The VP Blog
A blog about financial markets and the VP investing framework
US Growth Coming in As Expected
(The following is from our December Leading Indicator Watch (LIW), released December 4th, 2014. The LIW is a monthly report giving a summary of all or our main leading indicators, allowing clients to forecast early on where the business cycle in major countries is...
read moreUS Home Prices to Continue to Rise
(from our Leading Indicator Watch from March 5th, 2015) Our leading indicator for US house prices is supportive of an improvement in price growth. One of the inputs that drives our leading index is the number of months’ supply of new homes. The continued fall in...
read moreECB QE: Inflation to Start Surprising to the Upside
The sharp devaluation in the euro and the rapid acceleration in economic activity will mean short-term inflation dynamics in the eurozone will soon start surprising to the upside. In this context it is important to remember that the only justification for ECB...
read moreTurkey’s External Debt Remains Worryingly High
Excerpt from VP Tactical first published on 14th April 2014: We have been flagging Turkey as our top candidate for a currency crisis since we released our Understanding Debt and Currency Crisis thematic in 3Q14. Although the lira has collapsed from 2.15 then to 2.65...
read moreUS Manufacturing – More Weakness to Come
US manufacturing has slowed in recent months, and we expect more to come. We had noted the discrepancy between the PMI and ISM surveys earlier this year as it looked like the ISM was outputting data inconsistent with our leading indicators. The ISM has now fallen...
read moreDownside Data Surprises Continue in Canada
First Published in 24th March Tactical For the past 6 months, we have been alerting clients to the persistent decline in our Canada leading indicator. This is now showing up in numerous Canadian coincident data releases, with retail sales being the latest to miss...
read moreEuropean Monetary Policy: Too Hot or Too Cold for Housing
The euro is not an optimal currency area, and monetary policy will be either too hot for the core or too cold for the periphery. Today, monetary policy is too hot for Germany, where we see rising house prices due to a monetary policy that has been geared at the...
read moreYield Curves Flattening Everywhere: Global Growth to Slow
As we remind our readers often, yield curves are one of the single best leading indicators. A yield curve inversion has predicted every US recession since 1945, with only one false positive, in 1966 (although the false positive preceded a downturn in industrial...
read moreGrowing number of lower paid workers in US
The participation rate in the US has declined much less for those at lower levels of education: Source: Macrobond That the lower educated are disproportionately supporting employment growth, through lower paid jobs, may help explain why, so far, we have not seen...
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