Strength of core inflation means ECB has a long way to go February’s increase in core inflation will reinforce ECB policymakers’ conviction that significant rate increases are needed. For some time we have been forecasting a 50bp hike at the meeting in …
2nd March 2023
Euro-zone HICP (Feb.) Strength of core inflation means ECB has a long way to go February’s increase in core inflation will reinforce ECB policymakers’ conviction that significant rate increases are needed. For some time we have been forecasting a 50bp …
Tokyo CPI data suggest some upside risks to our inflation forecasts The unemployment rate edged down in January but the job-to-applicant ratio held steady, suggesting the labour market doesn’t have room to tighten much further. Meanwhile, Tokyo inflation …
Q4 GDP growth to remain at 0.2% The increase in capital spending reported in today’s “Financial Statements Statistics of Corporations” is broadly consistent with the preliminary Q4 GDP estimate. That means Q4 GDP growth is likely to remain at 0.2% q/q in …
Although the fall in house prices slowed significantly in February, we are not convinced that Australia’s housing market is out of the woods yet. Even so, there are growing indications that dwellings investment will take less of a hit than we had …
US crude exports could rise even further Commercial crude stocks rose only slightly this week but this was despite a jump in US crude exports to a new record. With US domestic fuel demand unlikely to surge anytime soon, crude exports should remain …
1st March 2023
Strong data in France and Spain suggest to us euro-zone inflation rose in February (10.00 GMT) We think Brazil GDP figures will confirm the economic growth was flat in Q4 (12.00 GMT) Clients can sign-up here to our Drop-In on the impact of elections in …
The Israeli shekel has been amongst the worst performing currencies over the past month amid a rise in risk premia in Israel. We think it may remain under pressure against the US dollar over the coming months; but we doubt it will keep underperforming its …
The manufacturing PMIs for February remained very weak in most EMs, but they did at least provide signs that industry across much of the emerging world has fared better so far this year than it did in late 2022. Meanwhile, there were encouraging signs …
Terrible 2022 helps boost outlook for 2023 The latest IPF Consensus Survey showed a modest upgrade to forecasts for total returns in 2023, driven by an uplift to the capital value view. That looks to reflect the larger-than-expected fall in capital values …
The broad-based improvement in the output components of February’s manufacturing PMIs suggests that the worst of the global industrial downturn is already in the rear-view mirror. That said, it is too early to call a durable turnaround in industrial …
Still firmly in contractionary territory The modest rebound in the ISM manufacturing index to 47.7 in February, from 47.4, leaves it firmly in contractionary territory. That should temper talk of a manufacturing resurgence on the back of improvements in …
The annual meeting of China’s National People’s Congress began this weekend with the publication of key economic targets for the coming year. This year’s NPC also marks the crescendo of a major government reshuffle which is expected to confirm the …
The February PMI data out of China suggest economic growth is rebounding rapidly. While growth should moderate over the second half of year, it still points to higher metals and crude oil demand. Overall, the PMI surveys suggest that the risks to China’s …
Still firmly in contractionary territory The modest rebound in the ISM manufacturing index to 47.7 in February, from 47.4, leaves it firmly in contractionary territory, and should temper recent talk of a manufacturing resurgence on the back of …
Household spending in Saudi Arabia appeared to soften in the final months of 2022, but surveys suggest that consumers are optimistic about the outlook. The backdrop of loose fiscal policy, an improved labour market and falling inflation means that …
In our view, the Chairman of the SNB has over-stated the role of the exchange rate in explaining why inflation has remained so comparatively low in Switzerland in the past two years. However, policymakers’ focus on the currency will encourage them to …
Renewed rise in inflation will worry ECB The renewed rise in headline inflation in Germany, France and Spain in February suggests euro-zone inflation edged up this month, rather than falling as had been expected. With signs that underlying inflationary …
Encouraging signs in January CPI and economy has slowed sooner than expected But labour market still tight and wage pressures too strong Risk of higher interest rates elsewhere also keeps pressure on the Bank The fall in CPI inflation in January and …
Rise in mortgage rates cuts home demand Stronger-than-expected economic data led to a resurgence in mortgage rates in February, which put a stop to a tentative recovery in mortgage applications for home purchase. This points to sales staying close to …
Hopes that Nigeria’s elections would usher in a markedly more business-friendly administration were dashed after the ruling party’s Bola Tinubu was declared president-elect. Economic policy under a Tinubu administration is likely to shift only marginally …
Higher interest rates hurt housing, but other borrowing remains strong While January’s money and credit figures suggest that higher interest rates are continuing to act as a drag on the housing market, they appear to be having less influence in other …
Net lending holds up as even as investment collapses Net lending to property was once again positive in January, even as commercial property investment collapsed in the final quarter of last year. Investors may be preparing to re-enter the market and …
Q4 spike in mortgage rates continues to depress approvals The spike in mortgage rates in October and November last year ensured that mortgage approvals remained at a similar level to the depths of the 2007-09 financial crisis in January. That could mark …
RBA’s hawkishness suggests rates will rise for a few more months However, softer incoming data suggest that the peak in rates isn’t far off Looming slowdown in activity and inflation opens door for rate cuts before year-end The RBA adopted a more …
Electricity woes put further pressure on economy The sharp fall in South Africa’s manufacturing PMI last month provides further signs that the country’s electricity crisis is taking a heavy toll on the economy. And the jump in the prices component …
Industrial downturns in CEE bottoming out The manufacturing PM Is for February suggest that industrial sectors in Central and Eastern Europe are continuing to struggle, but there are tentative signs that the region may now be past the worst of its …
House prices continue to slide The further fall in house prices in February will keep optimism based on reports that demand has recovered in check. Indeed, even if buyer volumes have recovered, the amount they can spend on a new home has been reduced by …
Signs of improvement Manufacturing PMIs in Emerging Asia rose in February, helped by a rebound in the export orders sub-component. While the data provide the first tentative signs that the worst may be over for the region’s manufacturers, the recovery is …
Manufacturing PMI likely to drop back further India’s manufacturing PMI reading edged down in February to a four-month low. We expect the reading to drop further over the coming months as both external and domestic demand soften. The manufacturing PMI …
A very rapid recovery The latest survey data are exceptionally strong across the board, consistent with our expectation for a rapid near-term rebound. We expect this recovery to lose momentum later in the year but the risks to our forecasts look …
A very rapid rebound The latest survey data is exceptionally strong, consistent with our expectation for a rapid near-term rebound in economic activity. The Caixin manufacturing PMI rose from 49.2 in January to 51.6 in February (the Bloomberg consensus …
Stretched affordability will continue to push down prices Although the decline in house prices slowed markedly in February, we’re not convinced the worst is over. As such, we expect house prices to fall by another 6% before the year is up. The 0.2% m/m …
Slowdown in inflation won’t prevent RBA from lifting rates to 4.1% GDP growth softened last quarter and inflation slowed sharply in January. But with inflation still very high, that won’t prevent the RBA from hiking the cash rate to a peak of 4.1% in May …
GDP growth will slow sharply this year GDP growth softened last quarter and inflation slowed sharply in January. But with inflation still very high, that won’t prevent the RBA from hiking the cash rate to a peak of 4.1% in May. The 0.5% q/q rise in Q4 GDP …
We think even if some of the recent headwinds that have buffeted emerging market (EM) assets fade, a slowdown in global growth might keep them under pressure in the near term. EM assets have had a fairly tough month . Local-currency and …
28th February 2023
We think Australia’s GDP growth softened a touch in Q4 (00.30 GMT) Germany’s HICP inflation probably fell in January (13.00 GMT) We expect the ISM manufacturing index for February to have remained weak (15.00 GMT) Key Market Themes We think the recent …
Hungary’s central bank (MNB) reiterated the message that it’s unlikely to cut its base rate anytime soon, when it left that rate on hold again today (at 13.00%). That said, the MNB offered some signs that it may be close to phasing out its market …
House prices set for further falls in 2023 Despite a sixth consecutive month of falling house prices in December, affordability was still stretched even before the renewed rise in mortgage rates. As a result, it is likely that prices will continue to fall …
One development that would help to ease wage pressures would be an increase in the labour supply; there is still a significant group of countries where the pandemic is having lingering effects. The good news is that the size of the workforce is now …
The dramatic rise in borrowing costs in Brazil in the past few years appears to be causing debt problems at a growing number of companies. So far at least, there is little evidence of widespread stress and the banking sector looks well placed to deal with …
Economy stagnates, supporting the Bank’s move to the sidelines The stagnation in fourth-quarter GDP, together with the downward revision to third-quarter GDP growth, leaves the economy in worse shape than the Bank of Canada expected. That is another …
While the ~0.3% return from US dollar cash between 31 st January and 24 th February was hardly impressive, cash nonetheless outperformed all of the other eighteen headline indices that we track. As data pointing to a still-hot US economy and stubborn …
Economy coming off the boil GDP data for Q4 (Q3 of FY22/23) show that India’s economy came off the boil at the end of last year as higher interest rates weighed on household consumption and investment. But with the hawks still in the ascendancy within the …
MNB to keep its base rate on hold as inflation threat persists Hungary’s central bank (MNB) left its benchmark base rate on hold again today (at 13.00%) and, with inflation likely to stay far above target for some time, we don’t expect the MNB to start …
Local governments have stepped up their borrowing since the start of the year. They issued RMB860bn in special bonds over the course of January and February, up from an average of RMB105bn per month during the second half of 2022. Special bonds are …
While a slew of recent data from advanced economies have surprised to the upside, world trade data are still very much consistent with economic weakness in the near term. Not only did Q4 see one of the biggest drops in world goods trade since the 1980s, …
Pandemic savings won’t rescue the economy The value of savings that households built up during the pandemic has been wiped out by inflation. Rising interest rates, together with a desire to rebuild the spending power of their savings, suggest that …
The common-sense place to start The release of the 2023 version of the Global Methane Tracker by the International Energy Agency (IEA) last week once again highlighted how carbon dioxide (CO 2 ) emissions are far from the only challenge on the climate …
