Credit in UK Booming Again; Wage Growth Has Lagged

There are continuing signs the UK’s economy is increasingly resembling itself prior to the financial crisis.  House-price growth has cooled of late, but is still growing at 4.6% YoY, down from almost 12% last summer.  Consumer credit is also growing…


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Tactical Buy on NZD

(from our Tactical from 2nd of June) We only have one tactical signal this week, a buy on NZD.  The VP Divergence Signal looks at correlations to detect when an asset is trading out of sync with other related global macro…


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Manufacturing and Services PMIs Diverge

There has been a sharp divergence between ISM services and non-services in the US. Many of our leading indicators for manufacturing have pointed to weakness. This suggests demand is tilting away from manufacturing and towards the service sector.  The breakdown…


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US Growth Coming in As Expected

(The following is from our December Leading Indicator Watch (LIW), released December 4th, 2014.  The LIW is a monthly report giving a summary of all or our main leading indicators, allowing clients to forecast early on where the business cycle in major…


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US Home Prices to Continue to Rise

(from our Leading Indicator Watch from March 5th, 2015) Our leading indicator for US house prices is supportive of an improvement in price growth. One of the inputs that drives our leading index is the number of months’ supply of…


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ECB QE: Inflation to Start Surprising to the Upside

The sharp devaluation in the euro and the rapid acceleration in economic activity will mean short-term inflation dynamics in the eurozone will soon start surprising to the upside.  In this context it is important to remember that the only justification…


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Turkey’s External Debt Remains Worryingly High

Excerpt from VP Tactical first published on 14th April 2014: We have been flagging Turkey as our top candidate for a currency crisis since we released our Understanding Debt and Currency Crisis thematic in 3Q14.  Although the lira has collapsed…


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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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