Headwinds for Housing and Autos

Earlier this year we wrote a Thematic piece on autos arguing that we would see auto companies cut prices to move inventory, idle plants and produce fewer cars. We have already seen a slowdown in car sales, and some manufacturers have guided to lower production this...

Higher Yields a Vulnerability for US Housing

Higher US yields are already leading to higher mortgage rates in the US.  Building permits are one fo the best leading indicators for housing, and mortgage rates themselves lead building permits.  The next chart shows the modest recovery in building permits is likely...

Monetary Policy Still Too Hot for Germany

An ongoing theme we kept coming back to throughout 2015 in the eurozone is that monetary policy tends to either too hot or too cold for the core or periphery.  The ECB’s attempts to fight deflation and reflate the periphery have fuelled increases in German mortgages...

US 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...

The Housing Market in Canada is Starting to Look Shaky

We have pointed to the Canadian housing market boom and likely bust on several occasions in our reports to clients. Canadian households are overlevered and the housing market has risen to new highs. However, we are now starting to see decisive signs of weakness and...

UK: From Fixed to Floating; Mortgage Types Highlight Stress Ahead

Despite an historic low Bank of England base rate, the spread between the standard variable rate (SVR) for mortgages in the UK and the base rate widened significantly in the aftermath of the financial crisis, and has continued to trend higher. Fixed rate deals in the...