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 …
25th August 2023
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 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 …
US 2-Year Govt Bond Yield (%, since Q1 2000) …
India Current Account Balance ($bn, annual) …
Brazil Current Account Balance ($bn, annual) …
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 ($bn, annual) …
US 10Y/2Y Spread (bps, since Q1 2000) …
GBP/EUR (daily since 2018) …
Euro-zone Consumer Confidence …
Russia Current Account Balance ($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 …
Equities in Emerging Asia outside China have largely outperformed their peers in other Emerging Markets (EMs) since the pandemic started. We think that they will hold up better during the global stock market decline that we expect, and that they will also …
24th August 2023
We forecast a 170,000 increase in non-farm payrolls in August, illustrating that despite the apparent resilience of GDP growth, employment growth is still trending lower. The increases in employment of 185,000 and 187,000 over the previous two months have …
Denmark’s economy has been among the fastest-growing since the pandemic and, although growth will slow in the coming months, we expect it to continue outperforming the euro-zone. Nonetheless, the DNB will probably keep its policy rates below those of the …
Gilt yields and sterling have fallen from their cycle highs over the past month or so, and we think the worsening economic growth outlook in the UK and elsewhere mean that this trend will continue over at least the next couple of quarters. Although …
Stronger-than-expected Q2 earnings from Nvidia have extended this week’s relief rally in stock markets. While we think that US equities could falter over the rest of the year as growth disappoints, we suspect that AI enthusiasm will trigger an even …
Group Chief Economist Neil Shearing walks through the summer’s big market themes to discuss the growth outlook, the China slowdown scares and whether the hype around AI is justified. Along the way, he gives his take on the latest PMI readings, explains …
Time for a new acronym Earlier today it was confirmed that Saudi Arabia, the UAE, Egypt, Iran, Argentina, and Ethiopia were all being invited to join the BRICS bloc and, while this is unlikely to have major economic effects in the near term, the possible …
Sub-Saharan Africa’s tourism industry has recovered slowly from the pandemic, albeit with significant variation in performance across the continent. Signs that the tourism outlook is weakening risk exacerbating balance of payments strains in …
Equipment investment set to stagnate The 5.2% m/m fall in durable goods orders mainly reflected a reversal of the earlier jump in aircraft orders and wasn’t actually as bad as we had expected, with core orders also surprising on the upside. But the …
