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 …
24th April 2024
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 …
Inflation edges down and will remain low Saudi Arabia’s headline inflation rate slowed to 1.6% y/y in March on the back of weaker food and non-food inflation. While there’s likely to be a slight bump up in inflation in the second half of this year, the …
Further jump in inflation means tightening cycle likely to continue Nigeria recorded another acceleration in headline inflation to 33.2% y/y in March as the previous falls in the naira have continued to push up prices. And while the naira has staged a …
This page has been updated with additional analysis since first publication. Rise in output doesn’t improve poor outlook for industry Euro-zone industrial production rose in January, but the level of output is still weak and the outlook is poor. The 0.8% …
Consumers taking their cue from gasoline prices The small decline in the University of Michigan measure of sentiment in April lends some support to our forecast that consumer spending growth will be weaker in the first half of this year. Higher gasoline …
12th April 2024
This page has been updated with additional analysis since first publication. The fall in headline consumer price inflation in March to a 10-month low will comfort policymakers and, looking ahead, we think headline inflation will reach the RBI’s 4% …
This page has been updated with additional analysis since first publication Credit growth plummets in a further sign of weak demand Bank loan and broad credit growth in China both decelerated sharply in March. (See Chart 1.)While we expect the PBOC to cut …
Bernanke puts the boot in, but doesn’t recommend the BoE projects interest rates Our initial impression (our full analysis is here ) of the changes to the Bank of England’s forecasting and communications recommended by Ben Bernanke is that they would go a …
This page has been updated with additional analysis since first publication . Export volumes remain strong Despite a larger-than-expected y/y fall in export values, export volumes climbed to record highs. Nonetheless, we still think export volumes will …
This page has been updated with additional analysis since first publication. Recovery well underway, but inflation will continue to fall The 0.1% m/m rise in GDP in February (consensus and CE +0.1%) and the upward revision to the gain in January from 0.2% …
On hold, early rate cut unlikely With inflationary pressures lingering, the currency falling sharply and expectations of a rate cut by the US Federal Reserve being pushed back, the prospect of an early rate cut by the Bank of Korea (which today left …
The Monetary Authority of Singapore (MAS) kept policy settings unchanged today, as expected, but with the economy set to remain weak and core inflation on track to resume its downward trend soon we think the MAS will loosen policy at its meeting in …
Updated guidance suggests that June cut is likely The ECB’s decision to update its guidance suggests that an interest rate cut at the next meeting in June is very likely. In the press conference, Christine Lagarde won’t give a clear signal about the path …
11th April 2024
This page has been updated with additional analysis since first publication . Overinvestment will keep inflation below pre-pandemic average CPI inflation rose less than expected in March but is still trending upwards. We think an easing of food price …
Fed looking to slow QT by half from June According to the minutes of the Fed’s mid-March policy meeting “almost all participants judged that it would be appropriate to move policy to a less restrictive stance at some point this year if the economy evolved …
10th April 2024
Inflation stabilises, easing cycle is not that far away The stabilisation in Russian inflation at 7.7% y/y in March was in line with expectations and adds to evidence that inflation pressures have continued to cool in recent months. The month-on-month …
Bank leaves the door open for a June interest rate cut The acknowledgment by the Bank of Canada today that “the data since January have increased our confidence that inflation will continue to come down” leaves the door open to an interest rate cut at the …
Third consecutive 0.4% m/m gain in core CPI kills June rate cut hopes Alongside the pick-up in monthly payroll employment gains, the third consecutive 0.4% m/m rise in core CPI in March pretty much kills off hopes of a June rate cut from the Fed. The …
Underlying services prices still providing cause for concern The slightly softer-than-expected Brazilian inflation figure for March of 3.9% y/y keeps the door open to 50bp interest rate cuts at the Copom meetings both next month and in June. But with …
BoT on hold, but cuts likely later in the year Thailand’s central bank (BoT) today resisted pressure from the government to loosen monetary policy, but with growth set to remain weak and inflationary pressures very subdued, we still think rate cuts are …
RBNZ remains on the sidelines The RBNZ didn’t drop any hints as to when it might pivot to looser policy at its meeting today, but we still think that it will start cutting rates by August. The RBNZ’s decision to leave rates on hold at 5.50% was correctly …
Further rise in core services inflation shifts odds in favour of a hold Mexico’s headline inflation rate held steady at 4.4% y/y in March, but the further rise in core services inflation to a 10-month high last month adds weight to our view that Banxico …
9th April 2024
Door for rate cuts closing The decision by the Bank of Israel (BoI) to leave its policy rate unchanged at 4.50% (rather than cut) for the second meeting in a row underscores policymakers’ concerns about the large budget deficit, above-target inflation and …
8th April 2024
