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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
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 …
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 …
7th March 2023
We expect Australia’s central bank to hike by 25bp (04.30 GMT) Fed Chair Powell may reveal whether his outlook for interest rates has changed (15.00 GMT) We think China’s exports weakened, but imports strengthened, in January and February Key Market …
6th March 2023
Currency markets have mostly gone sideways this week, with the US dollar set to end it a touch weaker against most other major currencies. (See Chart 1.) With both activity and price data continuing to surprise to the upside in the US , Europe and China, …
3rd March 2023
We expect Australia’s RBA to hike by another 25bp (Tue.) Japan’s central bank will probably abandon Yield Curve Control (Thu./Fri.) We think US non-farm payrolls rose by 200,000 in February (Fri.) Key Market Themes Notwithstanding the partial …
We think inflation in Turkey eased slightly to 54% in February (07.00 GMT) Final PMIs in Europe may confirm that activity is holding up better than expected (09.00 GMT) We expect the US ISM services index to have fallen back in February (15.00 GMT) …
2nd March 2023
As political risks appear to be largely discounted by investors, we expect the Colombian peso to outperform other major EM currencies over the next couple of years. Although the Colombian peso is broadly unchanged against the greenback so far this year, …
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 …
1st March 2023
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 …
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 …
28th February 2023
We expect Hungary’s central bank to leave its policy rates on hold (13.00 GMT) US consumer confidence may have recovered a bit but is probably still low (15.00 GMT) Join our Drop-In on the long-run economic and market impacts of fracturing (15.00 GMT) …
27th February 2023
The US dollar looks set to end a third week higher against most major currencies amid mounting evidence that the US economy started the year on strong footing . In particular, hawkish FOMC minutes and a strong monthly rise in US PCE supported the dollar …
24th February 2023
We think that euro-zone inflation fell again in February (Wed.) The China PMIs will probably show another acceleration in activity (Wed. & Fri.) We doubt that the February ISM surveys will point to stronger growth (Thu. & Fri.) Key Market Themes Despite …
We think Japan’s headline CPI inflation rose to a four-decade high in January (23.30 GMT) US income and spending data is likely to show a strong rebound in consumption (13.30 GMT) We expect headline and core US PCE price indices to have risen by 0.5% …
23rd February 2023
Stronger-than-expected data out of the US have pushed up US yields more than elsewhere and drove the greenback higher against most currencies for the first time since its cyclical peak in October of last year. While US economic resilience may keep the …
Turkey’s central bank will probably cut its policy rate by 100bp (11.00 GMT) We think Mexico’s CPI edged down to 7.6% in the first half of February (12.00 GMT) We expect policymakers in Korea to keep interest rates on hold Key Market Themes We doubt …
22nd February 2023
We think the RBNZ will hike rates by an above-consensus 75bp (01.00 GMT) Final German HICP data will offer more clarity on inflation’s drivers there (07.00 GMT) February FOMC minutes may give more insight into the Fed’s thinking (19.00 GMT) Key Market …
21st February 2023
The February composite PMI probably rose further above 50 in the euro-zone… (09.00 GMT) … and remained below 50 in the UK and the US We think CPI inflation was unchanged at 6.3% in Canada in January (13.30 GMT) Key Market Themes Those hoping for stellar …
20th February 2023
Another round of robust US economic data and renewed hawkish rhetoric from Fed officials has given the US dollar a boost this week. With economic activity holding up better than we and most others had anticipated and price pressures appearing more …
17th February 2023
We think the Composite PMI rose to just above 50 in February in the euro-zone… (Tue.) …but remained below that threshold in the UK (Tue.) US real consumption probably rebounded in January, reversing declines in past months (Fri.) Key Market Themes While …
UK retail sales volumes probably rose by 0.5% m/m in January (07.00 GMT) We think Russia’s GDP fell by 3.5% y/y in Q4 (16.00 GMT) Catch-up here on yesterday’s Drop-In on our UK economic outlook Key Market Themes The recent strength of the US dollar and …
16th February 2023
The Mexican peso’s outperformance since the start of 2022 has pushed up its valuation substantially, and we think that this leaves it vulnerable to sharp falls against the US dollar if, as we expect, the US economy falls into recession later this year. …
We expect the central bank in the Philippines to raise rates by 50bps to 6%... (07.00 GMT) … and Bank Indonesia to keep rates unchanged at 5.75% (07.20 GMT) US January housing starts may temper economic optimism a bit (13.30 GMT) Key Market Themes This …
15th February 2023
A further decline in US inflation seems largely priced in to financial markets. But we still think investors are too optimistic about how quickly the economy will grow, and as such are sticking with our view that equities will come under renewed pressure, …
14th February 2023
We think the PBOC will cut the interest rate on its Medium-Term Lending Facility UK CPI inflation probably fell further in January (07.00 GMT) We expect US activity data to show some recovery, due partly to easing supply shortages Key Market Themes …
UK labour market probably remained historically tight in December (07.00 GMT) Economies in Central and Eastern Europe likely to have contracted in Q4 We think US headline and core inflation eased further in January (13.30 GMT) Key Market Themes Despite …
13th February 2023
The US dollar is set to end the week a touch stronger against most currencies, adding to its gains last week. But, aside from the Japanese yen round-tripping on news over the next BoJ governor, it’s been a relatively quiet week for the greenback – not …
10th February 2023
Given that US economic outperformance has tended to coincide with a stronger dollar, we suspect a “soft landing” in the US economy would provide a favourable backdrop for the greenback, if it also meant that growth in the US remained more resilient than …
We think annual US core CPI inflation fell to 6.1% in January… (Tue.) …while CPI inflation in the UK declined to 10.2%, from 10.5% in December (Wed.) We think Q4 GDP growth weakened in Colombia, Hungary, Romania, and Israel Key Market Themes Kazuo Ueda …
Some of the moves in China’s financial markets that followed its rapid reopening – including a rise in equity prices, higher bond yields and stronger renminbi – have unwound in the past couple of weeks, but we think they will resume before too long. …
We anticipate interest rate hikes in Mexico and Peru… (Thu.) … but think Russia’s central bank will leave rates on hold (Fri.) UK GDP data likely to show that the economy avoided a recession in 2022 (Fri.) Key Market Themes Shrinking central bank …
9th February 2023
We expect “high-beta” developed market (DM) currencies to weaken against the dollar over the coming months as risk sentiment worsens and, in some cases, yield gaps move against them. But we anticipate a rebound in appetite for risk later this year and …
We expect the Riksbank to conclude its tightening cycle with a 50bp hike (08.30 GMT) The central banks of Mexico and Peru are also likely to deliver final 25bp hikes… …while policymakers in Romania will probably keep interest rates on hold Key Market …
8th February 2023
We think India’s central bank will deliver a final rate hike, of 25bp, to 6.5%... (04.30 GMT) … but expect policymakers in Poland to keep rates unchanged at 6.75% Inflation in Russia probably rose a bit, to 12%, in January (16.00 GMT) Key Market …
7th February 2023
Germany’s industrial production probably didn’t change much in December (07.00 GMT) We think the trade deficit in the US widened last month… (13.30 GMT) …while Canada’s merchandise trade balance fell back into deficit (13.30 GMT) Key Market Themes …
6th February 2023
We think euro-zone retail sales contracted sharply in December (Tuesday) UK Q4 GDP is likely to confirm the economy avoided recession in 2022 (Friday) We expect central banks in Australia, Sweden, India, Mexico and Peru to hike rates next week Key …
3rd February 2023
The US dollar looks likely to record its largest weekly rise against other major currencies since its cyclical peak in September of last year. While investors’ dovish interpretations of announcements by the Fed, BoE, and ECB led the dollar on a roundtrip …
Despite some better news recently, we still think that advanced economies face a tough couple of quarters, an outturn which does not seem to be fully discounted in financial markets. With this in mind, our view remains that risky assets in general will …
We expect growth in US payrolls in January continued to slow (13.30 GMT) ISM Services Index likely to be consistent with mild US recession (15.00 GMT) We held a Drop-In on the Fed, ECB & BoE today – clients can catch up here Key Market Themes Despite …
2nd February 2023
The Fed will probably deliver a smaller 25bp hike, pushing the FFR to 4.50%-4.75% (Wed.) We think strong recent data will prompt the BoE to raise rates by 50bp, to 4%... (Thu.) …while the ECB will increase its deposit rate by 50bp to 2.5%, as signalled …
1st February 2023
Tension across financial markets has come down significantly since November, contributing to the US dollar’s broad-based weakness in that period. Ahead of key central bank meetings this week, this Update assesses whether that trend will continue. 2022 saw …
We think euro-zone inflation rose slightly in January (10.00 GMT) ISM manufacturing index may have fallen further below 50 in January (15.00 GMT) The Fed is set to hike by 25bp (19.00 GMT) Key Market Themes Although China’s equities have now rallied a …
31st January 2023
We think China’s PMIs picked up in January as its COVID wave ebbed (01.30 GMT) Euro-zone GDP probably flatlined in the fourth quarter… (10.00 GMT) …and economic growth may have weakened in Mexico and the Czech Republic Key Market Themes The Fed , ECB …
30th January 2023
We expect the Fed to slow the pace of interest rate hikes to 25bp… (Wednesday) …but the ECB and Bank of England are likely to raise rates by 50bp (Thursday) We’ve pencilled in a below-consensus gain of 150,000 in US non-farm payrolls (Friday) Key Market …
27th January 2023
The US dollar looks set to end another week broadly unchanged against most major currencies. Activity data released this week seemed consistent with resilience in European economies and near-recessionary conditions in the US , and we have revised our …
Optimism around China’s rapid re-opening and stronger-than-expected data out of Europe have put continued pressure on the US dollar over the past month or so. In turn, we have revised down our forecasts for the greenback against major currencies. But we …
26th January 2023
We expect Chile's central bank to leave its policy rate on hold at 11.25% (Thu.) Spain’s economy probably stagnated in the fourth quarter of last year (Fri.) We think US real consumption declined in December (Fri.) Key Market Themes “High-beta” …
We think the US economy expanded by nearly 2% annualised in Q4... (13.30 GMT) South Africa’s central bank will probably hike by 50bp on Thursday Sign up here for our Drop In on the latest economic and market developments in Asia Key Market Themes …
25th January 2023
We expect the Bank of Canada to hike by 25bp… (15.00 GMT) … and clients can register here for our Drop-In following that decision (17.00 GMT) We think rates will be raised by 25bp in Thailand and be left on hold in Sri Lanka Key Market Themes Today's …
24th January 2023
