Wage pressures easing This page has been updated with additional analysis since first publication. The strong headline employment gain in September was entirely due to a rebound in educational services employment, with employment elsewhere edging down. …
6th October 2023
Despite strong payrolls, wage growth continues to slow The surprisingly strong 336,000 increase in non-farm payrolls in September adds to the evidence on real activity that the economy is holding up well despite the headwind from higher interest rates. …
Near-term momentum in house prices is downwards The sixth consecutive monthly decline in the Halifax House Price Index in September leaves it significantly more downbeat than the Nationwide figures about near-term momentum in house prices. Given the …
RBI stands firm in fight against inflation The RBI kept the repo rate on hold at 6.50% today as expected and continued to strike a hawkish tone despite the recent easing in headline inflation. There is still a significant risk of the easing cycle that we …
This page has been updated with additional analysis since first publication. Regular wage growth set to remain strong Regular earnings growth remained strong in August and with the labour market set to tighten, it could yet accelerate further. Growth in …
Q3 exports rebound, but outlook remains weak The trade deficit narrowed to a three-year low of $58.3bn in August, from $64.7bn, as exports increased by $4.1bn or (+1.6% m/m) and imports declined by $2.3bn (-0.7% m/m). The gain in exports was driven by a …
5th October 2023
Surge in exports an upside risk to preliminary GDP estimate Exports rose by far more than imports in August, even as the latter benefited more from the fading disruption from the earlier BC port strikes. That suggests there are upside risks to the …
NBR holding firm in inflation fight The National Bank of Romania (NBR) kept its main policy rate unchanged at 7.00% today, and we expect policy to remain on hold into next year. The NBR will be the last in Central and Eastern Europe to start cutting …
This page has been updated with additional analysis since first publication. Construction PMI falls below 50 as commercial balance plunges The decline in the headline CIPS construction PMI from 50.8 in August to 45.0 in September took it below the 50 …
Australian economy braces for weaker growth Data released today reaffirm our view that the Australian economy is on shaky ground. To start with, trade data suggest that net exports will have become a drag on GDP growth in Q3. The trade surplus widened …
Surveys consistent with moderate growth The small fall in the ISM services index to 53.6 in September, from 54.5, contradicted the rebound in the ISM manufacturing index. Nevertheless, the weighted average of the two ISM surveys are still consistent with …
4th October 2023
NBP cuts again, but rates won’t fall as far as most expect The National Bank of Poland’s (NBP’s) decision to cut interest rates again today, from 6.00% to 5.75%, suggests that the doves are ruling the roost on the MPC, but we think that interest rates …
High mortgage rates crush home purchase demand Rising mortgage rates caused mortgage applications for home purchase to slip to a fresh 28-year low in September. With mortgage rates edging above 7.5% in the last week of the month as Treasury yields surged …
This page has been updated with additional analysis since first publication. Euro-zone headed for recession The drop in retail sales in August and weakness in the final PMIs for September are consistent with our view that the euro-zone economy will fall …
RBNZ’s next move will be down Although the RBNZ will retain its tightening bias, we believe that the official cash rate is at its cyclical peak. All 27 of the analysts polled by Reuters, including ourselves, had expected the Bank to leave the OCR …
This page has been updated with additional analysis since first publication . Japan’s Ministry of Finance may have intervened in support of the yen today after the USD/JPY rate rose through the symbolic 150 level in the wake of the upside surprise in US …
3rd October 2023
This page has been updated with additional analysis since first publication . Industry stumbled in Q3 The 0.4% m/m rise in Brazilian industrial production in August failed to fully offset the decline in July and suggests that the sector was as a drag on …
This report has been updated with additional analysis, as well as a Chart of the key data. Gulf non-oil sectors cushioning slowdown; Egypt’s economy sputtering along The September release of PMIs for the Middle East and North Africa showed that activity …
Inflation surge starting to cool, but further rate hikes in store The small (by Turkey’s recent standards) rise in inflation to 61.5% last month, from 58.9% in August, provides the first signs that the inflation spike is close to levelling off. But the …
This publication has been updated with additional analysis. Inflation rising, but not for long The rise in Switzerland’s headline inflation rate in September was largely due to the increase in oil prices in recent months, which caused energy inflation to …
This page has been updated with additional analysis since first publication. Indian manufacturing growth cools a touch India’s manufacturing PMI moderated in September but remained high. However, there are reasons to think a further slight cooling in …
RBA will deliver final rate hike next month While new RBA Governor Michelle Bullock didn’t spring any surprises at her first monetary policy decision today, we think that the Bank will hike interest rates to a peak of 4.35% at its next meeting in …
ISM hits 10-month high; construction boosted by lack of homes for sale The ISM manufacturing index rallied to a 10-month high of 49.0 in September, from 47.6, but that still leaves the index at a level that, historically, has been consistent with GDP …
2nd October 2023
This page has been updated with additional analysis since first publication . PMI continued weakness signals poor growth till year end South Africa’s manufacturing PMI recorded a fresh large fall in September, suggesting that the pick-up in activity in …
This page has been updated with additional analysis since first publication. PMIs increase, but CEE industry still in the doldrums The manufacturing PMIs increased across most of Emerging Europe last month, but remained consistent with weak industrial …
Pause in price falls unlikely to mark the trough The stabilisation of house prices in September was a surprise given mortgage rates are still well above the level which allowed the first leg down in house prices to bottom out. But leading indicators of …
This page has been updated with additional analysis since first publication. Price pressures remain strong as economy is running hot The stronger-than-expected improvement in the latest Tankan survey suggests that the economy will continue to expand at …
Core PCE inflation slowing rapidly despite resilient consumption The August income & spending data confirm that real consumption growth strengthened in the third quarter, but also cast doubt on the market narrative that resilient growth will see interest …
29th September 2023
This page has been updated with additional analysis since first publication. On the cusp of recession The economy failed to make much headway in July and August and the latest business surveys suggest that GDP probably contracted in September, which would …
This page has been updated with additional analysis since first publication. Monetary policy to stay tight despite big fall in inflation September’s sharp drop in euro-zone inflation was largely due to base effects, but core inflation also came in below …
Approvals to remain weak for the next six months The further decline in mortgage approvals in August to their lowest level since the aftermath of last autumn's “mini” budget showed that high mortgage rates are keeping home purchase demand very weak. Our …
While net lending to commercial property increased for the sixth consecutive month in August, we think this resilience will wane as high interest rates and slower economic activity take a toll on investment over the remainder of the year. Net lending to …
This page has been updated with additional analysis since first publication. Higher interest rates weighing more heavily on lending The drag from higher interest rates on bank lending grew further in August, particularly in the housing market. Although …
Softer inflation print raises the chance of another rate cut The sharper-than-expected decline in Polish inflation to 8.2% y/y in September raises the chance of another interest rate cut by the central bank at its meeting next week but, at this point, we …
This page has been updated with additional analysis since first publication. GDP growth nudged up, but resilience won't last The final Q2 2023 GDP data release shows that the economy was a bit more resilient in the first half of this year than we …
This page has been updated with additional analysis since first publication. Labour market set to tighten as GDP growth holding up While retail sales and industrial production were little changed in August, they point to another decent rise in GDP across …
This page has been updated with additional analysis since first publication. Inflation will only fall below 2% by end-2024 While the Tokyo CPI suggests that underlying inflation has now peaked it will take until late next year for inflation to fall below …
Banxico turns up its hawkish rhetoric Mexico’s central bank, as widely expected, left its policy rate unchanged at 11.25% at today’s Board meeting and the accompanying statement remained very hawkish. We think Banxico will be the last major central bank …
28th September 2023
GDP revisions change little; recent gap with GDI remains The comprehensive benchmark revisions to the GDP data changed almost nothing of substance – the real economy was still 6.1% bigger in the second quarter of this year than it was pre-pandemic in the …
This page has been updated with additional analysis since first publication. Sentiment ticks down, but still consistent with recovery The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in …
This page has been updated with additional analysis since first publication . Euro-zone sentiment weakens further The weak outturn for the euro-zone’s EC Economic Sentiment Indicator (ESI) in September supports our view that the economy will contract in …
German state figures point to big drop in euro-zone inflation The big drop in CPI inflation across German states in September all but confirms that German and euro-zone HICP inflation also fell sharply this month. While this mainly reflects base effects …
This page has been updated with additional analysis since first publication. RBA will hike despite slower retail sales growth Retail sales lost some momentum in August. However, with sales volumes still running above their pre-pandemic trend, that …
Fairly solid growth, meaningful slowdown unlikely until 2024 Russia’s industrial production and retail sales data for August suggest that activity remained fairly solid and we think the economy is on track for GDP growth of 2.5% this year. Monetary policy …
27th September 2023
Equipment investment growth still set to slow The 0.2% m/m rise in durable goods orders in August was, at first glance, better than expected, but the outperformance was mainly due to a surge in defence aircraft orders. Admittedly, gains in core orders and …
New York and LA see a decline in office jobs Total employment growth slowed slightly in August to 0.4% 3m/3m across the 30 metros we cover, once seasonally-adjusted. But office jobs in western cities have continued to decline as layoffs in the technology …
This page has been updated with additional analysis since first publication. Easing cycle just around the corner The Czech National bank (CNB) left interest rates on hold again at 7.00% at today’s meeting, but we still think that an easing cycle will …
Final hike of the cycle The Bank of Thailand (BoT) today raised interest rates by a further 25bps (to 2.50%), but hinted this was likely to be the last hike of the cycle. With inflation below target and headwinds to the economic recovery mounting, we …
This page has been updated with additional analysis since first publication. Resurgent price pressures raise risk of tighter policy With Australia’s disinflationary process stalling, there’s a growing risk that the Reserve Bank of Australia will resume …
Softening demand proves a tipping point for new home sales The 8.7% m/m drop in New Home Sales in August was the largest monthly decline since September 2022 and suggests that the renewed rise in mortgage rates has caused home purchase demand to decline …
26th September 2023
