Overview – With affordability stretched and the economy slowing, housing market activity is expected to remain weak over the coming quarters. While we expect house prices to lose some of their recent momentum, the worst of the correction appears to have …
11th August 2023
The big swings in Treasury yields recently have sent some ripples through the US stock market. This Update sets out how we think this will continue to play out, for the equity market as a whole and across some particularly interest-rate sensitive sectors, …
Where the US leads, the UK often follows. So the evidence of broad-based, rapid disinflation in the US offers some hope for the UK. Indeed, at 7.9%, the UK is still lumbered with a CPI inflation more than twice the US rate (3.2%). At least July’s UK CPI …
Further CEE disinflation keeps rate cuts on track The July inflation data out of Central and Eastern Europe (CEE) this week suggests that our forecasts for interest rate cuts to arrive across the region over the rest of this year, and in early 2024, …
It is not surprising that Italian bank shares slumped this week after the government announced that it is imposing a windfall tax on the banks. The decision seemed to come out of the blue and to have been cobbled together at the last minute with several …
This page has been updated with additional analysis since first publication Inflation rise means Copom won’t increase the size of rate cuts The jump in Brazilian inflation to a slightly higher-than-expected 4.0% last month won’t stop Copom from lowering …
Unemployment rises, real wages fall While Korea’s labour market remains very tight, figures from earlier this week show it is starting to loosen as the downturn in the economy feeds through in to higher unemployment and weaker wage growth. The …
This page has been updated with additional analysis since first publication. Downturn deepens as borrowers hold back China’s bank loan growth fell to its lowest in seven months in July, while broad credit growth dropped to a record low. We expect further …
Upside risks to inflation still remain The RBI kept the repo rate on hold at 6.50% as expected this week and maintained a hawkish tone amid the recent surge in food prices. The Bank revised up its inflation forecast for Q3 significantly (from 5.2% to …
Consumer price inflation slipped into negative territory in July. But this probably won’t last more than a quarter or two and has less to do with the health of domestic demand than many think. Inflation in services, the part of the CPI basket most …
This page has been updated with additional analysis since first publication. Resurgence in activity unlikely to last The 0.5% m/m rise in real GDP in June and 0.2% q/q increase in Q2 (CE, BoE, consensus 0.1% q/q) confirmed that a recession has so far been …
Wage growth & external demand holding up Data released this week showed that overall wage growth remained above 2% for the second consecutive month as a slowdown in regular earnings growth was offset by a strong contribution from bonus payments as firms …
Households continue tightening their belts Earlier this week, we got further confirmation that household spending in Australia is now in freefall. The ABS’ monthly indicator showed that the slowdown in household spending deepened in June. As a …
Banxico continues to sit on the sidelines Mexico’s central bank chose not to follow its peers in the rest of Latin America and begin an easing cycle, leaving its policy rate unchanged at 11.25% at today’s Board meeting. Concerns about the persistence of …
10th August 2023
We think disinflationary pressures will help the Fed pivot to rate cuts sooner than investors expect, giving a boost to “safe” assets this year and next. US CPI data for July, published today, was largely in line with consensus expectations. (See here .) …
With lingering pandemic and energy support measures coming to a close and governments returning one eye to previous fiscal targets, fiscal policy will tighten a little in advanced economies over the coming years. This will contribute to slower growth. But …
We are unconvinced by Christine Lagarde’s claim that the recent strength of employment in the euro-zone is due mainly to labour hoarding and shifts in the sectoral composition of employment. Instead, we suspect it is mainly due to understaffed firms …
Since our last Financial Market Stress Monitor on 13 th May, strains have continued to ease. This abbreviated Stress Monitor takes stock of developments since then. Overall, stress across core financial markets appears about as low as at any point …
Aramco’s profit slump ≠ austerity The slump in the profits of Saudi Arabia’s state oil company, Aramco, in Q2 has focussed attention on the deterioration in the Kingdom’s budget position. But the authorities appear to be taking as many steps as possible …
While China’s latest price reports have markets worrying about deflation, Group Chief Economist Neil Shearing thinks the real issue is what’s happening in core inflation against a backdrop of a struggling economy. He also reviews the “immaculate” July CPI …
Apart from lagging shelter prices, Fed already hit its inflation target The disinflationary pressures continued to build in July, with both headline and core CPI increasing by a moderate 0.2% m/m. Admittedly, the annual headline inflation rate actually …
The stark and unusual contrast between falling credit spreads of high-yield (HY) corporate bonds and rising ones of private-label commercial mortgage-backed securities (CMBS) in the US suggests investors expect the economy there to shrug off lingering …
UK Retail Yield Forecasts (%, 2023-2027) …
Spain Retail Yield Forecasts (%, 2023-2027) …
Germany Retail Rental Value Growth Forecasts (% y/y, 2023-2027) …
France Retail Capital Value Growth Forecasts (% y/y, 2023-2027) …
Table: Industrial Rental Value Growth in Ge, Fr, It, Sp, Nl, Cz, Pl, UK (% y/y) …
France Office Rental Value Growth Forecasts (% y/y, 2023-2027) …
UK Retail Rental Value Growth Forecasts (% y/y, 2023-2027) …
Spain Retail Rental Value Growth Forecasts (% y/y, 2023-2027) …
Belgium Retail Rental Value Growth Forecasts (% y/y, 2023-2027) …
Spain Office Rental Value Growth Forecasts (% y/y, 2023-2027) …
Germany Office Capital Value Growth Forecasts (% y/y, 2023-2027) …
UK Retail Capital Value Growth Forecasts (% y/y, 2023-2027) …
Germany Retail Capital Value Growth Forecasts (% y/y, 2023-2027) …
Belgium Retail Capital Value Growth Forecasts (% y/y, 2023-2027) …
Table: Industrial Net Initial Yield/Prime Yield in Ge, Fr, It, Sp, Nl, Cz, Pl, UK (%) …
Belgium Office Capital Value Growth Forecasts (% y/y, 2023-2027) …
Belgium Office Rental Value Growth Forecasts (% y/y, 2023-2027) …
Spain Retail Capital Value Growth Forecasts (% y/y, 2023-2027) …
Germany Retail Yield Forecasts (%, 2023-2027) …
France Retail Yield Forecasts (%, 2023-2027) …
Belgium Retail Yield Forecasts (%, 2023-2027) …
Table: Industrial Total Returns Growth in Ge, Fr, It, Sp, Nl, Cz, Pl, UK (% y/y) …
UK Office Yield Forecasts (%, 2023-2027) …
France Office Yield Forecasts (%, 2023-2027) …
Belgium Office Yield Forecasts (%, 2023-2027) …
France Retail Rental Value Growth Forecasts (% y/y, 2023-2027) …
Table: Industrial Capital Value Growth in Ge, Fr, It, Sp, Nl, Cz, Pl, UK (% y/y) …
UK Office Capital Value Growth Forecasts (% y/y, 2023-2027) …
