Inflation jumps again, but CBRT unlikely to respond with rate hike The further jump in Turkey’s headline inflation rate to 19.0% y/y in July is unlikely to trigger an interest rate hike but it will delay the start of an easing cycle until the back end of …
3rd August 2021
Supply problems no longer getting any worse The further small decline in the ISM manufacturing index in July probably has more to do with the continued drag from supply constraints than waning demand. The details did at least suggest that supplier …
2nd August 2021
PMI points to heavy blow to manufacturing sector from unrest and lockdown South Africa’s manufacturing PMI tanked in July as activity was hit by violent unrest and tighter virus containment measures. And while activity is likely to rebound this month, …
Supply disruption weighing on output in Czechia and Poland The PMIs for July suggest that supply chain disruptions weighed on output in Czechia and Poland and continued to put upward pressure on prices. Meanwhile, the releases suggest that manufacturing …
Re-opening inflation peak appears to have passed While inflation in Switzerland is likely to rise further in the coming months, the anticipated bout of re-opening inflation may have already passed, and the SNB will not be fazed. The slight pick-up in …
Manufacturing recovery underway The sharp rebound in India’s manufacturing PMI in July adds to evidence that the economy has been staging a strong recovery ever since the second virus wave receded. But with vaccine coverage still low, sustained …
Economy struggling to gain further ground The latest surveys suggest that the pace of growth slowed more than expected last month. Supply bottlenecks remain a constraint. But the PMIs suggest demand is cooling too, taking the heat out of price gains and …
Exports are levelling off, but few signs of a pullback yet July data add to evidence that Korean exports are plateauing, after reaching very high levels. While we expect some softening ahead as final demand weakens a touch, a sharp pullback in exports is …
Increasingly fraught industry conditions The July PMIs for Emerging Asia point to sharp contractions in manufacturing in those places worst affected by the virus. With outbreaks likely to remain a key headwind for months to come, the rapid growth in …
House prices boom not over yet House prices are continuing to surge and forward indicators suggest the upswing has a little further to run. Even so we think house price growth will slow in 2022. Across the eight capital cities, house prices rose by 1.6% …
Growth to accelerate following second-quarter expansion of 2.5% The monthly data suggest that GDP expanded by 2.5% annualised in the second quarter, despite the lockdowns in April and May, and the likely 0.7% m/m gain in June will provide a strong …
30th July 2021
The industrial recovery is underway India’s core infrastructure industries index rebounded in seasonally-adjusted m/m terms in June, suggesting that an industrial recovery is well underway. The core infrastructure industries index measures output in …
Robust Q2 but recovery to slow from here The re-opening of Mexico’s economy caused GDP growth to accelerate to 1.5% q/q in Q2, and we suspect that this preliminary figure will be revised up. But with new virus cases rising sharply, the economy is likely …
Southern rebound lifts euro-zone GDP After increasing more than expected in Q2, thanks to strong growth in the southern economies, euro-zone GDP should expand rapidly again in Q3 as core economies close in on their pandemic levels. The 2.0% q/q increase …
Inflation to rise above 3% but will fall back next year Euro-zone inflation resumed its upward trend in July and we expect it to rise further in the remainder of the year. But this is largely due to temporary factors, which should fade in 2022. The …
Recovery took a leg down in Q2 due to export decline Hong Kong’s economy contracted last quarter as exports moderated after an exceptional Q1. The path of output is likely to remain subdued until Hong Kong’s borders reopen. After soaring 5.4% q/q in Q1, …
Taiwan’s economy only contracted slightly last quarter despite a major COVID outbreak, as strong exports cushioned the blow. Large backlogs of orders should keep exports elevated which, alongside a recovery in private consumption, will set the scene for a …
Weaker-than-expected rebound as economy re-opens The disappointing 0.6% q/q expansion of Czech GDP in Q2 suggests that industry may have fared worse than expected as input shortages took a greater toll on output. With virus restrictions easing further …
Activity to recover further despite Delta blip Retail sales, industrial production and employment all rebounded strongly in June, pointing to a sizeable recovery in activity in between the Alpha- and Delta-driven coronavirus waves. That supports our view …
Market sentiment rebounds, while office picture brightens Improvements in occupier demand boosted market sentiment in Q2. With over half of surveyors perceiving the property cycle to be in an upturn, prospects for H2 performance look solid. But while we …
29th July 2021
Economy surpasses pre-pandemic size, but recovery slowing The relatively disappointing 6.5% annualised gain in second-quarter GDP, which was well below the consensus at 8.5%, included unexpected declines in government spending and residential investment, …
Take-off in German inflation to be temporary The increase in German inflation to nearly 4% on the CPI measure was partly due to last year’s VAT cut and partly due to rising energy and food inflation, all of which should prove short-lived. Inflation is …
Office and retail pessimism eases, while industrial sentiment still buoyant Surveyors indicated that both occupier demand and investment enquiries improved in Q2 on the back of stronger industrial activity. Looking ahead, expectations for office and …
Resurgence of virus triggers some rise in consumer caution The money and credit data showed that consumers were willing to take on more debt in June. However, with consumers accumulating excess savings at a faster pace, there were signs that the …
Sentiment drops back, price pressures building The EC’s Economic Sentiment Indicators showed a surprising fall in regional sentiment in July, but we suspect that this was a blip rather than the start of a trend. We still expect growth to be strong in Q3, …
Recovery still going strong Economic sentiment in the euro-zone continued to improve in July as restrictions were lifted further. The EC Survey also showed that persistent input shortages are causing price pressures to grow across all sectors. That said, …
Net lending falls sharply as repayments rise As the economic recovery gathers pace, lenders have been less willing to grant further payment holidays to landlords and a rise in repayments probably explains the sharp decline in net lending in June. Looking …
Rush for stamp duty relief drives borrowing to record high A surge in borrowing ahead of the tapering of the stamp duty holiday in July saw new mortgage lending set a fresh record high. Meanwhile, robust mortgage approvals pointed to activity remaining …
Swedish GDP growth set to accelerate further in Q3 The 0.9% q/q increase in Swedish GDP in Q2 was a touch weaker than our forecast (+1.0%) but stronger than the consensus (+0.7%). While the best of the rebound in the industrial sector may be behind us, …
Russia’s recovery continues at a solid pace in Q2 Russian activity data for June showed that the economy expanded at a solid pace in Q2, with overall GDP probably returning to just shy of its pre-pandemic level. While the re-opening boost will fade in Q3, …
28th July 2021
Build in crude stocks looks to have been a blip US commercial crude stocks resumed their downward trend last week. With domestic output still well below pre-virus levels and product demand likely to rise, we think crude stocks will fall further from here …
Office-based jobs return to pre-pandemic level in nearly a third of metros Employment growth accelerated in June, helping office-based employment return to pre-pandemic levels in almost a third of metros. But the 3m/3m growth rate in total employment was …
Inflation to rebound soon Consumer prices increased only marginally in June but, as firms’ selling price expectations are currently very elevated, we continue to expect inflation to rebound back toward 4% soon. The consumer price index rose by just 0.1% …
House prices lose a little momentum The drop back in the Nationwide house price inflation in July suggests that the tapering of the stamp duty holiday has taken a little heat out of the market. But as the tax break was just one of many factors that have …
Inflation will keep surprising to the upside Most of the surge in inflation in Q2 was driven by base effects that will unwind over the next couple of quarters, but we think that inflation will remain stronger than the RBA is anticipating. The 0.8% q/q …
Q2 returns point to investors becoming increasingly aggressive on pricing All-property total returns strengthened again in Q2, reflecting improvement in all sectors. Industrial returns set a new quarterly record for the sector, while office and retail …
27th July 2021
House price growth continues to boom, but slowdown on the horizon House prices showed no signs of slowing in May, with annual growth setting new records on both the Case-Shiller and FHFA measures. But with housing demand falling back since the start of …
Equipment investment growth set to remain above trend The June durable goods data were a little weaker than we had expected, but the further rise in underlying orders suggests that business equipment investment growth is slowing only gradually. The 0.8% …
Korea’s recovery looks set to continue in the quarters ahead after GDP rose further above its pre-crisis level in Q2. Provided the economy proves relatively resilient to the latest wave of the virus, as we expect, a rate hike from the Bank of Korea is …
Supply constraints push new home sales to 14-month low New homes sales dropped for the third month in a row in June, as homebuilders restricted sales in an effort to catch-up with the backlog of homes sold last year. But builders have reported continued …
26th July 2021
Economy still on track for strong recovery The small decline in the Ifo Business Climate Index in July suggests that the rebound in Germany may be losing some momentum. But Germany will still post very rapid GDP growth in both Q2 and Q3 and should regain …
Services sector to recover as most seniors now vaccinated Today’s flash PMI suggests that the services sector was hit by Tokyo’s state of emergency but we still expect activity to recover towards the end of this quarter . The services PMI dropped from …
Sales fell again ahead of June rebound Retail sales fell again in May but the preliminary estimate suggests they rebounded strongly in June as non-essential stores re-opened. Consumers may transition away from spending on goods as the restrictions on …
23rd July 2021
Inflation jump likely to prompt a 100bp hike The rise in Brazilian inflation to 8.6% y/y in the middle of July means that the headline rate is overshooting the central bank’s latest projections. That’s likely to tip the balance on Copom towards a larger …
Further evidence of a slowdown in China’s steel production Growth in global steel production remained in double digits in June, but this largely reflects the low base for comparison from last year. Meanwhile, government-imposed environmental controls in …
Recovery becoming more tepid The second consecutive decline in the flash composite PMI in July came as no surprise to us as we expected the pace of the economic recovery to naturally slow after the big gains following the reopening of retail and …
Rising activity, rising inflation July’s euro-zone PMIs confirm that the economy is still rebounding rapidly and that price pressures are continuing to build. While the Delta variant poses a risk to our above-consensus GDP forecasts, it seems most likely …
Some signs of softening The underlying trend in retail sales volumes is a bit weaker than the 0.5% m/m rise in June suggests. And other evidence indicates that the resurgence in the virus and the “pingdemic” may have taken some oomph out of the overall …
Rise in sales to prove short-lived Existing home sales edged higher in June, but the bigger picture is that housing market activity is cooling. Booming house prices, rising mortgage rates and tight inventory will weigh on demand this year. As a result, we …
22nd July 2021
Above-target inflation to keep Banxico in tightening mode The small fall in Mexico’s headline inflation to 5.8% y/y in the first half of July was mainly due to fuel inflation dropping back, while the core rate remained stubbornly high at 4.6% y/y. The …
