Recap 10-16-12




  • Both the FT and WSJ report that Spain is prepared to make a formal ESM bailout request.
  • The Greman ZEW economic sentiment survey increased to -11.5 vs -14.9 exp and -18.2 prev.
  • US NAHB index rose to 41 in Oct vs 40 exp and prev. This is the higest print since June 2006.
  • WSJ: US government appears set to hit debt ceiling by mid-January.
  • BoC’s Carney was dovish, and many noted that he did not mention the need to tighten policy in his speech last night. However, he also didn’t mention it in his previous speech. Although he did in the one before.
  1. The overall impact of QE3 for Canada is estimated to be modestly positive, reflecting its supportive implications for U.S. and global activity and the resulting boost to commodity prices.
  2. There is some evidence that global uncertainty is affecting domestic activity. According to the Bank’s most recent quarterly Business Outlook Survey, released this morning, Canadian firms have become more circumspect about new capital expenditures and less inclined to hire new workers.6 In this environment of slow global economic growth and uncertainty about demand, firms have also tempered their sales expectations for the next 12 months.
  3. Next week’s Monetary Policy Report will provide a full update on the Bank’s outlook for economic growth and inflation in Canada. It will take into account the impact of the uncertainty that I have been discussing today.

Department of Transportation office worker by day, Prime Minister of Somalia by night. – NYT

Upcoming Data:

  • Tues: UK CPI, German Zew, EU Trade Balance, US CPI, NAHB Housing Index
  • Wed: BoE Minutes, UK Jobless Claims, China GDP, IP, Retail Sales
  • Thu: US Jobless Claims, Philly Fed
  • Fri: CanadaCPI, US Existing Home Sales