Appearing More Robust And European

HIGHLIGHTS OF THE WEEK United States Economic data out of the U.S. gave mixed signals of the state of the economy. While retail sales started the week with a strong 0.8% increase, industrial production stalled and housing starts and existing home sales both fell. A feeling of déjà vu has gripped economy watchers remembering back to last year's spring slowdown. While we expect growth to slow from relatively strong first quarter growth, we continue to expect real GDP growth of around 2.0%. The recent decline in gasoline prices contributes to our relative optimism. The U.S. economy is healing, but the shock from the financial crisis is still reverberating and will keep a lid on growth rates. The biggest risk to economic growth remains fiscal drag in 2013. Canada The Bank ...

The Weekly Bottom Line : 11/02/2012 HIGHLIGHTS OF THE WEEK United States Negotiations between Greece and its international lenders kept financial markets switching the risk button on and off throughout the week. A parliament vote on further austerity measures has been scheduled for Sunday; if it fails, Greece could default in March. In the U.S. initial jobless claims declined, bringing total claims down to levels not seen since September 2008. A $25 billion deal between the White House and five leading commercial lenders was announced on Thursday. It will help underwater homeowners to refinance their loans. It is a positive step, but arguably one with limited macroeconomic impact. Canada Canada's trade surplus more than doubled in December, on the back of a sharp 4.9% ...

Economic Data Analysis Signs of Cyclical Turn? Key indicators suggest modest improvement in activity, supporting risk sentiment. The coming week's PMI's should add to the view that global output is firming. Euro area remains key risk to a more positive outlook, with the upcoming Summit in focus. Equities followed the now familiar pattern of 2012: a more cautious close following earlier gains. Nevertheless US, Euro area and UK bourses looked like closing another week in positive territory, a further testimony to the wider improvement in risk sentiment this year. Unless the last days of the month see a sharp reversal, January looks set to post a strong rise on the month, something that in stock market lore bodes well for the year ahead (true just over twothirds of the time over ...

The Weekly Bottom Line : 02/12/2011 HIGHLIGHTS OF THE WEEK United States Markets posted a spectacular rally this week. As of noon Friday, the Dow was poised to rise a cool 831 points (or 7.4%) from last week. Policy makers provided much of the fuel for the rally. In the developing world, China and Brazil both cut their policy rates in a bid to combat slowing economic growth. This biggest policy maneuver, however, came when leading developed world central banks announced plans to expand and enhance their currency swap lines. Meanwhile, the stream of decent U.S. data continues to trickle in, bucking the global trend of slower growth. Canada A decisively positive week for equity markets was driven by several international developments to support Europe's troubled ...

The Weekly Bottom Line : 14/10/2011 HIGHLIGHTS OF THE WEEK United States Markets continued to rally this week, with the S&P 500 gaining more than 5%. While encouraging, the index remains down about 3.5% on the year. The growing appetite for risk among investors stems from some policy action in Europe, diminished recessionary fears in the U.S., and signs that the Fed is ready to inject more stimulus if the economy weakens. However, the risks to the economic outlook remain largely unchanged from a few weeks ago. While the market's recent rally is encouraging, volatility is sure to remain elevated in the weeks and months ahead. Canada This week's Canadian data helped underscore our view that the Canadian economy would bounce back modestly from the small contraction ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States The Fed's acknowledgement that underlying inflation is no longer perceived as subdued was an important signal to the markets and highlighted that core inflation is gradually inching higher. At the same time, the Fed trimmed its economic growth forecasts for 2011 and 2012, but left its 2013 unchanged. While growth forecasts came down, the view remains that the slowdown is transient. The troubled housing market will remain the major domestic downside risk to economic growth. In May, the demand for housing weakened as both new and existing home sales declined. On a positive note, the stronger than expected durable goods orders offers a positive sign about economic growth as we head into the second half of the year. ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States * Financial turbulence triggered by Europe's sovereign debt woes, fears of a relapse in the U.S. recovery, and further stimulatory monetary policy by the Fed were the dominant drivers throughout the year * However, U.S. stock markets managed a rally over the last three months of the year, closing yesterday at a level not seen since early-September 2008 * In 2011, the main risks affecting the stock market will resemble those of the previous year. Perhaps the only mitigating factor will be less uncertainty regarding monetary policy by the Fed over the first half of 2011 Canada * Canadian real GDP growth for 2010 is tracking just under 3%, not far off our expectations set at the start of the year. * Still, ...

Weekly Focus: Another Week in the Shadow of the Debt Crisis Market Movers ahead * Developments in the European debt crisis will probably be the dominant theme in a week with no major releases in the US or Euroland to steal the limelight. * Otherwise the week will see monetary policy meetings in Japan and Switzerland. The latter is the more hotly awaited, especially in terms of the SNB's take on the stronger Swiss franc. * In Scandinavia, only Sweden has interesting releases scheduled, with the main focus on the labour market. Global Update * Financial markets were not expecting much from the ECB's meeting, so there was no negative market reaction when it failed to announce any new initiatives or disclose further information about its government bond purchase programme. ...