Chancellor unlikely to get much more help from the economy, for now The winding down of the furlough scheme helped to bring down public sector net borrowing in October. But we doubt that the public finances will get much help from faster GDP growth in the …
19th November 2021
Underlying inflation to continue to disappoint Headline inflation edged down in October despite an acceleration in energy inflation. Hit yet again by weaker mobile phone tariff inflation underlying inflation weakened further into negative territory. We …
Turbocharged recovery to prompt more aggressive hikes The 4.9% q/q surge in Chile’s GDP in Q3 took output not only above its pre-pandemic level but also its pre-crisis trend . The strength of the figures means that we now expect above-consensus growth of …
18th November 2021
Recovery losing steam The drop in Nigeria’s GDP growth to 4.0% y/y in Q3 points to the recovery in activity outside the key oil sector petering out. We think this will continue over the coming quarters, weighing on headline growth even as oil output …
The big picture is still one of healthy US demand The latest weekly data show falling crude and petroleum product inventories and a jump in implied demand. The strength in demand is somewhat surprising given the rise in gasoline prices, but we suspect …
17th November 2021
Softer rise in GDP, growth likely to slow further in Q4 The softer-than-expected 4.3% y/y expansion in Russia’s GDP in Q3 suggests that the recovery lost momentum during the summer and, with the severe virus outbreak likely to take its toll on domestic …
Further rise in inflation mainly due to energy prices Inflation rose to an 18-year high of 4.7% in October but, as this was driven primarily by higher energy prices and was in line with the Bank of Canada’s forecast, it is unlikely to shift the timing of …
Single-family starts drop again, but signs of hope in permit data Single-family starts dropped for the fourth consecutive month in October to a 15-month low. But we expect starts will soon turn the corner. New home demand is strong, lumber prices have …
GDP probably fell in Q3 despite activity rebounding following July hit South Africa’s hard activity data for September point to output continuing to rebound in the sectors hardest hit by violent unrest in July. But the economy probably still contracted …
Inflation to stay above 2% until late 2022 October’s euro-zone inflation data confirm that core price pressures are weaker than in other advanced economies. That said, we think headline inflation will remain above 2% until late 2022. Data released today …
Stable inflation support case for slow tightening cycle South Africa’s headline inflation rate stayed at 5.0% y/y in October, with underlying price pressures remaining soft. That, combined with the fragile economic recovery, supports our view that the …
Bank unlikely to ignore this leap in inflation When coupled with yesterday’s decent labour market release, the bigger-than-expected leap in CPI inflation in October makes an interest rate hike in December even more likely. That said, we still think the …
Wage growth will firm up next year putting pressure on the RBA The 0.6% q/q rise in the wage price index in Q3 will provide the RBA with some confidence that rates need to remain low in the near term. But we think that wage growth will rise over 2022, …
Car exports set for rapid rebound The recovery in exports in October suggests that supply shortages were beginning to ease in the automobile sector. We think that the rebound in exports will pick up pace over the coming months as production at Japanese …
Economy roaring back to life The stronger-than-expected 5.7% q/q jump in Colombia’s GDP in Q3 more than offset the setback in Q2, and took output 2.6% above its pre-pandemic level. While the recovery will slow from here, we now expect above-consensus GDP …
16th November 2021
Supply chain woes unlikely to ease quickly The strong 1.6% m/m rebound in industrial production in October came as the unwinding of earlier hurricane-related disruption and a partial recovery in motor vehicle production boosted manufacturing output. But …
Spending on goods rebounds, but services subdued The 1.7% m/m rise in retail sales in October, driven by a similarly strong increase in underlying control group sales, suggests that real consumption will rebound to between 3% and 4% annualised in the …
Growth slows sharply as the re-opening boost fades in Q3 Israel’s economy slowed much more sharply than expected in Q3 as a shift in consumption habits away from goods and a fading of the re-opening boost to services caused a marked slowdown in …
Pace of recovery to slow The decent increase in euro-zone GDP in Q3 means that the recovery is now almost complete in most of the region. We had already expected growth to slow markedly in Q4 as the boost from reopening fades and supply chain disruption …
Recoveries fading as supply chain disruptions take their toll The Q3 GDP data for Central and Eastern Europe (CEE) generally undershot expectations and suggest that economies entered Q4 with a clear loss of momentum. With supply disruptions set to persist …
Market remains tight after the end of furlough This labour market release is the first of two before the Bank of England’s December policy meeting and it suggests that the labour market remained tight after the furlough scheme ended. If the story is …
Inflation loses its momentum in October The much-weaker-than-expected rise in consumer prices in Israel in October was due to a sharp fall in airfares, but the big picture is that underlying inflation pressures generally remain soft. We don’t think the …
15th November 2021
Cuts to motor vehicle production weigh heavily on manufacturing sales The renewed closures of auto plants weighed heavily on manufacturing sales in September. While many factories re-opened again this month, there is still a chance that overall …
Inflation continues to ease The fall in the headline inflation rate in Nigeria to 16.0% y/y in October will bolster the case for policymakers to keep their benchmark interest rate on hold in order to support the economic recovery. Figures released today …
Something, at last, for the Riksbank to ponder CPIF inflation rose to a 15-year high in October, although the headline rate was just half that reached in the US, for example, and the core rate remained below 2%. Policymakers won’t be losing sleep just …
WPI inflation will peak soon The jump in headline wholesale price inflation in October was due almost entirely to higher commodity prices, but we think they are now close to peaking. While the RBI will be wary that wholesale prices remain elevated, …
Inflation to drift higher, but remain subdued Saudi inflation edged higher to 0.8% y/y in October and will probably continue to drift upwards over the coming months. Overall, though, we expect price pressures to remain subdued, at 1.0-2.0% over the course …
Disruption in industry eases as energy shortages dissipate Industrial growth rebounded last month as energy shortages eased. But this pick-up is likely to be short-lived given the deepening downturn in property construction. And while retail sales also …
Economy to rebound in Q4, but recovery will slow thereafter Thai GDP shrank in the third quarter after the government tightened restrictions and, while the economy should bounce back strongly in the fourth quarter, the speed of the recovery beyond the end …
Domestic demand to bounce back strongly While the economy contracted yet again in Q3 as supply shortages and the Delta wave softened domestic demand, output should now be rebounding sharply. With most domestic restrictions removed, we expect GDP to regain …
Lending set for strong finish to the year Outstanding real estate debt increased for the fifth consecutive month in October, driven by positive net lending in both residential and commercial real estate (CRE) sectors. We think that this reflects the rapid …
12th November 2021
Rise in inflation keeps it still well within RBI target range India’s consumer price inflation edged up in October but remained well below the 6% ceiling of the RBI’s inflation target range. And we expect it to stay there for several months yet, which …
Manufacturing will face a tough Q4 The second successive monthly decline in industrial production, in September, means that production was unchanged in Q3 compared to Q2. As supply-chain difficulties are likely to persist for some time, the outlook for …
Another strong rise in GDP, inflation pressures to persist The solid 2.1% q/q rise in Poland’s GDP in Q3 took the economy to almost 3% above its pre-pandemic level, marking one of the strongest recoveries across Europe. But capacity constraints are …
Another strong performance in Q3, but downside risks mounting Turkey’s activity data for September were the proverbial mixed bag with industrial production falling back but retail sales putting in another robust performance. On balance, the data suggest …
Economy already rebounding strongly after tough third quarter Malaysia’s economy shrank further in Q3 but was already rebounding sharply by the end of the quarter. With vaccinations high, virus cases down and restrictions being eased, this rebound will …
Auto slump drags down industry The surprise 1.4% m/m drop in Mexican industrial production in September in large part reflects auto sector woes and suggests that the flash Q3 GDP estimate of -0.2% q/q may be revised down. This release adds to our view …
11th November 2021
New-found momentum will soon fade The economy regained some momentum in September, but continued shortages and the drag on real incomes from higher utility prices probably mean it will soon fizzle out. That’s one reason why we doubt that the Bank of …
Market remains tight after stamp duty holiday Rather than representing a “rush before mortgage rates rise”, we suspect that the rise in new buyer interest in October will prove durable. With inventory very limited, that points to house prices rising by …
Unemployment rate to fall again in the months ahead The rise in the unemployment rate suggests that the labour market continued to suffer right up until the end of the recent lockdowns. But given the ending of lockdowns in mid-October we expect the …
Crude stocks rise for a second week but will remain low for a while Crude oil in commercial storage rose last week for the second week on the trot, helped by a planned release of strategic reserves. But the big picture is that stocks remain low by past …
10th November 2021
Inflationary pressures building throughout the economy The 0.9% m/m surge in consumer prices in October illustrates that the upward pressure from supply shortages remains intense and that, even when those effects eventually fade, rising cyclical pressures …
Risk of an even larger rate hike growing The larger-than-expected jump in Brazilian inflation, to 10.7% y/y, last month, coming alongside a rise in inflation expectations and continued fiscal risks, increases the likelihood that Copom ups the pace of …
Slowdown in credit growth may be over Broad credit growth levelled off in October having previously decelerated to its slowest pace since December 2005. There are some signs that PBOC policy is turning more supportive in response to strains in the …
Inflation to remain elevated over the coming months Egypt’s headline inflation rate eased to 6.3% y/y in October and is likely to remain around 6.0-6.5% over the rest of this year and in early 2022. Against this backdrop, we think the Central Bank of …
Close to the peak The breakdown of October’s inflation data confirms that most of the increase, from 4.1% in September to 4.6% on the HICP measure, was due to higher energy prices. We suspect that inflation will edge up a bit further before year-end but …
Subdued core inflation will not deter the Norges Bank The fact that the Norges Bank’s target measure of inflation fell to below 1% in October and is likely to remain at around this level until early 2023 will not stop policymakers from pressing on with …
Factory gate inflation reaches another high Producer price inflation continued to surge and reached a new high last month. But this largely reflects temporary disruption in a handful of industries from energy shortages, which are already easing. There are …
Another 25bp rate hike on the cards The rise in inflation in Mexico to 6.2% y/y in October paves the way for another rate hike at the central bank’s meeting on Thursday. However, the surprise fall in GDP in Q3 will probably keep the pace of tightening …
9th November 2021
Oil sector fuelling the Kingdom’s recovery The Saudi economy expanded by 5.8% q/q in Q3, the fastest pace of growth in over a decade, as the ramping up of oil production drove the recovery. As OPEC+ continues to raise production quotas, remaining virus …
