Weaker China demand and high energy costs to drag on steel output Global steel production fell in y/y terms in February, driven by a double-digit contraction in China. Our expectation is that high energy costs and softer construction-led demand growth in …
22nd March 2022
Mixed bag for the Chancellor ahead of the Spring Statement Notwithstanding the deterioration in the public finances in February, large revisions to the back data mean that borrowing in 2021/22 is on track to undershoot the OBR’s October 2021 forecast by a …
Soaring energy costs to weigh on supply for some time High power prices in Europe continued to cause production curtailment in February but there were signs of a rebound in China’s production. Looking ahead, we expect supply to remain constrained for now …
21st March 2022
Activity remains strong, but war in Ukraine casts a dark cloud Activity data for February show that Poland’s economy continued to expand strongly at the start of this year but the war in Ukraine is likely to drag on the recovery through a hit to exports, …
Home sales fall back as higher rates bite Existing home sales slipped in February, more than reversing January’s surprise increase. And the Fed’s first move on interest rates this week reinforces our expectation that existing sales will remain soft in the …
18th March 2022
Data show continued wide divergence in the rate of metros’ recoveries The jobs recovery continued in January, but nearly two years on from the start of the pandemic, employment in most metros is still not back to its pre-crisis peak. And, in terms of …
Strong start to 2022 Retail sales made a strong start to 2022 and, while the hit to household purchasing power from higher gasoline prices is a headwind to further growth in sales volumes, the fact that consumer confidence has held up well supports our …
Economy slowing but external vulnerabilities growing The 1.8% q/q rise in Chile’s GDP in Q4 kept output well above its pre-pandemic trend but, with the economy now coming back down to earth, there is a growing chance of a recession this year. Meanwhile, …
Slower wage growth despite shortages The latest data show that euro-zone wage growth remained subdued at the end of last year, despite reports of widespread labour shortages. The tightening in the labour market that we expect is likely to put upward …
Headline inflation to break 2% Inflation picked up in February due to another jump in utilities inflation and a strong rise in fresh food inflation. We think headline inflation will rise above 2% in April as some of the spike in energy prices due to the …
Output jumps, but supply shortages persist The jump in manufacturing output last month in part reflects the easing of widespread absenteeism as covid cases fell back sharply . The 1.2% rebound in manufacturing output in February was in line with the jump …
17th March 2022
Starts rise but face headwinds from materials shortages Housing starts rose by 5.7% m/m in February following two months of declines. While a tight inventory of existing homes is supporting homebuilder confidence, shortages of labour and materials will …
Headline inflation to stay around 6% until Q4 With the war in Ukraine pushing up energy and food prices and potentially exacerbating supply problems, we think euro-zone inflation will remain around 6% until Q4 and average well above 2% next year. …
Full employment will drive RBA to hike rates The further decline in the Australian unemployment rate takes the labour market closer to full employment, setting the RBA up to hike rates in June. The 77,400 rise in employment in February was well above the …
Business investment still languishing The fall in machinery orders in January suggests that business investment may not recover much this quarter from a disappointing 2021. But with corporate profits recovering strongly last year, firms have plenty of …
Strong rebound to persist in 2022 The rebound in GDP at the end of last year was larger than the RBNZ was anticipating, which should keep the Bank on its hiking track. And we expect the rebound to have continued in the current quarter despite New …
16th March 2022
High prices likely to put a floor under crude stocks US commercial crude stocks rose last week but remained historically low for the time of the year. Demand took a tumble and will probably struggle to rise much further with gasoline prices so high. In …
Inflation likely to hit 6.0% in March While the price increases in February were not as broad-based as in January, they nevertheless caused all three of the Bank of Canada’s core inflation measures to rise further and suggest that, even if oil prices were …
February weakness offset by upward revisions to January The muted 0.3% m/m rise in retail sales in February was largely offset by the upward revision to January’s gain which, overall, suggests that real consumption growth remains solid. With the sharp …
Recovery picking up pace January’s hard activity data show that South Africa’s recovery gained ground following the Omicron virus wave. Taken together with more timely figures that point to a continued rebound in activity and mounting inflationary …
Exports to disappoint again this quarter Exports fell again in February, though they should rebound over the coming months provided the recent Omicron outbreak in China doesn’t cause major supply chain disruptions to resurface. The 19.1% annual rise in …
Manufacturing sales volumes probably rebounded in February The sharp fall in manufacturing sales volumes in January was at least in part due to the impact of staff absenteeism amid the Omicron outbreak and, with hours worked across the sector increasing …
15th March 2022
Inflation ticks up, pressure building on CBN to tighten The small rise in Nigeria’s headline inflation rate to 15.7% y/y last month provides further evidence that draconian foreign exchange policies are causing shortages and fuelling price pressures. …
Inflation to increase further Saudi inflation rose to 1.6% y/y in February, and we think that it will continue to strengthen over the coming months on the back of increasing food prices, peaking at around 2.5% y/y in Q3. Data released this morning showed …
Fears high inflation is fuelling wage growth The further fall in the unemployment rate to within a whisker of the pre-pandemic rate will only encourage the Bank of England to raise interest rates on Thursday, probably from 0.50% to 0.75%, despite the …
Stronger-than-expected start to 2022 Activity data for the first two months of the year was stronger than anticipated, which probably explains why the People’s Bank (PBOC) unexpectedly kept its policy rates on hold today. But the economy looks set to come …
Commodity price surge will keep headline inflation high India’s consumer price inflation breached the RBI’s 6% ceiling in February, sooner than even our relatively hawkish forecasts had suggested. The surge in commodity prices will keep the headline rate …
14th March 2022
Another month of decent net lending points to a solid start for investment The rate of commercial lending growth dipped a little in February but remained above its five-year average. That dip was due only to a slower month for multifamily, with net …
Another blow to the notion of Swedish inflation exceptionalism The stronger-than-expected increase in Swedish inflation in February is surely the final nail in the coffin for the Riksbank’s thus-far dovish stance, and lends support to our view that the …
WPI inflation to remain elevated for a while yet Indian wholesale price inflation remained near historic highs in February, and it is likely to stay elevated in the near term given the recent surge in commodity prices. Headline WPI edged up from 13% y/y …
Surge in employment pushes unemployment rate below pre-pandemic level The labour market boom resumed in February and the odds of a sharp acceleration in wage growth are rising, which would add to the pressure for the Bank of Canada to continue raising …
11th March 2022
Industry holds up despite Omicron, but new headwinds emerge Indian industrial production held steady in m/m terms in January, supporting our view that the Omicron hit to the economy was small. But looking ahead, the surge in commodity prices as a result …
Solid start to 2022, but challenges ahead The unexpectedly-strong 1.0% m/m rise in Mexico’s industrial production in January suggests the economy came through the Omicron wave in decent shape. That said, the fallout from the war in Ukraine war may hold …
Rising inflation to keep Copom’s tightening cycle going The rise in Brazilian inflation to 10.5% y/y in February will be followed by further increases to more than 11% in the coming months on the back of higher fuel prices. While Copom hinted at its last …
Credit growth disappoints Broad credit growth was much weaker than expected last month, reversing much of the acceleration of the past few months. This suggests that more easing measures will be needed to meet the policy objectives that were recently laid …
As good as it gets for this year The cost of living crisis and the influence of the war in Ukraine probably means that the 0.8% m/m leap in GDP in January is as good as it gets for this year. Meanwhile, two-thirds of the huge 20% m/m fall in UK exports to …
Downturn at the start of 2022 Turkey’s latest activity figures confirm that the economy entered a downturn at the start of this year as the surge in inflation triggered a further drop in retail sales and weaker domestic demand started to weigh on …
Inflation to peak at more than 8% this month Rising energy prices pushed the CPI inflation rate up to a 40-year high of 7.9% in February and, given the spike in crude oil and gasoline prices since Russia's invasion of Ukraine, it will climb well above 8% …
10th March 2022
Jump in inflation to prompt rate hike Egypt’s headline inflation rate climbed to a near three-year high of 8.8% y/y in February and it will continue to increase over the coming months on the back of soaring global food and energy prices, as well as the …
No let-up in housing market activity The February RICS residential survey continued to point to resilience in UK housing markets. New enquiries remained strong and, while there is some evidence that supply constraints may be easing at last, the number of …
Panic buying and flatlining production to send stocks even lower Crude stocks in the US continued to fall last week and are now at a multi-year low for this time of year. The sharp drop in product stocks points to panic buying by consumers, while domestic …
9th March 2022
Inflation picks up further with sharp acceleration in sight Russian inflation rose to 9.2% y/y in February and, more importantly, the weekly CPI figures up to 4 th March (also just released) show that the collapse in the ruble led to a particularly sharp …
Rising price pressures may prompt more aggressive tightening The rise in Mexico’s headline inflation to 7.3% y/y in February was mainly driven by a jump in the core rate to 6.6% y/y and the fallout from the war in Ukraine will push inflation up further in …
Economy off to a poor start to the year The larger-than-expected 2.4% m/m fall in Brazilian industrial production in January almost fully reversed the gains made towards the end of last year. And taken together with weak surveys for February and possible …
Inflation ticks up amid global commodity price shock Chinese inflation picked up last month, though this was masked in the headline figures by base effects. With commodity prices soaring in response to the war in Ukraine, inflation will rise further in …
Net trade a drag on GDP growth The increase in the trade deficit to a record $89.7bn in January, from $82.0bn, means that net trade is on track to subtract close to 2%-pts from annualised first-quarter GDP growth, which we expect to slow to only 1.5% …
8th March 2022
Goods trade headed for even bigger surplus The goods trade balance moved back to a surplus of more than $2bn in January and, based on the recent broad gains in commodity prices, it is likely to hit close to $5bn this month. If that were sustained, it …
Lending set to rebound after stamp duty related pause While mortgage lending was softer at the end of last year that largely reflected the jolt from the ending of stamp duty discounts. More recent data point to very strong market activity in early 2022 …
Economy weathered Omicron breeze in Q4 South Africa posted decent GDP growth of 1.2% q/q in Q4, shrugging off the Omicron virus wave. While elevated commodity prices will support the economy over the coming months, growth is likely to slow considerably in …
Wage growth will remain around 1% The pick-up in wage growth in January was broad-based. However, with regular pay growth still around 0%, the coming energy-driven surge in inflation towards the BoJ’s 2% target won’t be sustained. The 0.9% annual rise in …
