The SAVE student loan plan eases the burden on low-income households and should reduce the economic impact as repayments resume in October. Nonetheless, with the hit to disposable incomes just one of several headwinds in the fourth quarter, it is still …
29th August 2023
This page has been updated with additional analysis since first publication. MNB cuts rates again, but a short pause in the easing cycle may be coming The Hungarian central bank (MNB) announced another 100bp cut to its quick deposit rate (the key policy …
Despite the slowdown in EM GDP growth in Q2, there’s little sign that labour markets are softening. Wage growth remains alarmingly strong across much of Latin America and Central Europe (CEE). That supports our view that, while central banks in these …
The effects of tighter monetary policy are very clear in the latest money and credit data, reinforcing our view that the euro-zone economy will perform worse than most analysts expect in the coming quarters. Data released yesterday showed that the sharp …
Our China Activity Proxy (CAP) suggests that China’s economy regained some ground in July, following a contraction in June. But the big picture is that output has levelled off recently and that the economy could tip into a downward spiral unless policy …
Note: We’ll be discussing the China growth/stimulus question, the BOJ’s policy outlook, Indian food price inflation and more in our monthly Asia Drop-In on Thursday, 31 st August . Register here to join the online briefing. This page has been updated with …
This page has been updated with additional analysis since first publication. RBA will look past upswing in retail sales We don’t believe that the healthy uptick in retail sales in July represents a second wind for the Australian consumer. Accordingly, …
28th August 2023
PMI and other data released this week have added to evidence of the relative strength of the US economy amid a weakening global backdrop, shifting yield gaps in favour of the greenback and pushing it higher against most major currencies yet again. (See …
25th August 2023
After a relatively cautious speech at Jackson Hole from Fed Chair Jerome Powell and data this week which cast doubt on the idea of an economic resurgence, we still aren’t convinced that the rise in market interest rate expectations for the next few years …
Market participants have taken Fed Chair Powell’s much-anticipated keynote speech at the Jackson Hole conference today as somewhat hawkish, even if the fallout, so far, is some way from the violent market moves which followed his remarks at last year’s …
South Africa fiscal concerns build Growing concerns about the direction of South Africa’s public finances have caused the yield curve to steepen as risk premia have risen, a trend that may continue as next year’s election approaches. Short-dated local …
The worst Canadian wildfires on record appear to be behind much of the recent weakness in GDP and, with more areas now under evacuation orders, the data are likely to remain weak in the coming months. Broader negative impact than 2016 wildfires Worst “on …
It has generally been a positive week for commodity prices. Most metals and agricultural prices rose on the week, in somewhat of a turnaround from recent trends. By contrast, energy commodities fell for the second consecutive week, as concerns about the …
CBRT policy shift now firmly back on track There’s a lot of confusion about what drove Turkey’s central bank to deliver an unexpected 750bp rate hike this week and doubts remain about the policy U-turn. But at this point we’re minded to focus on the …
Solid growth not yet prompting Fed rethink Fed Chair Jerome Powell underscored the FOMC’s commitment to data dependence in his Jackson Hole speech today, but there was no suggestion that signs of economic resilience have already prompted Fed officials to …
Property yields rose across all sectors in Q2. However, for the retail sector this was offset by rises in the 10-year treasury yield. Consequently retail saw a small decline in valuations, whereas valuations in the other sectors improved. That said, both …
Drought takes its toll on the Panama Canal Panama is the latest victim of climate change in the region. The country is reeling from a drought with “no historical precedence” according to Panamanian authorities, which has seen water levels at the Gatun …
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Growth pick up is likely to be short-lived Nigeria’s economic growth picked up to 2.5% y/y in Q2 as the damaging effects of a botched demonetisation process …
BRICS expansion unlikely to challenge G7 India made history this week after its Chandrayaan-3 mission became the first to touch down on the south pole of the moon. Remaining column inches in the local press have been given to the BRICS summit in …
Strong immigration and the turnaround in the housing market raise the chance that the economy will avoid recession but, with the Bank of Canada keeping further rate hikes on the table, we still judge that GDP will contract later this year. Even if …
Worries that Germany is becoming the “sick man of Europe” again have resurfaced over the past few weeks. The term was first used in relation to Germany in 1999, at a time when it had been growing much more slowly than countries such as France and Spain …
This week’s bigger fall in UK rate expectations, bond yields and the exchange rate compared to elsewhere is largely due to the markets deciding that a weaker economy will trim inflation, meaning the Bank of England has less work to do. Market pricing is …
This page has been updated with additional analysis since first publication . Inflation rise likely to take larger rate cuts off the table The jump in Brazilian inflation to a higher-than-expected 4.2% y/y in the middle of the month (and the prospect of …
Note: We’ll be discussing the China growth/stimulus question, the BOJ’s policy outlook, Indian food price inflation and more in our monthly Asia Drop-In on Thursday, 31 st August . Register here to join the online briefing. Have the leadership given up on …
Efforts by the BRICS group to demonstrate an image of unity and cooperation were on full show at this week’s summit, but – aside from membership expansion – policy proposals were light and not overly ambitious. And while there’s a broader question about …
Bloated inventories set to weigh on GDP Recent data from Taiwan have been mixed, with exports showing signs of life but consumer demand softening. We think the economy will weaken in the near-term as any further support from export demand is likely to be …
This month’s briefing on the big regional macro and market stories includes the latest on China’s struggling economy, the next steps from the Bank of Japan as inflation becomes more widespread, and potential upsets for the Reserve Bank of India’s policy …
Our forecast that the Bank of England won’t start cutting interest rates until the second half of 2024 means mortgage rates are likely to stay between 5.5% and 6.0% for the next 12 months. While transactions volumes have only seen a modest decline so far, …
US 2-Year Govt Bond Yield (%, since Q1 2000) …
US Policy Rate & Govt Bond Yields (%, since Q1 2010) …
Poland, Czech Republic & Hungary EC Consumer Price Expectations (balance) …
Poland, Czech Republic & Hungary EC Economic Sentiment Indicator …
UK Policy Rate & Govt Bond Yields (%, since Q1 2010) …
Sweden Policy Rate & Govt Bond Yields (%, since Q1 2010) …
Germany Policy Rate & Govt Bond Yields (%, since Q1 2010) …
Central & Eastern Europe Weighted Selling Price Expectations (balance, weighted by 2023 GDP) …
South Africa Current Account Balance ($bn, annual) …
India Current Account Balance ($bn, annual) …
Brazil Current Account Balance ($bn, annual) …
US 10Y/2Y Spread (bps, since Q1 2000) …
GBP/EUR (daily since 2018) …
Euro-zone Consumer Confidence …
Russia Current Account Balance ($bn, annual) …
China Current Account Balance ($bn, quarterly) …
This page has been updated with additional analysis since first publication. German economy set to contract again in third quarter The fourth successive monthly decline in the Ifo Business Climate Index in August, following the slump in the PMIs earlier …
Momentum behind price rises starting to slow The economic data released this week suggest that the case for policy rate hikes in response to above-target inflation is still not compelling. For a start, the Tokyo CPI showed that inflation excluding fresh …
New Zealand activity in free fall Data published by StatsNZ on Wednesday showed that retail sales volumes fell by 1% q/q last quarter, a much weaker result than the 0.4% contraction anticipated by the analyst consensus. The weakness in retail sales was …
This page has been updated with additional analysis since first publication. Underlying inflation losing momentum While underlying inflation remained at a 40-year high in the August Tokyo CPI, the momentum of price increases has slowed markedly which …
