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A View from the Bridge - Sep 2016

So the US is back to winning ways in the sporting world but the outlook for the economy is not quite as clear cut. The US consumer is clearly not spending as much as they have been, which is reflected not only in a slump in imports but also a drop off in car sales by between 5 and 9% and pending home sales falling to a 7 month low. Productivity has fallen for a 3rd month in a row and manufacturing experienced a sharp fall in August so it’s no wonder that the Fed reserved judgement on a rate rise until further data is available towards the end of the year and probably after the election.
Tags: GBPEUR, IMF, OECD, BIS

PegasusCapital - Mon 3rd Oct

A View from the Bridge - July 2016

Data output for July was never going to be anything but dramatic after the Brexit result but it wasn't the UK grabbing the headlines. US seasonally and inflation adjusted annual GDP growth of just 1.2% in Q2 was the weakest pace in any expansion period since 1949! This was at odds with some of the more positive news as consumer spending remains strong, home sales have hit a post-recession high and 287 thousand new jobs were added but reduced business investment, large reductions in inventories and declining Government spending have clearly knocked economic output. The likelihood of a September rate hike has reduced to 12% and US long term rates have hit the lowest in their 227 year history.

PegasusCapital - Thu 4th Aug

A View from the Bridge - April 2016

Nine months ago the odds being offered on Leicester City winning the Premier League were identical to the quoted odds on Elvis Presley being found alive this year and twice as long as the 2,500-1 odds offered on Eddie “The Eagle” Edwards winning ski-jumping gold at the 1988 Winter Olympics. Clearly the bookmakers will now have to recalibrate their “risk adjusted return” models to take into account those complete outliers just in case they do come true!

PegasusCapital - Tue 3rd May

A View from the Bridge - October 2015

65% of economists from leading banks and financial institutions around the world expect the US to raise interest rates in December and the Federal Reserve after its October meeting signalled as much to the markets. However, with inflation still below target, GDP growth slowing to 1.5% in Q3, exports dropping 2% because of the stronger dollar and not as many jobs being created in September, there are reasons for caution. That said, US retail spending was up 3.2% in Q3 and sales of existing houses jumped 4.7% in September so there could be a need to dampen domestic demand.

PegasusCapital - Mon 2nd Nov

A View from the Bridge - June 2015

As one European country (Iceland) phases out capital controls as it emerges from the 2007/2008 financial crisis and the failure of its banking system, another imposes capital controls and faces the prospect of one or more of its banks failing depending on the decisions to be taken by the ECB.

PegasusCapital - Wed 1st Jul

A View from the Bridge - Sep 2017

UK GDP increased by 0.3% quarter-on-quarter in Q2, matching the second quarter estimate and the consensus however, the y-o-y growth rate was revised down to 1.5%, from 1.7%. In addition, the latest PMI survey showed a modest deceleration in the rates of expansion in UK manufacturing production and new orders. Exports remain a bright spot and are still rising at one of the strongest rates over the past six-and-a-half years however, manufacturing is also increasingly being impacted by rising cost inflationary pressures due to rising commodity prices and higher import costs from the historically weak sterling exchange rate.
Tags: UK GDP, ECB, FOMC

PegasusCapital - Wed 4th Oct