The winner of Mexico’s presidential election on 2nd June will have a busy in-tray, from taking advantage of the opportunities presented by near-shoring to the challenges posed by Pemex. And that’s before they even consider the looming issue of a potential …
16th May 2024
Overseas loans by Chinese banks peaked in late 2021 and have since been curtailed in response to increased debt problems among EM borrowers. While these strains are partly a consequence of global shocks, they have also underscored some flaws with China’s …
Europe Commercial Property Valuation Monitor (Q2 2024) …
Dovish BSP hints at first rate cut in Q3 The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), but the tone of the statement was much less hawkish than at its April meeting. Not only did the central bank cut its …
Labour market will continue to loosen The continued rise in the unemployment rate in April further diminishes the likelihood that the Reserve Bank of Australia will deliver another interest rate hike. The 38,500 rise in employment last month was stronger …
This page has been updated with additional analysis since first publication. Activity set to rebound this quarter The renewed drop in GDP in the first quarter mostly reflects production shutdowns at major carmakers and a pronounced rebound this quarter …
Housing market struggling to bloom The April housing market data show that the spring season is shaping up to be vastly different than last year, with sales dropping back despite higher listings and house prices unchanged. This has caused us to trim our …
15th May 2024
The surge in copper prices today, to a record high of over $5/lb in trading on the New York commodities exchange (COMEX), is the latest twist in the eye-popping market rally and leaves prices looking even more overstretched. Although the fundamentals will …
Better news on US inflation over the past couple of days has provided further relief for bond and equity markets, and supports our forecast that Treasury yields will fall back a bit more over the coming months while the equity market scales new highs. …
Despite the rand’s recent outperformance, we think risks around the upcoming election in South Africa, among other factors, will cause renewed weakness in the currency before long. Since US Treasury yields peaked in late April – falling further after the …
Global Economics Chart Pack (May 2024) …
This note answers some of the most frequently asked questions that we received from clients during a recent online briefing about the latest US tariffs on China. Watch the original briefing here . What has been announced? Yesterday was the end of a …
Manufacturing sector faltering The weakness of manufacturing sales in March suggests that the economy lost momentum heading into the second quarter, matching the message from the earlier preliminary estimates for retail sales and GDP. The 2.1% m/m fall in …
Consumers not looking quite as strong We would caution against jumping to the conclusion that consumers are starting to crack under high interest rates, despite the disappointing retail sales data for April, as some payback always seemed likely after the …
The 1.1% q/q expansion in Colombia’s GDP in Q1 confirmed that the economy made a strong start to the year and supports our view that the central bank won’t step up the pace of easing at its next meeting in June. The outturn was a touch below the Refinitiv …
CPI consistent with September rate cut The slightly more modest 0.3% m/m increase in core CPI in April was even better than it looked, particularly given that we already know the PPI components that feed into the Fed’s preferred PCE deflator measure came …
The latest hard activity data suggest that South Africa’s economy contracted in the first quarter of 2024 and, regardless of the outcome of the upcoming election, this ongoing weakness will put pressure on the next government to revive growth, including …
Egypt’s shift back toward economic orthodoxy will result in near-term economic pain, but it could also pave the way for faster economic growth over a longer horizon. Part of that will rest on Egypt capitalising on its improved external competitiveness, …
Forecasts for prime office rental growth have generally proven too pessimistic over the past couple of years, but there is again broad agreement that a slowdown is on the way this year. However, we think the risks are still to the downside and that the …
Spending on hotels and overseas visits to the UK are still not back to their pre-COVID-19 levels. But with cost-of-living pressures set to ease around the world and consumer spending likely to outpace overall GDP growth in the UK, demand will recover over …
Our forward-looking proprietary Green Transition Scores make it easy to judge, assess and explain your climate position and strategy. If you have any questions about the content, please contact david.oxley@capitaleconomics.com or …
We expect total returns from both US dollar-denominated, and especially local-currency (LC), emerging market (EM) sovereign bonds to trump, in general, those from US Treasuries in the next couple of years. Dollar-denominated and LC EM sovereign bond …
This interactive dashboard allows you to explore our energy market forecasts through to 2050, which are characterised by continued growth in energy consumption and an accelerating shift to renewables . The dashboard was last updated on 23rd April 2024. …
This interactive dashboard allows you to explore all of our forecasts and key data for China's economy. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top right of each chart …
Euro-zone out of recession but June rate cut still on Data released today confirm that the euro-zone came out of recession in the first quarter, but we suspect that the recovery will be quite muted. The second estimate of euro-zone GDP in the first …
CEE’s recovery moving into second gear The Q1 GDP figures released out of Central and Eastern Europe (CEE) this morning show that growth strengthened across most of the region at the start of this year, and we expect a further modest pick up over the …
Inflation holds steady but may pick up in H2 Saudi Arabia’s headline inflation rate was unchanged at 1.6% y/y in April and, while we think that there may be a slight acceleration at the start of Q3, the bigger picture is that inflation in the Kingdom is …
April’s inflation data confirm Riksbank unlikely to cut in June. The small increase in the Riksbank’s target CPIF measure of inflation, which excludes the effect of changes in interest rates, from 2.2% in March to 2.3% in April, was broadly as expected …
Treasurer Jim Chalmers has sought to present the 2024/25 Budget as one that strikes a balance between providing support to an ailing economy and keeping pressure off inflation. In our view, that’s disingenuous: the combination of increased government …
We are resending this publication to correct an error in the second paragraph. Slowdown in wage growth means RBA won’t hike any more Wages growth is easing more rapidly than the RBA had anticipated. While this will forestall any further policy tightening, …
Future global macro markets leadership …
14th May 2024
Even if interest in ‘meme’ stocks rebounds following a renewed surge in GameStop’s share price, some of the telltale signs that a bubble in the broader stock market may be entering its final stages – such as excessive leverage – are absent. This suggests …
Mortgage rates climbed back above 7% last month but we think that trend will soon reverse, with rates falling to 6.5% by year-end. Lower borrowing costs will draw more mortgaged buyers into the market. But supply will remain tight as the fall in mortgage …
The tariffs announced today on US imports from China won’t cause much direct economic damage since trade in the affected goods is already low. But US economic sanctions on China seem to act like a ratchet: they only ever get tighter. In many areas that …
This interactive dashboard allows you to explore all of our forecasts and key data for the UK housing market. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top right of each …
We think the Bank of England will decide to start cutting rates at its next meeting, but there’s a series of crucial data releases between now and that policy decision on 20th June – not least the April CPI report due Wednesday, 22nd May . Our UK team …
The impact of the US tariffs announced today will barely register on the paltry flows of solar panels and electric vehicles that China directly exports to the US. However, the new tariffs could have a bigger impact on imports of Chinese-made batteries, …
We think the ECB’s June meeting will mark the start of a more aggressive rate cutting cycle than markets are currently pricing. How far and how fast will the Governing Council go to ease policy? And what will lower rates mean for the euro-zone economy and …
Increased immigration would be the easiest way for Singapore to offset a decline in the working age population. However, such a move would be politically controversial, and deciding how many foreign workers to allow into the country will be one of the …
PPI brings mixed news for PCE supercore The bigger-than-expected 0.5% m/m increases in both all items and core final demand producer prices in April were mainly due to downward revisions to earlier months, with the 0.2% m/m gains in March both revised to …
Contrary to the earlier assumption that the US Federal Reserve would lead the monetary policy loosening cycle among advanced economies, it is Switzerland and Sweden that have cut first. This has reflected a combination of weaker inflation and softer …
Minutes suggest Copom isn’t so divided The minutes to last week’s Brazilian central bank meeting suggest that the balance on Copom is, overall, more cautious than had been widely assumed immediately after the meeting. That may provide some support to the …
A key concern around South Africa’s upcoming election is that the left-wing Economic Freedom Fighters (EFF) could get into government as part of what’s being dubbed in some quarters as a “doomsday coalition” with the ANC. This Focus takes a closer look at …
After weeks of rising tensions around the question of Chinese industrial overcapacity, the Biden administration has announced a new raft of tariffs on goods from China. But what will these latest actions mean for the US and Chinese economies? Will Europe …
This page has been updated with additional analysis since first publication. Sticky wage growth is a lingering concern for the BoE While the further easing in regular private sector pay growth in March suggests that wage pressures faded a bit faster than …
We expect the RBNZ to leave policy settings unchanged at its meeting next week. Although the domestic economic backdrop is clearly weak, lingering risks around inflation persistence means policy loosening is unlikely to come onto the agenda before Q4. …
While we expect government bond yields in most developed markets to fall back, we think that those in Japan will stabilise around their current levels. In turn, we anticipate that interest rate differentials will provide support to the yen. The yield of …
13th May 2024
The dissolution of Kuwait’s parliament for the fourth time in two years highlights political infighting that has held back the economy for years. While much remains uncertain, there is now a clear path for fiscal policy to be loosened and help to unlock …
Easing cycle delayed, cut pushed back to Q3 Romania’s central bank (NBR) left its policy rate on hold at 7.00% today, in contrast to consensus expectations for a cut but in line with our own forecast. With inflation pressures falling more slowly than …
