Encouraging signs under the surface This page has been updated with additional analysis since first publication. While the continued above-target gains in the CPI-trim and CPI-median core measures may cause some concern for the Bank of Canada, there were …
15th August 2023
This page has been updated with additional analysis since first publication. Consumer resilience continues The 0.7% m/m jump in retail sales in July suggests that tighter monetary policy is still having remarkably little impact on real economic activity, …
Inflation rises again, CBN has more work to do Nigeria’s headline inflation rate rose again to an almost-18 year high of 24.1% y/y, as the removal of fuel subsidies and the devaluation of the naira continue to push up prices. This fresh increase in …
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Inflation slows to weakest pace in a year and will ease further Saudi Arabia’s headline inflation rate eased from 2.7% y/y in June to 2.3% y/y in July, the …
Russia’s central bank steps up to the plate, but more needed to stop ruble’s fall The Russian central bank’s 350bp interest rate hike, to 12.0%, at today’s unscheduled meeting is likely to be followed by further increases in the coming months. But there’s …
Unchanged inflation points September rate hike The unchanged readings for both headline inflation and the Riksbank’s target variable suggest that a further interest rate hike in September is highly likely. Headline inflation came in at 9.3% in July, …
This page has been updated with additional analysis since first publication. Accelerating wage growth supports the case for one more rate hike The fall in employment in the three months to June and further rise in the unemployment rate will be welcomed by …
This page has been updated with additional analysis and charts since first publication. Growth has slowed to a crawl All the main activity indicators undershot consensus expectations in July, with most either stagnant or barely expanding in m/m terms. And …
This page has been updated with additional analysis since first publication . Underwhelming wage growth bolsters case for RBA to stay put The sluggish pace of wage growth in Q2 reinforces our view that the Reserve Bank of Australia won't lift interest …
This page has been updated with additional analysis since first publication. Above-trend growth won't be sustained Japan’s economy expanded at an extremely rapid pace last quarter, but we expect a renewed slowdown across the second half of the year. The …
PASO election tips economy deeper into crisis The news just out that Argentina has devalued the peso by around 20% against the dollar (to 350/$) and hiked the policy interest rate by 21%-pts to 118% underscores that the economy is lurching towards an even …
14th August 2023
Total rise in July hides slowdown in commercial lending July saw the amount of outstanding debt secured against real estate rise (albeit marginally) after a sharp drop in June, driven by a strong rebound in residential lending. Across the commercial real …
This page has been updated with additional analysis since first publication. An inflation shocker Headline consumer price inflation accelerated to a 15-month high of 7.4% y/y in July amid the surge in food price inflation. While the RBI expects the sharp …
This page has been updated with additional analysis since first publication . A strong recovery, but Russia’s economic vulnerabilities are increasing The better than expected pick-up in Russia’s GDP growth in Q2, to 4.9% y/y, confirms that the economy had …
11th August 2023
Falling expectations drag down confidence The University of Michigan consumer sentiment index stalled in August, with the index slipping back to 71.2, from 71.6. With tighter credit conditions and a weaker labour market likely to weigh on confidence …
This page has been updated with additional analysis since first publication Inflation rise means Copom won’t increase the size of rate cuts The jump in Brazilian inflation to a slightly higher-than-expected 4.0% last month won’t stop Copom from lowering …
This page has been updated with additional analysis since first publication. Downturn deepens as borrowers hold back China’s bank loan growth fell to its lowest in seven months in July, while broad credit growth dropped to a record low. We expect further …
This page has been updated with additional analysis since first publication. Resurgence in activity unlikely to last The 0.5% m/m rise in real GDP in June and 0.2% q/q increase in Q2 (CE, BoE, consensus 0.1% q/q) confirmed that a recession has so far been …
Banxico continues to sit on the sidelines Mexico’s central bank chose not to follow its peers in the rest of Latin America and begin an easing cycle, leaving its policy rate unchanged at 11.25% at today’s Board meeting. Concerns about the persistence of …
10th August 2023
Apart from lagging shelter prices, Fed already hit its inflation target The disinflationary pressures continued to build in July, with both headline and core CPI increasing by a moderate 0.2% m/m. Admittedly, the annual headline inflation rate actually …
Inflation hits fresh record high, CBE has more work to do Egypt’s headline inflation hit a fresh record high of 36.5% y/y in July and, with a fresh devaluation of the pound on the cards in the coming months, it will remain elevated for some time. The …
Decline in inflation in line with central bank’s expectations July’s decline in inflation in Norway was broadly in line with the central bank’s forecast. So Norges Bank is likely to go ahead with its planned 25bp rate hike next week. The decline in …
This page has been updated with additional analysis since first publication. The economy contracted in Q2 and we expect continued weakness in the near-term as elevated interest rates and weak global demand weigh on economic output in the Philippines. …
Inflation pressures picking up, tightening cycle has only just begun The jump in Russian inflation to 4.3% y/y in July provides firmer evidence that the recent build-up of inflation pressures, including from the weakening of the ruble, are now showing up …
9th August 2023
Sticky services inflation to keep Banxico in hawkish mood Mexico’s headline inflation rate continued to drop back in July, to 4.8% y/y, but with services inflation proving to be sticky, we doubt that Banxico will turn to interest rate cuts until the turn …
This page has been updated with additional analysis since first publication . Services inflation hits 17-month high CPI joined PPI in deflationary territory last month. But this was due to a sharp drop in food inflation caused by base effects. More …
Net trade weighed on second-quarter GDP growth Weaker global demand and the fading boost from easing supply shortages took a toll on exports in June, confirming that net trade weighed on second-quarter GDP growth. While the surveys point to further …
8th August 2023
Exports set for renewed weakness soon The narrowing in the trade deficit to $65.5bn in June, from $68.3bn, mainly reflected a further slide in imports, with exports little changed. But with the survey evidence suggesting that renewed weakness in exports …
This page has been updated with additional analysis since first publication . Exports have further to fall Chinese exports contracted in July by the most since the start of the pandemic. But the recent declines mostly reflect lower prices rather than …
This page has been updated with additional analysis since first publication. Wage growth should slow as labour market slackens Wage growth remained strong in June as summer bonuses rose, but regular pay growth slowed and is unlikely to become strong …
This page has been updated with additional analysis since first publication. NBR to stand pat until early 2024 The National Bank of Romania (NBR) left its main policy rate on hold again today, at 7.00%, and we think that it will continue to leave rates …
7th August 2023
Halifax prices edged lower in July With mortgage rates rising to around 6% in July, it was no surprise that the slide in the Halifax house price index continued. Although there might be a modest fall in mortgage rates in the near term, we think they will …
Slump in June and more weakness to come German industrial output fell in June and we expect it to decline further in the rest of this year as high interest rates and weakening demand take a toll on production. The 1.5% m/m fall in industrial production …
This page has been updated with additional analysis since first publication. Official figures show Indonesia’s economy grew by 5.2% y/y in the second quarter of the year, slightly higher than the 5.0% growth rate recorded in Q1. In contrast, our own …
This page has been updated with additional analysis since first publication. Labour market continues to loosen The small fall in employment and rise in the unemployment rate in July show that the labour market continues to loosen, suggesting that the …
4th August 2023
Labour market conditions easing Non-farm payroll employment increased by 187,000 in July and, while that represented a trivial improvement on the downwardly revised 185,000 gain the month before, those are otherwise the two weakest monthly gains in …
The headline CIPS construction PMI resumed its upward trend in July, with the rise to 51.7 more than reversing the drop into contractionary territory in June. All sectors saw an increase in their respective balances, with commercial rising to 54.4, its …
Renewed drop and more weakness ahead Euro-zone retail sales fell in June and we expect them to continue to trend down over the rest of this year as high interest rates take an increasing toll on consumers. The 0.3% m/m drop in retail sales in June was …
Surveys point to muted activity growth and lower core inflation The fall in the ISM services index in July illustrates that even though the risks of a recession may be easing, that doesn’t mean the economy is set to enjoy a strong performance over the …
3rd August 2023
This page has been updated with additional analysis since the post-meeting statement and press conference. CNB on the edge of a policy shift The Czech National Bank (CNB) left its main policy rate on hold at 7.00% today, but the post-meeting …
Closing in on the summit, but BoE suggests rates will stay at the top for a long time Today’s 25bps rise in interest rates, from 5.00% to 5.25% (CE 5.25%, 2/3 of consensus 5.25%, 1/3 of consensus 5.50%), may be followed by another hike in September to our …
Recession likely in H2 The final euro-zone PMIs confirmed that economic conditions deteriorated in July, with the Composite index consistent with GDP declining slightly. We continue to expect the euro-zone economy to fall into recession in the second half …
Lira depreciation feeding through more strongly The jump in Turkish inflation in July to 47.8% y/y is likely to be followed by further rises in the coming months as the recent sharp fall in the lira and hikes to VAT continue to feed through. The central …
This page has been updated with charts since first publication. Inflation declines further below 2% Easing core inflation drove headline inflation lower in July, but we don’t expect it to fall much further this year. Despite inflation now sitting within …
Net trade buoyed GDP growth in Q2 The rise in the trade surplus to $11.3bn in June, from $10.5bn in May, was broadly in line with what most had expected (Refinitiv Consensus: $11bn, CE: $11.5bn). Although exports of goods and services fell by 1.7% in …
BCB kicks off Brazil’s easing cycle The Brazilian central bank (BCB) started its easing cycle today with a larger-than-expected 50bp cut in the Selic rate, to 13.25%, and the relatively dovish tone of the accompanying statement suggests that policymakers’ …
2nd August 2023
Strong Q2, but signs of softening industrial activity Russia’s economy is likely to have had a very strong second quarter as industrial production and retail sales rose sharply in Q2 (both by more than 3.0% q/q). But the activity data for June suggest …
Office-based jobs suffering in western tech-led markets Seasonally-adjusted total employment growth rose by 0.6% 3m/3m on average across the 30 metros we track for the third consecutive month. But there has been clear weakness in the information sector in …
Applications dipped back down toward 30-year lows June’s rebound in mortgage applications for home purchase was short-lived as total applications fell by 1.7% in July. This pushed applications back down toward 30-year lows and was probably prompted by …
Fitch downgrade to have little impact The news that Fitch Ratings is downgrading its US sovereign credit rating one notch from AAA to AA+ has predictably had little to no immediate impact on the Treasury market – yields are up on the day, but down since …
