Overview – May was a good month for metals prices. (See Chart 1). The ongoing revival in economic activity in China helped to lift the prices of most industrial metals, while investment demand for precious metals remained strong. We think that industrial …
3rd June 2020
Overview – The prices of most commodities rose in May on the back of the ongoing recovery in China’s economic activity and a gradual easing of lockdown conditions in the US and Europe. We think that most prices will make further gains from here, but they …
2nd June 2020
Timely data suggest that April may have been the trough for EM GDP (see Chart 1), and activity at an aggregate level should recover – albeit slowly – in the coming months. But this is likely to mask a big divergence between regions. Large parts of …
29th May 2020
Yields rose again in April and there is more of the same to come over the summer months. While rental values fell slightly, the rise in yields meant that capital values declined by 1.8% m/m in April. This saw annual returns turn negative for the first …
The coronavirus has continued to spread rapidly across much of the region, with Brazil now registering the most new cases per day of any country in the world. And on a per capita basis, the surge in Peru and Chile look particularly alarming. High …
Governments across much of Sub-Saharan Africa have moved towards lifting coronavirus containment measures in recent weeks but, with the exception of South Africa, this has much more to do with economic concerns than success in controlling the virus’ …
As the lockdowns have largely come to an end in both countries, output is starting to recover. In New Zealand, most activity is now allowed to resume, though gatherings are limited to 100 people. In Australia, states are easing restrictions at different …
The rapid spread of the coronavirus in the region means that plans to lift lockdowns have come later than in many other EMs and the damaging economic effects of social distancing have persisted. The Gulf economies have also suffered from the effects of …
28th May 2020
With new infections falling sharply across the region and with lockdowns being eased, economic activity is starting to recover. However, the latest high-frequency data that we track, including routing requests from Apple and mobility data from Google, …
Much like the rest of Europe, shifts in prime rents and yields in CEE were relatively muted in Q1. The lack of movement was mainly due to thin deal evidence and market uncertainty. But looking ahead, given that the worst hit to economic activity from the …
The coronavirus crisis has dealt a heavy blow to the economies of Emerging Europe over the past few months but the worst of the downturn now appears to have passed. As infection curves have flattened, most countries have eased lockdowns in recent weeks …
27th May 2020
The government’s annual work report published on Friday made clear that policymakers will engineer an acceleration in credit growth this year. The report didn’t offer an explicit target for aggregate financing (AFRE), the official measure of broad credit, …
Despite the contraction in economic activity in Q1, property values in Scandinavia and Switzerland held broadly steady. However, in a large part this reflected uncertainty and low deal flow, which meant that it was not possible for agents to provide a …
The Labour Force Survey shows that the number of hours worked dropped by 28% between February and April. As the bulk of the hours lost have been in relatively low-productivity sectors, GDP should not fall by that much. But we still expect a total decline …
26th May 2020
While the rally in developed market (DM) equities has lost some steam over recent weeks, we think that they will make up some further ground in the coming months provided that the global economy starts to recover. We suspect that the stock markets with a …
21st May 2020
Measures to slow the spread of the virus have had a hugely detrimental impact on the US economy. This began to hit occupier demand in Q1, but is yet to be reflected in dramatic changes in vacancy or falls in rents. Nevertheless, valuers have already …
20th May 2020
The housing market ground to a halt in response to the coronavirus lockdown, but looking ahead, restrictions on housing activity have been eased. Still, the huge hit to the economy from the virus combined with weakened buyer confidence suggests that the …
Despite a stringent lockdown that has lasted nearly two months, new recorded cases of COVID-19 in India remain on a sharp upward trajectory and hit a record high yesterday. (See Chart 1.) The true number of cases is likely to be higher still given limited …
Prime euro-zone rents and yields held broadly steady in Q1, with many agents noting it was not possible to provide a robust reassessment of values. This marked the end of period of positive rental growth and yield declines in many markets. Indeed, there …
After falling by around 6% q/q in Q1, world GDP looks set for an equally sharp slump in the second quarter. As major advanced economies are following Asia’s lead in easing containment measures, global activity has hopefully passed its trough. …
19th May 2020
The latest hard data suggest economic activity was running 20% below February levels in April, a far sharper downturn than the 2008/09 financial crisis and one compressed into just two months. (See Chart 1.) With lockdowns easing the economy is now …
Economic activity remained severely damaged by coronavirus containment efforts in early May. In particular, the retail sector usually receives a substantial boost during Golden Week but the number of restaurant goers was extremely low throughout this …
15th May 2020
The estimates of Q1 GDP that have been released so far have been subject to all manner of health warnings and are liable to be revised, potentially significantly, over the coming quarters. Nonetheless, there is a clear relationship between the severity …
14th May 2020
While EM assets, especially in Latin America and EMEA, have been among the worst hit by the fallout from the coronavirus pandemic, we think that they will regain some of the ground lost over the past few months. But even then, we expect that most will end …
13th May 2020
The impact of the coronavirus is showing up in housing market activity. Pending home sales plummeted 21% m/m in March, which points to existing home sales falling to just over 4m annualised in April. (See Chart 1.) We expect they will eventually bottom …
12th May 2020
Governments have taken their first steps towards lifting the restrictions which caused the economy to collapse in the past few weeks. As a result, high frequency indicators show some people returning to the streets in major cities and a small rebound in …
6th May 2020
While the latest data suggest that our estimate that GDP has fallen by an eyewatering 25% from peak to trough is in the right ballpark, it looks as though the most restrictive parts of the coronavirus lockdown will be eased in May rather than in June as …
5th May 2020
Overview – The prices of most commodities struggled in April against a backdrop of moribund global demand. That said, the performance of energy commodities was mixed: while Brent crude and Henry Hub gas rose in price, the other energy commodities fell. We …
While the recent outperformance of “risky” assets has faltered in the past few days, we are sceptical of the idea that it has all been built on an overly-optimistic view of the economic outlook, for two reasons . First, there have been huge disparities in …
The Latin American economies that moved early to contain the coronavirus – Chile, Colombia and Peru – are all now starting to look at ways to ease lockdown measures, which should support a gradual recovery in activity later this quarter. But lockdowns …
1st May 2020
The early signs from the Middle East and North Africa are that efforts to contain the coronavirus and the collapse in oil prices are dealing a heavy economic blow. Whole economy PMIs plunged to record lows in March, flight cancellations are widespread and …
30th April 2020
The risk of further sovereign defaults has risen across the region this month. Rwanda has joined Zambia in seeking to restructure its sovereign debt. And the collapse in oil prices will put more pressure on already fragile external and fiscal positions in …
The strict lockdowns have resulted in a massive drop in demand, but they have also been successful at ‘flattening the curve’ or reducing the number of new daily cases of Covid-19 in both countries. (See Chart 1.) The success means both countries are now …
The real-time economic and market disruption from the coronavirus means that much of the data released during the past month offers little insight into current developments in the emerging world. Accordingly, this publication will now focus on the most …
29th April 2020
There are encouraging signs that the authorities in Central Europe have brought the virus under control and policymakers are slowly starting to ease lockdown measures, which will support a recovery in activity. It's a different story in Russia where the …
Early signs of the impact of COVID-19 on property were seen in the MSCI monthly data for March. While rental values did not see much of a deterioration, yields saw their biggest rise since after the EU Referendum in 2016, causing capital values to fall by …
We remain deeply concerned about the rapidly rising number of cases of coronavirus across South Asia as well as Indonesia. A failure to contain the virus would have significant economic consequences for these places. (See here .) More encouragingly, there …
27th April 2020
Output from China’s industrial sector rebounded in March, as the government encouraged firms to re-open. But revenues remained much weaker, signalling that demand remained depressed. Inventories surged as a result. (See Chart 1.) Subdued demand is likely …
The asset purchase programs announced by the Bank of Canada in the past few weeks mean its balance sheet is set to expand much further. The Bank’s assets have already risen by $200bn since mid-March to $320bn as of last week, which is far in excess of the …
23rd April 2020
Measures to contain the spread of the coronavirus will increase strains among traditional banks, but the shadow banking sector – still reeling from a large-scale default 18 months ago – is likely to fare even worse. Shadow banks have tended to lend to …
22nd April 2020
Strains in the financial markets have generally eased due to policymakers’ decisive action and equity markets have rebounded on hopes that the spread of the coronavirus is slowing. (See Chart 1.) Of course, asset prices have not recouped all their losses …
21st April 2020
A second wave of virus cases driven by rising infections in Tokyo and Osaka has triggered a major shift in economic behaviour. And while new cases in the two lynchpins of the Japanese economy have stabilised in recent days, yesterday’s declaration of a …
17th April 2020
The early hard data for March confirmed an unprecedented hit to economic activity from the coronavirus pandemic, with retail sales seeing the sharpest monthly fall in the survey’s 30-year history and manufacturing output experiencing its biggest decline …
16th April 2020
A host of global indicators are showing the devastating effects of the coronavirus and related containment measures on the world economy. The global services PMI (see Chart 1) dropped to its lowest level on record in March and such qualitative surveys are …
9th April 2020
While London’s housing market showed signs of life in the first quarter, the coronavirus has ended any hope of a recovery. Indeed, like the rest of the UK, London housing transactions are set to collapse over the next three months, although house prices …
8th April 2020
The scale of the economic damage in Switzerland and the Nordics following the imposition of draconian virus-related containment measures is becoming all too apparent. Business surveys have plunged across the board, and the statistical agency in Norway …
The coronavirus will cause a severe contraction in housing market activity. Mortgage applications for home purchase have already seen a 33% drop from their peak in late January. (See Chart 1.) A surge in unemployment to record highs, and restrictions on …
7th April 2020
Overview – Despite the prospect of a massive Saudi Arabian-led production cut, the price of oil has remained low in recent weeks amid a coronavirus-related collapse in demand. By contrast, coal and natural gas prices fared relatively better. This was due …
6th April 2020
The euro-zone is experiencing an unprecedented collapse in economic activity. (See Chart 1.) We suspect that GDP will be roughly 25% below its pre-crisis level during the lockdowns, with the scale of devastation varying between countries. Many sectors of …
Industrial metals prices plummeted in March. (See Chart 1.) And with the virus-related disruption outside of China yet to peak, we suspect that prices will fall further over the coming months. Even if containment measures are eased from the second half of …
2nd April 2020
