Rate hike on the cards, odds (just) in favour of a 25bp move The rise in Russian inflation to 3.3% y/y last month means the central bank will almost certainly follow through on its recent hawkish rhetoric by hiking interest rates when it meets next month. …
12th July 2023
Hike to 5.0% likely to be the last The Bank of Canada’s 25bp hike today, taking the policy rate to 5.0%, is likely to be the last in this cycle. With the labour market loosening, core inflation declining and the survey indicators implying that inflation …
This page has been updated with additional analysis since first publication. Core inflation has much further to fall The muted 0.2% m/m rise in core consumer prices in June won’t stop the Fed from hiking rates again later this month, but it supports our …
Industry now fully recovered from March drop The stronger-than-expected 1.0% m/m rise in Mexican industrial production in May means that the sector has now reversed all of the decline in output recorded in March. And more timely indicators point to a …
This page has been updated with additional analysis since first publication. June’s CPI data already old news Headline consumer price inflation came in at 4.8% y/y in June, comfortably within the RBI’s 2-6% tolerance range. But that’s already old news …
RBNZ leaves rates unchanged The RBNZ’s decision to leave its official cash rate on hold at 5.50% was widely expected. In fact, all 25 analysts polled by Reuters, including ourselves, had anticipated the pause. The minutes of the July meeting reinforce our …
This article has been updated with additional analysis and charts since it was first published. Business investment probably still grew in Q2 The fall in “core” machinery orders in May points to a significant fall in spending on machinery and transport …
This page has been updated with additional analysis since first publication. Inflation plunge seals the deal on an August rate cut The sharp fall in Brazilian inflation to just 3.2% y/y last month makes it almost certain that the central bank will kick …
11th July 2023
This page has been updated with additional analysis since first publication . Stronger than expected but still relatively weak Although stronger than most had expected, bank loan growth still fell to its lowest in five months in June, while broad credit …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing the UK inflation, growth and policy outlooks after the June CPI release on Wednesday 19th July. Register here to join that 20-minute online briefing. …
Further pressure on the CBE as inflation accelerates to an all-time high This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Egypt’s inflation rate rose from 32.7% y/y in May to a record high of 35.7% y/y in …
10th July 2023
This page has been updated with additional analysis since first publication. Core inflation again stronger than expected In June, Norway’s inflation data were much stronger than expected for the second month running. While the Norges Bank has signalled a …
This page has been updated with additional analysis since first publication . Price pressures set to remain subdued this year Producer price deflation deepened further last month to its lowest in more than seven years, and consumer price inflation dropped …
This page has been updated with additional analysis since first publication. Easing wage growth despite jump in employment The surge in employment in June was not quite as strong as it looks, with hours worked essentially unchanged last month, but still …
7th July 2023
This page has been updated with additional analysis since first publication. Easing employment growth offset by stubborn wage growth The 209,000 rise in non-farm payrolls in June was the weakest gain since December 2020 and suggests labour market …
Fall in Chilean inflation paves the way for start of easing cycle later this month The larger-than-expected decline in inflation in Chile to an 18-month low of 7.6% in June seals the deal on an interest cut at the central bank’s next meeting later this …
A fragile plateau The decline in the Halifax house price index in June was surprisingly modest given the scale of the increase in mortgage rates in the same month. But the current level of house prices looks unsustainably high given where mortgage rates …
Renewed fall in May and outlook is bleak German industrial production fell in May and is likely to have declined in Q2. We think industry will continue to struggle over the rest of this year. The 0.2% m/m fall in industrial production in May was worse …
Strong wage growth in May won’t last Regular wage growth hit a near three-decade high in May and bonus payments surged, resulting in a jump in labour cash earnings. But we wouldn’t read too much into the result, since it appears to be mostly driven by a …
Services activity rebounds; job openings still trending lower The rebound in the ISM services index to a four-month high of 53.9 in June, from 50.3, leaves a weighted average of the services and manufacturing indices at a level that, historically, has …
6th July 2023
Interest rate cuts coming into closer vision The National Bank of Poland (NBP) left its main policy rate on hold again today, at 6.75%, but it seems that the balance of the MPC is shifting in a more dovish direction. We expect the first interest rate cut …
Slump in exports a downside risk to GDP growth The slump in export volumes presents downside risks to the preliminary estimate that GDP rose strongly in May, and suggests that the earlier boost from easing supply shortages is now largely behind us. With …
Export weakness to hit Q2 GDP; ADP should be treated with caution The May trade data suggest that falling exports will be a big drag on second-quarter GDP growth, and we suspect the reported surge in ADP employment last month is too good to be true. The …
Demand rebounds marginally from historic lows A slight decline in mortgage rates allowed mortgage applications for home purchase to recover from the previous month’s lows in June. That said, applications remain below the average seen so far this year, …
Retail sales flat in May Euro-zone retail sales remained very weak in May and point to household consumption having fallen in Q2. Further out, low consumer confidence and rising interest rates suggest that household consumption will fall further over the …
Construction slows as interest rates stay higher for longer and recession looms After two months of gains the headline CIPS construction PMI reversed course in May, dropping to a five-month low of 48.9, which indicated a contraction in activity. All …
BNM to sit on the sidelines Malaysia’s central bank today left interest rates unchanged at 3.0%, and we think this marks the end of the tightening cycle. But unlike other central banks in the region that are set to cut interest rates over the coming …
Net exports will cushion GDP growth in Q2 The rise in the trade surplus, to $11.8bn in May from $10.5bn in April, was stronger than most had anticipated (Refinitiv Consensus: $10.5bn, CE:$10.9bn). Exports of goods and services rose by a solid 4.4% in …
Fed largely united in favour of temporary pause The minutes of the Fed’s mid-June FOMC meeting suggest that participants were largely of the same mind as far as the decision to temporarily pause the hiking cycle was concerned. Just as “almost all” …
5th July 2023
Rates on hold throughout this year Romania’s central bank (NBR) kept its main policy rate unchanged at 7.00% today and we think it will keep rates on hold throughout this year. The central bank is likely to be the last in the region to transition to …
This page has been updated with additional analysis and a Chart of the key data. Gulf non-hydrocarbon sectors enter second half of the year with strong momentum June’s batch of PMIs for the region improved almost entirely across the board and the strength …
Economy weakened at the end of Q2 The downward revision to the euro-zone Composite PMI for June, from 50.3 to 49.9, left it consistent with the economy stagnating at best at the end of Q2. Given that the PMI overstated growth in Q1, and that other data …
Lira depreciation starting to feed through Inflation in Turkey fell to 38.2% y/y in June but the impact of the recent sharp fall in the lira is now starting to work its way through. Inflation is likely to rise in July and we think it will end this year at …
Industry struggling in Q2 The weaker-than-expected 0.3% m/m rise in Brazilian industrial production in May only partly reverses April’s 0.6% m/m decline and suggests that industry remained weak over the course of the second quarter. At the margin, this …
4th July 2023
Tightening cycle not over yet The RBA’s decision to keep rates unchanged today suggests that interest rates may not rise all the way to 4.85% as we currently expect, but further tightening still seems likely. Today’s decision was a very close call: 15 …
This page has been updated with additional analysis since first publication. Still consistent with recession and disinflation The further fall in the ISM manufacturing index to 46.0 in June, from 46.9, is difficult to square with claims from some …
3rd July 2023
PMI falls further, easing price pressures to stay SARB’s hand South Africa’s manufacturing PMI fell in June to its lowest level since mid-2021 and remains consistent with declines in output in the sector over the coming months. The survey also shows that …
Renewed weakness in CEE industry The batch of manufacturing PMIs for June suggest that Turkey’s manufacturing sector continued to hold up well, but the they provided worrying signs that industrial sectors in Poland and Czechia slipped into a renewed …
This page has been updated with additional analysis since first publication . Inflation below 2% won’t stop the SNB hiking The fall in inflation in June was smaller than the SNB had expected and SNB Chairman Thomas Jordan’s comments after the meeting two …
This page has been updated with additional analysis since first publication. Indian manufacturing growth cools India’s manufacturing PMI edged down in June after reaching a 31-month high in the previous month. (See Chart 1.) This points to slight …
This page has been updated with additional analysis and charts since it was first published Economy probably won’t do as well as Q2 Tankan suggests Today’s Tankan survey showed a turnaround for the flagging manufacturing sector, while the services sector …
This page has been updated with additional analysis since first publication. Weak April offset by strong May The stagnation in GDP in April was weaker than expected but, with the preliminary estimate pointing to a sharp rise in GDP in May, quarterly …
30th June 2023
Consumption stagnates as core inflation eases The May income & spending data appear to confirm that real consumption growth slowed sharply in the second quarter, while also providing encouraging signs that core inflation is gradually easing. Although data …
This page has been updated with additional analysis since first publication. Euro-zone HICP (June) Strength of core inflation means ECB will keep hiking June’s inflation data won’t shift the dial at the ECB. While the headline rate is on a steep downward …
National index resilient, but regional data confirm affordability matters The pause in the fall in house prices extended into June according to Nationwide, but we think it is just a matter of time before the spike in mortgage rates in recent weeks causes …
This page has been updated with additional analysis since first publication. Recession still to come this year as resilience fades The final Q1 2023 GDP data confirms that the economy steered clear of a recession at the start of 2023. But with around 60% …
This article has been updated with additional analysis and charts since it was first published Downhill from now for underlying inflation The end-month data rush mostly affirms our view of the economy. The first fall in underlying inflation in Tokyo in …
June inflation figures will keep ECB hawkish The increase in German headline and core inflation in June was mainly due to base effects. Euro-zone headline inflation probably still fell but the core rate is likely to have been little changed which will be …
29th June 2023
ESIs point to weak growth, further disinflation The European Commission’s Economic Sentiment Indicators (ESIs) for Central and Eastern Europe (CEE) generally fell in June, and our regional-weighted headline measure points to lacklustre GDP growth this …
Sentiment weakens and points to stagnation The EC Economic Sentiment Indicator (ESI) weakened further in June and is broadly consistent with the economy stagnating at best. We expect the euro-zone’s mild recession to continue for the rest of the year as …
