Retail sales lose momentum October’s decline in euro-zone retail sales followed a good third quarter for retailers. We suspect that the strength in sales in Q3 was just a one off and that growth will be subdued in the coming quarters. The 0.5% m/m fall in …
5th December 2024
Jump in commercial activity supports a rise in the headline balance The headline CIPS construction PMI increased to 55.2 in November, from 54.3 in October, indicating an expansion of construction activity. The rise was entirely driven by the commercial …
ISM services index drops back to three-month low The fall in the ISM services index to 52.1 in November is not too concerning, given it was driven partly by a slump in the supplier deliveries index, but it does lend some support to our view that GDP …
4th December 2024
NBP leaves rates on hold, little scope for easing in 2025 The National Bank of Poland (NBP) left its policy rate on hold again today, at 5.75%, and a rise in inflation over the coming months means that the monetary easing cycle won’t resume until the …
Purchasing activity rebounds despite higher borrowing costs The rebound in purchase mortgage applications in November shows that there were some signs of life in the market, despite the return of 7% mortgage rates. But taking a step back, activity remains …
Weak activity points to RBA easing policy before long GDP growth remained sluggish in the third quarter, adding to the case for the RBA to start easing policy before long. The 0.3% q/q rise in GDP in the third quarter was a touch weaker than the analyst …
Another strong quarter points to larger Selic hike The strong 0.9% q/q expansion in Brazil’s GDP in Q3 will add to the central bank’s concerns that the economy is running too hot. Alongside rising inflation and the sell-off in local financial markets in …
3rd December 2024
Gulf ending the year on a stronger note November’s batch of PMIs showed an increase all of the Gulf economies, although there remained some underlying signs that non-oil activity is softening. Elsewhere, Egypt’s PMI improved a touch as price pressures …
Surprise contraction, but things not so bad under the hood South Africa’s economy recorded a surprise contraction of 0.3% q/q in Q3, but that was largely due to a steep decline in agricultural output. The rest of the economy held up much better and we …
This page has been updated since publication with additional analysis. Rise in inflation will prove temporary The uptick in Swiss inflation in November is likely to prove short-lived and should not prevent the SNB from cutting interest rates again in …
Rate cut in December may be jumping the gun The smaller-than-expected decline in Turkish inflation in November, to 47.1% y/y, suggests to us that a monetary easing cycle probably won’t start later this month as many analysts seem to be expecting. We …
This page has been updated with additional analysis since first publication. Post-disruption rebound can’t hide weakness The rebound in the ISM manufacturing index in November was as expected following recent hurricanes and the end of the Boeing strike, …
2nd December 2024
Unemployment rate set to rise next year With the unemployment rate unchanged at 6.3% in October, the euro-zone labour market appears to be holding up reasonably well. However, this looks set to change in the coming months as the outlook for economic …
Central Europe continues to struggle The PMIs fell deeper into contractionary territory in Poland and Czechia last month, adding to the disappointing run of activity data out of Central Europe. In contrast, the PMIs rose in Turkey and Russia. And an …
Centre-left comes out on top, but fragmented coalition likely The centre-left Social Democrats (PSD) – the largest party in Romania’s current coalition – look set to win the most votes in the parliamentary election which took place on Sunday, but strong …
This page has been updated with additional analysis since first publication. Shrugging off higher mortgage rates November’s surprisingly large rise in the Nationwide house price index suggests the housing market is picking up momentum despite recent rises …
Consumption growth may pick up further in Q4 Retail sales rose rather strongly in October and suggest that real consumption growth will continue to accelerate this quarter. The 0.6% m/m rise in retail sales values in October followed a muted 0.1% m/m rise …
50bp rate cut hopes not dead yet The 1.0% annualised gain in third-quarter GDP was not as bad as it looks, with most of the weakness due to a big drag from the volatile inventories component and the Bank of Canada likely to be encouraged by the sharp …
29th November 2024
Sharp fall in Growth GDP figures show the economy slowed sharply last quarter, and we expect economic activity to struggle over the coming quarters. That bolsters the case for policy loosening, but the recent jump in inflation means the RBI won’t feel …
This page has been updated with additional analysis since first publication. Inflation data make 50bp December cut less likely The continued strength of euro-zone services inflation in November reduces the chance that the ECB will cut interest rates by …
Net lending to property on a firm upward trend Net lending to property totalled £1.16bn in October, marking the third consecutive month of net lending exceeding £1bn. Indeed, at £3.93bn in the three months to October, lending was at its highest since May …
This page has been updated with additional analysis since first publication. Pre-Budget jitters clearly influenced households’ financial decisions October’s money and lending figures suggest that Budget worries prompted households to become more cautious …
Rebalancing underway The 0.2% q/q contraction in the Turkish economy in Q3 suggests that policymakers’ efforts to weaken demand and tame high inflation are taking effect. We still think that it would be premature for the central bank to start an easing …
Activity data point to sluggish Q4 While industrial production and retail sales both rose in October, the figures are consistent with output stagnating at best this quarter. Taking industrial production first, the 3.0% m/m rise marked the second …
Underlying inflation set to remain above 2% The Tokyo CPI suggests that inflation excluding fresh food and energy rose further above the Bank of Japan’s 2% target in November, supporting our long-held view that the Bank will hike rates in December. In …
28th November 2024
Lower than expected German HICP inflation The inflation data for Germany and Spain do not significantly alter our forecast for euro-zone inflation which will be published tomorrow. We are forecasting a 50bp rate cut by the ECB in December but recent …
This page has been updated with additional analysis since first publication. EC Survey consistent with economy stagnating The EC survey was little changed in November and is still consistent with weak growth at best, while the price components suggest …
Interest rates cut, further easing ahead The Bank of Korea cut interest rates today by 25bps (to 3.00%) for a second meeting in a row. We were one of the few analysts to correctly predict a cut, with 34 out of 38 forecasters polled by Reuters expecting …
Another above-target-consistent rise in core PCE prices The 0.27% m/m rise in the core PCE deflator in October was a little lower than we feared based on the earlier CPI and PPI data, but still confirms that prices rose at an above-target rate for the …
27th November 2024
Economy remains resilient October’s income and spending data, due at 10am ET today, could also affect our estimate but, for now, the big drop back in goods imports in October means that we have forth-quarter GDP growth tracking at 2.7%, up from 2.2%, …
Further rate cuts likely as deflation concerns increase Sri Lanka’s central bank (CBSL) today loosened policy further, and hinted at more rate cuts over the coming months amid continued deflationary pressures, weak growth and a further improvement in the …
RBNZ will cut rates by another 50bp in February The RBNZ didn’t provide a clear signal about the speed of future rate cuts when it lowered the overnight cash rates by 50bp today, but we think it will deliver another 50bp cut at its February meeting. The …
Underlying inflation will reach top end of RBA’s target range next quarter The stagnation in headline inflation in October belies a renewed uptick in trimmed mean inflation and we’re sticking to our forecast that the RBA won’t cut interest rates before Q2 …
Fed slows pace of rate cuts The minutes of the Fed’s early-November FOMC meeting, when it slowed the pace of policy loosening with a smaller 25bp cut, tell us little about whether to expect another smaller quarter-point cut at the upcoming policy meeting …
26th November 2024
Hurricanes and elevated mortgage rates hit sales The large fall in new home sales in October was to be expected given the disruption from hurricanes Helene and Milton, as well as the rise in mortgage rates last month. While sales should rebound this …
House price growth picks up momentum in the summer The second consecutive moderate 0.3% rise in house prices in September reflects the market picking up momentum over the summer as mortgage rates fell. However, timelier indicators, like the sales-to-new …
25bp hike probably the last of this cycle The Central Bank of Nigeria opted for a smaller-than-expected hike in its policy rate of 25bp to 27.50%, at its meeting today and, with Governor Cardoso sounding optimistic that the effects of petrol price hikes …
Inflation jumps, Selic heading higher The rise in Brazil’s headline inflation rate, to 4.8% y/y, in the first half of November was partly driven by a further increase in underlying core services inflation and means that Copom is likely to raise the Selic …
Economy bounces back at the start of Q4 The stronger-than-expected Polish activity data for October suggest that the contraction in the economy in Q3 wasn’t the start of a renewed trend. With fiscal policy set to remain loose over the coming year and …
BoI on hold as upside inflation risks remain The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, and the accompanying communications suggest that the risk of a return to interest rate hikes has receded over the past month. Even …
25th November 2024
Growth picks up, but outlook remains challenging Nigeria recorded a surprise pick-up in GDP growth to 3.5% y/y in Q3 as stronger growth in the non-oil economy more than offset a slowdown in the oil sector. We expect growth to remain soft until the …
Shock victory for far-right candidate raises risks for Romania The surprise lead for an independent far-right candidate, Călin Georgescu, in the first round of Romania’s presidential election raises the risk of an abrupt shift towards more populist …
This page has been updated with additional analysis since first publication. German economy still in the doldrums The fall in the Ifo Business Climate Index (BCI) in November left it even deeper into recessionary territory and is consistent with our view …
Consumption outlook improving fast The strong increase in retail sales volumes in September confirms that they grew by around 5% annualised last quarter, suggesting that household consumption growth picked up strongly. The October preliminary estimate …
22nd November 2024
Fall in inflation leaves door open for December cut The larger-than-expected fall in Mexican inflation in the first half of November, to 4.6% y/y, alongside easing core price pressures and the relative resilience in the peso mean that Banxico is likely to …
This page has been updated with additional analysis since first publication. Budget and Trump may have triggered slowdown in activity At face value, the fall in the composite PMI from 51.8 in October to 49.9 in November suggests that real GDP growth is …
This page has been updated with additional analysis since first publication. Economy stalling again The slump in the euro-zone Composite PMI in November suggests that the economy is losing momentum in Q4 and supports our below-consensus growth forecast, …
This page has been updated with additional analysis since first publication. Slow start to the golden quarter, but the outlook is improving The bigger-than-expected 0.7% m/m fall in retail sales in October (consensus forecast -0.3% m/m) suggests that …
This page has been updated with additional analysis since first publication. Flash PMI points to continued rebound in activity The renewed rise in the composite PMI supports our view that activity will continue to expand at a robust pace in the remainder …
Pick-up in underlying inflation will prompt rate hike next month The slowdown in headline inflation in October was due to base effects from utilities prices. With underlying inflation climbing further above the Bank’s 2% target, the case for another rate …
21st November 2024
