We think that there is very little, or no, scope for rate expectations and bond yields to renew their downward trend in most economies, given how far they had already tumbled before their recent rebound. The dark blue bars in Chart 1 show how investors …
12th July 2019
Given the parallels with Brexit, the recent escalation in the spat between the EU and Switzerland has filled many column inches over the past month. (To re-cap, after the Swiss government refused to sign off on the proposed new treaty, the EC followed …
Summary: Lower mortgage rates are not expected to bring an upturn in housing activity. True, there was a strong rise in mortgage approvals last month as borrowers took advantage of falling rates. But this was mainly due to refinancing, and house purchase …
9th July 2019
The past month has brought evidence of a continued slowdown in global growth and this weakness now seems to be spreading to labour markets. While advanced economy employment growth held up very well during the initial stages of the slowdown, it has now …
5th July 2019
The latest economic data, together with the nomination of Christine Lagarde for ECB president, make us more confident in our view that the ECB will cut interest rates and re-launch QE before the year is out. All of the activity data point to a slowdown in …
4th July 2019
Oil & Gasoline – Oil prices rose a little in June on a combination of escalating US-Iran tensions, signs of a truce in the US-China trade war and the expectation that OPEC+ would extend its production cuts. However, prices have already eased back. In our …
The key themes last month were a marked decline in expectations for global growth and a dash for safe-haven assets by investors. Even the recent easing of tensions in the US-China trade dispute has done little to perk markets up. That said, lower supply …
Overview – While June was a relatively positive month for commodity prices, we think that a combination of slower global growth and waning risk appetite will lead to lower prices for energy and industrial metals later in the year. Energy – Oil prices …
3rd July 2019
The subdued global outlook and weakness in domestic economic activity has caused us to revise down our forecasts for interest rates in Australia and New Zealand. In Australia, annual GDP growth slowed to just 1.8% in the first quarter of 2019 and the …
1st July 2019
A rebound in government spending is likely to provide a boost to GDP growth in the Philippines over the next few quarters. Fiscal data published earlier this week from the Bureau of the Treasury show that government spending is starting to recover. In May …
27th June 2019
Recent economic news from Africa has been pretty poor. Figures released this month confirmed that South African GDP contracted in Q1. And while things probably improved more recently, sharp divides within the government suggest that President Cyril …
Investors have reassessed the outlook for UK monetary policy over the last month and have gone from expecting rate hikes at the start of May to expecting cuts now. This is partly because of a weakening global outlook and mounting expectations of rate cuts …
26th June 2019
The past month has been dominated by the escalation of tensions between the US and Iran and the risk of an outright conflict is rising. Admittedly, President Trump decided to call off airstrikes on Iran in response to the downing of a US drone by Iranian …
The downside risks to economic growth and property returns this year appear to be rising. Political and economic developments in May have increased the chance of a deterioration in global conditions and a no deal Brexit. Further, the falls in retail …
Investors have rapidly come round to our dovish view on Latin American monetary policy but, if anything, they have probably now gone too far in anticipating large rate cuts across the region over the next year or so. Brazil’s Copom is likely to trim the …
25th June 2019
We expect an average of the Bank’s core inflation measures to remain close to 2% this year, before declining in 2020, as GDP growth falls below potential. An average of the Bank of Canada’s three core inflation measures reached a seven-year high of 2.1% …
Recent activity data suggest that recoveries in Emerging Europe’s two largest economies – Russia and Turkey – have been disappointing. In Russia, where the economy expanded by a meagre 0.5% y/y in Q1, growth hasn’t been much quicker in Q2. And after …
Tariffs have weighed heavily on China’s exports to the US in recent months. Shipments of goods in the $50bn list were almost 30% lower in the first four months of 2019 than they were a year before. Exports of goods in the $200bn list, which had been …
