicator.  This is now showing up in numerous Canadian coincident data releases, with retail sales being…


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European Monetary Policy: Too Hot or Too Cold for Housing

The euro is not an optimal currency area, and monetary policy will be either too hot for the core or too cold for the periphery.  Today, monetary policy is too hot for Germany, where we see rising house prices due…


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Yield Curves Flattening Everywhere: Global Growth to Slow

As we remind our readers often, yield curves are one of the single best leading indicators.  A yield curve inversion has predicted every US recession since 1945, with only one false positive, in 1966 (although the false positive preceded a…


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Growing number of lower paid workers in US

The participation rate in the US has declined much less for those at lower levels of education: Source: Macrobond That the lower educated are disproportionately supporting employment growth, through lower paid jobs, may help explain why, so far, we have…


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Eurozone Deposits Growing Again

The ECB’s loan demand surveys (which lead by about 12 months) have been suggesting higher credit growth ahead for some time (top chart) and there are signs that this may finally be occurring.  The bottom chart shows that overall eurozone…


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Emerging Market Valuations Will be Compelling

A weak oil price and a strong dollar rally will put pressure on emerging markets, but valuations for many emerging markets should soon be compelling.  Emerging markets have been in a downtrend relative to the S&P since 2010.  We will…


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Top Ten Posts of 2014

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As we head in to 2015, here are the top ten posts from 2014. We wish our readers a Happy New Year! Top 10 Posts of 2014: Profit Margins To Head Lower, Equities To Suffer (May 22nd) Deflation Not A…


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Japanese Equity Flows Diverge

October saw the BoJ’s announcement of increased stimulus, coordinated with the new targets for the GPIF, 25% each for foreign and domestic equities (up from 12% each), and a decrease in JGBs, from 60% to 35% of holdings.  Investors, both…


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UK Credit and Money Growth at Extremes

Easy monetary policy in the UK is looking ever more inappropriate.  Divisia money is a weighted money-supply measure.  Higher forms of money, eg notes and coins have greater weights than less liquid forms of money, such as building society deposits. …


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