In today’s briefing:
- Residential Real Estate: From Real to Scarce Asset?
- Inflation Watch: Why Norway and the UK are the odd ones out on inflation
- 5-Year Yields Pivoting
![](http://www.smartkarma.com/assets/plugins/a3-lazy-load/assets/images/lazy_placeholder.gif)
Residential Real Estate: From Real to Scarce Asset?
- The 30-year mortgage rate and monthly home supply are excellent forecasters of changes in US home prices. They reveal that the brunt of the price decline is yet to come.
- However, cyclical and structural supply issues combined with stellar growth in US household formations mean residential real estate is increasingly behaving like a scarce asset.
- As a result, cyclically-caused home price declines will likely become more shallow as recoveries arrive more swiftly and forcefully.
Inflation Watch: Why Norway and the UK are the odd ones out on inflation
- We have been banging the drum on soft inflation data in the US and in the Euro area for a while and we are currently seeing the very signs of that in the data.
- Core inflation momentum (MoM annualized) is below target in several large economies including the US, France and Brazil, but there are a few odd ones out with substantially increasing core inflation momentum such as Norway and the UK.
- What makes Norway and the UK stand out?
5-Year Yields Pivoting
- European yields were already under pressure before the US ADP data release.
- However, the market suddenly paid attention to a private data point previously ignored in favour of the NFP report.
- Rather than the headline number, the positioning and break of key resistance levels significantly impacted yields.