Filtered by Topic: Monetary Policy Use setting Monetary Policy
Factory-gate inflation hits twelve-year high Producer price inflation continued to surge and reached its highest level since September 2008 last month, on the back of a further rise in global commodity prices. That said, there are some signs in the data …
9th June 2021
Above target inflation won’t be sustained The weakness in underlying inflation in Q1 is consistent with our view that the Reserve Bank of Australia will announce a third $100bn round of asset purchases before long. And it suggests that the financial …
28th April 2021
Fuel-driven rise in headline WPI inflation will be short-lived The faster-than-anticipated acceleration in headline wholesale price inflation in March was driven by a surge in fuel inflation, but we think it should fall back soon enough. And with the …
15th April 2021
Credit growth resumes its downward trajectory After an uptick in February, the slowdown in credit growth resumed in March. Hawkish signals in the government’s work report suggest that the deceleration will continue as policymakers focus on reining in …
12th April 2021
Tightening in the labour market has further to run The surge in employment in February is consistent with our view that the Australian labour market is tightening much faster than most expect. The 89,100 rise in employment in February much stronger than …
18th March 2021
Rise in headline WPI inflation won’t trigger a rate hike The acceleration in headline wholesale price inflation in February to a two-year high will do little to dampen growing market expectations of rate hikes in the very near future. However, we still …
15th March 2021
Inflation at its peak, but a fresh lira sell-off could prompt rate hikes The stronger-than-expected rise in Turkey’s headline inflation rate, to 15.6% y/y in February, is likely to mark the peak and we expect inflation to fall steadily over the next six …
3rd March 2021
Slip into deflation no cause for concern Headline consumer price inflation returned to negative territory last month, but this was largely due to a shift in the timing of the Lunar New Year. In fact, producer price inflation turned positive for the first …
10th February 2021
Credit growth continues to slow as policy turns less supportive Credit growth in China dropped back further last month due to a broad-based slowdown in both bank and non-bank lending. Credit is likely to continue decelerating as the PBOC focuses on …
9th February 2021
Inflation to continue its rise in 2021 The sharp rise in underlying inflation in Q4 is consistent with our view that the RBNZ will tighten policy in the years ahead. Prices in Q3 rose 0.5% q/q, well above the analyst consensus or than the RBNZ’s latest …
21st January 2021
Unemployment Rate to continue to plunge The further decline in the unemployment rate in December is consistent with our view that the RBA will not extend its asset purchases beyond April. The 50,000 rise in employment was in December was exactly in line …
Consumer price deflation reverses as food prices rise Headline inflation returned to positive territory last month as the drag from pork prices eased. Broader price pressures also edged up on the back of stronger demand. With underlying inflation likely …
11th January 2021
House prices may rise by 10% in 2021 House prices continue to rise strongly in Australia and we now think they will rise by 10% between the end of 2020 and the start of 2021. Across the eight capital cities, house prices rose by 0.9% m/m in December. …
4th January 2021
Upside surprise is under way The fall in the unemployment rate to 6.8% in November leaves it on track to fall to 6% by the middle of next year and is consistent with our view that the RBA won’t expand quantitative easing any further. The 90,000 rise in …
17th December 2020
Activity goes from strength to strength China’s economy continued to accelerate across all fronts in November. We expect output to remain above-trend in the coming quarters, even as tailwinds from stimulus and exports start to ease. Industrial production …
15th December 2020
Recovery still strong at start of Q4, but headwinds mounting Turkey’s industrial production and retail sales data for October suggest that the economy carried a lot of momentum into the start of Q4 but the recent tightening of virus containment measures, …
14th December 2020
Surge in mortgage advances comes despite reduction in riskier lending The surge in mortgage lending to its highest level since before the financial crisis has come despite banks curbing riskier loans. If we are right to think that house prices will dip, …
8th December 2020
Recovery to slow but not reverse The drop in the Economy Watchers Survey in November still leaves it consistent with solid growth in consumer spending. As such, the survey is consistent with our view that the third wave will slow rather than derail the …
Recovery to surprise to the upside The sizeable upward revision to Q3 GDP and the sharp rise in “core” household spending in October support our view that Japan’s economy will recover from the pandemic faster than the consensus expects. Meanwhile, wage …
Rebound in retail sales to continue in November The rebound in retail sales in October is likely to be overshadowed by an even larger increase in November as Victoria reopens . The 1.4% m/m rise in retail sales values in October was smaller than the …
4th December 2020
Inflation jumps, raising risk that CBRT is forced to hike rates again Turkey’s headline inflation rate jumped to a stronger-than-expected 14.0% y/y in November and, while the lira has rallied strongly over the past month and the economy looks set to …
3rd December 2020
Consumption and services back to normal The latest data suggest that the broad-based acceleration of China’s economy continued in October. Policy stimulus continued to boost investment and industrial output while growth in real retail sales and services …
16th November 2020
Rapid recovery set to continue The further surge in the Economy Watcher’s Survey (EWS) in October suggests that Q4 could surprise to the upside. However, further ahead the recovery will slow as the economy gets closer to pre-virus levels. The rise in …
10th November 2020
Food price drop drags inflation to eleven-year low Headline consumer price inflation fell sharply in October, to its lowest since 2009. But this was almost entirely due to falling food prices – core inflation and factory gate inflation held steady last …
Household incomes should rebound further Wage growth improved in September and should recover further over the coming months as overtime hours continue to rebound – besides a hit from a fall in end-of-year bonus payments. Meanwhile, the rise in “core” …
6th November 2020
Inflation begins steady rise, adding to pressure on CBRT Turkey’s headline inflation rate edged up to 11.9% y/y in October and is likely to rise further over the coming months. This, combined with the recent sharp falls in the lira, means that the central …
3rd November 2020
Recovery in consumption will slow in Q4 Retail sales were broadly unchanged in September, remaining a smidge below pre-virus levels in volumes terms. That’s consistent with our view that consumption rebounded strongly last quarter, although we think the …
29th October 2020
Underlying inflation to remain subdued The surge in quarterly inflation in Q3 only unwound some of the weakness in Q2 and we still expect underlying inflation to remain weak for years to come. The 1.6% q/q rise in consumer prices in Q3 was the largest …
28th October 2020
Japanese inflation to remain around zero Headline inflation dropped to zero September, and we think it be negative over the coming months before hovering around zero throughout most of next year. Headline CPI fell from +0.2% y/y to 0.0% y/y last month …
23rd October 2020
Inflation to ease further in the months ahead The further easing in headline and underlying inflation in Q3 are consistent with our view that weak inflation will prompt the RBNZ to cut rates into negative territory next year. Prices rose by 0.7%q/q in Q3, …
Rise in inflation to push next rate cut into 2021 The increase in Nigerian inflation in September, to 13.7% y/y, will probably be followed by similarly high inflation readings in the coming months. The central bank is likely to keep its benchmark rate on …
15th October 2020
Food aside, prices continue to recover from COVID-19 downturn Headline consumer price inflation, weighed down by easing food price inflation, continued its decline last month. But core consumer prices rose again for the second straight month and factory …
WPI inflation rises by more than expected The rise in headline wholesale price inflation in September was sharper than expected but, with price pressures likely to ease in earnest over the coming months, we think further policy rate cuts are still on the …
14th October 2020
Economy recovering, monetary policy set to stay loose for an extended period The Monetary Authority of Singapore (MAS) left policy on hold today as advanced GDP data showed that the economy rebounded well in Q3. However, with GDP still well below its …
Softer inflation unlikely to change policymakers’ mind The slight fall in South African inflation, to 3.1% y/y in August, is likely to be followed by subdued inflation rates over the next few months. Even so, the SARB’s easing cycle has now come to an …
30th September 2020
Recovery in activity to continue Retail sales rebounded back to pre-virus levels in August as the second wave began to dissipate, and we expect consumer spending to recover further over the coming months. Meanwhile, industrial production edged higher in …
Underlying inflation to weaken much further While headline inflation fell in August, excluding the government’s domestic travel subsidy scheme it showed a renewed pick up. However, we still think inflation will fall much further into negative territory …
18th September 2020
Jump in inflation to prevent rate cut… for now The increase in Nigerian inflation in August, to 13.2% y/y, will probably stay the hand of policymakers at next week’s MPC meeting. But, with a weak economic recovery, there may still be scope for an interest …
15th September 2020
Recovery continues as consumption rebounds Economic growth in China accelerated further in August as sentiment improved among consumers and private firms. Retail sales surpassed 2019 levels for the first time since the COVID-19 outbreak, while investment …
Inflation rises, but central banks won’t be too alarmed Brazilian inflation remained well below the central bank’s target last month, at 2.4% y/y, confirming that price pressures are soft and supporting our view that the Selic rate will stay low for a …
9th September 2020
Rebound in household incomes to continue Wage growth improved in July and household incomes are likely to rebound further as more workers who lost their jobs during the state of emergency find employment again. Meanwhile, the second estimate of Q2 GDP …
8th September 2020
Surge in sales to reverse in August Retail sales were 12% above pre-virus levels in July but the closure of non-essential shops in Victoria will weigh heavily on spending in August. That means that sales won’t rise all that much in Q3, though a rebound in …
4th September 2020
Still a very long way from normal The rise in the August PMIs pales in comparison with the falls during the lockdown and it is highly likely that output is still a very long way from pre-pandemic levels. Given the bleak economic outlook, we think the RBI …
3rd September 2020
Household incomes should continue to rebound Wage growth improved a little in June and household incomes are rebounding now that most furloughed workers are back in work. Meanwhile, the surge “core” household spending in June supports our view that …
7th August 2020
Lockdown to weigh on recovery Retail sales and external trade both rose in the month of June but may weaken again before long as imports begin to normalise and the renewed lockdown in Victoria weighs on retail sales. The 2.7% m/m rise in retail sales …
4th August 2020
Consumer spending should continue to recover The surge in retail sales in June suggests that consumer spending will rebound across Q3 even if some restrictions on activity are reimposed to curb the renewed spread of the virus. The 13.1% m/m rise in retail …
30th July 2020
Underlying inflation to weaken much further While headline inflation was unchanged for the third-straight month in June, we expect it to fall much further over the medium-term. We think inflation will turn consistently negative in the second half of the …
21st July 2020
A dip into deflation lies ahead The small rise in CPI inflation from +0.5% in May to +0.6% in June probably won’t be sustained for long as the effects of the Chancellor’s VAT cut for the hospitality/tourism sectors and the “Eat Out to Help Out” restaurant …
15th July 2020
Wage growth to weaken further even as household incomes rebound Wage growth weakened further in May, but we think household incomes are recovering as furloughed workers either return to work or receive their mandatory leave allowance. According to today’s …
7th July 2020
Consumption to surge in Q3 Retail sales rose above pre-virus levels in May and probably kept rising in June. As such, a sharp rebound in consumption in Q3 following Q2’s slump is all but guaranteed. However, services spending will probably fare worse and …
3rd July 2020
