Net trade to turn into a drag as imports bounce back While it’s early days , the October trade figures suggest that net trade will turn into a drag on GDP growth yet again as imports rebound after the end of lockdowns . The 3.3% m/m drop in export values …
2nd December 2021
US demand still outstripping supply, despite falls US commercial stocks fell as, despite some chunky falls in product demand, US demand is still outstripping supply. Although, the release did shows signs that crude production might finally be responding …
1st December 2021
Patchy start to Q4, but risks loom large Russia’s economy made a mixed start to Q4 as industrial production recovered while retail sales growth slowed sharply. With the country’s severe virus outbreak and low vaccine coverage set to keep virus …
Supply shortages still acute, but no longer worsening The November ISM manufacturing survey suggests that supply shortages are yet to ease significantly, but it does at least echo anecdotal reports that they are no longer getting worse. The slight rebound …
Home purchase demand surges even as mortgage rates rise A rise in mortgage rates to an eight-month high of 3.31% by the end of November failed to dampen home purchase demand, which surged to a nine-month high. The drop in 10-year Treasury yields from the …
Manufacturing rebound threatened by Omicron South Africa’s manufacturing PMI rebounded last month, but the emerging fourth virus wave and the threat from the Omicron variant has clouded the outlook for activity in the sector and the wider economy. Figures …
Supply chain disruptions continue to dominate The manufacturing PMIs in November were surprisingly strong across the board, but with supply chains stretched and the emergence of the Omicron variant clouding the outlook, there are reasons to be sceptical …
Swiss inflation at its peak Inflation surprised on the upside in Switzerland in November, but this was due to temporary factors and it is likely to fall back to below 1.0% over the coming months. The upshot is that there is next to no chance of the SNB …
Still no sign of house price growth cooling House prices recorded another above-consensus gain in November as strong buyer demand bid prices up further. There is little sign of that dynamic changing anytime soon, so we expect the consensus forecast for …
Manufacturing recovery still fragile The jump in India’s manufacturing PMI in November suggests that the recovery is still ongoing, although it appears that global supply shortages have remained a drag. And with vaccination coverage in India still low, …
Another record month, exports to stay elevated in near term Korean export values surged to record highs in November helped by temporary factors but also strong underlying growth. Exports should remain elevated for at least the next few months, helped by a …
Industry improves but rebound likely to prove temporary The Caixin manufacturing index published today slipped under 50 last month on the back of softer domestic demand. This contrasts with the official survey released yesterday. Taken together, the …
House prices to fall in 2023 Housing demand remains very strong, but rising interest rates and lending restrictions should result in a further slowdown in house price growth next year. The 1.1% m/m rise in seasonally-adjusted house prices across the eight …
Post-Delta recovery has further to run November Manufacturing PMIs suggest that the rebound in industry from the Delta wave in South East Asia continued last month, and we suspect it has further to run. The November PMIs released today for eight economies …
GDP growth to keep surprising to the upside With private consumption now rebounding strongly as lockdowns have ended, output in states not affected by lockdowns continuing to rise, and capital spending resilient, we expect GDP to surpass its pre-Delta …
House price growth begins to slow Annual house price growth fell for the first time in 16-months in September, and stretched affordability means it should continue to slow. It is too soon to say what impact the arrival of the Omicron variant will have on …
30th November 2021
Downward revision to Q2 flatters Q3 GDP growth We wouldn’t put too much weight on the stronger-than-expected pace of third-quarter GDP growth because it mainly reflects a downward revision to GDP in the second quarter. Nevertheless, the latest GDP data …
Rapid rebound, but Omicron variant a key downside risk The 8.4% y/y rise in Indian GDP in Q3 (Q2 of FY21/22) is consistent with a rapid q/q rebound as virus restrictions were lifted and activity surged. But timelier data suggest that the recovery has …
Inflation to remain above target for a long time November’s inflation data were yet another surprise on the upside. The Omicron variant has increased the level of uncertainty even further but for now we suspect that it will have a fairly small impact on …
Strong performance, but currency crisis to cause economy to contract in Q4 Turkey’s economy put in another strong performance in Q3 but, as the effects of the recent currency crisis filter through, it is likely to suffer a contraction in Q4. The only …
Easing power shortages provide temporary boost to industry The official PMIs suggest that industrial activity rebounded this month thanks to easing disruptions from power shortages while a renewed virus flare-up held back the recovery in services. And …
Stop-start recovery to continue Korea’s economy is likely to have already rebounded from the downbeat October revealed in activity data today. But prospects for continued improvements have diminished, as a resurgence in virus cases pushes back the …
Employment should rebound from recent slump Employment fell sharply again in October despite the lifting of states of emergency declarations at the start of the month. However, it should rebound sharply across November and December in line with the …
Inflation peaks at 6% and will decline regardless of Covid The increase in German inflation to 6% on the HICP measure was partly due to statistical quirks which should be reversed next month. But even the national CPI measure of inflation rose to 5.2%. …
29th November 2021
Industrial sentiment picks up, but virus outbreaks weigh on services The EC’s Economic Sentiment Indicators for November showed a broad-based rise in industrial sentiment, but services sentiment softened further. With restrictions on activity being …
Development activity rises sharply in October A drop in repayments and rise in development activity resulted in positive net lending in October for the first time since March. Despite this turnaround, credit conditions will remain tight and uncertainty …
Dip in mortgage approvals after stamp duty holiday ends Mortgage approvals remained robust in October after the end of the stamp duty holiday, only easing back into line with their pre-pandemic average. With demand strong, we suspect that mortgage …
Sentiment high before Omicron news Despite the slight deterioration on the month, November’s EC business and consumer survey showed that economic sentiment in the euro-zone was high before the recent news about the Omicron variant. It also confirmed that …
Omicron darkens the outlook for spending The rise in consumer credit in October adds to evidence that economic activity fared well at the start of Q4. But that no longer offers much comfort in light of the discovery of the new Omicron variant. While much …
Spending to keep rising as disruptions start to ease Retail sales kept rising in October despite another drop in motor vehicles sales. With supply disruptions now starting to ease and mobility picking up, they should continue to increase . The 1.1% m/m …
More upgrades to the consensus view, but heavily driven by 2021 The resilience of the commercial property market has led to further upgrades to the IPF Consensus view for this year, albeit still below our forecast. Beyond this year, we are more downbeat …
26th November 2021
Consumption to fully recover from lockdowns this quarter The 4.9% m/m jump in retail sales in October brought them very close to their May peak and supports our view that consumption will reverse nearly all of the plunge during the lockdown this quarter . …
175bp rate hike on the cards The Brazilian inflation reading of 10.7% y/y in mid-November (the same as the October full month figure) provides the first sign that inflation is now stabilising. But with the headline rate still far above target and fiscal …
25th November 2021
Investment to rebound as lockdowns end Private capital expenditure dropped during the recent lockdowns but firms’ forecasts point to a strong rebound over the coming quarters. The 2.2% q/q drop in private capital expenditure in Q3 was broadly in line with …
US demand still buoyant in the face of high prices US commercial stocks rose due to a pre-planned release of reserves and a large drop in exports. But the bigger picture is that product demand remains healthy, adding pressure to a tightening market . The …
24th November 2021
Healthier inventory to support new home sales The marginal improvement in new home sales in October was flattered by a downward revision to September’s data, and the bigger picture is that sales have been fairly steady since May. Looking ahead housing …
Fourth quarter GDP growth to be more than 5% annualised The 0.5% fall in durable goods orders was not as bad as it looked, given that it was entirely due to a fall in volatile aircraft orders. But the bigger news this morning was the huge 10.7% m/m surge …
Banxico tightening likely to remain gradual despite inflation surge The surge in Mexico’s inflation to 7.05% y/y in the first two weeks of November – the highest since 2001 – was partly a result of unfavourable base effects, but underlying price pressures …
Slowdown about to get much worse The fall in the Ifo Business Climate Index (BCI) for November was in line with expectations and suggests that the German economy was struggling even before the recent tightening of Covid restrictions. Things will be much …
Industry set to recover as shortages ease November’s flash PMI points to a rebound in industrial output amidst early signs that supply shortages are diminishing. But while the services sector is now on the mend, the recovery there is lacking vigour . …
Recovery to pick up pace again Revised Q3 GDP data show that Singapore’s economy grew more strongly than first thought last quarter, and while containment measures mean the recovery is unlikely to have gained much momentum so far this quarter, a gradual …
China will remain a drag on global steel output Global steel production contracted again in y/y terms in October, mainly owing to lower Chinese production. China’s output may rebound a little in the coming months as power rationing has come to an end, but …
23rd November 2021
Signs of higher cost inflation add to Bank’s inflation concerns The composite activity PMIs hardly changed in November as the economy held up fairly well despite continued supply disruptions and shortages. Meanwhile, signs that price pressures continued …
Recovery continues, but outlook darkening The unexpected rise in the euro-zone Composite PMI in November suggests that the region’s recovery has not lost further momentum. But with supply shortages still acute, Covid restrictions being tightened and price …
Economy starts Q4 on strong footing The latest data suggest that Poland’s economy started Q4 with solid momentum as industry and retail sales expanded strongly in October. We think that industry will continue to hold up well in the coming months, but …
Home sales to fall back slowly Existing home sales eked out a small gain in October, slowing considerably from last month’s increase. With inventory at a record low, buyer sentiment in a pit and mortgage rates on the rise, we expect sales will fall back …
22nd November 2021
Aluminium output boosted as power rationing in China eases October’s IAI data suggest the easing of power restrictions in China has enabled greater utilisation rates at smelters, driving the global increase in output this month. We think that aluminium …
Exports set to see a strong end to the year Korean export values saw continued strength in the first 20 days of November and should remain elevated in the coming months as exporters work through large backlogs of unmet orders. The timely nature of the …
Supply disruptions, warm weather and reduced policy support weigh on sales The ongoing supply chain disruptions and unseasonably warm weather explain most of the weakness of retail sales in September, but it seems likely that the winding down of fiscal …
19th November 2021
Rebound in retail sales will give Bank of England confidence The rebound in retail sales in October adds to the evidence that activity held up well in October and will raise expectations that the Bank of England will hike interest rates from 0.10% to …
