Halifax confirms that prices are on the rise again The second consecutive monthly rise in the Halifax house price index in November mirrored the increase in the Nationwide index, confirming that house prices have not only stabilised, but are rising. …
7th December 2023
This page has been updated with additional analysis since first publication . Export volumes reach new high China’s export values rose year-on-year for the first time since May while the level of export volumes hit a fresh high, supported by exporters …
Net trade could remain a drag on growth in Q4 Notwithstanding the slight expansion in the goods trade surplus in October, net trade could subtract from growth this quarter. The rise in the goods trade surplus from a downwards-revised $6.2bn in September …
We think that sovereign bond yields in most major economies will generally reach their troughs around the same time over the next year or so. But with the Bank of Japan seemingly set to buck the trend once again, yields there may be an exception. The …
6th December 2023
Property yields rose across all sectors in Q3, but this was offset by a sharp rise in alternative asset yields towards the end of the quarter. As a result, all sectors saw a deterioration in valuations, which pushed the retail sector back into the …
While government bond yields continue to plunge and the main euro-zone equity index has risen to a new high, the rally in US equities has stalled over recent days and the dollar recovered some ground. This suggests to us that the resurgent optimism in …
The Bank of Canada is clinging on to the idea that restrictive policy is still needed to get inflation back to 2%. Nonetheless, with core inflation pressures muted, GDP and house prices falling, and labour market conditions loosening rapidly, it won’t be …
Overview – As core inflation is on track to return to the 2% target by the middle of next year, we expect the Fed to cut interest rates by 25bp at every meeting next year from March onwards, with rates eventually falling to between 3.00% and 3.25% in …
Cocoa prices neared a 45-year high in November on the back of concerns about supply from Côte d’Ivoire and Ghana. Constrained supply alongside high seasonal demand will, in our view, continue to support high cocoa prices through 2024, until new supply …
Bank maintains tightening bias, but next move likely to be a cut The policy statement from the Bank of Canada was a bit more hawkish than we expected, with the Bank reiterating that it is still concerned about the outlook for inflation and “remains …
Officials not yet willing to fully endorse rate cut bets; tightening bias could be retained New SEP should confirm rates are at the peak but significant downgrades unlikely We expect the first rate cut in March and 175bp of easing in total next year With …
Imports and exports set for further growth in Q4 Despite the widening in the trade deficit in October, net trade looks set to be only a modest drag on fourth-quarter GDP growth. But the survey evidence suggests renewed weakness in exports may still lie …
Slump in imports only partly due to UAW strike The slump in import volumes in October was partly due to the knock-on effects of the UAW strike in the US, but it also suggests that firms are now drawing down their inventories as demand weakens. That raises …
Easing cycle paused The National Bank of Poland (NBP) left interest rates on hold as expected today, and we think the easing cycle will remain on pause until the end of Q1. With the economy recovering and the disinflation process likely to stall over the …
Note: We’ll be discussing the Fed, ECB and Bank of England December decisions and the policy outlook for 2024 in an online briefing on Thursday, 14 th December . Click here to register for the 20-minute session. ECB will slash its 2024 inflation forecast …
Falling rates allow mortgage demand to recover Falling mortgage rates sparked a modest uptick in mortgage applications for home purchase in November. Recent falls in Treasury yields mean further falls in mortgage rates are imminent, so the trough in …
Overview – China’s economy has regained some strength recently. We expect this to continue into 2024, on the back of support from fiscal policy and a further pick-up in household spending. But with property construction likely to continue to decline and …
This page has been updated with additional analysis since first publication. Construction PMIs once again below 50 in November The headline CIPS construction PMI barely changed in November, settling at 45.5 from 45.6 in October, and was still below the 50 …
GDP growth will continue to disappoint GDP growth was softer than most expected in Q3 and with that weakness set to continue, we think that the RBA is done tightening policy. The 0.2% q/q rise in output fell short of the analyst consensus of 0.4% as well …
We held two online Drop-In sessions today to discuss the outlook for 2024 and the risks to our forecasts. (See a recording here .) This Update summarises the answers to several of the questions that we received. Are there recessions coming in advanced …
5th December 2023
Although the relative performance of the three “big-tech” sectors of the S&P 500 has underwhelmed recently, we suspect that they will be at, or near, the front of the pack again in 2024. While the three big-tech “growth-heavy” sectors that contain the …
November JOLTS data suggest that labour market slack is growing, even as payroll growth remains relatively resilient. With signs pointing to a sharper fall in wage growth ahead, the Fed can be reassured ahead of its meeting next week that that …
Hotel demand has suffered recently from the impact of high inflation and interest rates weighing on discretionary spending. But thanks to the soaring cost of foreign holidays and a revival in international tourism, we think that hotel rental growth will …
First-time buyer (FTB) loan originations have been weak for over a year now. That’s mainly down to higher mortgage rates which have made buying too expensive for many younger adults. And as we think mortgage rates are unlikely to drop much below 6.0% …
Muted ISM services consistent with GDP stagnation; job openings drop back The modest rebound in the ISM services index to 52.7 in November, from 51.8, left our weighted composite index at a level consistent with an outright stagnation in GDP. Admittedly, …
Inflows into EM bond and equity markets have picked up over the past month, particularly in Turkey where optimism around the policy U-turn seems to be building. Capital flows into EMs may be bumpy in the very near term as global growth disappoints, but …
Overview – India’s economy has grown at a healthy clip over recent quarters and, with the help of government spending, we think it will continue to hold up well ahead of next year’s general election. Given also that food inflation has picked up again, the …
Overview – With higher interest rates taking longer to percolate through the economy, we now think the recession will be shallower and GDP growth will stay weak throughout all of 2024. It’s a softer landing for the economy, but the runway is longer. And …
This page has been updated with additional analysis since first publication . Entering a period of softer growth Brazil’s economy fared better than expected in Q3, expanding by 0.1% q/q, but the bigger picture is that the strong growth seen in the first …
This report has been updated with additional analysis, including the release of the UAE's PMI on 6th December. Gulf non-oil sectors cushioning slowdown; Egypt’s economy sputtering along The batch of PMIs for November from the Middle East and North Africa …
