Economy losing steam, headwinds intensify Turkey’s activity figures for February suggest that the economy lost momentum in the first quarter of this year and the recent surge in COVID-19 cases, combined with the tightening of financial conditions, means …
13th April 2021
Imports at record high, exports soften a touch Export and import growth remained elevated in y/y terms last month, even as base effects turned slightly less favourable. In level terms, exports dropped back slightly but imports continued to rise thanks to …
Several indicators strengthen to record-highs The Bank of Canada’s quarterly surveys suggest that investment and consumption will recover strongly in the coming year, and are another reason to expect the Bank to trim its asset purchases next week. While …
12th April 2021
Rising headline inflation won’t trigger rate hikes India’s consumer price inflation jumped to a four-month high in March as food inflation accelerated. But we doubt that the headline rate will continue rising for much longer and, with the economic …
Restrictions still holding back retail spending Euro-zone retail sales rose in February but were 2.8% below their pre-pandemic levels. In many countries coronavirus restrictions have been tightened since then, and are unlikely to be eased again until well …
Credit growth resumes its downward trajectory After an uptick in February, the slowdown in credit growth resumed in March. Hawkish signals in the government’s work report suggest that the deceleration will continue as policymakers focus on reining in …
Slight dip in exports no cause for concern Korean export values dipped at the start of April, but we wouldn’t read too much into it – the 10-day data can be volatile and, in any case, exports remain well above their pre-crisis level. The timely nature of …
Commercial property debt to benefit from easing restrictions Commercial real estate debt fell for the second consecutive month in March. That likely reflects weak investment activity due to virus restrictions. But, as constraints continue to ease and …
9th April 2021
Strong gain to be partly reversed this month The 303,000 jump in employment in March was far stronger than expected. While some of the gains will be reversed this month due to the tightening of coronavirus restrictions, that will prove temporary and the …
Inflation spike means further hikes on the cards The jump in Brazilian inflation to 6.1% in March was largely a result of rising energy inflation, which will be transitory. Even so, the central bank is clearly worried by above-target inflation and another …
Industry resilient despite power outages The surprising 0.4% m/m rise in Mexico’s industrial production in February came despite the hit to manufacturing and utilities output from power outages. The industrial sector probably gained further ground in …
Prices resume increase on extension of policy support The rise in house prices recorded by Halifax in March probably marks the start of a renewed surge in house price inflation into double figures over the summer. The 1.1% m/m rise in the Halifax house …
German GDP will have fallen in Q1 The unexpected fall in industrial production in February means that German GDP will almost certainly have contracted in Q1. With severe restrictions likely to remain in place until well into the second quarter, a …
Persistently above-target inflation to pave way for rate hikes The fact that core inflation in Norway came in above target for the fifteenth month in a row in March came as no surprise. However, it underlines that the Norges Bank is in a very different …
Factory gate prices jump by most in four years Consumer price deflation reversed last month due to a jump in fuel prices and an uptick in core inflation. But evidence of intensifying price pressures was clearest in producer price inflation, which was the …
Banxico likely to look through surging inflation The jump in Mexico’s headline inflation, to 4.7% y/y in March, was driven once again by higher fuel inflation. We think this trend has a bit further to run, but the central bank is likely to look through …
8th April 2021
Soft price pressures increase chances of rate cut Egypt’s headline inflation rate held steady at 4.5% y/y in March, leaving it below the lower bound of the central bank’s (CBE’s) target range. There is a growing chance that, with the economy still …
Strongest growth in construction activity since 2014 A broad-based strengthening in construction activity pushed up the construction PMI to a six-and-a-half-year high in March. Strong housing and logistics development will continue to support …
Economy started 2021 on the front foot Monthly GDP data from Sweden for February indicate that output it is all but certain to have expanded in Q1. The recent surge in virus cases casts a cloud on the government’s plans to ease restrictions again soon, …
Housing market boom gains renewed momentum The extension of the stamp duty holiday has given the ongoing housing market boom renewed momentum and could push house price inflation up from 6% in March well into double figures by the summer. The rise in the …
Leisure & hospitality sector re-openings will drive H1 2021 outperformance Employment growth in the three-months to February was heavily influenced by the rate of virus cases and consequent restrictions in place. And office-based jobs growth is still …
7th April 2021
Despite a slow start, product demand should pick up this quarter Commercial crude stocks continued to fall in the latest weekly data, but this was a reflection of lower supply and higher exports than a recovery in consumer demand . However, all the signs …
Weather disruption will unwind in March The widening in the trade deficit to $71.1bn in February, from $67.8bn, came as trade in both directions was hit by the severe winter weather. Import growth is on course to outpace exports again in the first quarter …
Semiconductor shortage weighs on trade The global semiconductor shortage and severe winter weather in the US contributed to the falls in exports and imports in February, with the auto sector hit especially hard. Those shortages look set to persist for …
Record low inventory and stretched affordability to weigh on home demand Home purchase mortgage applications edged out a small gain in March but, even as the economy reopens, we doubt that is a sign that home demand will see additional gains this year. …
PMIs could be overstating recovery The euro-zone Composite PMI rose to an 8-month high in March, but the level of activity remains low. And while the PMIs suggest that price pressures are building, we suspect this will be temporary. The increase in the …
Strong Q1, but outlook deteriorating India’s PMI readings for March indicate that the economic recovery continued to progress well at the end of Q1. But with virus cases surging and new restrictions quickly coming onto the agenda, the outlook has taken a …
Rise in inflation to prompt further rate hikes The further rise in Russia’s headline inflation rate last month, to 5.8% y/y, is likely to prompt the central bank to follow up March’s interest rate hike with further tightening. We have pencilled in two …
6th April 2021
Unchanged jobless rate even as restrictions are tightened The euro-zone’s unemployment rate was unchanged at 8.3% in February despite tighter virus measures being tightened, highlighting the extent to which government policies have protected jobs during …
Manufacturing outlook takes a turn for the worse India’s manufacturing PMI for March indicates a continued rebound in the sector last month, but that has already been overtaken by more recent events. In particular, the renewed surge in new COVID-19 cases …
5th April 2021
Big jobs rebound as restrictions lifted and weather distortion unwinds The better than expected 916,000 rebound in non-farm payrolls in March still leaves employment 8.4 million below its pre-pandemic peak from just over a year ago but, with the …
2nd April 2021
Holding up through the second wave The improvement in Russian GDP growth to -1.8% y/y in Q4 was driven by a rebound in household consumption and investment and confirms that the economy held up well during the second virus wave. This is likely to continue …
1st April 2021
Demand continuing to outstrip supply The rise in the ISM manufacturing index to 64.7 in March, the highest level since 1983, echoes the message from the other surveys that demand is surging. But the details suggest that supply is struggling to keep up, …
Disappointing February likely to be followed by further weakness The 0.7% m/m drop in Brazilian industrial production was led by the auto sector, which may reflect supply shortages but also weakening demand following the end of emergency income support. …
PMI jumps, but recovery still faces key headwinds The sharp rise in South Africa’s manufacturing PMI in March suggests that the sector bounced back quickly as virus containment measures were eased. But the recovery will continue to be held back by a slow …
Supply problems and price pressures continue to build The manufacturing PMIs showed that supply problems intensified in March, and this continued to push up price pressures. While supply disruption also artificially pushed up the headline PMIs, there are …
Looming pick-up in inflation won’t faze the SNB Swiss inflation looks set to continue its upward trend over the coming months, but with temporary factors likely to fade in H2, and underlying price pressures likely to remain much weaker, this won’t change …
House price growth should ease later this year House prices are surging but forward indicators somewhat mixed and we suspect the pace of price growth will ease in the second half of this year. Across the eight capital cities, house prices rose by 2.8% m/m …
Unofficial survey paints a less upbeat picture After yesterday’s strong set of Official PMI data, the Caixin manufacturing index published today disappointed, falling to an eleven-month low. Taken together, the surveys are consistent with a slight pick-up …
Strong first quarter for industry March PMI readings suggest that manufacturing sectors improved further in most places in Asia. Global demand for electronics should continue to support the sector for the next few months. PMIs for March were released …
Trade may have been a drag on growth in Q1 Retail sales and the trade surplus declined in February but while we still expect consumption to rise in Q1, net trade may have been a drag on growth. The trade surplus narrowed in February from $9.6bn to $7.5bn …
Recovery to gather pace again The further strong rebound in the Q1 Tankan supports our view that the economy’s recovery from the pandemic will gather pace again soon. And firms’ upbeat capital spending plans for the upcoming fiscal year bolster our view …
Stronger demand to weigh on crude stocks The increase in refinery throughput and decline in net imports meant that US crude stocks fell last week for the first time in around two months. We expect that stocks will fall further in the coming weeks as …
31st March 2021
Stronger performance points to QE reduction in April The economy’s stronger-than-expected performance at the start of 2021 bodes well for the recovery and is likely to further convince the Bank of Canada that it is time to reduce the pace of its asset …
Industrial outlook takes turn for the worse Growth in India’s core infrastructure industries slumped in February and, with the broader industrial outlook taking a turn for the worse as new COVID-19 cases mount, the RBI is likely to keep policy very …
Inflation to rise above 2% in second half of the year Euro-zone inflation continued on its upward trend in March and we think it will rise above 2% in the second half of the year. But this is largely due to temporary factors that are likely to fade in …
High saving rate paves the way for rapid rebound in 2021 The upward revision to GDP in the second half of 2020 means the economy does not have quite as far to recover from the COVID-19 crisis. And Q4’s high saving rate leaves plenty of scope for a rapid …
Cooling in house price growth likely to be temporary The small month-on-month decline in house prices recorded by Nationwide in March probably reflects a temporary softening in demand before the stamp duty holiday was extended. Judging by other …
Growth bounce not sustainable The latest surveys suggest that after being hit by virus disruptions earlier in the year, activity bounced back strongly this month. But we suspect it won’t be long before growth is slowing again. The official manufacturing …
Manufacturing output will resume its recovery The fall in industrial production in February came off the back of a strong January and shouldn’t prevent manufacturing output rising across Q1. And firms’ production forecasts for April point to a surge in …
