Net lending to property staged a recovery in April, rising to a 10-month high of £1.18bn. Both standing and development lending increased, with the latter now positive for each of the past three months. The pick-up in lending is in line with the Q1 RICS …
1st June 2023
Indian manufacturing sector remains resilient India’s manufacturing PMI reading rose in May to a 31-month high and points to very healthy growth in the sector. But the survey also shows that price pressures are well past the peak, supporting our view …
Policymakers warn against selling the yen The yen made headlines this week after breaching 140 against the greenback, hitting 140.93 at one point on Tuesday. That’s the weakest it had been since November last year and prompted Japanese policymakers to …
House prices flattened off in May after a rise in April. But with mortgage rates now on their way back up we suspect that the stabilisation in prices over the last couple of months will soon give way to renewed falls. The -0.1% m/m fall in house prices in …
Sri Lanka’s central bank (CBSL) cut interest rates in a surprise move today but we think further monetary loosening will be gradual as concerns about the external position are likely to persist in the near-term. The decision to cut both the Standing …
Manufacturing sector remains under pressure Manufacturing PMIs declined in most countries in Emerging Asia. Weak demand and elevated inventory levels are likely to continue to weigh on manufacturing output in Asia over the coming quarters. May …
House prices gain traction With house prices having risen for the third month in a row, there is a growing risk to our view that the housing downturn has further to run. Nonetheless, with rising interest rates set to squeeze affordability even more, we …
Inflation and GDP growth have surprised to the upside since April meeting Housing turnaround an upside risk to inflation and inflation expectations Progress on US debt ceiling deal means little reason to wait until July before hiking As GDP growth and CPI …
31st May 2023
Economic momentum sustained at the start of Q2 The continued growth of Russian industrial production and retail sales in April suggests that the strength of activity seen in Q1 continued at the start of Q2. This momentum is likely to be sustained in the …
The US dollar has rebounded in recent weeks as resilient US economic data and renewed hawkish noises from the FOMC have revived the “higher for longer” narrative, shifting relative interest rate expectations back in favour of the US. There is probably …
The April JOLTS data suggest that the gradual easing in labour market conditions continues, which is putting downward pressure on wage growth. Although the job openings rate edged back up to 6.1% last month, from 5.9%, the timelier data from Indeed …
House of Representatives to vote on the Fiscal Responsibility Act late on Wednesday Clients can sign up here for three of our Drop-Ins tomorrow… … these will be focused on euro-zone inflation, OPEC+, and the case for EM equities Key Market Themes While …
Recent gains in the US stock market have been unusually narrow, and we don’t think the conditions are yet in place for a broad-based rally. A striking fact about the recent gains in US equities is that they have been driven by a remarkably small number of …
Financial risks across the major EMs look relatively well contained for the time being but there are some areas of weakness. Most immediately, following President Erdogan’s election victory the prospect of continued unorthodox policymaking in Turkey …
Ajay Banga appears to be well qualified to lead the World Bank Group and is as well-placed as anyone to “mobilise” Wall Street cash to fund climate-related projects. However, progress on reducing global emissions will require more than a stream of climate …
Upside surprise further boosts the case for another rate hike The larger-than-expected 3.1% annualised rise in first-quarter GDP and the strong preliminary estimate in April boost the case for another interest rate hike from the Bank of Canada, which …
Consensus becomes more optimistic, but inflation a concern The latest IPF Consensus Survey showed another upgrade to forecasts for total returns in 2023, driven by improvements to both the rental and capital value outlook. A better-than-expected start to …
Although world trade rebounded in March amid the reopening recovery in China, we don’t think this marks the beginning of a broader turnaround in global trade. In fact, timelier data point to renewed falls in April, and the latest business surveys suggest …
Good news on inflation but core rate still high The fall in German headline inflation in May and signs that core price pressures eased echo the message from the inflation figures for France and Spain and supports the case for the ECB to limit further …
Job growth holding up across metros; southern markets continue to lead Total employment growth reached a solid 0.7% 3m/3m on average in April for the second consecutive month, led by Boston, Las Vegas, Charlotte and Orlando. But for office-based jobs, …
Growth likely to slow after Q1 rebound GDP data for Q1 (Q4 of FY22/23) show that India’s economy rebounded at the start of the year. But with higher interest rates still feeding through and fiscal policy turning slightly less supportive, growth is likely …
Good news on inflation but core rate still high The fall in German headline inflation in May along with signs that core price pressures eased echoes the message from the inflation figures for France and Spain and supports the case for the ECB to limit …
There has been further evidence over the past month that resilient export growth, weak domestic demand and lower energy prices have helped to improve current account positions across Central and Eastern Europe this year. This has been particularly …
European property valuations continued to improve in Q1 on the back of further increases in property yields as well as falls in government bond yields. Nonetheless, all office and industrial markets aside from Istanbul remained overvalued. Indeed, we …
India’s economy is one of the most vulnerable in the world to the physical effects of climate change. Climate change alone won’t stop relatively rapid rates of growth over the coming decades. But it is likely to mean that income convergence with other, …
The Bank of Thailand (BoT) raised its policy rate by 25bps, to 2.0%, today but given the relatively benign outlook for inflation we think this marks the end of the tightening cycle. Today’s decision was accurately predicted by 17 of 22 analysts polled …
Solid Q1, but economy set for slowdown in growth Turkey’s economy shrugged off the impact of the earthquakes in February and grew by 0.3% q/q (4.0% y/y) in Q1. GDP growth is likely to remain soft in q/q terms this year, but a continuation of President …
Further tightening unlikely The Bank of Thailand (BoT) raised its policy rate by 25bps, to 2.0%, today but given the relatively benign outlook for inflation we think this marks the end of the tightening cycle. In the accompanying statement to today’s …
Encouraging inflation data from France The larger-than-expected fall in headline inflation in France and the fall in both services and core goods inflation bode well for euro-zone HICP inflation which will be published tomorrow and will strengthen the …
Economy softening, but not collapsing Inflation overshooting Bank’s forecasts and upside risks abound We now expect two more 25bp hike in June and July; rate cuts unlikely until Q2 2024 With inflation set to overshoot the Reserve Bank of Australia’s …
This page has been updated with additional analysis and charts since first publication. Recovery still making headway The PMI surveys suggest that China’s economic recovery was still ongoing in May. Waning fiscal support weighed on construction activity. …
Renewed acceleration will prompt further RBA tightening While the pick-up in inflation in April mostly reflects base effects from the excise duty cut a year ago, trimmed mean CPI picked up as well. With inflation set to overshoot the RBA’s forecasts this …
Renewed acceleration in inflation will prompt further RBA tightening With inflation set to overshoot the RBA’s forecasts this quarter, the Bank will continue to increase interest rates, perhaps as soon as next week. According to the Monthly CPI …
Balanced risks to Q2 GDP outlook April’s activity data were a mixed bag. The fall in industrial production and sharp drop in retail sales volumes pose downside risks to our Q2 GDP growth forecast . By contrast, capital goods shipments data suggest …
Further contractions in industrial production in store The weakness in both industrial activity and retail spending in April points to a poor start to Q2 for the economy after it expanded by 0.4% q/q last quarter, posing downside risks to our current …
We think that the slump in demand for mortgages will more than offset the support from the high backlog of work and result in a sizeable contraction in euro-zone construction output in the coming quarters. Euro-zone construction output – which accounts …
30th May 2023
High net immigration helps explain why rental growth accelerated to its fastest pace on record last year. Immigration won’t be as high this year, adding to the reasons to think that rental growth has peaked. But strong pay growth, high mortgage rates and …
“Official” China PMIs may show a further slowdown in the reopening rebound (02.30 BST) We expect Thailand’s central bank to hike by 25bp, to 2.00% (08.00 BST) Canada’s rate of growth probably picked up in Q1 (13.30 BST) Key Market Themes A sense that …
House price declines reverse In line with the stronger-than-expected economic data releases at the start of the year, house prices proved resilient in March. But we expect the economy to weaken in the coming months, which will weigh on homebuyer …
The upward revision to our Bank Rate forecast suggests that mortgage rates will return to a similar peak as last autumn by the end of the year. That would undermine the recent pick-up in mortgage approvals and lead to renewed falls in house prices. Higher …
Overview – Higher-than-expected core inflation means interest rates are now set to be higher for longer and we still think the economy will enter a mild recession later this year. That’s not a great backdrop for commercial property and yields will need …
Economy stagnating, price pressures still high The larger-than-expected fall in the EC Economic Sentiment Indicator in May is consistent with our view that the euro-zone will continue to stagnate in the second quarter. Meanwhile, firms’ selling price …
The renminbi strengthened sharply against the US dollar in response to China’s move away from zero-COVID. But the currency has since reversed much of those gains and is now approaching 7.10/$, its weakest level since December. Optimism over China’s …
April’s money and credit data suggest that the decline in bank deposits in recent months is due to rising interest rates rather than worries about the banks’ stability. Meanwhile, bank lending remained extremely weak. Data released this morning show that …
It’s Political Economy 101 that if the cost of household staples rises for long enough then governments will reach for price controls. This is exactly what is starting to happen across Europe in response to the sharp rise in food prices over the past …
Economic rebound likely to be short-lived The rebound in the Swiss economy in Q1 was due to robust domestic private sector demand, which more than offset a weakening in net trade. However, we expect the economy to slow over the remainder of the year as …
Fall in inflation much faster in Spain than elsewhere At face value, the fall in Spain’s HICP inflation rate to below 3% in May is encouraging for the ECB. However, it largely reflects country-specific factors which may not be replicated elsewhere for …
Many commentators have pinned the recent outperformance of Japan’s stock market on the stronger focus by Japanese firms to maximise shareholder value. But while those efforts showed some success in the run-up to the pandemic, there hasn’t been much …
Unemployment rate still set to rise in H2 The unemployment rate reversed the sharp rise in March last month and the job-to-applicant ratio stabilised, but a recession in H2 should still see the unemployment rate peak at 3% by year-end. The labour force …
