GDP growth picked up in Q3 but timelier data suggest that the economy is poised for a weak Q4. We expect growth to remain slow next year regardless of whether President Trump raises tariffs on imports from Europe. We also think that inflation will be well …
8th November 2024
Confidence buoyed by lower inflation expectations The rise in the University of Michigan consumer sentiment index, despite uncertainty ahead of the US election, shows that economic developments remain the key driver of confidence in the aggregate. While …
Trump’s tariff threats – lessons from his first term The reaction in Mexican financial markets to Donald Trump’s victory in the US election has been somewhat surprising. Having come under pressure as it became apparent that Trump was on course to win – …
Today’s fiscal announcement was far smaller and less detailed than many had hoped for. The explanation, we think, is that China’s leadership sees less need for stimulus than most commentators (we’re with the leadership on this). Its priority instead seems …
Winston Churchill is supposed to have said that “jaw-jaw” is better than “war-war” and we think European politicians will take the same view when faced with the threat of a trade conflict next year. We set out our working assumption about how a US …
After a big couple of weeks for the UK, the US, the world and global financial markets, we have revised some of our economics forecasts. Due to the policies in the UK Budget (bigger and sooner rises in government spending than taxes, see here ), we now …
Muted job gain even worse that it seems The muted rise in employment in October was even weaker than it seems, as, like in September, it was propped up by strong gains in youth employment. While the unchanged unemployment rate will reassure the Bank that …
Taking the long view on President-elect Trump We discussed the implications of a second Trump presidency on commodity markets here . In short, despite his pledges to “drill, baby, drill” and dramatically raise tariffs on China, we suspect that the net …
Easing cycle on pause, waiting for more clarity on fiscal policy The National Bank of Romania (NBR) left its policy rate on hold again today, at 6.50%, against a backdrop of stubborn above-target inflation and concerns about the loose fiscal stance ahead …
Exporters could do even better in the near-term We published our initial thoughts on the impact of a second Trump presidency on China’s economy here . Counter-intuitively, perhaps, we concluded that there would be initial upside for exporters, as US firms …
Inflation rises, more rate hikes on the cards The further rise in Brazil’s headline inflation rate to 4.8% y/y in October means that the central bank is almost certain to deliver additional interest rate hikes at its upcoming meetings. The risks are …
Residential’s growing share of investor portfolios speaks to the buzz around its potential to keep providing outsized returns. But will the sector continue to deliver? Join our Commercial Real Estate team for a special online briefing all about the …
Financial market and monetary policy impact Asian currencies fell against the dollar after the US election result was announced, and we think they will weaken over the coming months on the back of higher US Treasury yields and an increase in US tariffs. …
Unless there’s more to come later this evening, today’s fiscal announcement is another disappointment for those expecting substantial stimulus. The key measure announced at a press conference earlier is a refinancing of local government debt. Local …
Tariffs won’t be a big drag We’re now assuming that Donald Trump will impose a 60% tariff on US imports from China and a 10% tariff on imports from all other countries next year. The US is Japan’s largest export destination, with shipments equivalent to a …
Trump trade puts rupee under pressure All of our analysis of the US election can be found on this webpage and in the recording of an online briefing held after the result on 6 th November. In terms of the market reaction, the “ Trump trade ” has been in …
RBA need not fret geopolitical risks The RBA’s meeting this week came and went without much ado, with the Bank leaving rates on hold yet again and providing little in terms of new forward guidance. In fact, the RBA’s meeting was quickly overshadowed by …
As expected, after a run of stronger activity and inflation data since it started its rate cutting cycle with a 50bp reduction in mid-September, the Fed opted for a more modest 25bp cut at the conclusion of its two-day FOMC meeting, taking the fed funds …
7th November 2024
Fed slows pace of rate cuts As expected, after a run of stronger activity and inflation data since it started its rate cutting cycle with a 50bp reduction in mid-September, the Fed opted for a more modest 25bp cut at the conclusion of its two-day FOMC …
With the US election out of the way and markets starting to settle down after some dramatic swings yesterday, attention now turns back to the more humdrum topic of central bank policy and the near-term economic outlook. While the global easing cycle is …
Mexico is one of the most vulnerable economies to the policies that US President-elect Trump flagged on the campaign trail. This Update looks at the channels through which it could be affected. One key point in all of this is that policymakers don’t have …
We have revised some of our key market forecasts in response to Donald Trump’s victory and the news that the Republicans are on course to regain full control of Congress. These include higher projections for the 10-year Treasury yield and the greenback. …
The victory for Donald Trump in the US election will have major ramifications for the Middle East. (You can read all of our US election coverage here .) For the most part, the Middle East should be shielded from any direct impact if Trump pushes ahead …
OPEC+ and China, not Trump, will drive prices in 2025 Trump’s election victory won’t have a big impact on commodity markets in the short term. US oil and gas production is near record highs and prices, not policy, will be the key driver of drilling next …
UK Commercial Property Valuation Monitor (Q3 24) …
Watch a recording of our post-MPC online briefing here . While cutting interest rates from 5.00% to 4.75% today, the Bank of England implied that the Budget means rates will continue to fall only gradually. We agree and due to the Budget (and not the US …
Easing cycle to continue, but risk of slower pace of cuts The Czech National Bank (CNB) cut its policy rate by 25bp again today, to 4.00%, and we still think that the conditions will be in place for the policy rate to be lowered to its estimated neutral …
Surge in ULC illustrates upside risks to services inflation The BLS finally incorporated the upward revisions to its labour compensation estimates into the productivity and unit labour costs data, and the results are likely to trigger some inflation …
The collapse of its coalition government, triggered by disagreement over fiscal policy, means Germany will probably have a CDU-led government by mid-2025. This may be more stable and functional than the outgoing coalition, but would face the same …
Today’s 50bp cut is likely to be the only one in the cycle for the Riksbank, and we expect it to cut by just 25bp at its next two meetings to take the policy rate to its “terminal” level of 2.25% in January. This is less than the four cuts that market …
Watch a recording of our post-MPC online briefing here . Budget means Bank may not cut rates as fast and far While cutting interest rates from 5.00% to 4.75% today, the Bank of England implied that the Budget means rates will continue to fall only …
This page has been updated with additional analysis since first publication. Retail sales strong in September but unlikely to keep rising rapidly Euro-zone retail sales rose in September rounding off a good quarter for retailers. We suspect that sales …
COP29 – which is set to kick off in Baku next week – has been dubbed the ‘finance COP’ given that the top priority for negotiators will be to agree on a new climate finance pledge. However, Trump’s election victory looms large over the event and adds to …
Alongside its decision to leave interest rates unchanged today, Norges Bank reiterated that it expects to remain on hold in December too. It is likely to start cutting in Q1 next year and we suspect that it will then loosen policy a little more quickly …
Easing core inflation and peso recovery leave 25bp cut in play The larger-than-expected rise in Mexico’s headline inflation rate, to 4.8% y/y in October, was driven entirely by a jump in agricultural price inflation. Core inflation edged down last month …
Riksbank increases pace of cuts, but doesn’t change its terminal rate forecast The Riksbank cut its policy rate by 50bp today to 2.75%, but the accompanying policy statement suggested that it plans only two more 25bps rate cuts to take it to a …
German industry continues to struggle The German industrial production release will be overshadowed by the break-up of Germany’s ruling coalition, which we will comment on later this morning. But the further fall in industrial output in September …
This page has been updated with additional analysis since first publication. House prices rise to record high and will accelerate next year October’s 0.2% m/m rise in Halifax house prices suggests that the recent momentum in house prices has a bit further …
The recent weakness in productivity growth is only partly due to a cyclical hangover from the pandemic as it also reflects the structural weakness in investment. With investment growth set to remain mediocre, productivity growth will remain lacklustre …
Exports to remain robust in the near term despite Trump victory Export values grew y/y at the fastest pace in more than two years, and export volumes picked up too. We expect shipments to stay strong in the coming months – any drag from potential Trump …
Large US tariffs would hurt China’s export sector but less than many suppose. We estimate that the direct impact of even a 60% US tariff on goods from China would be well under 1% of China’s GDP . The bigger challenge for policymakers could be the …
Growth to cool in the coming quarters GDP growth accelerated in Q3 but we think this strength is unlikely to last as slower growth in remittances, tighter fiscal policy and weaker export demand weigh on activity. According to the data published today, GDP …
Regular wage growth may already have peaked The strong pay hikes in this year’s spring wage negotiations now seem to be fully reflected in labour cash earnings and we expect wage growth to slow again next year. According to today’s preliminary estimate, …
In the wake of Donald Trump’s stunning election victory, our senior economists briefed clients ahead of the New York open on its macro and market implications. In this exclusive clip, you’ll hear Group Chief Economist Neil Shearing talking to Chief North …
6th November 2024
Copom hikes again Brazil’s central bank hiked the Selic rate for a second consecutive meeting, by 50bp to 11.25%, today but this has more to do with the domestic macro backdrop and shoring up monetary policy credibility than a response to the market …
Our US Housing Market Chart Pack has been updated with the latest data and our analysis of recent developments. Lower borrowing costs should breathe some much-needed life into the market next year, but stretched affordability and tight supply due to …
Negative natural gas prices at a few trading hubs in West Texas, including the Waha Hub, have curiously become the norm this year. This Update looks at five key questions on the topic. 1) Why have natural gas prices at the Waha Hub been getting so much …
Donald Trump’s second presidency is likely to result in lower US GDP growth, faster US inflation and a slightly higher path for the fed funds rate. The implications for the rest of the world are highly uncertain, not least because it is unclear how many …
NBP leaves rates on hold, risks to our rate forecast shift up slightly The decision by the National Bank of Poland (NBP) to leave its policy rate on hold again today, at 5.75%, was never in doubt, and we think that interest rate cuts are unlikely to …
Our senior economist team were online the day after the election to help clients understand the economic and market implications of what we know so far - and what's still to be answered. … Drop-In: Trump's second term - Macro and market …
