Survey shows prices and activity continuing to fall in November The RICS survey confirmed that there were widespread house price falls in November. Surveyors expect a further drop in prices and slowdown in transactions ahead, in line with our forecasts. …
8th December 2022
Net trade to boost GDP growth a bit in Q4 The October trade data point to a huge boost from net trade to Q4 GDP growth but we suspect that a further fall in exports will moderate that contribution. The decline in the trade surplus, from $12.4bn in …
Rising product stocks should eventually translate into lower crude demand Commercial crude stocks fell again, but there were some chunky builds in product stocks. Given the rise in stocks, product prices should fall further, which will eventually lead to …
7th December 2022
Housing demand rises for first time since March A fall in mortgage rates from recent 20-year highs helped home purchase applications rise for the first time in eight months in November. However, while we expect mortgage rates to continue to trend lower …
German industrial output resilient but still set for contraction German industrial production once again held up better than expected in October. But this resilience was driven partly by a recovery in construction which tends to be volatile. We still …
Sharp drop confirms that house price correction has begun The largest monthly fall in the Halifax house price index since October 2008 confirms that the house price correction that we forecast has begun. While mortgage rates have fallen back somewhat in …
Exports to shrink further as global recession looms Chinese exports contracted year-on-year in November by the most since the start of the pandemic and imports dropped at the fastest pace in 30 months. We expect outbound shipments to fall further over the …
Economy will come to a standstill next year The decent rise in Q3 GDP probably marks the last hurrah for Australia’s economy as tighter monetary policy and falling real incomes weigh on spending . The 0.6% q/q increase in Q3 GDP was a touch weaker than …
Export volumes struggling despite boost from agricultural sector The essentially unchanged level of export volumes in October, despite big gains in agricultural and pharmaceutical exports, suggests the sector is struggling amid weaker global demand. …
6th December 2022
Deficit widens on shift in pharmaceutical trade The trade deficit widened to $78.2bn in October, from $74.1bn, as the weakness in global demand began to weigh on exports, which declined by $1.9bn. At the same time, imports increased by $2.4bn, as a …
Headline index starts to fall as recession cuts demand As expected, the headline CIPS construction index retreated in November as falling demand outweighed the benefit of easing prices and an increase in the availability of contractors. As the recession …
Strong rebound, but signs of underlying weakness South Africa’s economy rebounded in Q3, with a 1.6% q/q expansion, but the underlying picture was less rosy as growth was supported by a build-up of inventories; household spending contracted . Persistent …
Household real incomes to fall in 2023 despite energy subsidies Labour cash earnings increased by a slower 1.8% y/y in October due mostly to a much smaller gain in volatile bonus payments. However, real wage losses have extended for a seventh consecutive …
Households cutting back amid high inflation The sharp drop in euro-zone retail spending in October is consistent with our view that – notwithstanding the slight uptick in some business surveys recently – the economy is entering recession. With …
5th December 2022
Unemployment rate declines despite slowdown in hiring The slowdown in hiring in November did not prevent a decline in the unemployment rate, as the labour force contracted. The Bank of Canada will be more encouraged by the fall in the 3-month annualised …
2nd December 2022
Resilience in payrolls and wages won’t stop Fed from slowing rate hike pace The resilience of the labour market and the resurgence in wage pressures don’t change our view that core price inflation is going to fall more rapidly than the Fed believes, and …
A fleeting recovery The better-than-expected 0.3% m/m rise in Brazilian industrial production in October only partly reversed the falls in output in the previous few months. And surveys suggest that the sector fared much worse in November. This supports …
Total employment grew across the 30 metros, but at a slower pace as labour market conditions continued to ease. With our proprietary indicators pointing to a 90% probability of an imminent recession, we maintain the view that those metros worst affected …
1st December 2022
Index drops below 50 mark The decline in the ISM manufacturing index to 49.0 in November, the lowest reading since the early stages of the pandemic, from 50.2, leaves it at a level consistent with a stagnation in broader economic growth. The decline in …
Slowdown now underway The weaker-than-expected Brazilian Q3 GDP growth figure, of 0.4% q/q, highlights that the weakening global economy and higher interest rates are bringing the recent period of strong growth to an end. And leading indicators suggest …
Labour market to soften from here, but remain tight The record-low euro-zone unemployment rate of 6.5% in October is likely to be as good as it gets for the region’s labour market. But the rise in unemployment from here will probably be small. The …
South Africa’s manufacturing PMI increased in November, to 52.6, but underlying activity in the sector is likely to remain subdued as the combination of sustained power cuts and fiscal and monetary policy tightening bites. And the pick-up in the prices …
Mixed bag, but industrial weakness likely in Q4 The manufacturing PMIs for November were a mixed bag, but suggest that weakening demand and the fading boost from easing supply shortages has begun to take a heavier toll on industrial sectors in Turkey, …
Sharp drop in prices as market adjusts to higher mortgage rates The 1.4% m/m drop in house prices in November was far larger than anyone expected, raising the risk that prices fall more rapidly and further in response to high mortgage rates than we …
Stable inflation keeps pressure off SNB The low inflation rate in November supports our view that the Swiss National Bank will not need to raise interest rates much further in the current cycle. Indeed, there is a growing chance that policymakers raise …
Further weakness ahead Manufacturing PMIs across the region fell further into contractionary territory in November, driven by a sharp decline in the employment index. We expect conditions to remain subdued as weaker global demand, high inflation and …
Indian manufacturing continues to buck the regional trend India’s manufacturing PMI edged up in November and continues to buck the weaker regional trend. The survey also indicates that price pressures are easing, reinforcing our view that the RBI is now …
More signs of weakness in industry The Caixin manufacturing PMI edged up in November but remained weak. Taken together with the official survey published yesterday, they suggest that downward pressure on industrial activity intensified last month. The …
Strength in capital spending won’t last Private investment rebounded last quarter and while firms’ projections at face value point to a further pick-up over the remainder of the financial year, the figures are consistent with a slowdown in real terms . …
Rapid worsening in affordability will continue to push down prices House prices continued to fall at a rapid rate in November and with housing affordability now the most stretched since the early 1990s, that downturn has much further to run. The 1.1% m/m …
30th November 2022
Refineries may reduce output soon amid soft domestic demand Commercial crude stocks plunged as the refinery utilisation rate rose, net imports fell sharply and strategic reserve releases continued to wind down. However, signs of lower domestic product …
Economy lacking momentum The October retail sales and industrial production data for Russia tell more of the same story: an economy that has passed the worst of the downturn, but that is desperately struggling for momentum. An outright contraction in Q4 …
Further downgrades as yields rise and rental growth falls back The latest IPF Consensus Survey showed further significant downgrades for total returns in 2022 and 2023, as higher interest rates have boosted yields and a looming recession cuts rental …
Economy holds up in Q3, but higher rates now taking a toll While base effects caused a sharp slowdown in headline GDP growth in India in Q3 (Q2 of FY22/23), growth held up well in quarter-on-quarter terms. However, there are signs in more timely activity …
Peak headline inflation won’t stop ECB hiking Euro-zone inflation may now be past its peak but with the core measure unchanged in November and set to remain well above 2% next year, we expect the ECB to hike rates by 50bp or 75bp in December. The fall …
Economy comes off the boil in Q3 Turkey’s resilience since last year’s currency crisis came to an end in Q3 as the economy contracted by 0.1% q/q. Private consumption remained strong, but fixed investment declined and net trade was a large drag. We expect …
The Bank of Thailand hiked interest rates today by a further 25bps (to 1.25%), and reiterated that it is likely to continue tightening policy gradually over the coming months. The decision was correctly predicted by 17 out of the 19 analysts polled by …
COVID disruptions deliver a further hit to activity The official PMIs add further evidence of another large blow to services activity as virus disruptions intensified this month. The hit to industry looks to have been more modest. But downside risks …
Inflation still set to rise further in Q4 We wouldn’t read too much into the drop in the Monthly CPI Indicator in October because the figures don’t cover the entire CPI basket, but the data suggest that inflation is about to peak. Headline inflation …
Industrial production looking to end 2022 with a whimper Industrial production saw a steeper contraction in October, while firms’ output forecasts for November and December point to a weak rebound. Industrial production contracted by a sharper 2.6% m/m in …
Third consecutive month of falling prices, and counting A deterioration in affordability helped the Case-Shiller house price index to fall for the third consecutive month in September. The FHFA reported a small rise in prices, but we think more falls are …
29th November 2022
Domestic demand contracts for first time since Q2 2021 The stronger-than-expected gain in third-quarter GDP tips the odds slightly toward another 50 bp interest rate hike from the Bank of Canada next week. But, with domestic demand contracting for the …
Headline inflation close to a peak, but core may rise further November’s fall in headline inflation in Germany and Spain suggest that the euro-zone headline rate will come in lower than we had anticipated when it is published tomorrow, and is now close …
Small improvement in sentiment and fall in inflation The small increase in the EC Economic Sentiment Indicator (ESI) for November suggests that prospects for the euro-zone economy may no longer be deteriorating. We still expect a recession, but it is …
Higher interest rates beginning to influence the economy October’s money and credit figures highlight how higher interest rates are starting to influence the economy. Higher interest rates are weakening the demand for credit, especially for mortgages, …
Net lending sees further gains even as capital values fall Falling capital values have not yet deterred commercial property investors, with net lending to property increasing for the second month in a row in October. Bargain hunters may have given lending …
Slump in approvals points to sharper downturn in activity ahead Rocketing mortgage rates led to a sharp drop in mortgage approvals in October. While quoted mortgage rates have peaked they are unlikely to fall much below 5% next year, keeping the cost of …
Sentiment improves, but recessions still likely The EC’s Economic Sentiment Indicators increased in most Central and Eastern European economies in November, but sentiment remains at levels that have been consistent with recessions in most countries in the …
Growth set to slow in Q4 After increasing by 0.2% q/q in Q3, the Swiss economy is set to slow in Q4, although any recession will probably be shallower than we had previously expected, and shallower than in neighbouring Germany. The 0.2% q/q increase in …
Labour market tightening on hold, soaring inflation to drag retail sales The unemployment rate stayed unchanged in October and will hover around 2.5% through 2023 due to a looming economic recession. Meanwhile, retail sales values barely grew in October …
