Strong Q1, but growth likely to slow in the second quarter Despite the weaker-than-expected rise in GDP in February, first-quarter growth still looks to be close to 2.5% annualised. The weaker flash estimate for March points to less momentum going into …
30th April 2024
Wage growth now looks a little sticky too The persistence of wage growth is another reason for the Fed to take its time on rate cuts. According to the first-quarter employment cost index, civilian wages increased at a 1.1% non-annualised pace and the …
May rate cut off the table The slightly faster-than-expected 0.2% q/q expansion in Mexico’s economy in Q1, alongside strong underlying price pressures and the delay to rate cuts in the US, mean that Banxico is all but certain to leave interest rates …
Strong GDP data will not stop June rate cut Today’s stronger-than-expected Q1 GDP data means the euro-zone has come out of recession but, with core and services inflation both declining in April, this will not prevent the ECB from starting its easing …
This page has been updated with additional analysis since first publication. Further evidence the drag on activity from high interest rates is fading March’s money and credit figures provide further evidence that the drag from high interest rates is …
Net lending has a weak start to the year Following a dip in February, net lending to commercial property ticked up in March, but the rise of £259m was modest and entirely due to lending to standing property. Looking through the monthly volatility net …
Leadership promises continued policy support, new round of reforms The readout of the Politburo’s quarterly meeting on economic affairs has just been published by state media. The tone remained dovish, suggesting that policy will remain supportive in the …
Taiwan’s economy accelerated in y/y terms last quarter and we expect growth to remain strong over the coming year, helped by robust demand for AI-related products. Economic growth slowed in q/q terms but the strength of the economy over the past year …
A strong start to 2024 The national-level data released so far this morning suggest that euro-zone GDP, which will be published in just under an hour, will show an expansion of 0.3% q/q in Q1. All of the euro-zone’s largest economies grew in the first …
Recoveries continue The slightly better-than-expected Q1 GDP figures out of Hungary and Czechia suggest that economic recoveries had a little more momentum at the start of this year than we previously thought and that the risks to our growth forecasts for …
This page has been updated with additional analysis since first publication. Softness in retail sales probably won’t prevent a rate hike The weakness in retail sales last month suggests that sales volumes fell across Q1 as a whole. That said, with …
This page has been updated with additional analysis since first publication. GDP set to rebound this quarter Coupled with solid output forecasts for April and May, the strong rebound in industrial production in March suggests that the likely slump in GDP …
This page has been updated with additional analysis since first publication. Survey points to stagnant economy and still-high price pressures The weaker-than-expected EC business and consumer survey for April is a reminder that the euro-zone economy is …
29th April 2024
This page has been updated with additional analysis since first publication. Fairly strong start to Q2 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in April, but our regional …
Disinflationary trend to resume soon; real spending still strong The slightly bigger-than-expected 3.7% annualised first-quarter gain in the core PCE deflator was principally because January’s gain was revised up to 0.50% from 0.45%. Nevertheless, the …
26th April 2024
Softer inflation figure (just about) keeps a 50bp cut in May in play The slightly lower-than-expected Brazilian inflation figure for the first half of this month, of 3.8% y/y, and signs of softening underlying core price pressures might just be enough to …
Hawkish CBR worried about upside inflation risks The hawkish communications accompanying the decision by the Russian central bank (CBR) to leave its key policy rate on hold today suggests that monetary easing will probably arrive later than we previously …
Bank of Japan will hike rates further in July The Bank of Japan signalled growing confidence in meeting its inflation target at today’s meeting and we’re sticking to our forecast that it will increase its policy rate further to 0.3% in July. As widely …
GDP growth slows, but underlying momentum remains strong First-quarter GDP growth came in weaker-than-expected at 1.6% annualised, the weakest quarterly gain in almost two years, but the strong 3.1% gain in final sales to private domestic purchasers …
25th April 2024
Hawkish message as rates remain on hold Turkey’s central bank left its policy rate on hold at 50.00% at today’s meeting, but the statement continued to strike a hawkish tone amid persistent inflation risks in the economy. While we think the tightening …
GDP growth in Korea rose sharply in Q1 but we don't expect this strength to last. Weak global growth is set to weigh on exports in the near term while tight monetary and fiscal policy will curtail domestic demand. Today’s figures show that the economy …
Retail sales growth disappointing The surprise fall in retail sales in February and the apparent stagnation in March means they had a disappointing first quarter. That reinforces our view that the Bank of Canada is likely to cut interest rates at the next …
24th April 2024
First-quarter business equipment declined The rise in durable goods orders in March was mainly due to the volatile transport component, with core and underlying capital goods orders only inching up. While underlying capital goods shipments rose last …
Rise in inflation puts the final nail in the coffin for a May rate cut The rise in Mexico’s headline inflation rate to 4.6% y/y in the first half of April, coming alongside the delay to rate cuts in the US (and fall in the peso), mean that Banxico is all …
This page has been updated with additional analysis since first publication. Signs of life for the German economy The rise in the German Ifo in April, together with the jump in the Composite PMI in the same month, suggests that the German economy may be …
Hike aimed at supporting the currency In a surprise move, Bank Indonesia (BI) today hiked its main policy rate by 25bps (to 6.25%), and made clear that supporting the currency would remain its key priority over the coming months. However, with …
Upside inflation surprise bodes poorly for rate cuts With price pressures proving inordinately resilient, there is little scope for the Reserve Bank of Australia to start loosening policy in the near future. The 1.0% q/q rise in consumer prices in Q1 was …
Largest increase in new home sales in over a year The large uptick in new home sales in March is consistent with our above-consensus prediction that sales of new homes will climb to 750,000 by year end. The 8.8% rise in new home sales in March took them …
23rd April 2024
This page has been updated with additional analysis since first publication. Easing services prices may encourage BoE to cut rates in the coming months Although the unexpected rise in the composite activity PMI in April suggests the economy grew faster at …
Weak end to Q1 Poland’s weaker-than-expected activity data for March suggest the risk to our forecast for GDP growth of 2.5% y/y in Q1 (up from 1.0% y/y in Q4) are tilted to the downside. While we maintain our above-consensus GDP growth forecast of 3.0% …
Euro-zone coming out of recession The bigger-than-expected increase in the Composite PMI for April suggests that the euro-zone is coming out of recession, but this will not prevent the ECB from cutting interest rates in June. The increase in the euro-zone …
This page has been updated with additional analysis since first publication. Limited scope for tax cuts March’s public finances figures show that public borrowing in 2023/24 came in £6.6bn higher than the OBR predicted only a month ago, casting further …
This page has been updated with additional analysis since first publication. Activity strong on eve of election The flash composite PMI reading for April suggests that the strength of economic activity over the past few quarters has continued through to …
This page has been updated with additional analysis since first publication. A strong rebound in Q2 GDP is likely The composite PMI continued to rise strongly to a eight-month high in April, suggesting that a strong rebound is on the cards for Q2 GDP …
This page has been updated with additional analysis since first publication . Retail outlook still bright despite sales stalling in March Although retail sales volumes remaining unchanged in March was worse than expected (consensus forecast +0.3% m/m, CE …
19th April 2024
The economy rebounded during the first quarter but we continue to expect the economy to grow below trend this year as a whole. Elevated interest rates, a cooling labour market, soft foreign demand and tighter fiscal policy are all likely to curtail …
Inflation should receive a boost in mid-year Inflation moderated slightly in March, in line with the consensus and our forecasts. If inflation continues to move in line with the BoJ’s projections, further rate hikes may be on the cards this year. Headline …
Existing home sales drop back due to higher mortgage rates The fall in existing home sales in March was triggered by mortgage rates climbing back above 7% the month before. Even so, transactions remain above the trough at the end of last year, consistent …
18th April 2024
This page has been updated with additional analysis since first publication. Still-tight labour market gives RBA reason to be cautious The modest rise in unemployment last month doesn’t change the bigger picture that Australia’s labour market is firing on …
This page has been updated with additional analysis since first publication. Inflation fall will not sway the SARB into interest rate cuts The larger-than-expected fall in South Africa’s headline inflation rate, to 5.3% y/y, in March will not be enough to …
17th April 2024
This page has been updated with additional analysis since first publication. Upside surprise, but big drop to below 2% still coming in April The smaller-than-expected fall in CPI inflation from 3.4% in February to 3.2% in March (BoE and consensus 3.1%, CE …
This page has been updated with additional analysis since first publication. Net exports will be a drag on Q1 GDP While the trade deficit increased in March, net goods trade should contribute positively to Q1 GDP figures. But net services should have …
This page has been updated with additional analysis since first publication. Upside inflation surprise raises “higher for longer” risks Although the Q1 CPI print was a touch stronger than we had predicted, we still expect inflation to return to the RBNZ’s …
Manufacturing rallies, but hi-tech boom revised down The 0.4% m/m increase in industrial production in March was principally due to a 0.5% m/m increase in manufacturing output, which was a lot better than we had expected given the already-reported decline …
16th April 2024
Largest decline in housing starts since April 2020 Housing starts weren’t able to build on the strong performance of the previous month in March, falling by the largest monthly amount since April 2020 in the early days of the pandemic. Although some of …
On track for a June interest rate cut The March CPI data showed the third consecutive month of muted gains in the Bank of Canada’s preferred core inflation measures, suggesting that there is a growing chance of the Bank cutting interest rates at its next …
This page has been updated with additional analysis since first publication. Weaker labour market points to weaker wage growth The sharp fall in employment and the jump in the unemployment rate in February suggest that wage growth will continue to slow …
Fiscally-fuelled improvement unlikely to last long Stronger-than-expected official GDP figures indicate that China’s economy gained momentum in Q1, thanks to policy support. But monthly activity data suggest that this policy-driven recovery is shaky. …
Downside risks to flash GDP estimate for February The unchanged level of wholesale sales and signs that manufacturing GDP contracted suggest that there are downside risks to the flash estimate that GDP rose by 0.4% m/m in February. The 0.7% m/m rise in …
15th April 2024
Consumption growth still rock solid The strong rise in retail sales in March and upward revision to February’s data will further support the Fed’s stance that there is no rush to start lowering interest rates. The 0.7% m/m rise in headline sales was …
