Flash PMI economic momentum is fizzling out The sharp fall in the composite PMI to a 2-year low supports our view that the strong rebound in activity that started in Q2 will be more muted across the second half of the year. Today’s flash estimate showed …
24th October 2024
The latest GDP figures showed a tepid rebound in Q3, following the contraction in Q2 and we expect Korea’s economic growth to remain below trend for the next few quarters. The advance estimate of GDP released today show that the economy expanded by just …
Stagnant existing home sales should rally soon The 1% m/m fall in seasonally adjusted existing home sales in September seems underwhelming given last month’s drop in mortgage rates, but the rise in mortgage applications in September points to a recovery …
23rd October 2024
50bp cut likely to be followed by another The weak economic backdrop means there is a strong case for the Bank of Canada to follow its larger 50bp cut today, which took the policy rate to 3.75%, with another 50bp move at the next meeting in December. Our …
Sharp drop sets the stage for 25bp rate cut in November The drop in South Africa’s headline inflation rate, to 3.8% y/y, in September, means that the SARB will almost certainly continue its easing cycle. The chances of a 50bp cut at its the next meeting …
MNB pauses easing cycle again The Hungarian central bank (MNB) acknowledged the possibility that interest rates could be left on hold for an “extended period” after it paused its easing cycle today. We maintain our forecast that the policy rate will be …
22nd October 2024
Retail sales collapse in September, but weakness probably temporary The much weaker-than-expected Polish retail sales data for September suggest that the economy slowed more than we had been expecting in Q3. Even so, we think that this weakness was …
This page has been updated with additional analysis since first publication. Borrowing disappoints but won’t prevent the Chancellor from raising investment While it is too late for September’s disappointing public finances figures to influence the amount …
Economy set to cool further Economic growth in Malaysia softened in Q3 but came in well above trend for the third consecutive quarter. Looking ahead we think GDP growth will drop back to trend if, as we expect, a jump in inflation driven by the removal of …
21st October 2024
The PBOC continues to support the economy Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to support the economy. We expect additional easing to follow in the coming quarters, but this is unlikely …
Multi-family weakness offsets gain in single-family starts The small fall in housing starts in September was entirely due to the multi-family segment, whereas single-family starts rose to a five-month high. While starts will probably weaken this month due …
18th October 2024
This page has been updated with additional analysis since first publication. Households still increasing spending despite fears about tax rises September’s 0.3% m/m rise in retail sales volumes was stronger than expected (consensus forecast -0.3% m/m, CE …
Recovery still shaky, underscoring need for fiscal boost After slowing in Q2, the economy regained some momentum last quarter. A boost from fiscal stimulus should help narrowly meet the annual growth target this year and support activity in the coming …
Underlying inflation will remain around 2% for now While the resumption of electricity subsidies resulted in a plunge in headline inflation in September, inflation excluding fresh food and energy rose to a three-month high and should remain around 2% over …
Production hit by hurricane and Boeing disruptions The fall in manufacturing output in September was entirely due to the disruption caused by the Boeing machinists’ strike and Hurricane Helene. Indeed, with these impacts excluded, industrial production …
17th October 2024
Sales strong despite late-month hurricane disruption The strong 0.7% m/m rise in control group retail sales in September suggests that consumption growth strengthened to more than 3% annualised last quarter. That said, timelier data show a big drop in …
25bp rate cuts likely to keep coming Alongside its decision to cut interest rates by 25bp, the ECB stuck to its guidance about data dependence and making decisions on a meeting-by-meeting basis. But the press release also acknowledged the recent weakness …
Slow pace of disinflation will prevent monetary easing this year The decision by the Turkish central bank (CBRT) to leave its policy rate on hold again today, at 50.00%, was accompanied by communications which support our view that monetary easing is …
This page has been updated with additional analysis since first publication. RBA to focus on inflation fight as labour market remains robust With the labour market running red hot, the Reserve Bank of Australia won’t cut rates before the first half of …
Manufacturers still struggling The 0.8% m/m decline in manufacturing sales volumes in August looks consistent with the flash estimate that GDP was unchanged that month, leaving the economy on track for a weaker third quarter. Although the S&P Global …
16th October 2024
We will be holding an online briefing later today to discuss the outlook for economic policy across Asia. You can register here . Hold does not mark the end of the easing cycle Bank Indonesia today left interest rates on hold (at 6.00%), but we think …
Another 25bps cut, with more to come The central bank in the Philippines cut rates by 25bps and signalled that the recent economic data support its shift towards a looser monetary policy stance. Further gradual loosening lies in store in the coming …
We will be holding an online briefing later today to discuss the outlook for economic policy across Asia. You can register here . BoT cuts as deflation risks mount Thailand’s central bank (BoT) today cut interest rates by 25bps (to 2.25%), but appeared to …
This page has been updated with additional analysis since first publication. Not quite as good as it looks The surprisingly large drop in CPI inflation in September increases the chances that the Bank of England will speed up the pace of interest rate …
This page has been updated with additional analysis since first publication. Soft inflation data tee up another 50bp cut by the RBNZ The weaker-than-expected Q3 CPI data reinforce our conviction that the RBNZ will loosen policy more aggressively than most …
15th October 2024
Downside surprise makes a 50bp cut next week look likely The downside surprise to headline inflation in September and muted monthly gains in the CPI-trim and CPI-median core measures support our view that the Bank of Canada will choose a more aggressive …
Inflation picks up, one more rate hike lies in store Nigeria’s headline inflation picked up to 32.7% y/y in September, confirming that the CBN’s fears about upside risks from last month’s petrol price hikes were not misplaced. We think the CBN will …
This page has been updated with additional analysis since first publication. Rise in industrial production not the start of a recovery While the 1.8% m/m rise in industrial production in August was the strongest monthly rise in over a year, it is probably …
Inflation edges higher This response has been updated with additional analysis. Saudi Arabia’s headline inflation rate rose a touch from 1.6% y/y in August to 1.7% y/y in September, a third consecutive increase and the fastest pace of inflation since …
This page has been updated with additional analysis since first publication. Further easing in wage growth supports case for more interest rate cuts The further fall in wage growth in August, together with signs that the labour market continued to loosen …
In light of both Hurricanes Helene and Milton we are flagging notes where we highlighted the physical climate risks facing the US. Ranking metros by physical climate risks to real estate Elevated insurance premiums continue to hit valuations Unpriced …
14th October 2024
Rise in headline inflation unlikely to derail rate cuts The jump in India’s headline CPI inflation in September was larger than had generally been expected including by the RBI, so it raises the chances of the central bank proceeding with more caution. …
Credit growth still slowing, highlighting need for larger fiscal response Despite monetary easing and a pick-up in government bond issuance, both broad credit and bank loan growth hit fresh lows in September. While the PBOC will continue to loosen policy, …
Exports still strong but headwinds emerging Export growth slowed last month but remained resilient, with volumes still rising at a double-digit pace. We think shipments will stay strong in the near term, supported by gains in export competitiveness. …
Fiscal boost needed as deflationary pressures build CPI inflation fell in September, as an increase in food inflation was outweighed by further decreases in energy and core inflation. Meanwhile, producer price deflation deepened further on the back of …
MAS pivot still likely in January The Monetary Authority of Singapore (MAS) kept policy settings unchanged today, but with growth set to weaken and inflation on its way to target we think the central bank will loosen policy in January. The MAS conducts …
Inflation declines, but another rate hike looking more likely Headline inflation fell to 8.6% y/y in Russia in September but this was a touch less than expected and the breakdown showed that core price pressures are easing only very slowly. It now looks …
11th October 2024
Mood turns sour amid Helene The trivial fall in the University of Michigan consumer sentiment index in October was likely driven in part by Hurricane Helene, although the fall in the expectations index suggests the mood among households may have soured …
PPI points to 0.24% m/m increase in core PCE Based on the combined CPI and PPI data, we now calculate that the Fed’s preferred core PCE deflator price measure increased by 0.24% m/m in September which, at 2.9% annualised, is a little hotter than we’ve …
Stronger employment gain unlikely to be repeated The stronger rise in employment and fall in the unemployment rate in September were largely due to a seasonal quirk, as the weak summer jobs market meant that fewer young workers left positions than usual …
This page has been updated with additional analysis since first publication. Modest economic growth more likely than another recession this year The 0.2% m/m rise in GDP in August (consensus and Capital Economics 0.2%), which came on the back of the …
Interest rates cut, further easing ahead The Bank of Korea kickstarted its easing cycle today with a 25bps cut. With growth struggling and inflation below target, we expect more easing over the coming months. The decision to lower the policy rate from …
Core CPI consistent with another muted gain in core PCE Although core CPI prices increased by 0.3% m/m for a second consecutive month in September, our calculations suggest that core PCE prices increased by 0.20% m/m which, at an annualised pace, is only …
10th October 2024
This page has been updated with additional analysis since first publication. Core inflation below Norges Bank forecast once again Core inflation in Norway was again below Norges Bank’s forecast in September, strengthening the case for it to start cutting …
Fed split on whether to kick off with 50bp or 25bp rate cut last month The minutes of the mid-September FOMC meeting reveal that support among Fed officials for kicking off the loosening cycle with a bigger 50bp rate cut was a little weaker than the lone …
9th October 2024
War concerns drive further hawkish tilt at the BoI The communications alongside the decision by the Bank of Israel (BoI) to leave its policy rate on hold again today, at 4.50%, underline that policymakers have grown more concerned about the escalation of …
Brazil inflation rises, more Selic hikes incoming The rise in Brazil’s headline inflation rate to 4.4% y/y in September was mainly due to drought-related effects on food and electricity prices but, even so, it will reinforce the hawkishness of Copom and …
Inflation ticks up again, CBE to wait until Q1 ’25 before first rate cut The second consecutive rise in Egypt’s headline inflation rate, to 26.4% y/y in September, on the back of electricity and fuel price hikes further reduces the chances of a first …
RBI lays groundwork for December rate cut The Reserve Bank of India’s new-look MPC voted to keep the repo rate unchanged at 6.50% today as expected but struck a less hawkish tone in its communications, which included a change in the official policy stance …
RBNZ hands down a dovish 50bp cut The RBNZ is likely to hand down a couple more 50bp rate cuts over the next few months . And we think it will end up cutting rates more aggressively than most are predicting. The RBNZ’s decision to cut its Official Cash …
