Yesterday, OPEC+ members announced voluntary cuts to production from May until the end of the year. In total, the cuts amount to 1.16m bpd or about 1.1% of global supply, with Saudi Arabia accounting for the lion’s share of 0.5m bpd. At the same time, …
3rd April 2023
Contraction in manufacturing production in Q1 on the cards The fall in South Africa’s manufacturing PMI last month paints a downbeat picture of a sector unable to escape from a severe energy crisis. The figures are consistent with manufacturing output …
Consumer spending jumped during the first two months of the year as virus disruptions faded. The March retail sales data won’t be published for another couple of weeks. But the data we have so far suggest that the consumer recovery remained uneven last …
In the wake of the surprise move by OPEC+ to cut oil production, we held a special online briefing about the decision’s economic and market implications – as well as what this signals about global politics. Economists from across our Macro and Commodities …
Overall picture remains downbeat, but some green shoots Manufacturing PMIs for March were weak in Czechia and Poland and suggest that industry remained in recessionary territory in Q1. But there were some bright spots, including the improvement in …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Vietnam’s central bank lowered its benchmark refinancing rate by 50bp, on Friday evening, citing the need to support the economy. The rate cut was in …
March’s sharp fall in headline inflation in Switzerland will provide some relief for the SNB as the decrease was spread across a wide range of goods. However, underlying price pressures remain strong by Swiss standards and we expect the SNB to hike …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Strength of manufacturing PMI supports rate hike this week India’s manufacturing PMI reading edged up in March and points to healthy growth in the …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Production likely to remain weak ahead Manufacturing PMIs in Emerging Asia dropped back in March, driven by a fall in the new export orders and …
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Reopening boost to industrial activity already waning The Caixin manufacturing index was more downbeat than its official counterpart, especially when …
Reopening boost to industrial activity already waning The Caixin manufacturing index was more downbeat than its official counterpart, especially when it came to export orders. Taken together, the surveys suggest that growth in factory activity dropped …
Housing downturn has further to run With housing affordability the most stretched it’s been since the global financial crisis, we don’t think the uptick in house prices in March will be sustained. We’re sticking to our forecast that house prices will fall …
Faltering business conditions, investment intentions point to recession Today’s Tankan survey suggests that while the services sector remains resilient, the outlook for the manufacturing sector has worsened materially. The Tankan’s headline index for …
Tankan points to sharp investment slowdown The Tankan’s headline index for large manufacturers fell for the fifth consecutive quarter from +7 to +1, broadly consistent with decline indicated by the monthly Reuters Tankan (Bloomberg consensus: +3, CE …
It may be too soon to say that the banking turmoil is definitively over, but it’s not too early to try to understand why events of the past few weeks are going to leave a painful legacy for the US economy. Chief US Economist Paul Ashworth talks to David …
1st April 2023
Overview – We expect most commodity prices to drift lower in the near term as advanced economies enter mild recessions and financial market risk aversion persists. A stronger US dollar will also weigh on prices. However, later in the year, prices should …
31st March 2023
Despite only being three months old, 2023 has already seen several macro narratives play out in markets. “Soft landing” optimism in January was followed by a “no landing” narrative in February which has given way to concerns about a banking crisis in …
Despite making up some ground today, the dollar seems set to end the week somewhat lower against nearly all major currencies. Banking turmoil in the US and elsewhere appears to be receding (for now), with the latest Fed data confirming emergency …
The strength of GDP growth at the start of the year reflected several temporary factors. The Bank of Canada’s latest quarterly surveys, released next week, will provide a better guide to how firms and consumers are coping with higher interest rates. GDP …
Overview – Homegrown problems in Sub-Saharan African economies exacerbated by external headwinds are likely to curtail growth this year. We think that regional GDP will expand by 2.3%, which is well below the consensus. Public debt problems will remain …
Overview – Emerging Europe has seen less steep falls in values than elsewhere so far, but will not be immune in 2023. Higher interest rates and economic weakness mean these markets will have a challenging year and recent financial disruption only …
Copom’s minutes will leave a sour taste for Lula The minutes from last week’s Copom meeting , released on Tuesday, will have dashed any hopes (not least in the government) that policymakers might turn to interest rate cuts any time soon. Three points …
We expect the RBA to pause its tightening cycle next week (Tue.) The National Bank of Poland will probably also keep rates on hold (Wed.) We think the US labour market cooled in March (Fri.) Key Market Themes Although a “narrowing” of the stock market …
With the latest shudders in financial markets seemingly contained, most commodity prices ground steadily upward over the week. Oil prices did receive a boost from supply disruptions in Iraqi Kurdistan but, on the whole, a greater appetite for risk drove …
Strong start to the year begins to flag After an unexpectedly strong start to the year in January, which was mostly maintained in February, the March data will tell us whether that early strength was a temporary weather-related spike or a genuine pick-up …
Israel’s legal reforms spark constitutional crisis Israel’s political crisis that flared up earlier this week has since calmed down after PM Netanyahu paused the government’s controversial judicial reforms. While tensions may flare up again and Israel’s …
While there are downside risks from hidden exposures or a sudden loss of confidence and deposits, our sense is that the banking issues won’t escalate significantly further, or spread to UK banks. (See here .) The broad message from this week’s …
The strength of GDP growth in January, and probably February too, suggests the Bank of Canada will use its April meeting to reiterate that, despite the recent banking turmoil, it is still prepared to raise interest rates again if needed. The 0.5% m/m rise …
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Central banks re-upping the pace of tightening Central banks in South Africa, Kenya and Ghana all delivered more aggressive interest rate hikes this …
A strong start to the year GDP rose strongly in January and the preliminary estimate points to another healthy gain in February. That strength suggests the Bank of Canada will use its April meeting to reiterate that, despite the recent issues in the US …
This time last week the markets and financial media were worrying about the future of Deutsche Bank. German Chancellor Olaf Scholz publicly stated that the bank was “very profitable” and President Macron declared that the European banking sector as a …
The “ Powering up Britain ” plan presented by the UK government this week highlights the benefits and limitations of official involvement in reducing emissions. On the one hand, the plans to reduce the price of electricity relative to gas will help to …
The recent turmoil in the global banking sector have sent ripples through financial markets. So far, a full-blown financial crisis doesn’t seem likely to us, although clearly any escalation would add to risky assets’ worries. But even if that is avoided, …
Real spending drops back; core inflation still elevated Although real consumption declined by 0.1% m/m in February, that reversed only a small fraction of the upwardly revised 1.5% surge in January (previously estimated to be 1.1%). Even allowing for …
Less than two weeks have passed since the demise of Credit Suisse so it is too early to draw many lessons about the implications (if any) for the global banking sector. But the speed of the collapse of a bank which had passed the key financial health …
Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . The broad message from the recent spate of EM central bank meetings is that policymakers are still focussed on reining in inflation even as the global …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Korea’s economic outlook remains bleak The latest activity data from Korea were a mixed bag but the economy is likely to feature among the worst …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . China and Brazil are taking steps to allow bilateral trade to be settled in renminbi rather than US dollars. The Brazilian branch of ICBC will …
Central banks in Mexico and Colombia both delivered 25bp hikes yesterday, and hinted that these could be the end of their cycles. But, on balance, we think that the strength of inflation will prompt policymakers in both countries to deliver a final 25bp …
Headline rate falling but strength of core inflation will keep ECB hawkish Policymakers at the ECB won’t read too much into the drop in headline inflation in March and will be more concerned that the core rate hit a new record high. So March’s consumer …
Headline rate falling but strength of core inflation will keep ECB hawkish Policymakers at the ECB won’t read too much into the drop in headline inflation in March and will be more concerned that the core rate hit a new record high. Overall, March’s …
Recession still to come this year as resilience recedes The final Q4 2022 GDP data suggested the economy was even more resilient in 2022 than we previously thought, as the government absorbed some of the hit to households from high inflation. But we …
Synthesising the Synthesis Report The main climate-related event of the month – other than the publication of our inaugural Climate Economics Outlook , of course – was the release of the Intergovernmental Panel on Climate Change’s (IPCC) sixth Synthesis …
Wage-price spiral still looking unlikely Ahead of today’s deadline for initial submissions to the 2022-23 Annual Wage Review, stakeholders have been haggling over increases to the minimum wage this year. The Australian Council of Trade Unions has backed a …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Rosneft, IOC deal will keep Russian oil flowing We’ve made the case in much of our research that, in an increasingly fractured global economy that …
Adjustment to higher mortgage rates continues House prices fell for a seventh consecutive month in February, taking the total fall from their peak in August to 4.6%. With house prices still significantly overvalued in today’s higher mortgage rate …
Households have a slightly larger savings buffer The upward revision to real GDP growth in Q3 and Q4 of last year suggests that high inflation took a slightly smaller toll on the economy than we previously thought. But with around two-thirds of the drag …
BoJ facing dilemma The economic data released this week underline the dilemma facing incoming Bank of Japan Governor Ueda. On the one hand, price pressures continue to strengthen. Inflation excluding fresh food and energy rose from 3.1% to 3.4% in the …
