Tuesday, March 24, 2015

Porcelain floor and wall tiles for bars and restaurants

Perfect for cafés and restaurants, Pietralavica and Lastranera porcelain tiles help create settings and solutions of great charm and elegance, underlining every element of the interior and creating attractive lighting effects.

Eiffelgres porcelain floor and wall tiles for cafés and restaurants   

Hundson`s porcelain floor and wall tiles for cafés and restaurants  Hundson`s porcelain floor and wall tiles for cafés and restaurants In restaurants, bars, lounges and cafés, porcelain tiles offer a series of benefits for interior flooring and permit creation of an optimal atmosphere for enjoying a drink or a meal in company. In the past few years exponential growth in the number of television programmes and web sites about cooking has focused a lot of attention on the restaurant environment. Creating the particular atmosphere required in settings such as these has become a primary task of architectural design, and porcelain floor and wall tiles help to create this atmosphere and make it unique and attractive. The many properties of porcelain include light-fastness and long-term inalterability, features which ensure that man-made stone tiles preserve their aesthetic properties even in the presence of stress, frequent washing and contact with chemical agents.

Eiffelgres porcelain floor and wall tiles for cafés and restaurants
Hundson`s porcelain floor and wall tiles for cafés and restaurants
In its vast production of high-tech porcelain, Hundson`s has covered the surfaces in a number of cafés and restaurants, all places for socialisation, intimacy and public relations: places where the sensorial experience counts a lot more than the individual details, settings for the collective rites of social living.
On the basis of these factors, the porcelain tiles Hundson`s uses to cover surfaces in restaurants are Pietralavica, Pearlgrey and Brown versions, and Lastranera, used to cover the floors and walls of 201 Forest Avenue at St. Hilaire de Riez (France); in Acquarium restaurant in Brunico and Pepe Nero in Barletta; and in Flora bar in Turin. Both Pietralavica, a synthesis and sublime interpretation of the material inspiring it (presented in 5 colours and countless different sizes as well as strips and decorative pieces), and Lastranera, a perfect reproduction of natural slate, feature contemporary design and style to give spaces an attractive, elegant, carefree atmosphere appropriate for places where people get together to enjoy a meal.

Hundson`s porcelain floor and wall tiles for cafés and restaurants
Porcelain tiles from the E-Stone (Lastranera) and E-Style (Pietralavica) collections allow the interior associated with the floor and wall tiles to vary with a series of attractive creative solutions, including geometric and decorative shapes on ceilings, columns and skylights; arrangements of tables and chairs that appear to increase the amount of space available; and delicate colour contrasts in furnishing accessories.
But it is above all the lighting, a key element in interior design, that can be underlined by porcelain floor tiles, even if using dark Lastranera: skilful use of light (direct, indirect, reflected) can easily create angles and intimate, reserved areas in shadow, perfect for a candlelit dinner.

Monday, March 23, 2015

How to Instal Glass Mosaic Tiles

Below is DIY guid for installing glass mosaic tiles

Step 1: Buy 50 lbs of white thin-set and 9.48 litres of mortar admix, because that is the smallest quantity that you can buy it in. (This will cover 120 square feet - we are covering 24 square feet. I think we'll have a bit left over if anybody needs some!)

Step 2: Measure the amount of powder thin-set that you think you'll need by weighing it on your bathroom scale. (We opted for 10 lbs.)
Step 3: Put on your dust mask, goggles and rubber gloves, pour the toxic liquid admix into the power and stir like mad. Avoid inhaling deeply. (note: goggles provide better protection when they are over your eyes, not your hair!)

Step 4: Using a putty knife, smear the thin-set onto the wall where the first tile should go. Using a v-notched trowel, scrape the thin-set so that it creates ridges.

Step 5: Try to steady your shaking hands while you grasp one of the 12x12 tile sheets (that's 144 little tiny tiles per sheet) and place it on the designated spot. Slide it gently to get it level both horizontally and vertically. Press it down gently so that each little tile makes contact, but not too much so that the thin-set oozes between the tiles. (Thin-set between tiles is bad, because that is where your grout is supposed to go.)

Step 6: Repeat steps 4 and 5 until the surface is covered in glass mosaic tiles. Use tiny plastic spacers in attempt to keep the sheets uniformly spaced and level.

Step 7: Throw out the remaining thin-set before it hardens in your bucket. Wash off your brand new counter top and sink, removing all the stray thin-set, and wash all your trowels and tools.

Step 8: Marvel at how good it all looks while enjoying a victory beer. Worry about the next step, when you have to peel the plastic layer off the surface of the tiles without pulling the tiles off the wall (but do not attempt this for several days, when you believe that the tiles are permanently adhered to the wall). Also worry about the upcoming grouting process.

Mosaic Tile Ideas

If you are a proud homeowner, you are most probably aware of the significance of the tiling process that is done mainly in bathroom areas and areas near the stove and sink in the kitchen. Of course there are cases where people have introduced mosaic tiling in other parts of their living premises. Actually, with the number of materials available and the infinite number of ways in which you can align the pieces, there is actually nothing that you cannot accomplish. Feel free to let the creative juices following, and make sure that you don't overdo it, because everything that is overdone is, in plain words, just bad.

In the following piece of text I will provide you with some mosaic tile ideas that I have come across while browsing the net, and you can use these ideas in order to come up with your own. When you finish reading this article you will be amazed at what your possibilities are, and I hope that you will have a blast. So, without further ado, here they are:

1      The first design that I am going to show you is, as you can see in the picture below, a bathroom design. I have chosen this design not only because it is magnificent, elegant and stunning (at least in my opinion), but because it shows how you can create complex images using very small pieces of material. If you think of your wall as a black page on your computer, then each piece is a pixel. So, therefore, if you have more individual but small tiles, you can do wonders. However, in order to make this kind of construction you will need a good tile installer, and sufficient funds. But, if you have the means, by all means go for something like this and use it for your own home design improvement.

2      The next item on the agenda is a very unique and interesting kitchen splash-back design. This is, as far as I can tell an advanced form of art, and it shows you that you have the possibility to go out of the limb and copy some famous art piece in front of your stove. If you are a person who has taste and appreciates art and what art represents, and you have such a thing in front of you while you cook, I assure you, cooking will have an entirely new dimension. Take a good look at the picture, and consider your options.

3      Earlier, I said that the kitchen and the bathroom are not the only places where you can put a mosaic construction. The picture below is an elegant garden design with a rock mosaic. When I said that there are loads of materials that you can use, I meant it. The most conventional ones are porcelain and ceramic, but there are also materials like, stainless steel and, obviously, rock. Feel free to check out all these materials, how they look, and maybe even consider using several materials for one and the same mosaic construction, which can be very great, come to think about it.

4      The picture below is the last example on the list. Now this is a very uncommon place for mosaic tiling but it proves the point that you can incorporate a mosaic tile installation anywhere in your home and that it will look good. Again, I am advising you to explore the possibilities. You can put it behind the TV, or you can put it on the floor. Maybe you can put it on the ceiling. You can have your favorite photos put behind a glass mosaic tile, so that you can protect your wall and still have your entire life story incorporated in it, to constantly remind you of the good times. As I said, the number of options is infinite.

To conclude, there are loads of ways to beautify your home and mosaic tiling may be just the thing you need. If your home is just the way you like it, then you can just kick back and let all the worries go away. Nowadays, rest is something that we all need, and as we progress in life, the more rest we need. Make your home the best place in the world for you, and there will be no problem. 

Stunning Mosaic Walls Featuring Bits And Pieces Of Glass

Not many residences are adorned with a mosaic wall, but for the tiny handful that are, the style has lent itself very nicely to the decor. Often instances mosaic walls are featured in a single color, but there are some that nonetheless demonstrate the style's standard beauty, which requires nicely believed-out images and geometric shapes.

Mosaic walls are like the huge youngsters on the block, specially when compared to other wall embellishments such as decals and posters. Their sophisticated look does wonders in producing an uplifting space filled with texturized intrigue and colorful individuality. If you have ever regarded as puzzling with each other a mosaic wall for a area in your house, don't hesitate -just do it!

Simplicity Goes A Long Way

The question comes to thoughts: Where do I set up such a wall? For starters, I'd advise the bedroom and bathroom, primarily since these rooms can be rather bland. Folks attempt not to overcrowd their bedroom with extra ornaments or added furnishings, but a mosaic wall can rectify the troubling design conundrum by giving you a taste of style along with a space-saving approach.

beckwith interiors Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Beckwith Interiors

See how the mosaic backdrop adds a powerful power that enhances the feel of the living space above? If you had been only to have white walls with the exact same furnishings, the result would be significantly various, possibly even a small bland.

bernbaum magadini architects Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Bernbaum Magadini Architects

Once again, you can see the intensity the mosaic wall adds to the bathroom, turning a calm, serene space into an invigorating oasis perfect for bath time pleasure.

Aqua Blue For Various Settings

Surprisingly, aqua blue is a quite well-liked color for artists designing a mosaic wall. This selection closely resembles the rippling of water under the sun, which can be fairly mesmerizing, even if it only requires shape in the form of little glass cubes.

birdhouse media Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Birdhouse Media

bonick landscaping Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Bonick Landscaping

dkor interiors inc Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Dkor Interiors Inc

triton austin construction professionals Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Triton Austin Architectural Interiors

A Option Of Colour

I like mosaic walls for their color. There is really no right or wrong way to come about such a design technique. As long as you pick the color of your selection, there is bound to be a pot of gold waiting at the finish of your style rainbow.

ekman design studio Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Ekman Design Studio

elad Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Elad Gonen

The sunflower mosaic above is a beautiful creation for residences hunting to establish a warm, comforting vibe. When a effective image is accented with the right backdrop colour, correct design and style magic occurs. Above we see how a deep tone of maroon offsets the radiant floral style, creating a spectacular attitude and overall impact.

esther hershcovich Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Esther Herschcorch

If massive flower mosaics are not your issue, maybe piecing with each other your favored quote across the wall of the room could be favorable. Let me guess yours… "carpe diem?"

imi design llc Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by IMI Style Inc.

jen chu design Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Jen Chu Design

Superb and Colorful Patterns

We all take pleasure in a great pattern each now and once more, especially if it is completed correct and by the hands of a talented creative genius. Right here are some praiseworthy mosaic patterns that will lure you in, if you haven't already been swept away by it all.

kallista Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

by Kallista

The design and style above is meant to resemble flower petals, and if you ask me, I consider the designers did a great job in creating one thing abstractly wonderful.

photography anthony lindsey Stunning Mosaic Walls Featuring Bits And Pieces Of Glass interior design 2

Of course I usually like to save the very best for final. The selection above is almost certainly a single of my favored styles all through this post, because it ties in colour, story, and a bit of traditional taste. It's ideal for a monochromatic home that just demands a single feature to make the complete location pop.

Now that you've observed what you can do with mosaic walls, share your thoughts with other folks under…

Sunday, March 22, 2015


1. Go Reflective
Now this is a beautiful tile idea. It makes the bathroom look bigger, even with its dark color.Archello.


2. Go With the Ocean Colors
Tile in turquoise, aqua, seafoam or blue green (whichever name you prefer) would work. Here's another bathroom in reflective tile but this time it's turquoise. It produces a very festive look.Archello.


Seafoam tile makes this tiny bathroom awesome. It makes you wanna take a swim, and the pool with the matching water color is right there. Photos: Ricardo Oliveira Alves


These blue green 'fish scale' tiles with the ocean motif are definitely in. Style-files.


3. Go Artistic
Designed by Marcel Wanders, even a bathroom is an art creation in this patterned and textured space.


4. Go Bold
Love the red tile and the beautiful accent it adds to the bathroom. Red works perfectly with natural wood color. Balance Associates Architects.


5. Go Horizontal
The long horizontal tile pattern is quite trendy now. Even Home Depot carries similar tile now. Makes room look wider.


6. Go Exotic
Finding exotic looking natural stone slabs is not easy but well worth the challenge. Many stone warehouses carry them on occasion. Symmetrical slabs make the most impression but they don't have to be symmetric to look exotic. A slab such as is must be 'on display', no questions about.Elliman.


7. Go Matchy-Matchy
In this bathroom idea, the multi-color tiles are perfectly coordinated with the colors of the recycled wood barn door and the color of the vanity. BeyondHomes.


8. Go Monochrome
Similar patterned tile (as above) but in monochrome colors. It's the latest hottest trend. Follow beautiful floor and wall tile ideas in this stunning warehouse renovation by Paola Navone.


Which new flooring trend matches your unique style?

Updating your flooring changes the whole mood and atmosphere of your home. The flooring experts at City Carpet and Flooring in Cambridge have some advice on the latest style trends that will take your home from bland to beautiful.

Trends take into account much more than simply colour, although that's an important aspect. The newest colours are richer and deeper, with texture playing an important role, since you want to please your feet as well as your eyes.

It's easy to make a dramatic statement with tile and stone.

Tile selection includes accent tiles that sparkle and shine like jewelry, as well as tile that looks like wood.

Tile and stone are always a popular choice because you can completely customize your own unique design so easily. As well, it can be very durable for even the busiest homes.

Hudson Ceramic, in business since 2006, has an excellent selection of quality flooring products, including Porcelain Tiles, Rustic Tiles, Mosaic Tiles, Sanitary Ware,Kitchen Sink & Faucet, Quartz & Stone, Furniture, Door and more.

Grey concrete tile, considered the new neutral, continue to be a popular choice for homeowners.

If you need more information of tiles or the trends products, please visit our site: www.hudsonchina.com and leave us a massage.

Saturday, March 21, 2015

Canadian Retail Sales Down 1.7% in January

Canadian Retail Sales Down 1.7% in January

Canadian retail sales declined by 1.7% in January 2015, marking a larger decline than market expectations for a 0.8% drop and building on a revised 1.8% decline (was -2.0%) in December 2014.
Much of the weakness in nominal sales resulted from a sharp drop in gasoline prices that pushed gasoline station receipts downward by 8.8% after a 6.9% drop on December; however, excluding gasoline stations, sales still declined by 0.8% in January.
Controlling for the effect of prices, the volume of sales declined by 1.2% in January following a similar 1.2% drop in December (was -1.3%) and a 0.6% (was 0.7%) gain in November.
Weakness in retail sales was widespread with sales down in nine provinces. The largest drop, in dollar terms, occurred in Quebec (-2.4%) with sales also down sharply in Ontario (-1.4%) and Alberta (-2.8%).
Canadian retail sales dropped by 1.7% in January 2015. That was a larger decline than expectations for a 0.8% drop and built on a 1.8% decline (was -2.0%) in December and a 0.3% increase (was 0.4%) in November. A price-related 8.8% decline in gasoline sales, the seventh monthly drop in a row, accounted for much of the weakness; however, excluding gasoline stations, sales were still down by 0.8% in January. Auto sales declined by 1.8% in January, thereby marking a fourth consecutive monthly decline; however, earlier increases still left sales in that category up 6.2% from a year ago. Furniture store sales declined by 2.1%, and sales at sporting goods (-5.3%) and general merchandise (-1.1%) stores also declined, with partial offset from higher sales at electronics (3.8%) and building material (1.2%) stores.

Weakness in retail sales was widespread with sales down in nine provinces. The largest drop, in dollar terms, occurred in Quebec (-2.4%). Sales also declined sharply in Ontario (-1.4%), although almost entirely reflecting lower gasoline station sales, and Alberta (-2.8%).

Excluding the effect of prices, the volume of retail sales declined by 1.2%, building on a 1.2% decline in December that followed a 0.6% increase in November. The volume of sales is still up by 1.9% from a year ago but is down an annualized 6.9% relative to its fourth-quarter 2014 average.

The larger than expected decline in retail sale volumes in January built on an already large drop in December to leave the measure well below its fourth-quarter 2014 average. The weaker level of sales early in 2015 was disappointing and suggested that households are, as yet, not spending a significant portion of savings related to the almost 30% drop in gasoline prices since June 2014. We continue to expect spending to pick up, with the consumer sector on net benefiting from lower oil prices; however, today's sales report along with a much weaker than expected January wholesale trade report earlier this week, and on top of expected weakness in construction and drilling activity in the oil and gas sector in the month, suggested that GDP likely declined in January, with our monitoring pointing to a 0.2% drop. Although much of the weakness in wholesale and retail trade to date does not appear to be directly related to weaker activity in the oil patch, any rebound in activity in the eastern and central part of the country may well be delayed by the extreme winter weather in those regions in February. This suggests clear downside risk to our prior monitoring for a 2.0% annualized increase in first-quarter 2015 GDP, with growth potentially also coming in below the Bank of Canada's 1.5% estimate in the January Monetary Policy Report.

Residential building activity levels down in early 2015 from a year ago

Residential building activity levels down in early 2015 from a year ago.


Building activity in the South African market for new housing, as reflected by the number of building plans approved and the number of buildings completed, started 2015 on a relatively low note, with both the planning and the construction phases recording a decline in volumes in January from a year ago. These trends are based on data published by Statistics South Africa in respect of building activity related to private sector-financed housing. 

The number of new housing units for which building plans were approved dropped by almost 12% year-on-year (y/y), or 562 units, to 4 145 units in January from a year ago. This was the net effect of a significant drop in plans approved in respect of houses less than 80m², whereas plans approved in the segment of flats and townhouses jumped by just more than 30% y/y in January. The category of houses larger than 80m² showed negligible growth of just 1% y/y in the first month of the year.  The number of new housing units reported as constructed declined marginally by 1,6% y/y on the back of a contraction in both the segments of houses, whereas the number of flats and townhouses posted growth of almost 30% y/y in January. 

The real value of plans approved for new residential buildings increased by 1,3% y/y, or R35,73 million to R2,69 billion in January from R2,65 billion a year ago. The real value of residential buildings reported as completed was down by 8,7% y/y, or R136,52 million, to R1,44 billion in January from R1,58 billion in the corresponding month last year. These real values are calculated at constant 2010 prices.

According to Jacques du Toit, Property Analyst at Absa Home Loans: "The average building cost of new housing constructed came to R6 025 per square metre in January 2015, which was 7,7% up on the building cost of R5 205 per square metre a year ago. Building costs continue to increase by a higher rate than the average consumer price inflation rate, impacting the prices of newly built housing as well as renovations and alterations to existing housing. The building area planned and completed with regard to alterations and additions to existing houses contracted further in the first month of the year."

Building costs are affected by a number of factors such as building material costs, labour costs, transport costs, equipment costs, land prices, rezoning costs, and developer and contractor holding costs and profit margins. Building confidence, based on the Bureau for Economic Research's building confidence index, was somewhat lower in the first quarter of 2015 from the fourth quarter of last year, but is still above the neutral level of 50 and remains in line with the rising trend in the confidence index since bottoming in 2011.

The building confidence index measures prevailing business conditions in the building industry sub-sectors of architects, quantity surveyors, main building contractors, subcontractors, manufacturers of building materials and retailers of building materials and hardware.

Residential building activity will continue to be driven by economic developments, the state of household finances, consumer and building confidence and consumer lifestyles, which will be reflected in the demand for and supply of new housing. Based on the outlook for the economy and the household sector, residential building activity is in 2015 set to continue around the levels of the past few years. However, a continuation of these trends will increase the pressure on available housing stock and eventually house prices, driven by a growing population and an increasing number of households.   

Tuesday, March 17, 2015

Hudson`s new product in 2015: STATUARO

Welcome to visit our booth (NO. 5885) in Coverings 2015, and discuss everything you would like to know.

Monday, March 16, 2015

Weekly Economic and Financial Commentary

Consumers in Winter Hibernation?

  • Retail sales unexpectedly fell 0.6 percent in February. Sales looked to have been depressed by the harsh winter weather that hit parts of the country during the month, with the biggest monthly declines occurring at auto retailers and building material stores.
  • The labor market continued to show signs of tightening this week. Job openings rose to a 14 year high in January while initial jobless claims ticked lower over the past week.
  • Inflation reports this week showed import prices rebounding on higher fuel costs, but widespread declines were reported across components of the Producer Price Index.

Consumer Spending Should Perk Up Come Spring

After an unimpressive start to the year, consumer spending does not look to have perked up much at all in February. Retail sales unexpectedly fell, declining 0.6 percent. The drop marks the third straight monthly decline, with sales now contracting at a threemonth average annualized rate of 4.8 percent. However, unlike previous months, February's miss was tougher to pin on pricerelated declines in sales at gasoline stations. Following the first monthly increase since June in AAA's measure of gas prices, sales at gasoline stations rose 1.5 percent.

Excluding gas, retail sales fell 0.8 percent. The broader miss comes as much of the Midwest and Northeast experienced record cold and snowfall, which likely kept many shoppers at home. Car purchases were put on the backburner, with sales falling 2.5 percent. In addition, sales at building material stores, which are likely to be more sensitive to outdoor temperatures and precipitation, saw the largest monthly decline in nearly three years. Only a handful of store categories besides gas stations recorded an increase in sales over the month. Among them were grocery stores and non-store retailers, i.e., online shopping, which rose at the fastest pace in more than a year.

Despite the disappointing run of retail sales reports the past few months, we still believe consumer spending is set to strengthen in the months ahead. Data released this week showed household wealth continues to rise, which should encourage more consumers to part with more of their income. Household net worth increased $1.5 trillion in Q4, led largely by growth in financial markets but also by higher real estate values. Net worth has recovered alongside consumer confidence, which sits near an eight-year high. Moreover, households' real income in the three months through January rose at a 7.7 percent annualized rate, supported by low inflation and solid job gains.

The run of strong job growth looks likely to continue. This week's Job Openings and Labor Turnover Survey showed demand for workers continues to grow, with job openings rising to the highest level in 14 years. Involuntary separations, i.e., layoffs and firings, also moved lower, as employers seem to remain comfortable with the size of their workforce. The more timely initial jobless claims series showed claims edged lower last week, keeping the fourweek moving average near this cycle's lows.

Inflation Picture Still Favorable for Real Income Gains

The first of the inflation reports out for February showed that, even with a rebound in oil and gasoline prices over the month, inflation remains tepid. Import prices posted their first gain in seven months, but stripping out fuel and food, prices fell 0.3 percent. The producer price index for final demand fell 0.5 percent on a drop in the goods and services indices. The fall in energy costs is seeping into some services. Transportation services fell 1.1 percent, while lower margins at gasoline stations accounted for 30 percent of the drop in services prices. Price pressure further back in the pipeline continues to ease, with intermediate processed and unprocessed goods again falling.

U.S. Outlook

Industrial Production • Monday

Industrial production increased 0.2 percent in January, slightly below consensus, but still increased 4.8 percent year over year. Weakness mostly stemmed from autos and mining. Utilities output rose 2.3 percent. A warm December was followed by a cold January, contributing to the volatility in the demand for electricity and natural gas.

Capacity utilization remained flat at 79.4 in February and is near its long-run average. Mining capacity utilization, on the other hand, fell a full percentage point in January and has fallen three percentage points since the recent July peak.

We expect industrial production increased 0.2 percent month over month in February and that capacity utilization was flat at 79.4 percent on the month. We look for mining output to continue to be volatile in the coming months.

Previous: 0.2% Wells Fargo: 0.2% Consensus: 0.2% (Month-over-Month)

Housing Starts • Tuesday

Housing starts tumbled 2.0 percent in January to a 1.07 million unit rate. Single-family starts were the reason for the decline, falling 6.7 percent on the month. Multifamily, on the other hand, increased 7.5 percent. Weather was likely a factor in the decline in January. In addition, single-family starts outpaced permits in December, possibly indicating further weakness in the indicator. It appears as if we will see continued strength in multifamily, as multifamily permits outpaced starts on the month.

We expect that housing starts slowed to a 1.00 million-unit pace in February, reflecting the slower pace of permits and difficult building conditions in much of the country. Although the average temperature was near average nationally, the South and Northeast experienced below-average temperatures, and several winter storms likely weighed on housing starts during the month.

Previous: 1065K Wells Fargo: 1004K Consensus: 1050K (SAAR)

Current Account • Thursday

The current account deficit widened to $100.3 billion in Q3. This was largely in line with expectations; however, the new information revealed in the release was that the surplus in the income balance fell from $32.8 billion to $24.1 billion in Q3. This was largely a result of one-off fines paid to the U.S. government in Q2, which helped inflate the income receipts. Turning to the financial account, foreign direct investment and portfolio investment in the United States remained strong in Q3, reflecting the relative outperformance of the U.S. economy.

We expect the current account widened modestly to end the year. A stronger dollar and weak global economy likely supported imports and weighed on exports. The continued dollar appreciation may suggest investment in the United States was stronger in Q4, implying further strength in the financial account.

Previous: -$100.3B Wells Fargo: -$100.0B Consensus: -$104.1B

Global Review

Tough Sledding for European Manufacturing

  • January industrial production figures for both the Eurozone and the United Kingdom hit the wire this week and, in both instances, we saw a modest decline despite expectations of small improvement. The manufacturing picture is likely better than these reports suggest, and the manufacturing PMIs shows that activity is slowly improving (bottom graph).
  • Although Australia's February employment report beat expectations, the improvement was not enough to offset the weakness seen in the prior month.

Soft Industrial Production in the United Kingdom

Industrial production in the United Kingdom slipped 0.1 percent in January. The U.K. manufacturing PMI had improved in January, leading many market watchers to anticipate an increase in the output figures for January. Most of the weakness was in the volatile electricity, gas steam and AC category, which is similar to utilities production in the United States. Moves here can say as much about weather as they do about underlying manufacturing activity. The mining and quarrying category posted a 2.0 percent gain for January and oil & gas production increased 2.4 percent on the month.

The manufacturing PMI increased again in February, indicating that prospects for firming in the U.K. manufacturing sector are brightening. Indeed the year-over-year rate of output growth climbed to 1.2 percent, just shy of the fastest annual growth rate since August.

Eurozone Production Weak as Well

In a remarkably similar outturn, industrial production in the Eurozone also fell 0.1 percent, despite expectations for a 0.2 percent monthly increase. The key explanatory variable for the miss in the Eurozone, however, was the fact that December production figures were revised sharply higher. The initial industrial production report for December was 0.0 percent, but that figure was revised to a 0.3 percent monthly increase.

The revision set up a higher base for the monthly change, but the actual level of output was better than most were expecting. This is evident in the fact that the year-over-year rate of output growth in the Eurozone climbed to 1.2 percent (working-day adjusted), despite expectations for a scant increase of just 0.1 percent.

The PMI numbers in the Eurozone are not quite as robust as they are in the United Kingdom. The Eurozone manufacturing PMI, for example, was 51.0 in January and unchanged in February. That 51 figure is above the 50 line that separates growth from contraction, but only barely, and is consistent with slow growth in the Eurozone.

Better Jobs Report in Australia

In January, the Aussie economy shed 14,600 jobs and the unemployment rate climbed to 6.4 percent from 6.1 percent previously. We learned this week that Australian employers added a net 15,600 jobs in February and that was sufficient to bring the unemployment rate down to 6.3 percent.

While the outturn was better than the consensus had expected, Australia's labor market is not without its share of difficulties at the moment. Full-time jobs (up 10,300) comprised a healthy share of February's job growth, but it was a decline of 30,900 fulltime jobs that led January's decline. The improvement in February retraces only a third of the full-time job losses of the prior month. The lack of conviction in job growth, combined with below-target CPI inflation, will likely cause Australia's Reserve Bank to cut its cash rate again this year.

Global Outlook

Brazil Economic Activity Index • Monday

To argue that the Brazilian economy is in trouble is an understatement. From every side you look at the Brazilian economy, things are not looking good. The economic activity index will be released on Monday and we expect it will confirm the bad times ahead for the Brazilian economy. Although the index recovered a bit in December on a year-over-year basis, up 0.7 percent, the index dropped 0.6 percent from November. Thus, the prospects for this release, which will give a first hint at the conditions of the economy at the start of 2015, are probably going to disappoint. Higher inflation and significant depreciation of the currency since mid-2014 have pushed the Brazilian central bank to increase interest rates, which we expect may lead to further deterioration in domestic consumption. The only positive of the depreciation of the currency is its effects on exports, which could help the economy a bit this year.

Previous: 0.7% (Year-over-Year) Consensus: -1.4%

Germany ZEW Survey • Tuesday

The recent slight improvement in the German economy will be tested on Tuesday when the ZEW survey on current situation and expectations is released. The index has been giving a more positive signal over the past several months after weakening considerably during most of 2014. The better-than-expected growth coming from the German economy during the last quarter of 2014 confirmed this slight improvement. An even better reading will be a good indicator that the German economy has turned the corner and what is good for the German economy is good for the Eurozone. We have already seen some improvement in the industrial production index as well as in the manufacturing PMI, so a further improvement in the ZEW indices would tend to indicate that the German economy may continue to improve.

Previous: 53.0 Consensus: 59.4

U.K. Weekly Earnings • Wednesday

Several labor market indicators will be released next week in the United Kingdom, including jobless claims for February, as well as the ILO unemployment rate, employment change and three-month average weekly earnings for January. Average weekly earnings have been growing nicely since mid-2014, but the pace of growth remains low compared to the rate experienced during the first decade of the century. We suspect that relatively higher consumer price inflation in the prior decade may have played a role in the discrepancy.

Thus, growth in average weekly earnings that continues to be in line with the rate of inflation should not be of concern to the Bank of England as it continues to gauge its next monetary policy move, which we expect to come at the end of this year. Also slated for release on Wednesday are the Bank of England's minutes from its last monetary policy meeting.

Previous: 2.1% (Year-over-Year of 3-M Avg.) Consensus: 2.2%

Point of View

Interest Rate Watch

On Board for a June Rate Hike

Expectations for a June liftoff to Fed rate hikes increased considerably following February's strong employment report. The Fed's reluctance to normalize policy has largely hinged on the continued slack in the labor market but that argument now seems to have lost steam. Not only has job growth ramped up, but the quality of jobs has also increased and more workers are working longer hours and taking home larger paychecks. The unemployment rate has also fallen to 5.5 percent, which is the upper end of what is widely considered as the zone of full employment.

While there are still some powerful arguments to be made that there is still considerable slack available in the labor market and hourly wages have yet to increase significantly, the labor market appears to be well on its way to a full recovery.

Concerns about the timing of the Fed's first rate hike have now shifted to inflation, which has been running too low, the dollar, which has been strengthening rapidly and the recent weakness in retail sales. While all of these concerns are valid, none of these concerns preclude the Fed from hiking rates this year and most will likely improve before the Fed has to make a call.

February's weakness in retail sales added an unexpected wrinkle to the Fed's deliberations. Retail sales have fallen in each of the past three months, which is a rarity outside of recessions. Most of that drop, however, is tied to plunging gasoline prices. However, even after excluding sales at gasoline stations, as well as food, building materials and motor vehicles, sales have still fallen for the past two months and are up at just a 1.2 percent annual rate over the past three months.

While the weakness in retail sales is disconcerting it probably will not alter the timetable for the Fed's first rate hike. Warmer weather appears to have brought shoppers out of hiding in March and, with sales so weak over the past three months, even modest gains this spring should more than reverse the slowdown we have seen over the past three months.

Credit Market Insights

Defrosting the Housing Market

In the beginning of this year, we saw a slowdown in home sales and new home construction. Though concerning, weather has been a major hindrance for much of the country. That said, with the winter season coming to a close, the slowdown should prove to be primarily seasonal.

Improvements are already being seen in the market with mortgages applications for new home purchases as well as mortgage credit availability on the rise, according to the Mortgage Bankers Association. In accordance with that report, Freddie Mac released its Economic and Housing Market Outlook for March, which is calling 2015 a strong year for home sales and construction.

One thing worth noting that could put a damper on housing activity is higher mortgage rates. The Fed is looking to June as the start date for rate increases; mortgage rates will more than likely increase as well. However, with rates for 30-year fixed-rate mortgages at historic lows, marginal increases may not be significant enough to choke off activity. As the winter blues subside, we expect the housing market to thaw as we enter the home buying season. We are still hopeful that the housing market will improve this year. The most recent jobs report pointed to improvement in the labor markets across age groups, in spite of less than stellar wage growth. This should help increase demand for homes and apartments, as signs are pointing to potential pent up demand. In other words, we should see much needed growth in the housing market this year and the next with little lasting effect from the winter season.

Topic of the Week

The Dollar Soars

The U.S. dollar has strengthened significantly since last summer. As shown in the top chart, the Fed's "Major Currency" index, which, as the name implies, measures the value of the dollar versus a trade weighted index of seven major currencies, has risen 20 percent since last July to reach a 12-year high. Since last summer, the greenback has shot up 15 percent against the British pound, 20 percent versus the Japanese yen and 30 percent vis-à-vis the euro. The dollar has also enjoyed broad-based support against the currencies of many developing countries (bottom chart).

So what is driving the dollar at present? The main driver appears to be the expected and actual divergence in monetary policy stances among central banks in 2015. While most analysts, we included, look for the Fed to begin hiking rates later this year, many foreign central banks are embracing further policy accommodation. The yield on the 2-year government bond in the United States is up about 20 bps on balance since last July. In contrast, the yield on the comparable bond in Germany is down about 25 bps over the same period, and is actually in negative territory at present. This swing in interest rate differentials in the dollar's favor is helping support the value of the greenback versus most other currencies.

Will the dollar's appreciation have any detrimental effects on the U.S. economy? Statistical analysis confirms that dollar appreciation generally is associated with slower growth in U.S. exports. However, the most important variable determining export growth is the rate of economic growth in the rest of the world, not the value of the currency. History is instructive in that regard. Between early 1983 and mid-1985, the "Major Currency" index rose 25 percent, reaching levels that were 40 percent higher than the current level. Yet, real exports grew 8 percent in 1984 and 3 percent in 1985 due to solid growth in the rest of the world at that time. If dollar strength did not kill off American exports in the mid-80s, when the dollar was much stronger, it is unlikely to do so today.