Virus restrictions deal a blow to sentiment The EC’s Economic Sentiment Indicators (ESIs) took a leg down in November and point to the recovery stalling in the middle of Q4. The fall in sentiment was broad-based across the region, though it was much …
27th November 2020
Capital investment may be approaching its trough We estimate that private investment fell by a modest 1.2% q/q in Q3, and firms’ expectations of future capital expenditure suggest we may be near the trough in investment . Today’s private capital …
26th November 2020
Demand to remain subdued … for now US commercial crude stocks fell slightly last week, while implied product demand also ticked down. And, with new US virus cases still at very high levels, we think that it probably won’t be until next year – once …
25th November 2020
Low inventory weighs on home sales New home sales levelled off in October, suggesting that pent-up demand from the spring is running out. In addition, strong sales over the summer months have left the supply of homes for sale at an all-time low, making it …
Investment rebound continues, but jobless claims rising again October's durable goods data suggest that the economy started the fourth quarter on a strong footing, with business equipment investment continuing to rebound, but the second consecutive weekly …
Price pressures pick up The rise in South African inflation, to 3.3% y/y in October, was driven by stronger food inflation and so is unlikely to be a major concern for the Reserve Bank. Subdued core price pressures and a weak economic recovery mean that …
House price boom should prove short-lived House price growth is quickly entering boom territory, with both Case-Shiller and FHFA reporting a surge in annual gains in September. At 9.1% y/y, the rise on the FHFA index is the highest in almost 15 years. But …
24th November 2020
Vaccine rollout will boost global production Despite the slight fall in China, global steel production continued to rise in October and will probably increase further in the year ahead providing that the rollout of COVID-19 vaccines is successful . …
Fall in Mexican inflation supports the case for a rate cut The fall in Mexican inflation, to 3.4% y/y, in the middle of this month, supports our view that Banxico will cut its policy rate by a further 25bp, which we now expect to happen at next month’s …
Strong manufacturing limiting the damage The small decline in the Ifo Business Climate Index for November confirms that the German economy is losing momentum but also that it is holding up much better than many other countries. We suspect that GDP will …
PMIs suggest economy holding up better than expected in second lockdown The relatively small fall in November’s flash composite PMI suggests that the hit to GDP from the second lockdown will be much smaller than the first and that our expectation of an 8% …
23rd November 2020
Darkness before the dawn The drop in the Composite PMI to well below 50 adds to the evidence that the euro-zone economy will post another sizeable contraction in Q4. But with vaccines looking increasingly likely to be rolled out in the first half of next …
Industry holding up as the recovery in retail goes into reverse October’s batch of Polish activity data showed a marked divergence in the performance of industry and retail that will probably grow in November as lockdown measures bite harder. The recent …
Exports maintain strong momentum Buoyant foreign demand for electronics drove strong export growth over the first 20 days of November and this should remain the case over the coming months. Timely Korean trade data are a good bellwether for the health of …
Economy bouncing back strongly The upward revision to Singapore’s Q3 GDP figures shows that the economy has rebounded strongly, and we expect the recovery to continue at a decent pace on the back of strong fiscal support and buoyant global demand for …
Recovery goes into reverse in October Russian activity data for October suggest that the recovery in activity stalled at the start of Q4. With virus restrictions tightening in many regions, the roll out of the vaccine pushed back, and fiscal support …
20th November 2020
Confidence likely to remain low for a while The fall in consumer confidence in November suggests that good news about the vaccine has not done much to improve sentiment in the euro-zone. With the virus still spreading quickly and lockdowns likely to be …
China aluminium production to hold up, despite winter curbs Ongoing strength in China’s aluminium production meant that global aluminium output continued to grow in October. And despite the winter environmental restrictions in China, supply there is set …
Sales rose by more than expected The 1.1% m/m rise in retail sales in September was much better than expected, but sales appear to have stagnated in October and the prospect of restrictions being imposed on all non-essential businesses in some cities does …
Better news on government borrowing won’t last October’s public finances figures were far better than expected. But the likely economic contraction in November and extension of the government’s support measures mean that the better news won’t last. The …
Shift towards online supports sales before lockdown The further rise in retail sales in October means that retail sales are now 6.8% above their pre-virus level. But the current lockdown means that retail sales, and total consumer spending, will probably …
PMI still consistent with rebound in activity While the decline in the composite PMI could be an early sign that the third wave is resulting in a renewed drop in activity, the survey still points to a further rebound in industrial output and consumption. …
Core inflation unlikely to weaken much further Headline inflation fell sharply in October due largely to last year’s sales tax hike dropping out of the annual comparison, and we think it will weaken slightly further before recovering early next year. …
Sales surprise on the upside, pushing inventory to another record low Existing home sales surprised on the upside in October, rising to a 15-year high. However, even with mortgage rates set to stay low, we expect sales will see some retrenchment over the …
19th November 2020
The unemployment rate is past its peak The surge in employment in October largely preceded the relaxing of restrictions in Victoria so we expect that November data should show a further rise. The 178,800 rise in employment in October was much larger than …
Risks to demand skewed to downside in the weeks ahead Crude stocks rose last week as rebounding output offset increased refinery activity. Meanwhile, with new US virus cases continuing to rise, we suspect that the risks to demand are now firmly to the …
18th November 2020
Inflation unlikely to rise further in short term, but long-term risks increasing The unexpected rise in inflation to 0.7% in October, from 0.5%, was mainly due to higher food prices. While renewed restrictions related to COVID-19 could cause prices for …
Surge in homebuilder confidence points to further rise in starts Single-family starts had another strong month in October, and are now up 75% compared to their trough in April. Record low inventory is supporting homebuilder confidence, and that points to …
Small Q2 recovery but outlook remains bright The 5.2% q/q rise in Chile’s GDP in Q3 may seem small relative to the 13.5% q/q drop in Q2. But the recovery was accelerating through the quarter, and we think that output will return to its pre-crisis level …
Low core inflation a strong rationale for more ECB easing Headline inflation is likely to remain below zero for several more months and the COVID-19 restrictions in place throughout the euro-zone will keep core inflation close to zero too. There was no …
Pockets of pandemic-induced inflation, but outlook subdued The rise in CPI inflation from 0.5% in September to 0.7% in October shows that inflation is well past its crisis low point of 0.2%. But while it will rise more significantly from next April, we …
Annual wage growth should continue to ease The weakness in wage growth in Q3 was partly driven by the delay to the minimum wage increase but we still think overall wage growth will remain soft in the years ahead. The wage price index (WPI) showed wages …
Boost from net trade to fade Although export volumes returned to pre-virus levels in October, import volumes bounced back more strongly. That supports our view that the boost to growth from net trade will now fade. The 0.2% annual fall in export values in …
Recovery faces large hurdles despite vaccine hopes The 8.7% q/q rebound in Colombia’s GDP in Q3 meant output was still 9% below its pre-virus level by the end of the quarter. Although hopes for a vaccine have brightened the outlook, weak fiscal support …
17th November 2020
Production catching up with consumption The acceleration in manufacturing output in October suggests that, after lagging the broader recovery over the past six months, the factory sector is now making up some lost ground. With inventory levels still lean, …
New virus wave starting to weigh on spending The weaker than expected 0.3% m/m rise in retail sales in October is still broadly consistent with our forecast that consumption growth will slow to 7.5% annualised in the fourth quarter. But the details …
Norwegian economy to start 2021 on the back foot This morning’s release of Q3 GDP data from Norway confirmed that the mainland economy bounced back strongly over the summer. However, new restrictions both locally and in key trade partners mean that the …
Manufacturing sales remain depressed The 1.5% m/m rise in manufacturing sales in September reversed the 1.4% fall in August, but still left sales down 6% y/y. While the business surveys point to another month-on-month rise in October, the increase in …
16th November 2020
Another jump in inflation The rise in Nigerian inflation in October, to 14.2% y/y, will probably prevent policymakers from continuing their easing cycle next week. But we think that further cuts lie in store in early 2021. Figures released today showed …
Core inflation drives pick up in headline rate The rise in headline wholesale price inflation in October was largely the result of a jump in core inflation, which adds to the evidence from the latest CPI data that underlying price pressures are proving …
Consumption and services back to normal The latest data suggest that the broad-based acceleration of China’s economy continued in October. Policy stimulus continued to boost investment and industrial output while growth in real retail sales and services …
External sector remains in doldrums, tourism dependence to delay recovery GDP figures published today show that the worst is now over for Thailand’s economy, but its dependence on tourism means it is likely to experience one of the slowest recoveries in …
Strong rebound in output should continue Output rose sharply in the third quarter and should recover further this quarter provided the third wave of coronavirus infections doesn’t spiral out of control. According to today’s preliminary estimate, GDP rose …
Commercial property debt stable again as repayments resume Outstanding real estate debt fell markedly in October, but this was fully driven by a drop in residential loan balances. Commercial real estate debt was up only marginally, but the bigger point is …
13th November 2020
Third quarter rebound will be partly reversed in Q4 The second estimate that euro-zone GDP rose by 12.6% q/q in Q3 was little different to the “preliminary flash” estimate published a fortnight ago and means that GDP was 4.4% below its Q4 2019 level. …
An impressive rebound, but the strength will not last for long The Q3 GDP data for Central and Eastern Europe generally beat expectations and Poland’s economy recovered much faster than elsewhere in the region. But the recent tightening of virus …
