Global production rising, despite lockdowns Global steel production rose again in April as lower output in India, in particular, was offset by sizeable jumps in production in China, Russia and Brazil. For now, virus-containment measures remain a key …
21st May 2021
Strong end to Q1 but sales hit hard by lockdowns in April After reaching a record high in March, the preliminary estimate suggests that the lockdowns caused retail sales to slump in April. There is likely to be only a small rise this month given stores …
Economic recovery shifting through the gears Another rise in the flash composite PMI from 60.7 in April to a record high of 62.0 in May points to the economic recovery shifting through the gears and picking up speed. That suggests the pace of the rises in …
Supply shortages continuing to drive up input prices May’s rise in the euro-zone Composite PMI reflects the further lifting of restrictions in many parts of the region and suggests the economic recovery is now fully underway. Supply chain difficulties …
Rocketing retail sales fire up the recovery The surge in retail sales volumes in April shows that households flooded back to the shops once they reopened in the middle of the month and suggests there is even some upside risk to our forecast that the …
Exports on renewed upwards path Korean export values are likely to surge to an all-time high this month. A buoyant external sector looks set to prop up GDP again this quarter. The timely nature of the Korean trade data makes them a good bellwether for the …
Manufacturing to keep recovering, services to remain weak Today’s flash PMIs suggest that the manufacturing sector will continue to recover as supply shortages are starting to ease. However, the plunge in the services PMI suggests that overall economic …
Underlying inflation to rise further, but not much Inflation fell in April but that was almost entirely due to a plunge in mobile phone tariffs. Sifting through that distortion, headline inflation rose in April and will float higher over the coming …
High prices to incentivise production growth Average daily global aluminium production was unchanged in April, but we continue to expect that output will increase this year given current high prices and premiums . According to the International Aluminium …
20th May 2021
Inflation to continue to drift higher, but set to fall sharply in H2 Saudi inflation rose to 5.3% y/y in April and, while we expect the headline rate to rise further over the rest of this quarter, it is set to fall sharply to 1.5-2.0% from July as the …
Jobs growth to resume, but at slower pace While the economy shed some jobs after the JobKeeper wage subsidy scheme came to an end, the surge in vacancies suggests employment will keep rising over the coming months . The 30,600 decline in employment in …
Exports to rise at slower pace While export volumes edged higher in April, the rebound in exports is slowing and external demand is unlikely to provide much of a tailwind to growth over the coming months. Meanwhile, the muted rise in machinery orders in …
Curtailment of refinery activity to boost crude stocks next week US commercial crude stocks increased last week as inventories continue to be drawn down from the US government’s strategic reserves. We expect commercial crude stocks to rise further next …
19th May 2021
Inflationary pressures emerging The large 0.6% m/m seasonally-adjusted rise in prices in April shows that the jump in inflation to 3.4% was not due to base effects alone. With firms’ selling price expectations elevated, we expect inflation to remain close …
Inflation jump unlikely to trouble the SARB The jump in South Africa’s headline inflation in April, to 4.4% y/y, was driven by energy price effects but there were signs that broader price pressures are starting to build. But even so, we think that the …
Burst of inflation temporary, but upside risks remain The jump in CPI inflation from 0.7% in March to 1.5% in April (consensus forecast 1.4%) was almost entirely driven by energy price effects, which will only be temporary. We doubt a sustained increase …
Wage growth will rise further but still has a long way to go The strength in wage growth in Q1 was partly due to one-off factors which will fade in the year ahead, but we still think the tightening in the labour market will see wage growth rise in earnest …
High lumber prices weigh on starts Single-family starts dropped back in April and continue to underperform building permits. This adds to the evidence that high lumber and other material prices are constraining housing starts. But lumber prices are now …
18th May 2021
Recovery hitting a temporary bump The softer-than-expected 3.2% q/q rise in Chilean GDP in Q1 will probably be followed by a marked slowdown in Q2 caused by the lockdown at the start of the quarter. Nonetheless, high-frequency data are already showing …
Unexpected contraction in Q1, clouds form over the outlook The surprise 6.5% annualised contraction in Israeli GDP in Q1 largely reflected the impact of a vehicle tax hike on consumption and a sharp fall in government consumption. We expect GDP to rebound …
Economy contracted in Q1 but recovery now underway The euro-zone economy contracted again in Q1 but continued progress on reducing Covid infections and administering vaccines suggests that the region’s economic recovery is underway. The 0.6% contraction …
Divergent performance in Q1, recovery to gather pace in Q2 The Q1 GDP data for Central and Eastern Europe revealed a divergence in performance between the regions’ economies amid third virus waves, with Hungary and Romania outperforming. With virus …
On the front foot Today’s data release suggests that the labour market is now on the front foot. Admittedly, the unemployment rate may still rise over the rest of this year. But this will probably be due to people re-joining the labour market rather than …
Slow vaccination progress taking its toll The economy contracted yet again during the second state of emergency. With the medical situation still worsening during the current third state of emergency and the vaccine rollout too slow, it will take until …
Economy recovers in Q1 as Russia avoids a third virus wave The improvement in Russian GDP growth to -1.0% y/y in Q1 was largely driven by a slight easing of containment measures as virus cases continued to fall during the winter. The vaccine rollout is …
17th May 2021
Surprise drop in inflation to back up MPC’s dovish majority The slight drop in Nigeria’s headline inflation rate, to 18.1% y/y in April, on the back of easing food price pressures will provide some ammunition to the doves on the MPC and means that it is …
Fuel-driven rise in headline WPI inflation will be short-lived The surge in Indian wholesale price inflation in April was driven in large part by the rally in commodity prices, which we think will reverse over the coming months. That should allow the RBI …
A softer start to Q2 Year-on-year growth on all indicators dropped back last month. This partly reflects a less flattering base for comparison. But current momentum was also a bit softer, especially for retail sales. We think m/m growth will remain modest …
Thailand set to go from bad to worse Thailand’s GDP inched up in Q1, despite a renewed outbreak of the virus. But output is unlikely to hold up this quarter. We expect the economy to shrink sharply as a further surge in new COVID-19 cases pushes the …
Lending standards set to ease in the coming months Outstanding commercial real estate debt nudged higher in April. And with the vaccine rollout allowing more of the economy to reopen and lending standards set to loosen, we expect to see further gains in …
14th May 2021
Supply constraints beginning to weigh on production Manufacturing output increased by a modest 0.4% m/m in April but was held back by a 4.3% m/m drop back in motor vehicle production, as the global shortage of semiconductors really began to bite. Imports …
Sales remain elevated, but recovery in services losing momentum The unchanged reading for retail sales in April is slightly stronger than it looks given that it follows an upwardly revised 10.7% m/m surge in March, and it suggests that the boost from the …
Manufacturing sales volumes fell in the first quarter The 2.3% m/m rise in March was not enough to prevent manufacturing sales volumes from falling during the first quarter. The sector should perform better in the second quarter, but sales volumes are …
Few signs of “reopening inflation”, policy to stay loose The latest inflation figures for Israel provided few signs that the reopening of the economy resulted in a pick-up in price pressures in April. This supports our view that inflation will remain in …
Recovery to gather steam in second half of the year Poland’s economy performed a little worse than most had expected in Q1 and the tightening of restrictions to curb a third wave of COVID-19 means that quarterly growth in Q2 is likely to be slower still. …
Demand-supply mismatch intensifies Extremely high demand and limited supply pushed up house prices sharply in April. The market will undoubtedly cool as the rush to buy during the stamp duty holiday eases. But with mortgage rates low and the economy …
13th May 2021
Pipeline shutdown may push crude stocks back up US commercial crude stocks held fairly steady last week despite a collapse in exports. While both exports and product demand will probably increase over the coming weeks, crude stocks may have actually risen …
12th May 2021
Headline inflation to remain anchored below RBI’s 6% upper limit India’s consumer price inflation dropped to a three-month low in April, adding to evidence elsewhere that the recent tightening of virus restrictions has not been as economically disruptive …
Reopening & supply shortages trigger price surge, but Fed won’t react The 0.9% surge in core prices last month, the biggest monthly gain since April 1982, was concentrated in sectors that are reopening and/or facing intense supply shortages, which should …
Manufacturing bounces back after power outages in February The 0.7% m/m rise in Mexican industrial production in March masked a more impressive 3.0% m/m increase in output in the key manufacturing sector, which recovered from disruptions caused by power …
Credit slowing faster than most anticipated Both bank lending and broad credit dropped off more sharply than most expected in April. Apart from during last year’s lockdown, loan growth hasn’t been this slow in nearly two decades. The net increases of both …
Shortages holding back manufacturers The small rise in euro-zone industrial production in March suggests that the region’s manufacturing sector is still far from back to normal, as persistent supply shortages outweigh strengthening demand. But the high …
Energy-driven boost to inflation to prove temporary The energy-driven increase in Swedish inflation in April is likely to be temporary and will not trouble the Riksbank (even as bicycle prices keep on climbing). That said, house price inflation is likely …
Shifting into gear even before the COVID-19 restrictions were lifted The burst of growth in March shows that the recovery has been gathering momentum more quickly than we had thought and suggests that the risks to our forecast for the economy to return to …
Tough start to the year, but outlook brightening The weaker-than-expected 1.0% q/q decrease in Norwegian mainland GDP in Q1 confirmed that the economy slipped behind its Swedish counterpart at the start of the year, and suggests that it is now unlikely to …
Inflation jump points to another rate hike in June The further jump in Brazilian inflation to 6.8% in April makes another 75bp rate hike (to 4.25%) at the next central bank meeting in June highly likely. But the breakdown of the data provides reason to …
11th May 2021
Growth over Q1, but fresh contraction likely in Q2 Turkey’s activity figures for March suggest that the economy recorded further growth in Q1. But the recovery lost steam over the quarter and the combination of more restrictive virus containment measures …
GDP rebounds, consumption set to remain a drag Malaysia’s economy saw an export-driven rebound of 2.7% q/q in Q1, despite a partial lockdown midway through the quarter. But a resurgence in virus cases and the recent reimposition of containment measures …
Factory-gate inflation hits three-year high Producer price inflation was the strongest since October 2017 last month, as upstream price pressures remained significant due to supply constraints. This is feeding through to a rebound in consumer price …
GDP to contract in Q2 after recovery stalls in Q1 The Philippines economy barely improved in Q1 and the reimposition of strict containment measures is likely to see output shrink this quarter. Data released today show that the contraction in GDP eased …
