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July 12, 2024

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EZ and UK Government Bonds: Decoupling From the U.S.?
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July 12, 2024 9:37 AM UTC

Different economic and inflation dynamics, plus no constraint from trade weighted exchange rates, means that the ECB and BOE can cut irrespective of the Fed in the coming quarters.  This can see 2yr yields decline, though less so in Germany where a 2.5% ECB depo rate is already discounted.  10yr y

July 11, 2024

U.S. Fed's Daly and Musalem welcome CPI
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July 11, 2024 5:30 PM UTC

Fed's Musalem and Daly have welcomed the CPI data, without giving any signal for a near-term easing.

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U.S. Republican National Convention Approaching
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July 11, 2024 4:51 PM UTC

US political focus may currently be on whether President Joe Biden will remain in the contest for president, though the Republican National Convention which runs from August 15 through August 18 is rapidly approaching. This will give useful insight on what a second term for former president Donald T

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U.S. June CPI - Very soft, even if a few components look erratic
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July 11, 2024 1:04 PM UTC

June CPI is even weaker than expected, down by 0.1% overall and up by only 0.1% ex food and energy, with the core increase before rounding only 0.065%, a sign that inflationary pressures have faded significantly since the bounce at the start of the year. Initial claims at 222k from 239k suggest the

July 10, 2024

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Preview: Due July 11 - U.S. June CPI - Another subdued month, similar to May
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July 10, 2024 12:07 PM UTC

We expect June’s CPI to look similar to May’s, with an unchanged outcome overall and a 0.2% increase ex food and energy. Before rounding we expect gains of 0.04% overall and 0.19% ex food and energy, up from 0.01% and 0.15% respectively in May, but both May and June would still be softer than an

July 09, 2024

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Israel and Hezbollah: Tensions or War?
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July 9, 2024 2:28 PM UTC

Tensions are growing between Israel and Hezbollah, though the odds of a war in the next 6 months remain modest.  Military strategists note that such a war would require a large scale ground offensive and this is difficult given the war in Gaza.  

U.S. Fed's Powell - More good data would strengthen confidence inflation heading to target
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July 9, 2024 2:14 PM UTC

July 05, 2024

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Preview: Due July 16 - U.S. June Retail Sales - Trend losing momentum
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July 5, 2024 5:22 PM UTC

We expect a weak end to Q2 from US retail sales, with a 0.6% decline in June, and a 0.3% decline ex autos. While a weak month for autos and lower gasoline prices will lead the dip, we also expect a marginal 0.1% decline ex autos and gasoline.

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U.S. June Employment - Consistent with an economy growing below potential
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July 5, 2024 12:59 PM UTC

June’s non-farm payroll is slightly stronger than expected in the overall gain of 206k, but with significant negative back month revisions of 111k, while private sector payrolls rose by a weaker than expected 136k. With average hourly earnings up a moderate on consensus 0.3% and unemployment up to

July 04, 2024

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US Equities: Soft v Harder Landing More Than Politics
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July 4, 2024 11:05 AM UTC

The U.S. equity market sees positives and negatives behind the volatility of U.S. presidential expectations, partially as Donald Trump is seen to be in favour of lower corporate tax rates.  We see the soft versus harder landing for the U.S. economy as being more important, as a harder landing could

July 03, 2024

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FOMC Minutes from June 12 - Economy Seen Cooling But Little Discussion of Easing
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July 3, 2024 6:52 PM UTC

FOMC minutes from June 12 show that the vast majority assessed that growth in economic activity appeared to be gradually cooling and the views expressed on inflation are cautiously optimistic. However there was agreement that easing would not be appropriate until they had gained greater confidence o

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Preview: Due July 5 - U.S. June Employment (Non-Farm Payrolls) - Initial claims suggest some loss of momentum
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July 3, 2024 2:41 PM UTC

We expect June’s non-farm payroll to hint at some loss of labor market momentum, with a 185k increase overall and 145k in the private sector, the latter the slowest since October 2023. We expect average hourly earnings to follow a strong 0.4% May increase with a rise of 0.3% and less before roundi

July 02, 2024

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U.S. Q2 GDP heading for a similar rise to Q1, with weaker detail
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July 2, 2024 6:06 PM UTC

In our quarterly outlook on June 20 we looked for Q2 US GDP to increase by 2.0% annualized before growth of near 1.0% in the second half of the year. Weaker than expected trade and consumer spending data released since then have moved our forecast down to 1.5%, similar to the 1.4% increase seen in Q

U.S. Fed's Powell - Disinflation showing signs of resuming
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July 2, 2024 1:51 PM UTC

July 01, 2024

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Preview: Due July 11 - U.S. June CPI - Another subdued month, similar to May
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July 1, 2024 3:55 PM UTC

We expect June’s CPI to look similar to May’s, with an unchanged outcome overall and a 0.2% increase ex food and energy. Before rounding we expect gains of 0.04% overall and 0.19% ex food and energy, up from 0.01% and 0.15% respectively in May, but both May and June would still be softer than an

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EM After the Elections: Fiscal Focus and Inflation Questions
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July 1, 2024 8:05 AM UTC

Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil.  India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip

June 28, 2024

U.S. Fed's Daly - PCE prices good news
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June 28, 2024 1:31 PM UTC

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U.S. May Personal Income and Spending - PCE Prices slowing, Spending lagging Income in Q2
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June 28, 2024 12:57 PM UTC

May core PCE prices are very soft, the 0.1% rise is on consensus but the gain was only 0.083% before rounding while the overall PCE price index was flat. Spending is losing momentum, with May’s rise only 0.2% and downward back revisions, this falling behind a stronger than expected 0.5% rise in pe

June 27, 2024

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FOMC Minutes from June 12 to Look Less Hawkish Than Those from May 1
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June 27, 2024 6:51 PM UTC

FOMC minutes from June 12 are due on July 3. We expect less alarming inflation data seen since the previous meeting on May 1 will see the tone of the minutes less hawkish than those from May 1. That could support a view that the Fed might ease by more this year than the one 25bps move seen in the la

U.S. Fed's Bostic - Expects one rate cut this year, welcomes recent inflation data
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June 27, 2024 2:28 PM UTC

Preview: Due June 28 - U.S. May Personal Income and Spending - Core PCE Prices to round up to 0.2%
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June 27, 2024 1:49 PM UTC

We expect a 0.2% increase in May’s core PCE price index, consistent with the core CPI though like the CPI we expect the gain to be on the low side of 0.2% before rounding. We expect a 0.3% rise in personal spending, underperforming a 0.5% rise in personal income.

June 26, 2024

Continuum Economics Calendar July 2024
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June 26, 2024 10:52 AM UTC

Data and Events Calendar July 2024.

Outlook Forecasts to download in Excel
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June 26, 2024 10:30 AM UTC

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

June 25, 2024

U.S. Fed's Cook - Appropriate to reduce rates at some point
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June 25, 2024 4:13 PM UTC

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Equities Outlook: Choppy U.S. and Outperformance Elsewhere
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June 25, 2024 7:05 AM UTC

 •    U.S. equities are overvalued and waiting for earnings growth to catch-up, which leaves the market choppy, directionless and vulnerable to intermittent 5% corrections. Our forecast slowing of the U.S. economy before Fed rate cuts or nervousness about the post-election prospects are potenti

June 24, 2024

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Preview: Due July 5 - U.S. June Employment (Non-Farm Payrolls) - Initial claims suggest some loss of momentum
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June 24, 2024 3:00 PM UTC

We expect June’s non-farm payroll to hint at some loss of labor market momentum, with a 185k increase overall and 145k in the private sector, the latter the slowest since October 2023. We expect average hourly earnings to follow a strong 0.4% May increase with a rise of 0.3% and less before roundi

June 20, 2024

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U.S. Outlook: Economy Starting to Lose Momentum
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June 20, 2024 6:17 PM UTC

•    The U.S. economy is starting to lose momentum after a surprisingly strong second half of 2023, and we expect the loss of momentum to become more apparent in the second half of 2024, causing a slowing in employment growth from its current strong pace. We expect inflation to resume a gradua

June 18, 2024

U.S. Fed talk - Musalem and Logan hawkish, others more balanced but few sounding dovish
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June 18, 2024 6:58 PM UTC

There has been plenty of Fed talk today, with Musalem, Logan and Collins sounding quite hawkish, and Williams, Barkin and Kugler more balanced. Few are sounding dovish. Even the usually dovish Goolsbee, while like several welcoming recent inflation data, made few hints about easing. 

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U.S. May Retail Sales suggest consumer spending losing momentum
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June 18, 2024 12:49 PM UTC

May retail sales with a 0.1% increase are weaker than expected and the downside surprise is larger when noting modest downward revisions to May and April. May sales fell by 0.1% ex autos and rose by only 0.1% ex autos and gasoline. 

June 17, 2024

U.S. Fed's Harker - Expects one rate cut in 2024, two or none possible
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June 17, 2024 6:17 PM UTC

June 14, 2024

U.S. Fed's Mester - May CPI is welcome news
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June 14, 2024 12:52 PM UTC

June 12, 2024

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Fed: Door Still Open to 2024 Rate Cuts
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June 12, 2024 7:43 PM UTC

Though the June SEP median Fed dot is for one 25bps cut in 2024, the details of the summary of economic projections and guidance from Fed chair Powell during the press conference make clear that one or two cuts are in current Fed thinking.  Data dependence is key for the Fed and we look for less GD

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U.S. May CPI Loses Momentum, Most Notably in Transport Services
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June 12, 2024 1:10 PM UTC

May CPI has come in softer than expected, unchanged overall with a 0.2% increase ex food and energy, with the latter up only 0.163% before rounding, which is the softest since August 2021. If sustained this would be consistent with inflation returning to target though the Fed will treat one soft mon

June 11, 2024

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DM Fiscal Consolidation Problems: Politics/Central bank QT and Low Nominal GDP
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June 11, 2024 2:10 PM UTC

 Some governments are politically reluctant to restrain government expenditure growth or in the U.S. case raise taxes.  This means that intermittent fiscal stress and concerns can be seen in the coming years.  However, to get to crisis levels would require a government that abandons any attempts

June 07, 2024

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FOMC Preview For June 12: Hawkish Dots, Flexible Press Conference
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June 7, 2024 3:29 PM UTC

Bottom Line: The FOMC meets on June 12 and looks sure to leave the target range unchanged at 5.25%-5.50%. The tone of the statement may be influenced by the May CPI that will be released on the morning of the decision, but even if CPI surprises on the downside is unlikely to give any hints easing is