Economy overheating, central bank has more work to do The rise in Russian GDP growth to 5.5% y/y in Q3 was larger than expected and adds to evidence that the economy continued to overheat last quarter. With fiscal policy set to loosen further and …
15th November 2023
This page has been updated with additional analysis since first publication . Struggling for momentum The softer-than-expected 0.2% q/q rise in Colombian GDP in Q3, coming alongside signs that the economy was weakening towards the end of the quarter, …
Manufacturing and wholesale trade GDP broadly unchanged in September The slightly better-than-expected gains in manufacturing and wholesale sales in September do not change the big picture that GDP in each sector was probably largely unchanged, supporting …
Despite the indefatigable consumer, price pressures fading fast Retail sales values fell by 0.1% m/m in October, but the decline was principally due to a price-related drop back in gasoline station sales and a modest 1.0% m/m decline in motor vehicle …
Inflation quickens again, putting more pressure on the CBN to act Nigeria’s headline inflation accelerated again to 27.3% y/y in September, as the removal of fuel subsidies and the naira’s struggles continued to feed through. The central bank will need to …
Retail recovery helping to offset industrial weakness September’s activity data for South Africa suggest that the economy probably stagnated over Q3 as a whole. Some of the recent drags on the economy, such as loadshedding, are likely to ease in 2024 but …
This publication has been updated with additional analysis. Output to continue falling Euro-zone industrial production fell in September and is likely to continue contracting in the final quarter of the year, primarily due to weak demand. The 1.1% m/m …
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Saudi Arabia’s headline inflation rate edged down from 1.7% y/y in September to 1.6% y/y in October, the weakest pace of inflation in nearly two years, and …
This page has been updated with additional analysis since first publication. Slower progress ahead after big plunge The fall in CPI inflation from 6.7% in September to 4.6% in October was a bit bigger than expected (consensus and BoE forecasts 4.8%, CE …
This page has been updated with additional analysis and charts since first publication. Note: Join our Drop-In briefing on Thursday 16th November on the Xi-Biden meeting, the fracturing of the global economy, and what this means for Saudi Arabian …
This page has been updated with additional analysis since first publication . Wage growth has likely peaked Notwithstanding the acceleration in wage growth last quarter, we doubt that the Reserve Bank of Australia will tighten policy any further. The 1.3% …
GDP (Q3 2023, Preliminary) Tepid Q3 GDP outturn sets the tone for 2024 GDP growth weakened sharply in the third quarter and we expect it to remain soft next year. The 0.5% q/q contraction in Q3 GDP (-2.1% annualised) was much weaker than the analyst …
This page has been updated with additional analysis since first publication. Downward pressure on core inflation resumes The softer 0.2% m/m rise in core consumer prices in October makes it even less likely that the Fed will raise rates any further, and …
14th November 2023
This page has been updated with additional analysis since first publication. Weak economy will cool labour market from here We do not think the slight acceleration in employment growth in Q3 is a sign of things to come. With business surveys deep in …
Past the worst Q3 GDP figures out of Central and Eastern Europe (CEE) showed a mixed performance across the region, but as a whole CEE economies appear to be past the worst of the downturn. With households’ real incomes rising again after last year’s …
Rise in target measure of inflation supports case for another hike The increase in the Riksbank’s target measure of inflation in October was broadly as anticipated and does not change our view that, while it will be a close call, policymakers are most …
This page has been updated with additional analysis since first publication. Wage growth continues to ease, but only slowly With wage growth continuing to ease and signs that a further loosening in the labour market lies ahead, higher interest rates …
Second month of declining loan balances and plenty more to come The second consecutive monthly decline in outstanding commercial real estate loan balances held by US banks in October means the data are starting to reflect the pullback in real estate …
13th November 2023
This page has been updated with additional analysis since first publication. Renewed food price spike the key inflation threat Headline consumer price inflation edged down to a four-month low of 4.9% y/y in October, but that’s already old news given the …
Economy likely to have slowed sharply in Q3 Turkish retail sales and industrial production both fell again in m/m terms in September and GDP growth looks to have slowed sharply in the third quarter as a whole. The impact of policy tightening will take a …
Climbing inflation will keep pressure on the CBR The further chunky rise in Russian inflation to 6.7% y/y in October provides additional evidence that demand is outstripping supply in Russia’s economy. We think that inflation will continue to rise over …
10th November 2023
Renewed inflation concerns The continued rise in consumers’ inflation expectations in November showed that October’s jump was not a one-off and will be of some concern to the Fed. However, the headwind from persistently weak confidence is likely to weigh …
The fall in Brazilian inflation to 4.8% y/y in October confirms that the mini inflation cycle has now topped out. Inflation will continue to fall in the coming months, paving the way for further interest rate cuts. That said, we expect inflation to remain …
This page has been updated with additional analysis since first publication. Jump in inflation not enough to prompt another rate hike Despite the unexpected jump in Norway’s headline and core inflation rates in October, we still think the Norges Bank is …
This page has been updated with additional analysis since first publication. Recession or not, economy not weak enough to quash price pressures The Q3 GDP data will spark a big debate about whether or not a recession has just begun (the published growth …
Banxico remains hawkish, but may be starting to contemplate cuts Mexico’s central bank sprung no surprises and left its policy rate at 11.25% at today’s Board meeting and the accompanying statement retained its hawkish bias. That said, there was a very …
9th November 2023
Higher services inflation to keep Banxico in hawkish mood Mexico’s headline inflation rate dropped to a 32-month low of 4.3% y/y in October, but the fresh rise in services inflation will alarm officials at Banxico. We doubt this will prompt a restart to …
GDP rebounded strongly in the third quarter of the year but we don’t expect this strength to last as high interest rates and weaker global growth lead to renewed economic weakness in the near term. According to the data published today, GDP rose by 3.3% …
This page has been updated with additional charts and analysis since the first publication. Deflationary returns but is unlikely to persist CPI slipped back into deflationary territory last month. This was mostly due to a drop in food inflation. But core …
NBP pauses easing cycle, interest rates to stay high in 2024 The National Bank of Poland (NBP) surprised most analysts in pausing its easing cycle today, and we think that the scope to deliver further interest rate cuts over the coming year is quite …
8th November 2023
NBR yet to show signs of a dovish pivot The National Bank of Romania (NBR) left its policy rate on hold again at 7.00% today, and offered little evidence to suggest it is considering the start of an easing cycle just yet. We currently expect an easing …
Mortgage applications bottom out After their weakest month in 28 years, there were signs that mortgage applications for home purchase bottomed out at the end of October. Mortgage applications for home purchase dropped 9.1% m/m across October as a whole, …
This page has been updated with additional analysis since first publication. Sales fall further and more weakness ahead Euro-zone retail sales fell in September and, in our view, will remain weak in the coming months as the economy falls into recession. …
Surplus boosted by temporary surge in oil prices The September trade data look encouraging at first glance, with the merchandise trade surplus widening to $2.0bn, from $1.0bn, but the 2.7% m/m increase in export values was mostly due to higher oil prices. …
7th November 2023
Support from rebounding exports unlikely to last The modest increase in the trade deficit to $61.5bn in September, from $58.7bn, reflected strong gains in imports and exports, capping off solid quarterly rebounds in both. But with the global economy …
Worse than expected (again) German industrial production fell much more than anticipated in September and the prospects for the winter months look very poor. The 1.4% m/m fall in industrial production in September (see Chart 1) was worse than expected …
This page has been updated with additional analysis since first publication. Confirmation house prices have stopped falling The increase in the Halifax house price index in October confirmed that house prices are rising, suggesting that the high cost of …
This page has been updated with additional analysis since first publication . Import volumes surpass 2021 peak The year-on-year contraction in export values deepened last month. But this was mainly due to lower export prices. Export volumes were little …
RBA’s next move will be down With today’s widely anticipated rate rise now behind us, we believe the RBA’s tightening cycle is at an end. The RBA’s decision to lift its cash rate by 25bp at today’s meeting came as a surprise to few. Indeed, 35 out of 39 …
This page has been updated with additional analysis since first publication. Wage growth will continue to accelerate Regular wage growth accelerated in September and we think it will continue to climb to around 2% next year. According to the preliminary …
This page has been updated with additional analysis since first publication. Housing suffers but commercial surprisingly resilient The uptick in the headline CIPS construction PMI from 45.0 in September to 45.6 in October still left it below the 50 …
6th November 2023
This page has been updated with additional analysis since first publication. PMIs underline weak outlook, easing price pressures Final PMIs released today confirmed the preliminary estimates and are consistent with our forecast that euro-zone GDP will …
Figures released today suggest that economic growth remained broadly stable last quarter, but we don’t have much faith in the official data. Our own in-house activity tracker shows that the economy is performing worse than what the official data suggest. …
Slowdown spreads to services sector The ISM services index fell to a five-month low of 51.8 in October, from 53.6, adding to the evidence that economic growth is slowing after a blockbuster third quarter. Unlike the renewed slump in the manufacturing …
3rd November 2023
Looser labour market driving softer wage pressures This page has been updated with additional analysis since first publication. The more modest rise in employment and essentially unchanged hours worked in October suggest that labour demand is easing …
This page has been updated with additional analysis since first publication. Third-quarter strength fading rapidly The muted 150,000 gain in non-farm payrolls in October is another sign that the economy’s strength in the third quarter is likely to unwind …
Inflation eased a touch, peak approaching soon Turkish inflation unexpectedly fell to 61.4% y/y in October and while we think inflation is likely to rise again in the coming months, the peak is probably not too far away. The central bank’s aggressive …
CBE stands pat as all eyes turn to post-election meeting The Central Bank of Egypt (CBE) left its overnight deposit rate at 19.25% today but, with pressure on the pound mounting and inflation still well above target, there’s a good chance that …
2nd November 2023
Productivity acceleration bearing down on unit labour costs Data today confirmed that the surge in GDP in the third quarter was driven by a 4.7% annualised jump in productivity, the biggest gain since 2020. While it remains to be seen whether this is the …
Bank doubles-down on rates staying high for long The Bank’s decision to leave interest rates at 5.25% for the second time in a row and the doubling down on the message that rates cuts are a long way away supports our view that Bank Rate will stay at 5.25% …
