U.S. Fed's Bostic - No rush to get rates to neutral

October 18, 2024 5:45 PM UTC

Fed's Bostic has been taking a more cautious approach to easing since the strong September non-farm payroll was released. 

Preview: Due October 30 - U.S. Q3 GDP - Slower but still solid with Core PCE Prices consistent with target

October 18, 2024 4:20 PM UTC

We expect a 2.4% annualized increase in Q3 GDP, slower than Q2’s 3.0% but still maintaining solid momentum.  Q3’s gain will be led by consumer spending, with a slowing in core PCE prices to an on-target 2.0% annualized after gains of 2.8% in Q2 and 3.7% in Q1.

Preview: Due October 31 - U.S. September Personal Income and Spending - Core PCE prices may match Core CPI this month

October 17, 2024 6:28 PM UTC

September personal income and spending data will be largely old news at the time of the release, with Q3 totals due with the GDP release the day before. Ahead of the GDP release we look for a stronger 0.3% increase in core PCE prices, and a moderate 0.3% rise in personal income which we expect will

U.S. September Retail Sales continue to show resilience, Initial Claims correct lower

October 17, 2024 1:04 PM UTC

September retail sales show the consumer sustaining solid momentum through Q3 with a stronger than expected rise of 0.4% overall, 0.5% ex autos and impressive gains of 0.7% both ex autos and gasoline and in the control group that contributes to GDP. Initial claims in the survey week for October’s

Preview: Due October 17 - U.S. September Retail Sales - A moderate end to a stronger quarter

October 16, 2024 1:37 PM UTC

We expect a 0.2% increase in September retail sales with a 0.1% increase ex autos, similar to the 0.1% increases seen in both series in August. Ex autos and gasoline we expect a 0.3% increase, slightly stronger than August’s 0.2% but not quite matching a 0.4% gain seen in July.

U.S. House Race Becoming Closer

October 16, 2024 10:00 AM UTC

The probability of a Republican clean sweep has jumped to a 25% probability, which could see a future President Trump go beyond renewing 2017 lapsing tax cuts.  It could also increase the odds of tariffs being increased to fund extra tax cuts!  This would likely curtail the Fed easing cycle and pu

U.S. Tensions for China: Protected by BRICS and BRI?

October 15, 2024 9:30 AM UTC

BRICS can provide a political buffer but not economic, as BRICS are still searching for practical areas for cooperation.  However, Donald Trump universal tariffs threats could focus BRICS on more intra EM trade. BRI has already helped to redirect China exports to EM countries, despite the slowdown

U.S. Fed's Waller - Recent data suggests proceeding with more caution on rate cuts

October 14, 2024 7:25 PM UTC

Recent data suggests proceeding with more caution on rate cuts -- Fed Waller.

Preview: Due October 31 - U.S. Q3 Employment Cost Index - Matching Q2, trend slowing only gradually

October 11, 2024 6:16 PM UTC

We look for the Q3 employment cost index (ECI) to increase by 0.9%, matching the gain of Q2, though with slightly firmer growth in wages and salaries offset by a slowing in benefit costs.

U.S. September CPI - Core not led by housing this time, Hurricanes starting to lift Initial Claims

October 10, 2024 1:19 PM UTC

September CPI is on the high side of expectations, up 0.2% overall and 0.3% ex food and energy, with the gains before rounding being 0.18% and 0.31% respectively. While the core rate looks similar to August’s, the details are different with strength not led by housing this time. A spike in initial

FOMC Minutes from September 18 - Agreement on the economy, some debate on the decision

October 9, 2024 7:04 PM UTC

FOMC minutes from September 18 generated little response from the markets. A substantial majority favored the 50bps easing that was delivered though some would have preferred a 25bps move and a few others indicated they could support such a decision, though there was only one dissenting voter, Gover

Preview: Due October 10 - U.S. September CPI - Core returning to trend, gasoline softer

October 9, 2024 12:26 PM UTC

We expect September’s CPI to increase by 0.1% overall with a 0.2% increase ex food and energy. We expect the core CPI to be very close to 0.2% even before rounding, but with a significant decline in gasoline prices expected, we expect the headline CPI to rise by only 0.06% before rounding.

U.S. Fed's Bostic - Risk economy is too strong

October 8, 2024 5:23 PM UTC

U.S. Fed's Kashkari - No change in tone after strong payroll

October 7, 2024 6:22 PM UTC

U.S. Fed's Goolsbee - Jobs report superb, inflation might undershoot target

October 4, 2024 2:21 PM UTC

U.S. Fed's Goolsbee - Need rates down by a lot over next 12 months

October 3, 2024 5:31 PM UTC

FOMC Minutes Preview and Data Outlook Before the Next Meeting

October 2, 2024 5:52 PM UTC

After a less than dovish speech from Fed Chairman Jerome Powell to the NABE on Monday, it is likely that the minutes from the September 18 meeting due on October 9 will show a similar tone. However the next FOMC decision on November 7 will be data-dependent, and the minutes may highlight the signifi

Preview: Due October 17 - U.S. September Retail Sales - A moderate end to a stronger quarter

October 2, 2024 1:51 PM UTC

We expect a 0.2% increase in September retail sales with a 0.1% increase ex autos, similar to the 0.1% increases seen in both series in August. Ex autos and gasoline we expect a 0.3% increase, slightly stronger than August’s 0.2% but not quite matching a 0.4% gain seen in July.

Markets: Rate Cuts or Geopolitics?

October 2, 2024 9:36 AM UTC

Israel will likely counteract Iran, which will prompt a further missile attack by Iran.  However, our bias remains that Israel main aim is to have a buffer zone in southern Lebanon up to the Latani river and not fight a prolonged war with Iran.  This limits the economic fallout globally and on oil

Preview: Due October 10 - U.S. September CPI - Core returning to trend, gasoline softer

October 1, 2024 12:02 PM UTC

We expect September’s CPI to increase by 0.1% overall with a 0.2% increase ex food and energy. We expect the core CPI to be very close to 0.2% even before rounding, but with a significant decline in gasoline prices expected, we expect the headline CPI to rise by only 0.06% before rounding.

Powell suggests FOMC not in a hurry to get rates to neutral

September 30, 2024 7:07 PM UTC

The latest speech given by Fed Chairman Jerome Powell to the NABE was not seen as dovish, suggesting the labor market is roughly where the Fed wants and easing is designed to keep it that way. In the Q+A he went on to see GDP revisions as having reduced downside risk, and suggested the Fed is not in

U.S. Fed's Goolsbee - Dovish, and worried about impact of ports strike

September 30, 2024 5:05 PM UTC

Israel/Hezbollah Scenarios

September 30, 2024 9:26 AM UTC

The most likely scenarios between Israel and Hezbollah are Israel/Hezbollah intermittent attacks/counterattacks (40%) or significant ground invasion Southern Lebanon (45%).  Both would be difficult in human terms and raise geopolitical tensions, but are unlikely to cause a lasting impact on global

U.S. August Personal Income and Spending - Core PCE Prices looking subdued in Q3

September 27, 2024 1:16 PM UTC

August’s PCE price data, up 0.1% both overall and core (0.09% and 0.13% respectively before rounding) shows the core rate softer than expected, and well below the 0.3% core CPI. Personal income and spending gains of 0.2% are both on the low side of expectations but a narrower August advance goods

Preview: Due September 27 - U.S. August Personal Income and Spending - Core PCE prices to underperform Core CPI

September 26, 2024 5:03 PM UTC

We expect August core PCE prices to rise by 0.2%, a little softer than the 0.3% core CPI which rose by 0.28% before rounding. We also expect personal income with a 0.4% rise to outpace a 0.2% increase in personal spending. GDP revisions suggest back data for personal income will be revised significa

Outlook Forecasts to download in Excel

September 26, 2024 12:30 PM UTC

Below is an Excel file that contains our headline forecasts for GDP, Inflation, Monetary Policy, and Exchange Rates.

EM FX Outlook: Fed Easing Helps but Divergent Trends

September 26, 2024 8:00 AM UTC

  USD strength is ebbing across the board, which provides a positive force for most EM currencies on a spot basis.  However, where inflation differentials are large, the downward pressure will remain in 2025 e.g. Turkish Lira (TRY).  Where inflation differentials are modest against the U.S., but

Continuum Economics Calendar October 2024

September 25, 2024 1:45 PM UTC

Data and Events Calendar October 2024.

DM FX Outlook: USD Set for 2025 Decline

September 25, 2024 7:11 AM UTC

·       Bottom Line: The USD has reached the end of year targets of 1.12 for EUR/USD and 140 for USD/JPY that we forecast in June, when it was trading at 1.07 and 159 respectively. From here, we still favour the USD downside through both the rest of the year and 2025, as the Fed continues to

DM Rates Outlook: Rate Cuts Arrive Except Japan

September 24, 2024 9:00 AM UTC

•    For U.S. Treasuries, we see 2yr yields coming down further on our baseline soft landing view, as the Fed moves consistently to a 3.00-3.25% Fed Funds rate. However, with considerable Fed easing already discounted, 2yr yield decline should be modest and 2yr yields should bottom mid-2025. 1

Preview: Due October 4 - U.S. September Employment (Non-Farm Payrolls) - Initial claims suggest a stronger month

September 23, 2024 4:37 PM UTC

Lower initial claims suggest September’s nonfarm payroll will be a little stronger than the three preceding releases, which averaged 116k. We expect a 180k increase, with 150k in the private sector. We expect unemployment to be unchanged at 4.2% and an in line with trend 0.3% increase in average h

U.S. Outlook: Fed Focus Turning To Downside Risks

September 23, 2024 2:16 PM UTC

•    The U.S. economy is showing clear signs of labor market slowing which poses downside risks to the still impressive resilience of consumer spending, which has sustained healthy GDP growth through Q2 2024. We expect GDP growth below potential in the second half of 2024 and the first half of

U.S. Fed's Bostic, Kashkari - Backed 50bps move, but suggest future moves will be smaller

September 23, 2024 12:28 PM UTC

Fed: 50bps Cut and 175bps More to Follow?

September 18, 2024 7:39 PM UTC

The 50bps cut in the Fed Funds rate to 4.75-5.00% will likely be followed with two 25bps cuts in November and December. For 2025, we now look for 125bps rather than 150bps, given our soft landing view and also the 50bps being delivered at the September meeting.  This would be a 3.00-3.25% Fed Funds