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News & Insight

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Economic Outlook – 23 April 2017

Economic Outlook – 23 April 2017   US   • Housing market data released last week were generally mixed but continued to improve on trend. The NAHB / Wells Fargo Housing Market Index fell three points in April from its cycle-high in March. Despite the pullback, confidence remains relatively high. The present sales index has [...]

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Is the Car Loan Industry in the United States Setup for a Crash?

As featured on Seeking Alpha https://seekingalpha.com/article/4063921-u-s-car-loan-industry-set-crash Summary The balance of loans securitised against vehicles in the U.S. has dramatically increased since the financial crisis. Assessing the quality of the loans reveals a very fragile situation that is showing signs of deterioration. The risk distribution of auto financing companies is particularly concerning. The current progression is [...]

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Economic Outlook – 16 April 2017 (Easter Sunday)

Economic Outlook – 16 April 2017   US   • Headline US retail sales fell in line with expectations in March, declining 0.20%. February’s already soft print was revised lower, however. Weakness in auto sales continued to weigh on the headline, with auto sales falling in four of the past five months. Control group retail [...]

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Economic Outlook – 9 April 2017

Economic Outlook – 9 April 2017   US   • The six-month stretch of consecutive monthly increases in the ISM manufacturing headline ended in March, as the index dipped slightly from 57.7 to 57.2. Still, the measure of factory activity is solidly in expansion territory. Current production was the main drag on the headline, falling [...]

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Economic Outlook – 2 April 2017

Economic Outlook – 2 April 2017   US   • Comments from a few top Fed officials last week suggest that the path of policy tightening may be steeper than expected. Two hawkish Fed officials suggest that more than three hikes may be possible for this year. Agreeing with Rosengren, Fed Williams said that he [...]

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Economic Outlook – 26 March 2017

Economic Outlook – 26 March 2017   US   • After January’s cycle-high pace of existing US home sales, contract closings dipped in February to a 5.48-million unit pace. This was somewhat expected as pending home sales, which are counted when a contract is signed and are a leading indicator for existing home sales, declined [...]

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Economic Outlook – 19 March 2017

Economic Outlook – 19 March 2017   US   • The Federal Reserve raised its short-term target rate 25 bps at its March FOMC meeting, with one dissent. Median projections were largely unchanged and still point to three hikes in 2017 and 2018. The target range now rests between 0.75% and 1.00%. The timing of [...]

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Economic Outlook – 12 March 2017

Economic Outlook – 12 March 2017   US   • In the light of the recent positive readings, the FOMC is expected to raise the target range for the Fed funds rate on March 15th by 25 bps to 0.75% to 1.00% (an 88-bp midpoint), with the other policy rates following suit (interest rate paid [...]

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Economic Outlook – 5 March 2017

Economic Outlook – 5 March 2017   US   • Speeches by Federal Reserve officials continued to prep the markets for an increase in interest rates “relatively soon.” Market expectations have responded, with the Fed fund futures pricing in a 96% probability that the Fed will raise rates at the March 15 meeting.   • [...]

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Economic Outlook – 26 February 2017

Economic Outlook – 26 February 2017   US   • Following the first monthly contraction in five months in December, existing home sales rebounded 3.3% in January to a 5.69 million-unit rate, reaching the highest level in the post-recession period. Single-family sales rose 2.6% from an upwardly revised December print, and condos/co-ops grew 8.3% during [...]

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Economic Outlook – 19 February 2017

Economic Outlook – 19 February 2017   US   • Federal Open Market Committee (FOMC) Chair Yellen went to Capitol Hill for her semiannual testimony. While uneventful for the most part, clear signals were sent that the FOMC intends to hike rates at a slightly faster pace this year. With respect to understanding when the [...]

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China: The Yuan and the Elephant in the Room

As featured on Seeking Alpha: http://seekingalpha.com/article/4046733-china-yuan-elephant-room?   China, the Yuan and the Elephant in the Room By Nicholas Puri & Lorenzo Beriozza    Headlines this month have suggested that the rocky relationship between the US and China is on a path to improvement, following the acceptance of the ‘one China’ policy.   While this does [...]

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Economic Outlook – 12 February 2017

Economic Outlook – 12 February 2017   US   • International trade data for December was released leaving participants with little to chew on by way of economic data. The trade deficit narrowed to $44.3 billion from $45.7 billion in the prior month, beating economists’ expectations for a more modest pullback (to $45.0 billion). Exports [...]

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Economic Outlook – 5 February 2017

Economic Outlook – 5 February 2017   US   • The Federal Reserve held rates steady this week, as widely expected. It reiterated the strengthening US domestic outlook would warrant gradual policy tightening over the medium term. No clues were given on the timing of the next move, likely because uncertainty surrounds the unfolding of [...]

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The Deleveraging Myth & Revival of US Real Estate Concerns

As featured on Seeking Alpha http://seekingalpha.com/article/4041089-deleveraging-myth-revival-us-real-estate-concerns   By Nicholas Puri & Lorenzo Beriozza    Introduction    Whether you are a supporter of President Trump or not, there is no denying that he certainly has the ability to coin a catchy phrase that can really stick in the public mind.   We have been gifted with [...]

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Economic Outlook – 29 January 2017

Economic Outlook – 29 January 2017   US   • Real GDP growth in the United States slowed to end of 2016, registering a 1.9% annualised growth rate in Q4. International trade weighed heavily on economic growth in Q4, largely as a result of some payback due to the unusual surge in soybean exports that [...]

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Economic Outlook – 22 January 2017

Economic Outlook – 22 January 2017   US   • In a speech this week, Fed Chair Yellen said: “Now, it’s fair to say, the economy is near maximum employment and inflation is moving toward our goal.” The economic progress made in getting to this point was the justification for last month’s rate hike. Looking [...]

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Economic Outllook – 15 January 2017

Economic Outlook – 15 January 2017   US   • The key economic data for the US was the December retail sales figure that showed a rise in consumer spending driven largely by autos and gasoline. While broadly in line with expectations, sales ex-autos and gasoline were virtually unchanged from the previous month. Overall, the [...]

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Economic Outlook – 8 January 2017

Economic Outlook – 8 January 2017   US   • US Fed policy makers agreed to raise the target range for Fed funds rate to 0.50% – 0.75% in their last meeting “in light of considerable progress that had been made toward the Committee’s objective of maximum employment and that inflation would rise to 2.00% [...]

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Understanding the US Debt Ceiling – The Looming Showstopper

As featured on Seeking Alpha http://seekingalpha.com/article/4033365-understanding-italian-banking-crisis-new-lead-domino   Understanding the US Debt Ceiling – The Looming Showstopper   By Nicholas Puri and Lorenzo Beriozza    With President-Elect Trump’s inauguration fast approaching, public speculation regarding what his term will actually entail is arguably higher than any other presidential tenure in recent memory. The back and forth discussions [...]

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Understanding The Italian Banking Crisis, A New Lead Domino?

As featured on Seeking Alpha http://seekingalpha.com/article/4033365-understanding-italian-banking-crisis-new-lead-domino   Summary   • Non-performing loans have become the key area of concern for Italian banking, originating from the financial crisis in 2008.   • Further economic measures have compounded the issues for Italian banks, leading to an untenable situation.   • Potential solutions have been attempted, without great [...]

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Economic Outlook – 18 December 2016

Economic Outlook – 18 December 2016   US   • The big news was the second rate hike out of the FOMC since 2006. FOMC committee members signaled that more rate hikes may be needed in 2017, which sent interest rates higher across the yield curve. A closer look at the “dot plot” showed six [...]

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Economic Outlook – 11 December 2016

Economic Outlook – 11 December 2016   US   • The US ISM non-manufacturing posted its highest reading this year of 57.2 in November. The measure of services business activity has been up and down throughout 2016, but has found an upward trend toward the second half of the year. The details of the recent [...]

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Economic Outlook – 4 December 2016

Economic Outlook – 4 December 2016   US   • OPEC’s decision to cut output by 1.2m bpd to 32.5m bpd took center stage, shoring up global crude oil prices by 12% on optimism over easing oversupply. Brent and US WTI prices last traded at US$54 and US51/ barrel respectively. This breakthrough on output cut [...]

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Understanding Saudi Arabia’s Economic Restructuring – A Mirage Or A Reality?

As featured on Seeking Alpha http://seekingalpha.com/article/4027207-understanding-saudi-arabias-economic-restructuring-mirage-reality.   Understanding Saudi Arabia’s Economic Restructuring – A Mirage Or A Reality?   In our previous article titled “The U.S. – Saudi Arabia Relationship: A Brief Background” we went through the history of the Petrodollar relationship, from the events leading to its formation up to the present day.   [...]

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Economic Outlook – 27 November 2016

Economic Outlook – 27 November 2016   US   • All the major equity market indices hit record highs at various points this week, including a Dow-S&P 500-Nasdaq-Russell 2000 flush on Monday, reflecting postelection prospects for stronger economic growth and higher corporate profits owing to the potential policy trifecta of tax cuts, more infrastructure spending [...]

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The U.S.-Saudi Arabia Relationship

As featured on Seeking Alpha http://seekingalpha.com/article/4025111-u-s-saudi-arabia-relationship-brief-background.   The U.S.-Saudi Arabia Relationship : A Brief Background   The relationship between the US and Saudi Arabia continues to garner headlines in the global financial and political press. While this is expected to continue in the near future, considering President-Elect Trump’s stubborn stance on the issue, it is [...]

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Economic Outlook – 20 November 2016

Economic Outlook – 20 November 2016   US   • On the household front, retail sales started Q4 with a bang, rising 0.8% on top of an upwardly revised September reading. Strong auto and gasoline station sales provided a lift to the headline, but even excluding these components retail sales rose a solid 0.6% in [...]

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Economic Outlook – 13 November 2016

Economic Outlook – 13 November 2016   US   • The economic data calendar was light last week as the presidential election took centre stage. The NFIB relayed a generally optimistic tone from small businesses in October, as the measure increased to its highest point in 2016. The Job Openings and Labor Turnover Survey (JOLTS) [...]

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Economic Outlook – 6 November 2016

Economic Outlook – 6 November 2016   US   • The US economy expanded 2.9% quarter-on-quarter annualised pace in Q3, its fastest pace in two years followed a 1.4% growth in Q2. US consumer spending advanced 0.5% month-on-month in September (August: -0.1% M-o-M), in tandem with quicker increase in income (+0.3% M-o-M vs +0.2% M-o-M). [...]

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