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 …
29th November 2024
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
Modest rise in homes sales does not mark the start of the recovery The modest rise in existing home sales in October reflects the earlier drop in mortgage rates over the summer and is unlikely to be repeated, as borrowing costs have since rebounded to 7%. …
Interest rate cuts still a few months away (at least) The communications accompanying the decision by the Turkish central bank (CBRT) to leave its policy rate unchanged again today, at 50.00%, suggest that analysts’ expectations for an easing cycle to …
We have updated this page with additional analysis since first publication. Disappointing borrowing figures highlight Chancellor’s lack of wiggle room October’s disappointing public finances figures underline the fiscal challenge that the Chancellor still …
Sharp drop in inflation sets the stage for 25bp cut tomorrow The drop in South Africa’s headline inflation, to 2.8% y/y, in October, will make it harder for the SARB to strike a hawkish tone regarding inflation pressures at its monetary policy committee …
20th November 2024
Policy easing to resume in the second half of next year Bank Indonesia today left interest rates on hold at 6.00%, and we don’t think it will be until the second half of next year that the central bank resumes its easing cycle. The decision was broadly …
This page has been updated with additional analysis since first publication. Surprisingly big rebound suggests BoE will leave rates at 4.75% in December October’s surprisingly large rebound in CPI inflation from 1.7% to 2.3% (CE 2.1%, consensus & BoE …
Starts hit by hurricanes The decline in housing starts in October was exactly as we had expected given the hit to construction in the South from recent hurricanes and should partially reverse in November. Beyond this, we think the recent rebound in new …
19th November 2024
Upside surprise not only due to property tax update With headline inflation still at target and given the Bank’s recent emphasis on the need to ensure that GDP growth and the labour market pick up again, the upside surprise to core inflation in October …
Recession not enough for MNB to resume easing The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, despite the economy having just fallen back into recession. We think that the easing cycle will remain on pause over the next …
RBA still in “wait and watch” mode With the RBA maintaining its neutral stance, we’re sticking to our view that the Bank won’t begin cutting rates before Q2 2025. The minutes of the RBA’s November meeting confirmed that the decision to leaves interest …
Economic growth in Thailand accelerated in Q3 and we think the boost from loose fiscal policy will support growth in the coming quarters and help offset a slowdown in the tourism sector. The 1.2% q/q rise in Q3 GDP, following the 0.8% increase in Q2, was …
18th November 2024
Temporary disruptions weigh on production again The fall in manufacturing output in October was driven mainly by temporary disruptions which should soon reverse. Excluding these disruptions, industrial production would have remained unchanged, suggesting …
15th November 2024
Manufacturing sales weak, but tentative signs of a recovery Despite the 0.4% m/m decline in manufacturing sales volumes in September, the data still appear consistent with the flash estimate that GDP rose by 0.3% that month. Although manufacturing has …
This page has been updated with additional analysis since first publication. Underlying sales growth slowing to a more sustainable pace While October’s retail sales data showed underlying weakness and were accompanied by sizable revisions to previous …
Inflation jump to prompt 100bp hike from CBN this month Nigeria’s headline inflation picked up for a second consecutive month, to 33.9% y/y in October, largely due to the impact of rising petrol prices. The CBN now appears to have little choice but …
Swiss economy slows sharply, but will pick up in the coming quarters Economic growth was surprisingly slow in the third quarter as sporting event-adjusted GDP increased by just 0.2% q/q, a sharp slowdown from the 0.5% recorded in Q2. This will further …
This page has been updated with additional analysis since first publication. Q3 GDP growth muted, Q4 will be better The 0.1% m/m contraction in GDP in September meant that the economy still grew by 0.1% q/q in Q3 (consensus and CE forecasts 0.2% q/q), but …
Economy set to cool further The second estimate of Q3 GDP confirmed that growth in Malaysia remained above trend again. Looking ahead we think GDP growth will drop back close to trend if, as we expect, a jump in inflation driven by the removal of food and …
Economy regains momentum as consumers step up China’s economy improved further at the start of Q4, thanks to stronger-than-expected consumer spending. We think faster fiscal spending will support a continued cyclical pickup in activity overing the coming …
GDP growth set to remain sluggish The economy lost momentum in the third quarter and we think that GDP growth will remain around trend over the coming quarters. According to today’s preliminary estimate, GDP growth slowed from a downward-revised 0.5% q/q …
Banxico cuts, scope for further easing rests on the peso Mexico’s central bank delivered another 25bp interest rate cut at today’s meeting, to 10.25%, and it left the door open to further easing over the coming months, although a lot will depend on moves …
14th November 2024
