Reflects Confidence Of Both

U.S. Review To QE3 or Not To QE3: That is the Question - Some market participants are beginning to speculate about another round of quantitative easing. Although recent growth indicators have not been particularly stellar, the economy is still growing. Moreover, core CPI inflation in the neighborhood of 2 percent means that the threshold for more QE is relatively high. - Overall, indicators were positive during the week. Housing starts increased by 2.6 percent in April, the Empire Manufacturing index improved to 17.09 in May from a 6.56 print in April and retail sales printed a 0.1 percent increase in April, in line with expectations. To QE3 or Not To QE3: That is the Question QE3 seems to have more lives that a cat; it comes back into the forefront of the U.S. economy discussion ...

U.S. Review Modest Growth on a Broadening Base - The underlying tone of the recent economic reports remains consistent with modest economic growth. Consumer spending ended the first quarter on a solid note and spending is now on track to grow at a 2 percent pace in the second quarter. - Reports from the regional manufacturing surveys showed some weakness but the National ISM report came in stronger than expected. The nonmanufacturing survey, however, came in below expectations. - Nonfarm employment rose by 115,000 jobs in April and the unemployment rate fell 0.1 percent to 8.1 percent. Modest Growth on a Broadening Base This week's ISM report came in better than expected, rising 1.4 points to 54.8 in April, which greatly relieves fears built up from the weaker factory orders ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States - U.S. job creation may have weakened in the last few months, but the grounds for sustaining stronger employment growth are more fertile now than have been since the economic recovery began. Europe's labor market, by contrast, is likely to deteriorate further before it gets better. - Europe's (nonfinancial) corporate sector is highly leveraged. As balance sheet adjustments are made, Europe risks further decreases in investment, higher layoffs, and lower economic growth. These effects are compounded by deleveraging in the public sector. - U.S. corporations, by contrast, are more profitable and liquid than they have ever been. At some point some of these funds will be unleashed towards new investment, creating a positive ...

Weekly Economic and Financial Commentary U.S. Review First-Quarter GDP Growth Slows The U.S. economy grew at a 2.2 percent annual rate in the first quarter, somewhat slower than the consensus had expected. Consumption remained the primary driver of growth as business spending slowed and the government sector continued to scale back spending. In our U.S. review section this week, we discuss the GDP report in the context of the big miss in durables and consider what it means for business spending going forward. We also look at a very small change in the Fed statement this week that reflects an improving view on the troubled housing sector. Business Spending Poised for a Slowdown? Durable goods orders for March were ugly. The 4.2 percent drop was the largest decline since the U.S. ...

U.S. Review Look Past the Monthly Volatility and See the Trend This week of economic releases painted a somewhat mixed picture, but the underlying trend still reflects an economy that is growing at a modest pace. The milder-than-usual winter likely brought some activity forward and below-consensus readings are due in part to payback. Housing starts, existing home sales and industrial production all posted disappointing readings in March that are likely not indicative of the underlying trend. Headline retail sales, however, came in more than double the consensus estimate in March, ending the first quarter on a positive note. Early Spring Brings Payback Period The full week of economic releases painted a somewhat mixed picture, but the underlying trend still reflects an economy ...

German business data boost confidence in markets, helping the euro to rise, amid tensions spreading in markets that the European debt crisis is intensifying. German IFO business climate surged for the sixth consecutive month in April to 109.9, the highest level in nine months, compared with 109.8 in March, defying analysts' predictions of recording a drop to 109.5. Current assessment and expectations gauges also beat anticipations as they came in at 117.5 from 117.0 and 102.7 from 102.3 respectively. In response, the euro rose against the U.S. dollar to trade around 1.3173 compared with the day's opening of 1.3136. The data is providing evidence the euro area largest economy is on the right track, especially after the rise in investor confidence this month and drop in unemployment to ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States A narrowing trade deficit and larger than expected inventory accumulation in February suggests Q1 growth will be closer to 2.5-3.0% than our previous forecast for 1.7%. That being said, this does not change our underlying outlook. The higher print on GDP reflects an inventory swing and improved trade balance due to weak imports. In contrast, domestic demand still appears set to post a shallow 2% gain. In order for the U.S. economy to generate sustained growth at the 3% level, we will need to see a much healthier job market that is capable of generating widespread growth in real incomes. Canada In two survey releases, the Bank of Canada detailed that businesses are more upbeat about their sales' prospects and ...

(Reuters) - Consumer sentiment slipped modestly in early April as higher gasoline prices hit household budgets but optimism over the economic outlook lifted consumers' expectations, a survey released on Friday showed. The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment dipped to 75.7 in April from 76.2 in March. Economists had expected the index to hold at last month's level. "Needless to say, the revival of confidence critically depends on the two economic events that consumers still expect to happen: that jobs will become more plentiful and that gasoline prices have ended their sharp run up," survey director Richard Curtin said in a statement. "Both are widely expected, and these expectations are anchored well enough to withstand ...

Weekly Economic and Financial Commentary : 30/03/2012 U.S. Review Mixed Signals Housing data released this week were a bit disappointing but also offered some signs of optimism. Pending home sales fell in February but remained near a one-year high. The decline in the S&P Case-Shiller Home Price Index in January was the smallest since July, although the index did reach a new cyclical low. Personal spending rose in February by the most since July, as consumers dipped into savings to spend more on services. However, consumer confidence slipped in March due to a decline in the expectations index amid rising gas prices, although purchase plans improved. Mixed Signals Housing data released this week were slightly disappointing but also provided some signs of optimism. Pending home ...