Ending Q4 on a weak note The renewed decline in the Composite PMI in December suggests that growth slowed to a crawl as tighter restrictions and growing consumer caution are taking their toll on economic activity, with the service sector bearing the …
16th December 2021
Labour market strength points to early end to RBA bond purchases The remarkable recovery in Australia’s labour market following the recent lockdowns suggests that the Reserve Bank of Australia will end its asset purchases altogether in February. The …
Rebound in exports has further to run The jump in exports in November suggests that most supply chain constraints in the automobile sector had already eased last month. We think that exports will remain strong over the coming months as motor vehicle …
Activity already rebounding The fall in New Zealand’s output in Q3 will have partially unwound in Q4 as lockdowns were gradually eased. And the fact the fall in GDP was much smaller than the RBNZ’s forecast supports our view that the Bank will lift …
15th December 2021
Upcoming SPR releases could put a floor under commercial stocks Commercial crude oil stocks slumped last week as domestic demand strengthened and exports jumped. The decline in commercial stocks also came as strategic petroleum reserves fell. In the final …
Shortages partly explain weak start to Holiday season With prices rising sharply last month, the muted 0.3% m/m rise in retail sales values suggests that consumption was little changed in real terms. That won’t stop the Fed from accelerating the pace of …
Underlying inflationary pressures still mounting Consumer prices rose at a more modest pace in November, but the increase in the Bank’s preferred measure of core inflation suggests that price pressures are broadening. Inflation was unchanged at 4.7% in …
Inflation to pick up a little further Saudi inflation rose to 1.1% y/y in November, and is likely to increase further through the first half of next year. Even so, we expect price pressures to remain subdued, at 1.0-2.0% over the course of 2022-23, …
Inflation rises, but SARB likely to hold fire in January South Africa’s headline inflation rate rose to a slightly stronger-than-expected 5.5% y/y in November but, with core price pressures remaining soft and the economy struggling even before the latest …
Inflation close to being further above the target than ever before Inflation is close to being further above the target than at any point since the UK started targeting inflation in October 1992. This makes tomorrow’s interest rate decision look closer, …
Virus disruptions and property downturn continue to hold back economy Industry in China continued to rebound last month from disruptions caused by power shortages while the recovery in services activity was held back by renewed virus outbreaks. A new …
Industry has better start to Q4, but supply problems persist The rise in euro-zone industrial production in October means euro-zone industry started Q4 on a decent note. But supply-chain problems remain acute and, in any case, any improvement is likely to …
14th December 2021
More fodder for the Riksbank’s hawks The increase in Swedish CPIF inflation in November strengthens the hand of the hawks at the Riksbank and supports our view that policymakers will reduce the size of the balance sheet next year. But with energy effects …
Furlough fears fading, COVID-19 concerns climbing Even though the fallout after the furlough scheme was smaller and shorter than the Bank of England had feared, concerns over the deteriorating COVID-19 situation will probably prevent it from raising …
WPI inflation surges to record high Indian wholesale price inflation unexpectedly jumped to a record high in November. And given the mounting upside risks to the inflation outlook, there is a growing chance that the RBI brings forward the start of its …
Commercial property lending maintains momentum Commercial real estate debt recorded its largest gain in November since the onset of the pandemic. And with investment volumes on track for a record-breaking year, we expect lending activity to remain …
13th December 2021
Inflation risks are building India’s consumer price inflation rose to a three-month in November and upside risks to the outlook are mounting. While we still think the RBI won’t raise policy rates until the middle of next year, a sharp rise in food price …
Strong start to Q4, but currency crisis to hit activity before long Turkey’s industrial production and retail sales data for October suggest that the economy made a strong start to Q4, but these predate the recent currency crisis and we think the economy …
Services catch-up has further to run The Q4 Tankan survey showed that the services sector has started to narrow the gap relative to manufacturing and we think that process has further to run. The headline index for large manufacturers stalled at 18, which …
Inflation hits near 40-year high Consumer prices rose by 0.8% m/m in November, taking the annual CPI inflation rate up to a near 40-year high of 6.8% but, with energy prices falling sharply in recent weeks, last month probably marked the peak. The same is …
10th December 2021
Auto sector leads a small rebound The small 0.6% m/m rise in Mexican industrial production in October was helped by a rebound in auto production, suggesting the sector may be starting to turn a corner. However, the risk of further global supply …
Early signs of stabilisation The slightly softer-than-expected Brazilian inflation figure, of 10.7% y/y, isn’t going to stop Copom from hiking the Selic rate by another 150bp (to 10.75%) when it meets in early February. But it does provide a sign that …
Energy effects to subside next year Headline inflation reached a 13-year high in November, mainly driven by energy inflation. But the core rate was more subdued and is likely to remain below the Norges Bank’s target throughout 2022. The rise in headline …
Touch-and-go whether economy grows or contracts in December The news that the economy was hardly growing at all before Omicron means it is touch-and-go whether it will grow a bit in December or shrink a bit. Against that background, we doubt the Bank of …
Inflation hits 20-year high but another 25bp hike still likely The rise in Mexico’s headline inflation to a 20-year high of 7.4% y/y in November will be a concern for Banxico. But it was partly driven by unfavourable base effects which will soon unwind. …
9th December 2021
Recovery on the back foot even before emergence of Omicron South Africa’s hard activity data for October confirm that the economy was struggling even before the emergence of a fourth virus wave, which will probably dampen activity further. In light of …
A turn in the credit cycle Broad credit growth edged up for the first time in nine months in November. Given increased policy support we think the recent slowdown in lending has come to an end. But we think officials will seek to avoid a sharp rebound in …
Inflation drops, although CBE won’t ease policy yet Egypt’s headline inflation rate dropped to 5.6% y/y in November and, while we think inflation will rise in the coming months, it is likely to be at the lower end of the central bank’s 7±2% target range …
Continued strength suggests upside to prices in 2022 There was no sign of any let up in the house price boom in November as new buyer enquiries rose again. Another strong survey also suggests that the market could continue to run hot for some time, …
Food aside, price pressures are easing Consumer price inflation rose above 2% for the first time in over a year last month. But this was almost entirely due to food prices. Core inflation remains subdued and producer prices have levelled off. CPI rose …
US demand remains healthy, for now US commercial stocks remained range-bound, but there were sizeable additions to stocks of petroleum products. That said, implied product demand remains solid, despite rising new COVID-19 infections. Unless travel …
8th December 2021
Another 75bp hike on the cards next week The rise in Russian inflation to 8.4% y/y last month reinforces our view that the central bank will hike the one-week repo rate by 75bp (to 8.25%) when it meets in December – that’s a larger hike than the current …
Restart of motor vehicle production boosts trade The restart of motor vehicle production across the continent boosted Canada’s exports and imports sharply in October, although there are downside risks to trade in November due to the infrastructure damage …
7th December 2021
Net trade to provide big boost to Q4 GDP growth The 8.1% m/m surge in exports in October means that net trade is on course to add about 1% point to fourth-quarter GDP growth, which we think will be 6.5% annualised, and provides more evidence that global …
Multi-year high inflation will prompt further aggressive hikes The further rise in Chile’s inflation to 6.7% y/y – the highest rate since late 2008 – will keep pressure on the central bank to deliver further aggressive monetary tightening. We expect …
New Covid wave and supply shortages weighing on economy Data released today show that the euro-zone economy recovered to within 0.5% of its pre-pandemic level in Q3. But with Covid cases rising, governments tightening restrictions, and supply problems …
Economy to remain depressed following Q3 hit South Africa’s GDP contracted by 1.5% q/q in Q3 as violent unrest and a third virus wave hit the economy hard, and more recent data suggest that activity remained depressed even before the latest rise in …
Partial recovery in auto sector lifts output The rebound in auto output in October means that aggregate industrial production may increase in the fourth quarter. But with the services sector being hit hard by new Covid restrictions, it seems likely that …
Quarterly growth takes further step up to post-GFC high The Halifax house price index suggests that not only did the end of the stamp duty holiday fail to dent the market, but that house price growth has since accelerated to a post-financial crisis high. …
Shipments strengthen but Omicron injects uncertainty Exports and imports beat expectations last month thanks to stronger demand and easing semiconductor shortages. In the near-term, the emergence of the Omicron variant is likely to support demand for …
Wage growth to regain momentum Wage growth stayed weak in October but it should accelerate as the labour market tightens and the recent vaccine-led reopening allows a full recovery in overtime and bonus payments. Meanwhile, the rise in household spending …
PMI points to improvement, as constraints fade slightly The construction PMI rose for a second-consecutive month in October, to its highest level since July. However, we expect continued labour and supply shortages to hamper output in the near term. While …
6th December 2021
Employment growth stumbles, but details more positive The disappointing 210,000 gain in non-farm payrolls in November suggests the labour market recovery was faltering even before the potential impact of the new Omicron variant, possibly due to the rising …
3rd December 2021
Surge in employment makes April rate hike increasingly likely The surge in employment in November and the further strong gain in average earnings have arguably tipped the odds in favour of the Bank of Canada hiking interest rates in the first half of next …
Early signs of another contraction in Q4 The surprise 0.6% m/m fall in Brazilian industrial production in October and weakness in the surveys for last month provide early evidence that the contraction in the economy last quarter may be followed by another …
Consumption set for a weak Q4 Euro-zone retail sales have levelled off since June, but rising Covid cases and the return of restrictions are likely to weigh on sales and other components of consumption in the coming months. October’s 0.2% m/m increase in …
Inflation rises again, set to breach 25% soon The rise in Turkey’s headline inflation rate to 21.3% y/y in November will almost certainly be followed by further chunky increases over the coming months that take it to 25-30% as the effects of the recent …
Office jobs fully recovered in 17 metros; easing virus cases benefit the South The easing of the Delta wave of infections in the South boosted leisure & hospitality hiring in October. Meanwhile, office-based jobs rose in all 30 metros, following …
2nd December 2021
In recession despite re-opening The 0.1% q/q fall in Brazilian GDP in Q3 confirmed that problems in the agricultural and industrial sectors tipped the economy into a technical recession. And with financial conditions tightening, the terms of trade …
Covid situation casts doubt on further labour market gains While labour market conditions continued to improve in October, the recent deterioration of the Covid situation and increased uncertainty due to the Omicron variant are likely to mean the recovery …
