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1 week ago | 
think.ing.com | James Smith |James Knightley |Bert Colijn |Adam Antoniak
THINK Ahead It’s been six months since the great and the good of the finance world last met in Washington to chew on lukewarm canapes and sip decidedly average Champagne. I’m talking about the IMF’s annual meetings and, yes, maybe I’m still slightly bitter that I didn’t get the invite…Back then, the talk of the town was Donald Trump, whether he would win November’s election, and if he did, what would come first: tax cuts or tariffs? Well, I think we have our answer.
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1 week ago | 
fxstreet.com | James Knightley
Retail sales jumped as consumers brought forward purchases of 'big ticket' items to get ahead of feared tariffs. But with confidence plummeting on price, job and wealth concerns, the consumer will be less of a growth engine later in the year. US retail sales jumped 1.4% month-on-month in March, exactly in line with consensus. It's clear from high frequency reports that many consumers in the market for 'big ticket' imported items brought forward their purchases to get ahead of feared tariffs.
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1 week ago | 
think.ing.com | James Knightley |Francesco Pesole
A great focus on uncertainty by the BoC The Bank of Canada has left its policy interest rate unchanged at 2.75% despite CPI coming in softer yesterday and anxiety over the economic impact from tariffs. The market had been pricing around a one-third chance of a 25bp cut while economists saw it closer to being a coin toss with 15 banks, including ourselves, favouring 'no change' and 14 expecting a 25bp cut.
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1 week ago | 
think.ing.com | James Knightley
US retail sales jumped 1.4% month-on-month in March, exactly in line with consensus. It's clear from high frequency reports that many consumers in the market for 'big ticket' imported items brought forward their purchases to get ahead of feared tariffs. We already knew that the volume of auto sales surged nearly 11% last month and this translated into a 5.3% MoM jump in value of sales in today’s report.
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1 week ago | 
think.ing.com | James Knightley
Financial markets have delivered their verdict, and the steep falls in equity and bond prices and heightened volatility suggest deep unease. Although tariffs have enhanced security at the Mexican and Canadian borders, they have also sparked resentment, leading to retaliatory tariffs and some instances of consumer boycotts against American products and services. For example, there has been a noticeable drop in Canadian flight bookings to the US.
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1 week ago | 
think.ing.com | James Knightley |Carsten Brzeski |James Smith
President Trump’s tariffs will undoubtedly put up prices of imported goods, and there will be higher service prices too, such as repair and insurance of those goods. However, the hit to growth from tariffs via business uncertainty and the squeeze on consumer spending power, at a time when the government is implementing sweeping spending cuts, means that unemployment is likely to rise by more than the Fed had previously expected.
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1 week ago | 
think.ing.com | James Knightley |Francesco Pesole
Markets and economists are split as to whether the Bank of Canada will cut interest rates again on 16 April. There is a very slim majority that favours a no-change outcome after 25bp cuts in January and March, but it could go either way. On the one hand, recent activity data has beaten expectations, and inflation has ticked higher, and the BoC may want to keep some ammunition back, given the US tariff-related uncertainty.
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1 week ago | 
think.ing.com | James Smith |James Knightley |Adam Antoniak |David Havrlant
The week where everything - and nothing - changed Here are just a few things that changed in financial markets this week: US 10-year Treasury yields are up more than 40 basis points. That sort of week-on-week increase hasn’t happened since the early 2000s. The dollar is almost 4% weaker against the euro. More than a percentage point of that has happened since I started typing this earlier today. The S&P 500 is almost 4% higher, too.
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2 weeks ago | 
think.ing.com | James Knightley
United States The April University of Michigan consumer sentiment index suggest US households are braced for stagflation and are blaming the President Confidence plunges as households worry about inflation and jobs The Consumer Confidence Index published by the University of Michigan dropped 6.2 points to 50.8 in early April, below the 53.8 consensus with expectations falling 5.4 points and current conditions down 7.3. There was a marked deterioration in every sub-component across all income,...
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2 weeks ago | 
think.ing.com | James Knightley
A pleasant surprise for once After all the volatility and back-and-forth on tariffs we are back watching the macro data and have been treated to a remarkably benign US CPI report for March. Headline prices fell -0.1% month-on-month and core (excluding food and energy prices) rose just 0.1%. In fact it was just 0.057% when measured to to 3 decimal places.
