Asia Chart Pack (September 2024) …
30th September 2024
This page has been updated with additional analysis since first publication. House prices rise in Q3 and will rise further next year September’s 0.7% m/m rise in Nationwide house prices suggests that August’s 0.2% m/m fall was just a blip and that the …
This page has been updated with additional analysis since first publication. Softer rebound in activity, but another major downturn unlikely Q2 GDP growth of 0.5% q/q was a bit weaker than the previous estimate of 0.6% q/q, but the ONS also confirmed …
While banks have issued more housing loans that don’t meet APRA’s serviceability guidelines over the last couple of years, we aren’t convinced that this poses significant risks to financial stability. The Australian Prudential Regulation Authority’s …
This page has been updated with additional analysis since first publication. Stimulus measures will shore up near-term activity While the official PMIs held up okay in September, the Caixin PMIs dropped quite sharply which suggests that the economy lost …
Economic recovery lost some pace in Q3 While the plunge in industrial production in August creates some downside risks to our forecasts, the continued strength in consumer spending is encouraging. According to the preliminary estimate, industrial …
GDP-GDI gap resolved Leading up to this week’s annual revisions to the national accounts, we were attuned of the risk that the expenditure-based real GDP measure might be revised lower to match up with the income-based real GDI, given the wide gap that …
27th September 2024
We don’t see compelling reasons for policymakers in the US or the euro-zone to lower policy rates as much as market pricing suggests, so we expect long-dated bond yields there to edge up before long. That would probably be a wash for the euro. Today’s …
Economists from our China and Markets teams held a special briefing to assess the recent flurry of stimulus announcements from Beijing. During this, the team answered audience questions as they addressed key issues around the China outlook in light of …
Today’s release of weaker-than-expected US PCE data for August led investors to revise down slightly their expectations for the fed funds rate, and the DXY index slipped as a result. This, alongside an upside revision to US economic growth, leaves us more …
CBN rate hikes about inflation and credibility The Central Bank of Nigeria’s surprise hike this week highlighted the greater progress that the MPC wants to see on the inflation front and also importantly its steadfast ambition to restore its trust and …
Overview – A pivot towards fiscal and monetary stimulus should support China’s growth in the near-term. But the economy continues to be propped up by investment, still elevated levels of construction, and the willingness of trading partners to allow …
Worrying signs in the CFIB Business Barometer Although the CFIB Business Barometer covers only small firms, in recent years the survey indicators have provided a fairly accurate steer to economic conditions. The headline index fell to 55.0 in September …
Fiscal risks in Romania continue to build Romania’s fiscal watchdog this week warned that the country’s budget deficit could come in at 8.0% of GDP this year. This is significantly above the government’s original target of 5.0% and also above its new …
Government hinting about more investment The government appears to be laying the ground for a rise in public investment in the Budget on 30 th October. This week the Chancellor said “growth is the challenge and investment is the solution.” That was …
Stronger monthly GDP growth will be short lived Although the rise in GDP in July was stronger than expected, the preliminary estimate of unchanged GDP in August suggests that the momentum was short lived and puts third-quarter growth on track to surprise …
A 25bp interest rate cut by the ECB at its next meeting in mid-October is now more-or-less fully priced into the market. The decision will be a close call, but a cut is far from a foregone conclusion. Our base case remains that the Bank will wait until …
Trump lashes out at Mexico Comments from Donald Trump this week highlight how big a threat his return to the White House would pose to Mexico’s free trade relationship with the US. Earlier this week, Trump threatened to hit John Deere with a 200% tariff …
Africa Chart Pack (Sep. 2024) …
The stimulus packages announced by Chinese policymakers were the main reason behind the chunky increases in industrial metals prices this week, and explain why they performed better than most other commodity prices. However, the stimulus measures are no …
Fiscal policy to hold back Pakistan’s recovery The IMF this week approved a new long-term US$7bn loan for Pakistan. The country will receive the first US$1bn immediately, with the remainder to be paid over the three years of the deal. Pakistan was close …
Core price pressures easing; Q3 consumption growth solid As we calculated based on the earlier price data releases, the core PCE deflator increased by a muted 0.13% m/m in August, with the headline deflator up by 0.09% m/m. Admittedly, although the …
China’s leadership finally took action this week to staunch the economy’s bleeding with a flurry of stimulus announcements and pledges to do more. But will it be enough? Group Chief Economist Neil Shearing talks to David Wilder about whether the outlook …
Stimulus implementation gets underway A flurry of policy announcements propelled the largest weekly gains in Chinese equities since 2008 this week (CSI 300 up 15.7%; Hang Seng 13.0%). The catalyst was Tuesday’s stimulus announcement , which included …
Flagship policy falling short of aims This week marked the 10 year anniversary of PM Modi’s flagship “Make in India” policy initiative. Its aim was to encourage both foreign and local companies to develop, manufacture and assemble products in India and …
ESIs point to robust growth in Q3 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional economic growth strengthened at the end of Q3. But the rise in selling price expectations in the services …
Services inflation starting to fall September’s inflation data from France and Spain all but confirm that the headline rate in the euro-zone as a whole – released next week – will show a sharp decline to below the 2% target. Headline HICP inflation fell …
BoJ set to press ahead with "stupid" rate hikes Japan won’t have its first female Prime Minister after all as former defense minister Shigeru Ishiba won the runoff in the LDP leadership election against economic security minister Sanae Takaichi. In …
Cuts still won't come as soon as markets expect As expected, the RBA left rates unchanged at its meeting this Tuesday. Reading between the lines, however, the Bank does appear to have toned down its hawkish bias somewhat. Indeed, it’s worth noting that …
Inflation and growth backdrop supports further easing Mexico’s central bank delivered another 25bp interest rate cut at today’s meeting, to 10.50%, and the communications suggest that it will continue to ease policy over the coming months. We expect the …
26th September 2024
Most EM equities have fared well over the past week or so amid encouraging signs from China, the first Fed rate cut and broadening EM easing cycles. We think these equities will continue to fare well over the coming year, albeit not as well as US ones. …
China’s finance ministry appears to be lining up a fiscal support package to deliver on the Politburo’s pledge of additional support for the economy. If a report by Reuters is correct, the package could lift GDP by around 0.4% over the course of the next …
Capital inflows into EMs have rebounded over recent weeks amid the start of the Fed’s easing cycle. Looking ahead, we expect EM inflows to hold up well as global monetary conditions ease further. In general, EMs are not especially dependant on foreign …
We think labour market conditions continued to ease in September, with a 100,000 rise in non-farm payrolls and the unemployment rate edging up to 4.3%. Payroll gain to ease further The 142,000 rise in non-farm payrolls in August was stronger than the July …
Tight supply conditions have boosted German prime logistics rents despite weak occupier demand. This looks set to continue over the next year or two given completions pipelines for the German markets are among the tightest in Europe. However, weak …
Ahead of COP29 in November, discussions have been taking place at events in London and New York this week on all things climate. We attended the LSE’s Environment Week to hear the thoughts of academics and policymakers on carbon offsets, CBAM, and US …
Table of Key Forecasts Global Overview – The global economy has hit a soft patch with the euro-zone virtually stagnant, the US labour market flagging and China rationing its policy stimulus. We expect this weakness to persist around the turn of the year …
France’s new government suggested yesterday that the budget deficit will be over 6% of GDP this year, rather than the 5.6% as indicated only a couple of weeks ago. We expect the government to struggle to pass a budget which substantially reduces the …
GDP revision shows stronger income growth; core orders rally At first glance the annual revision to the national accounts doesn’t appear to have had much of an impact – with second-quarter GDP growth left unchanged at 3.0% and core PCE inflation unchanged …
Today’s news that Saudi Arabia will proceed with unwinding its voluntary oil output cuts from December does not change our thinking on the oil market balance; we still expect the market to be in a small surplus by Q4 2025 and prices to edge a little …
Is Saudi set to reverse its oil policy? Reports have emerged that officials in Saudi Arabia are set to change tack and raise oil output to recapture lost market share, rather than try to prop up prices. Higher oil output will, mechanically, result in …
After a tough 2022 and 2023, global trade finally showed signs of life in the first half of this year. But the outlook looks challenging, with our Global Economics team identifying five key risks which threaten this recovery: The most immediate threat is …
This summer’s falls in the share prices of companies involved in producing AI chips have prompted some to question whether the AI revolution will be quite the game-changer it has been built up to be. But it is important to separate the impact of AI on …
The leisure sector is yet to show signs of recovery from the cost-of-living crisis, in part because still-cautious households are prioritising buying goods rather than expensive leisure services. But a relatively large squeeze on higher-earning …
While the SNB only cut the policy rate by 25bp today to 1.0%, the accompanying statement was very dovish and indicated that there are at least two more rate cuts on the way, probably in 25bp increments in December and March. Despite the emphasis on the …
Further out, our base case is that the combination of a generally benign global economic backdrop and a dovish Fed leads to some further US dollar weakness over the next six to twelve months. But given the extent of Fed rate cuts now discounted in money …
Economies across Emerging Europe have struggled recently, and we forecast below consensus GDP growth in most countries this year. The export-orientated economies of Central and Eastern Europe will be held back by stagnating demand from key euro-zone …
SNB makes dovish 25bp cut, more to come The SNB’s decision to cut its policy rate by 25bp to 1.0% today shows that it prefers a gradual approach to policy loosening, but the accompanying statement indicates clearly that further cuts are on the way. The …
