Another dip in house prices this year unlikely after sixth consecutive rise The sixth consecutive rise in house prices in July showed that very tight supply is causing home prices to continue to rise despite sales volumes remaining weak, and suggests a …
26th September 2023
This page has been updated with additional analysis since first publication . Inflation data and minutes pour cold water on hopes for larger rate cuts The jump in Brazilian inflation to 5.0% y/y in the first half of September, taken together with the more …
Entering the second phase of the easing cycle The Hungarian central bank’s (MNB’s) decision to cut the top of its interest rate corridor, by 250bp, today is a first step in what is likely to be a shift in the monetary policy framework that will be …
Ifo points to renewed contraction in German GDP in Q3 The Ifo Business Climate Index (BCI) confirmed that the German economy remained in the doldrums in September. We continue to expect contractions in GDP in both Q3 and Q4 of this year. The small fall in …
25th September 2023
Retail sales volumes weakening despite strong population growth Retail sales volumes edged down in July and the preliminary estimate implies they fell even more sharply in August. Given that population growth has accelerated in recent months, retail sales …
22nd September 2023
Inflation falls, but Banxico in no rush to cut Mexico’s headline inflation rate came in a little weaker than expected at 4.4% y/y in the first half of September while services inflation remained elevated. Coming alongside strong wage growth and the …
This page has been updated with additional analysis since first publication. Signs that recession has started all-but confirms interest rates have peaked The fall in the activity PMI further below the boom-bust level of 50.0 in September suggests the …
This page has been updated with additional analysis since first publication. Composite PMI edges up but still points to recession The small increase in the euro-zone Composite PMI in September left it still in contractionary territory. We think a further …
This page has been updated with additional analysis since first publication. Not as good as it looks, sales likely to fall in Q3 The 0.4% m/m rebound in retail sales volumes in August isn’t as good as it looks as it partly reflected a pickup in sales …
Negative rates will end in early-2024 The Bank of Japan didn’t provide any hints that it will abandon loose monetary policy anytime soon when it kept policy settings unchanged today, but Governor Ueda may do so later today. We think the Bank will lift its …
This page has been updated with additional analysis since first publication. Inflation on its way down but price pressures remain Headline inflation fell slightly in August. This was driven by a slowdown in fresh food inflation as well as a further …
Sales fall back to January lows The 0.7% m/m fall back in existing home sales in August reflects falling mortgage borrowing and took sales back close to the low levels recorded in January. Our view that mortgage rates will remain above 6% for the rest of …
21st September 2023
CBRT sticks to the course with 500bp hike Turkey’s central bank delivered a 500bp interest rate hike at today’s meeting, to 30.00%, providing further encouragement about policymakers’ commitment to tackling the inflation problem. A lot more tightening …
The Bank’s job is done The surprise decision by the Bank of England to leave interest rates unchanged at 5.25% today probably means that rates are already at their peak. We think rates will stay at this peak of 5.25% for longer than the Fed, the ECB and …
Policy easing pushed back to 2024 Taiwan’s central bank (CBC) today left its policy rate unchanged at 1.875% for a second consecutive month. Despite the poor outlook for growth, lingering concerns about inflation have prompted us to shift the timing of …
Early signs of a recovery Poland’s retail sales and industrial production figures for August suggest that the economy may be at the early stages of a recovery, but we still expect overall GDP growth to be relatively tepid in the near term. We think that …
Norges Bank and Riksbank nearly done with rate hikes Following today’s rate hikes, the Riksbank and Norges Bank are now at, or close to, the end of their tightening cycles. Both central banks’ new projections suggest that they are more likely than not to …
Rupiah key concern for central bank Bank Indonesia (BI) today left its main policy rate unchanged at 5.75%, and made clear that supporting the rupiah would remain its main priority over the coming months. While there is still a good chance the central …
SNB goes for a hawkish pause, but we think rates have peaked. The SNB’s decision to keep rates unchanged at 1.75% was a big surprise, although it left the door open for further hikes. We do not expect any further increases in the policy rate as we expect …
BSP unlikely to resume tightening cycle despite inflation concerns The central bank (BSP) in the Philippines today left its main policy rate unchanged (at 6.25%), but warned that it may need to resume its tightening cycle soon. While we think monetary …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing September’s Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm BST today. Register here to join. A bit more wiggle room for pre-election …
This page has been updated with additional analysis since first publication. Strong pickup in growth puts rate hikes back on the table The unexpectedly strong rebound in activity last quarter means that the RBNZ may well judge it has more work to do. All …
BCB not opening the door to larger cuts The Brazilian central bank’s (BCB’s) 50bp cut in the Selic rate (to 12.75%) and accompanying statement are likely to dash hopes that policymakers will up the pace of the easing cycle, at least in the short term. The …
20th September 2023
Fed wants us to believe in “higher for longer” The Fed left its policy rate unchanged at 5.25% to 5.50% and, while the median forecast still shows one more 25bp rate hike this year, the FOMC appears to be more evenly split, with 12 in favour of that hike …
This page has been updated with additional analysis since first publication. Activity weak even before latest intensification of loadshedding South Africa’s activity data for July was relatively downbeat, and more timely data suggest that the economy is …
Inflation rises, but SARB to stand pat tomorrow The small rise in South Africa’s headline inflation rate to 4.8% y/y in August partly reflected a fresh pick-up in core price pressures, but we doubt that this will prompt the SARB to restart its tightening …
This page has been updated with additional analysis since first publication. Easing in services inflation may mean BoE halts rate hikes…after tomorrow Note: We’ll be discussing September’s Fed, ECB and Bank of England policy decisions in a Drop-In on …
This page has been updated with additional analysis since first publication. Q3 GDP growth to slow sharply Net exports probably won’t support GDP growth in the third quarter, but export volumes should continue to rise over coming quarters. The 0.8% …
Sharp drop in housing starts suggest turning point Housing starts fell sharply across both the single-family and multifamily sectors in August, suggesting that construction has now reached a turning point. We expect this downward trend to continue for the …
19th September 2023
This page has been updated with additional analysis since first publication. Jump in core inflation puts renewed pressure on the Bank The larger rise in core prices in August is bad news for the Bank of Canada although, with high interest rates now …
RBA’s pause to continue Although the RBA won’t be dropping its guard in the fight against inflation anytime soon, we still believe its tightening cycle is at an end. The minutes of the RBA’s September meeting showed that the Board did once again discuss …
Sharp rise in lending in August likely to be temporary The $29.0bn monthly rise in real estate debt held by US banks in August, now at $5.48trn outstanding, was the largest m/m increase in six months. However, we expect this spike to be short-lived, as …
18th September 2023
Easing inflation expectations an encouraging sign for Fed The small fall in the University of Michigan index suggests that consumers remain downbeat in September. But the bigger news was the fairly sharp drop-back in households’ inflation expectations – …
15th September 2023
Drop back in motor vehicle output not a concern The 0.1% m/m increase in manufacturing output in August was marginally better than we had expected, but doesn’t change the broader picture, which is that, with global manufacturing still struggling, the …
This page has been updated with additional analysis since first publication . Inflation accelerates once again, setting the stage for more tightening Nigeria’s headline inflation rate rose again to an almost-18 year high of 25.8% y/y in August, as the …
Easing supply shortages continue to support activity The continued strength of manufacturing sales in July suggests that GDP may be stronger than initially expected, as easing supply shortages continue to support the manufacturing sector. While there may …
CBR delivers another large hike, more tightening still in the pipeline Russia’s central bank (CBR) raised its policy rate by 100bp, to 13.00%, at today’s meeting and with the ruble likely to remain under pressure and inflation pressures to keep building, …
This page has been updated with additional analysis and charts since first publication. Economy regains momentum as consumers step up Although a slight uptick in activity was expected, the August data turned out to be even better than anticipated. Fiscal …
This page has been updated with additional analysis since first publication. Consumer strength fading The 0.6% m/m rise in retail sales values in August was mostly due to price-related strength in gasoline sales, with the muted 0.1% rise in underlying …
14th September 2023
A gesture of support from the PBOC The People’s Bank has just announced a cut to bank reserve requirements. With private sector credit demand still weak, this is a gesture rather than a meaningful support measure. Substantial rate cuts or a sea change in …
End of the tightening cycle The ECB’s decision to raise interest rates by a further 25bp today probably brings the current tightening cycle to an end. But given the strength of underlying inflation, we expect rates to remain at this level for at least a …
We have updated this webpage with additional analysis, as well as a Chart and Table of the key data. Inflation slows to weakest pace in a year and will ease further Saudi Arabia’s headline inflation rate slowed from 2.3% y/y in July to 2.0% y/y in August, …
Big fall in Swedish inflation won’t stop Riksbank hiking Although the drop in the Riksbank’s target measure of inflation in August was bigger than the consensus had anticipated, it will not prevent policymakers from raising its key policy rate by another …
This page has been updated with additional analysis since first publication Firm rebound in employment won't move the needle for the RBA Although job creation rose at a breakneck pace last month, it was matched by an equally forceful expansion of the …
This page has been updated with additional analysis since first publication. Business investment should still rebound in Q3 “Core” machinery orders fell by 1.1% m/m in July, and the data point to a sizeable fall in spending on machinery and transport …
This page has been updated with additional analysis since first publication. Downward trend in core inflation still firmly intact The Fed will look through the 0.6% m/m jump in headline CPI in August as it was driven by the recent rally in energy prices. …
13th September 2023
This page has been updated with additional analysis since first publication. Sizeable fall in July marks beginning of downward trend Euro-zone industrial production fell in July and we think it will continue to do so over the remainder of the year in the …
This page has been updated with additional analysis since first publication. Recession may have begun The 0.5% m/m fall in real GDP in July (consensus and CE forecasts both -0.2% m/m) could possibly mean that the mild recession we have been expecting has …
This page has been updated with additional analysis since first publication. Headline CPI rate drops, but food inflation threat is not over yet The drop in headline consumer price inflation in August should provide some welcome relief for the RBI. But …
12th September 2023
This page has been updated with additional analysis since first publication Another 50bp cut on the cards despite rise in inflation The rise in Brazilian inflation to 4.6% y/y in August won’t prevent the central bank from delivering another 50bp cut, to …
