Demand growth for industrial metals slowed to a halt at the end of last year. Even with some more recent improvements in advanced economy activity growth, metals demand probably kicked off the year on a weak note. Coupled with the prospect of “higher for …
9th March 2023
For most economies in Emerging Asia it will be local factors, not the actions of the US Fed, that determine the next moves by the region’s central banks. Given the poor outlook for economic growth in Asia, policymakers are unlikely to respond to a more …
The numerous “plans for growth” that have been announced by the Government, the Opposition, and various commentators in recent months vary in their analytical rigour but all miss one crucial point: many of the reforms required to lift the UK’s pitifully …
This webpage has been updated with additional analysis, Chart and Table of key figures. Inflation continues to soar, tightening cycle to resume Egypt’s headline inflation rate jumped to 31.9% y/y in February, leaving it just shy of an all-time high and …
We think MSCI’s India Index will fall over the next couple of quarters in local-currency (LC) terms, amid subdued domestic economic activity and a general deterioration in investors’ appetite for “risky” assets. While it was among the best performers in …
Malaysia’s central bank (BNM) left its policy rate unchanged today (at 2.75%) and with the economy likely to remain weak and inflation set to fall back further over the coming months, we expect rates to stay on hold for the rest of the year. Today’s …
Rates set to remain on hold in 2023 Malaysia’s central bank (BNM) left its main policy rate unchanged today (at 2.75%) and stated again that it would continue to take time to monitor the impact of past rate hikes before deciding if further tightening was …
Drop in inflation suggests reopening effects remain small Factory gate prices stopped falling last month, as China’s reopening helped to put a floor under global commodity prices. Meanwhile, consumer price inflation dropped back sharply due to a fall in …
Patches of positivity unlikely to last The slight recovery in the new buyer enquiries balance in February suggested that the reversal of the autumn spike in mortgage rates allowed a limited revival in demand. But with sales volumes falling and price …
Fed Chair Powell’s testimony to Congress has prompted a material revision to our forecast for the path of the fed funds rate and suggests the near-term risks to that forecast are skewed to the upside. This Update sets out some of the likely implications …
8th March 2023
Commercial crude stocks fell for the first time in nine weeks last week, while implied product demand dropped. We think oil demand will remain soft as higher interest rates drag on economic growth. The EIA’s weekly US Petroleum Status Report showed that …
The JOLTS survey showed a drop back in job openings in January, with the timelier job postings data from Indeed pointing to a more marked deterioration in labour market conditions in February. (See Chart 1.) The private job openings rate has …
China inflation data likely to show rising price pressures (01.30 GMT) We expect interest rates to be left on hold in Malaysia… (07.00 GMT) …and also expect Peru’s central bank to leave rates unchanged (23.00 GMT) Key Market Themes Most “risky” assets …
With another 50bps rate hike at the European Central Bank’s March meeting looking like a done deal, all eyes will be on how policymakers signal the path ahead for monetary tightening. Will the resilience seen in some of the recent data be reflected in the …
The Bank of Canada kept its policy rate unchanged at 4.5% today as expected but, with one eye on the strength of the recent US data and the Fed’s hawkish reaction to that, it sounded less confident that it could maintain the conditional pause in rates …
The National Bank of Poland (NBP) left its main policy rate on hold as expected today, at 6.75%, and we don’t think policymakers will rule out further rate hikes just yet (today’s statement gave little away in terms of guidance). But with inflation likely …
Recent evidence about the health of the euro-zone economy has been mixed. National figures released so far suggest industrial production rebounded in January but retail sales remained very weak. And while activity surveys now point to a small expansion …
Policy unchanged, but Bank leaves the door open to future hikes There were no surprises from the Bank of Canada today as it kept the policy rate unchanged at 4.5%, as it previously hinted it would, and reiterated that it is still prepared to resume …
Strong start to 2023 unlikely to be sustained The widening in the international trade deficit to $68.3bn in January, from $67.2bn, included big rebounds in both imports and exports which, at face value, add to the signs that demand is strengthening at …
Surge in exports supported GDP growth at start of 2023 The strong gains in exports and imports in January suggest that easing supply shortages are offsetting the negative impact of higher interest rates on both external and domestic demand. That presents …
Surge in exports supported GDP growth at start of 2023 The broad-based jump in exports at the start of the year suggests that net trade should boost GDP growth this quarter. Nonetheless, with the surveys of export orders still very weak, that boost seems …
Rates on hold, door for rate cuts this year remains open Poland’s central bank (NBP) left its main policy rate on hold as expected again today, at 6.75%, and we don’t think the NBP will rule out further interest rate hikes just yet. But with inflation …
JODI data on global oil and natural gas consumption show that global energy demand was weak in late 2022. China’s rapid reopening will likely boost demand for both. But plenty of downside risk remains. Advanced economies are either in the midst of a sharp …
Headline inflation in Mexico will continue to fall back over next couple of years, but strong wage growth means that it won’t return to Banxico’s 2-4% tolerance band until late-2024. Against that backdrop, we think the central bank will deliver two more …
We expect the Spring Budget on 15 th March to contain some giveaways confined to 2023/24. But a downgrade to the Office for Budget Responsibility’s (OBR) medium-term GDP growth forecasts will prevent an unwinding of the £54bn (1.8% of GDP) of fiscal …
A record amount of industrial space is currently under construction, which looks poorly timed given the upcoming recession. However, the sector is entering the downturn in a strong position with very low vacancy. And we expect the share of online retail …
Financial risks across the emerging world have eased since the start of the year but, with the Fed’s Jerome Powell all but confirming a higher peak for US rates, there is still scope for EMs with weak balance sheets to get punished. Although current …
Euro-zone flirting with recession Revised figures show that the euro-zone economy flatlined in Q4 last year and that domestic demand dropped sharply. There have been some positive signs in the past couple of months, but policy tightening is likely to …
The National People’s Congress (NPC) reports struck a cautious note on the outlook for economic activity in China this year. Fiscal stimulus will be limited and efforts to prevent “disorderly” expansion in the property sector are to continue. That said, …
The very high household saving rate in Czechia and the sharp fall in inflation we expect there this year means there is scope for consumer spending to recover over the coming quarters. But we think consumers will still exercise caution and that a …
Industrial rebound, but recession still coming The big rebound in German industrial output in January suggests that industry may continue to hold up well in the face of the energy crisis. However, with the renewed drop in retail sales pointing to …
Industrial rebound, but recession still coming The big rebound in German industrial production in January suggests that industry may continue to hold up well in the face of the energy crisis. However, with the renewed drop in retail sales pointing to …
What will UK Chancellor Jeremy Hunt deliver in his Spring Budget? Will he be able to splash any cash, will he hold back sweeteners until closer to the next general election, or will the OBR’s new economic forecasts tie his hands? Group Chief Economist …
7th March 2023
Germany’s industrial production probably fell a bit further in January (07.00 GMT) We think Poland’s central bank will leave its policy rate on hold… (13.00 GMT) …and the Bank of Canada will keep its policy rate unchanged as well (15.00 GMT) Key Market …
Higher rate expectations drag many commodity futures curves lower Most commodity prices fell and futures curves shifted lower this past month as higher interest rate expectations in advanced economies clouded the demand outlook. This is consistent with …
Fed Chair Jerome Powell confirmed today that interest rates are set to rise higher than we previously anticipated. But with most evidence still pointing to economic weakness and markedly lower inflation this year, we still believe the Fed will begin …
Powell confirms higher peak in rates Fed Chair Jerome Powell appears to have confirmed today that interest rates are set to rise a higher than we previously anticipated. But with most evidence still pointing to economic weakness and lower inflation this …
China’s imports were weak in January-February, but commodity imports fared better. What’s more, we think crude oil imports, in particular, will pick up from here given the resurgence in travel demand. China’s January-February trade data (published today) …
We think that most – perhaps two thirds – of the drag on activity from tighter monetary policy in advanced economies is still to come through in 2023. So, despite some surprisingly resilient data recently, we are sticking to our forecasts for advanced …
Recovery from Q4 GDP-shocker likely to be muted South Africa’s GDP fell by a sharper-than-expected 1.3% q/q in Q4, and the broad-based weakness in economic activity is unlikely to improve any time soon as severe power cuts and fiscal consolidation …
The substantial recovery in Halifax house prices in February added weight to the view that we will see a stand off between buyers and sellers that causes transactions to slump, but minimal price falls. That would be a historical anomaly, which is why our …
No reopening boost to imports yet China’s import volumes were little changed at the beginning of the year, disappointing hopes for a rebound. But we still think that reopening will eventually drive a pick-up in imports. And while exports fared better than …
The Reserve Bank of Australia signalled that further tightening will be needed when it hiked the cash rate to 3.60% today and we’re sticking to our forecast that the Bank will lift the cash rate to 4.10% by May . The RBA’s decision to lift the cash rate …
RBA will hike the cash rate to 4.10% The RBA signalled that further tightening will be needed when it hiked the cash rate to 3.6% today and we’re sticking to our forecast that the Bank will lift the cash rate to 4.10% by May. The RBA’s decision to lift …
Net exports should support GDP growth in Q1 Although the rise in export earnings lagged growth in the import bill in January, we still think net trade will provide a decent boost to GDP growth this quarter. The decline in the trade surplus in January, …
Worst hit to real wages since GFC could see spending fall in Q1 Wage growth fell sharply in January to its weakest in almost two years due largely to a slowdown in the growth of regular and overtime hours worked. Real wages posted the worst fall since the …
