Industry softer ahead of power shortages The manufacturing PMIs diverged this month. But the big picture is that industry was coming off the boil even prior to the latest power shortages. On a more upbeat note, the official surveys point to a sharp …
30th September 2021
Output may fall across Q3 The sharp falls in both retail sales and industrial production in August indicate that activity weakened significantly at the height of the Delta-driven fifth wave. But while that suggests that the economy may have contracted …
Crude stocks set to remain depressed, despite surprise increase A jump in crude oil production led to the first stock build in eight weeks. However, with output still constrained and demand set to remain strong, stocks are likely to remain low for some …
29th September 2021
Delta variant hits leisure & hospitality jobs in over a third of metros Delta variant fears resulted in leisure and hospitality employment falling in 12 of the 30 metros. Of these, Atlanta, Austin, Charlotte and Dallas were the worst hit. Leisure and …
Sentiment holds up in the euro-zone The small improvement in economic sentiment in the euro-zone in September provides reassurance that supply shortages and the Delta variant will not cause a sharp slowdown in economic growth. Nevertheless, price …
Broad based decrease in net lending Net lending to property decreased for the third consecutive month in August, driven by falls in both lending for standing investment and development. Looking ahead, we think that tight credit conditions and the slow …
Increase in mortgage size another sign of resilient demand While still above pre-COVID-19 levels mortgage approvals edged down in August, suggesting no great rush to move before the stamp duty holiday taper ends at the end of September. But an increase in …
Sentiment falls again as recovery comes off the boil The continued fall in the EC’s Economic Sentiment Indicators for September provides further evidence that the regional recovery in Central and Eastern Europe has slowed in Q3 as supply disruptions have …
Risk that the economy will take a small step back The tepid increase in consumer credit in August provides more evidence that the economy didn’t regain much momentum after stagnating in July. And with the current fuel crisis restraining activity (outside …
Huge hit to growth, but the worst is now over GDP data reveal that Vietnam paid a heavy economic price in efforts to control the virus this quarter, but monthly activity data at least suggest that the worst is over and that a recovery is now underway. The …
House price growth reaches new records Annual house price growth set another record in July as low mortgage rates, past stimulus payments and a tight market drove values higher. But there are tentative signs that the market is beginning to cool, and the …
28th September 2021
Business equipment investment still growing rapidly The 1.8% m/m rise in durable goods orders in August was due to the ongoing rebound in commercial aircraft orders together with solid growth in underlying capital goods orders, with the latter reflecting …
27th September 2021
New home sales rise as supply improves An improvement in inventory helped new home sales rise for the second consecutive month in August. Admittedly, overall housing demand has eased in recent months and a rise in mortgage rates argues against a rebound …
24th September 2021
Inflation spike to prompt another large hike in October The increase in Brazilian inflation to 10.1% y/y in the middle of September means that another large hike in the Selic rate at the Copom meeting next month is nailed on (we expect a 100bp hike to …
A disappointing end to Q3 The third successive decline in the Ifo Business Climate Index in September provides further evidence that Germany’s recovery is losing steam, as supply chain difficulties persist and the surge in gas prices piles additional …
Services recovering, manufacturing struggling September’s flash PMIs suggest that while the services sector is bouncing back as the delta wave has ebbed, the manufacturing sector is suffering from weaker demand and mounting supply shortages . According to …
Inflation to peak at +1.0% y/y Headline inflation stayed negative in August as a boost from Go To Travel base effects was offset by a major drag from fresh food inflation. But looking through one-off factors such as Go To and April’s mobile phone tariffs …
Fall in retail sales not as bad as it seems Retail sales fell in July, but that was mainly because consumers switched back to spending on services as the coronavirus restrictions were eased. In any case, the preliminary estimate suggests that retail sales …
23rd September 2021
High prices failing to boost steel supply, at least so far Despite high prices, global steel output contracted in August. And given that the authorities in China are proactively encouraging lower output there, further falls in the coming months appear …
High inflation to keep Banxico in tightening mode The renewed rise in Mexican headline and core inflation in the first two weeks of September, to 5.9% y/y and 4.9% y/y respectively, ensures that Banxico will continue its tightening cycle at its meeting …
Weaker activity and rising inflation may make life tricky for the MPC The small fall in the composite activity PMI in September indicates that the economy lost a little more momentum. But at the same time, there were clear signs that price pressures have …
Supply shortages hamper growth, exacerbate price pressures September’s PMIs suggest that the pace of recovery slowed further at the end of Q3, in part as the euro-zone economy approaches its pre-virus size but also as supply shortages continue to bite. …
Few signs of exports softening Korean export values are set to have another strong month in September. Large backlogs of orders are likely to keep exporters busy for many months to come. The timely nature of the Korean trade data makes them a good …
Declines in crude stocks seem unlikely to reverse any time soon US crude stocks have continued to fall as refinery activity has so far recovered faster than crude output following Hurricane Ida. And with demand already broadly back to pre-pandemic levels, …
22nd September 2021
Home sales drop back as booming prices shut out first-time buyers Existing home sales dropped back in August as booming house prices and a lack of affordable inventory shut out first-time buyers. A small recovery in home purchase mortgage demand suggests …
Policymakers to remain dovish despite rise in inflation South Africa’s headline inflation rate picked up to 4.9% y/y in August but the temporary factors behind the rise are unlikely to worry policymakers. Subdued core price pressures and the slow economic …
Strong multifamily performance pushes up starts A boom in multifamily construction has supported housing starts in recent months, with multifamily building permits rising to a 31-year high. On the single-family side, homebuilders have reported strong …
21st September 2021
Recovery losing steam Poland’s economy appeared to lose steam in August amid signs that global chip shortages started to weigh on industrial output and retail sales failed to reverse a dip in July. We still think that GDP will rise by a robust 1.5% q/q …
Borrowing undershoot won’t stop the Chancellor unwinding the fiscal boost August’s public finances figures provided further evidence that the government’s financial position isn’t as bad as the Office for Budget Responsibility (OBR) predicted back in …
Aluminium output still growing despite China fears August’s IAI data suggest that fears that power rationing in Chinese smelting hubs would negatively impact supply, which have boosted aluminium prices to decade highs, are overdone. Instead, we think that …
20th September 2021
Upside risks to inflation are building Rising costs – from shipping to energy – are likely to push euro-zone inflation up even further in the coming months. They might also mean that it doesn’t fall quite as quickly next year as we currently assume. But …
17th September 2021
Retailers struggle as households spend elsewhere The fourth consecutive fall in retail sales in August isn’t as bad as it looks as some of it reflects households spending more on non-retail items as life returns closer to normal. But as non-retail …
Delta playing havoc with the spending data Even though the 0.7% rise in headline retail sales in August was much better than expected, the details were far less positive, with big downward revisions to previous months, while the rise in online and grocery …
16th September 2021
Labour market to approach full employment by end-2022 Employment plunged by 1.1% m/m in August, but we still think that the unemployment rate won’t surpass it pre-Delta level over the coming months even as the participation rate rebounds . The 146,300 …
Japan’s exports set to surpass pre-GFC peak before long Today’s trade figures suggest that export volumes kept rising and we think that Japan’s focus on cars and machinery means that they will hold up better than in other Asian economies . The 26.2% y/y …
Plunge and a rebound ahead The strength in activity in Q2 was partly driven by the travel bubble which burst in Q3 as New Zealand went into lockdown. While we expect domestic demand to recover toward the end of the year, services trade may not rebound as …
Hurricane Ida continues to distort the data There were hefty falls in both crude and petroleum product stocks, reflecting closed production capacity due to damage caused by Hurricane Ida. Implied gasoline demand also dropped back but it is impossible to …
15th September 2021
Ida and Delta likely to cause further slowdown in September The 0.4% m/m rise in industrial production in August lifted it back above its pre-pandemic peak, but was nevertheless weaker than we had expected and suggests that the industrial recovery is …
Further rise in inflation mainly due to supply disruptions Inflation rose by more than expected last month but, with the gain mainly due to the ongoing supply disruptions, the Bank of Canada will remain comfortable with its view that elevated inflation is …
Wage pressures not quite as weak as Q2 data suggest The sharp fall in euro-zone average hourly labour costs in Q2 compared to a year earlier was mainly due to pandemic-related distortions to the data that will continue to muddy the picture for another …
Growing evidence of sustained drop in price pressures The drop in the headline inflation rate in Nigeria, to 17.0% y/y in August was, once again, driven by easing food price pressures, although core inflation also eased. This is likely to reassure …
Inflation set to remain subdued Saudi inflation edged down to 0.3% y/y in August and is likely to remain around this level over the coming months. We think that inflation will pick up to 1.0-1.5% y/y in 2022-23, although the possibility of a VAT cut …
Climb in inflation towards 4.5% to be an uncomfortable ride for the MPC The leap in CPI inflation from 2.0% in July to a nine-year high of 3.2% in August (consensus 2.9%, CE 3.1%) is the first step in a rise that may take inflation to 4.5% or above by …
Delta wave hit bigger than expected The hit to service activity from last month’s virus outbreak was even larger than we, and other forecasters, had anticipated. The rest of the economy held up better, although the headwinds facing the property sector …
Business investment to continue rapid recovery The rise in machinery orders in July and optimistic projections for August and September support our view that business investment will rise strongly again across Q3. And private investment should continue to …
Signs that re-opening inflation is fading The rise in Israeli inflation to an 8-year high of 2.2% y/y in August was partly driven by a chunky rise in housing costs, but there are signs that “re-opening inflation” in services has run its course. We think …
14th September 2021
Delta puts reopening inflation into reverse The more modest 0.1% m/m increase in core consumer prices in August will be heralded as a sign that the recent surge in inflation was transitory after all but, although the spread of the Delta variant has put …
Manufacturing sales volumes likely to remain depressed for rest of year Manufacturing sales fell in July and the renewed closures of auto plants across the continent, and the recent falls in some commodity prices, mean they are unlikely to recover …
Surge in home moving pushes lending up to post-financial crisis high The further surge in mortgage lending to a fresh post-financial-crisis high and booming house prices begs the question whether there is over-exuberance in the housing market. But as the …
Stronger inflation to change the conversation at the Riksbank The stronger-than-expected pick-up in Swedish headline inflation in August ups the ante for the Riksbank ahead of next week’s policy meeting. While repo rate hikes are low down on policymakers’ …
