Current pace of sales growth cannot be sustained Existing home sales had another strong month in September, and month-on-month growth has now averaged 14% since June. But with housing demand easing back, and inventory getting ever tighter, that pace of …
22nd October 2020
More restrictions to weigh on sentiment Given the surge in virus cases and new restrictions over the past few weeks, it was no surprise that euro-zone consumer confidence deteriorated in October. With governments ramping up their restrictions on “social …
Above-target inflation unlikely to stop Banxico’s easing cycle Although Mexico’s headline inflation was above the central bank’s target, at 4.1%, in the first half of October, with price pressures likely to ease and activity still weak, we think that …
Production should bounce back US commercial crude stocks declined as Hurricane Delta dealt a further blow to output. And though production should revive to pre-hurricane levels, gains will probably be smaller in the months thereafter . The EIA’s weekly US …
21st October 2020
Inflation set to remain low The September data showed that the housing boom is now feeding through into higher inflation, but the headline rate is nevertheless set to remain below 1% for the rest of this year. The rise in inflation to 0.5%, from 0.1%, was …
Strong Q3, but a renewed downturn lies ahead in Q4 September’s batch of Polish activity data confirmed that the economy rebounded strongly in Q3, with GDP growth likely to have increased from -8.2% y/y in Q2 to -2.5% y/y. But this strength came before the …
Government borrowing shows little sign of easing off Monthly borrowing in September was the third highest on record, only exceeded by that in April and May when the pandemic and the fiscal response were at their height. With the recovery stuttering and …
Low inflation gives the green light to more QE With CPI inflation just 0.5% in September and new COVID-19 restrictions darkening the economic outlook again, it’s hard to think of reasons why the Bank of England won’t launch another £100bn or so of …
Electronics-driven export rebound picking up speed Strong export growth in the first 20 days of October was driven by buoyant foreign demand for electronics, and exports now look likely to provide a boost to y/y growth this quarter. Timely Korean trade …
A very disappointing end to the third quarter There were few positives in September’s batch of Russian activity data as the contraction in retail sales deepened and the recovery in the manufacturing sector stalled. The rise in virus cases and tightening …
20th October 2020
Single-family starts see further gains on back of strong new home demand Single-family starts and building permits had another strong month in September, as builders increased production on the back of buoyant demand and dwindling inventory. A moderation …
China’s aluminium output set to climb even higher Growth in global aluminium production accelerated in September, led by robust output gains in China and Canada. Capacity additions in China should mean that global output continues to rise in the fourth …
Renewed restrictions a downside risk The Bank of Canada’s third-quarter business and consumer surveys show improvements, but still imply the recovery will be slow and were conducted before the latest restrictions were imposed. The past sales balance of …
19th October 2020
Services & consumption getting back on track China’s economy continued its rapid rebound last quarter, with the recovery broadening out and becoming less reliant on investment-led stimulus. What’s more, the monthly data show that growth was still …
Exports to return to pre-virus levels by year-end Exports continued to rise at a strong pace in September and we think they should return to pre-virus levels before the end of the year. By contrast, the recovery in imports has only just begun so net trade …
Manufacturing output stuck well below February level The 0.6% m/m decline in industrial production in September isn’t necessarily a sign that the broader economic recovery is in jeopardy when we know that retail sales rose strongly last month. But it is …
16th October 2020
Decline in sales likely to be temporary The 2.0% m/m decline in manufacturing sales in August was caused by a drop back in motor vehicle sales to more normal levels. The strong rise in rail freight volumes in September bodes well for sales last month. The …
Consumer rebound still solid The unexpectedly strong 1.9% rise in retail sales last month suggests the economy was carrying more momentum into the fourth quarter than anticipated, defying fears that the expiry of enhanced unemployment benefits in the …
September the low point, but inflation will stay subdued Core inflation is likely to edge up from the record low to which it fell in September. However, weak aggregate demand will keep it very subdued for the foreseeable future. Headline and core …
Hurricane-induced slump in production to prove short lived The suspension of production in the Gulf of Mexico ahead of Hurricane Delta largely explains the decline in US crude stocks last week. But most of this production has already been restarted and …
15th October 2020
Banks maintain property lending caution Mortgage availability saw a modest improvement Q3, but not enough to reverse the large fall seen in Q2. Meanwhile, credit availability to commercial property fell sharply during the quarter, and lenders expect to …
Rise in inflation to push next rate cut into 2021 The increase in Nigerian inflation in September, to 13.7% y/y, will probably be followed by similarly high inflation readings in the coming months. The central bank is likely to keep its benchmark rate on …
Food and education drag inflation down Saudi inflation dropped back to 5.7% y/y in September as food inflation eased and schools slashed tuition fees ahead of the new academic year. While the effects of July’s VAT hike will keep inflation elevated until …
Fall in employment unlikely to last The drop in employment in September was largely due to weakness in Victoria. As restrictions ease there, we expect the unemployment rate to fall again in the coming months. The 29,500 fall in employment in September was …
Food aside, prices continue to recover from COVID-19 downturn Headline consumer price inflation, weighed down by easing food price inflation, continued its decline last month. But core consumer prices rose again for the second straight month and factory …
Industrial rebound slowing but not going into reverse The recovery in euro-zone industrial output has slowed but is not going into reverse. The impact of the second COVID-19 wave should be much smaller than the first and will be felt most in the services …
14th October 2020
Credit growth has yet to peak this cycle Broad credit growth hit is highest level in nearly three years. We think this acceleration should continue until early next year. Chinese banks extended RMB 1,900bn in net new local currency loans in September, up …
WPI inflation rises by more than expected The rise in headline wholesale price inflation in September was sharper than expected but, with price pressures likely to ease in earnest over the coming months, we think further policy rate cuts are still on the …
Economy recovering, monetary policy set to stay loose for an extended period The Monetary Authority of Singapore (MAS) left policy on hold today as advanced GDP data showed that the economy rebounded well in Q3. However, with GDP still well below its …
Core inflation held down by services weakness The more modest rise in core consumer prices in September, which came despite a further surge in used vehicle prices, suggests that the previous upward pressure on prices resulting from supply constraints may …
13th October 2020
Frustratingly low prices pressures point to further support down the line The larger-than-expected fall in Swedish inflation in September will only strengthen the hand of the dovish contingent of the Riksbank’s Executive Board. We think it is only a …
Strong recovery set to lose steam Turkey’s industrial production and retail sales data for August add to the evidence that the recovery has remained strong, although the figures appear to have been flattered by a shift in the timing of maintenance …
More bad news to come The fallout in the labour market from the COVID-19 recession has been worse than previously thought. And with the latest COVID-19 restrictions threatening to stall the economic recovery, if not send it into reverse, the unemployment …
Imports surge, exports remain resilient Exports continued to do well, most likely thanks to the recent strength of retail sales among China’s major trading partners. And a jump in imports suggests that domestic investment spending remains robust. Imports …
Headline rate has probably peaked Headline consumer price inflation rose by more than expected in September but there are signs that it may now have peaked. We think it will drop in earnest over the coming months which will open space for the RBI to …
12th October 2020
Industry still struggling to recover The slump in industrial production eased in August but output is still well below its pre-virus levels. And the fiscal stimulus package announced today will do little to boost demand. The recovery in industry, much …
Manufacturing recovery fading The 3.3% m/m rise in Mexico’s industrial production in August was largely driven by a delayed rebound in construction output. Manufacturing production only rose by 0.8%, and more timely indicators suggest the sector will …
Good progress ahead of second wave The larger-than-expected 378,000 increase in employment in September seems to support our expectation that the recovery will be faster than most expect, but rising cases of COVID-19 and the renewed restrictions imposed …
9th October 2020
Food inflation surges, Copom unlikely to be troubled The jump in Brazilian inflation, to 3.1% y/y in September, was almost entirely driven by surging food inflation. Food inflation is likely to continue putting upward pressure on the headline rate in the …
Recovery already flattening off in August The disappointing 2.1% m/m rise in GDP (consensus forecast 4.6%) adds to the evidence that the initial rebound in economic activity is running out of steam. And with new restrictions being imposed to curb the …
More Banxico easing on the cards The stabilisation in Mexican inflation at 4.0%, after four successive monthly rises, should dampen hawkish sentiment at Mexico’s central bank. We think there is scope for at least one more 25bp rate cut, which is a more …
8th October 2020
One last surge in housing market activity Housing market activity rose for a fourth consecutive month in September, but the market may be approaching an inflection point. We expect house price growth and transactions to cool by the end of the year, as …
Hurricane Delta to weigh on stocks next week US commercial crude stocks rose a little as net imports jumped in combination with a revival in domestic production. But with another hurricane on the way, we expect output to dip back next week . The EIA’s …
7th October 2020
Mortgage rates fall again, but will soon bottom out Mortgage applications were once again stable in September, with a small fall in refinancing applications offset by a small rise in home purchase demand. Mortgage rates hit another record low by the end …
House price growth surges to four-year high House price growth surged to a four-year high according to the Halifax index. But there are tentative signs that the pent-up demand driving the latest mini-boom may be running out. We think house prices are …
Recovery far from complete The small fall in German industrial production in August left it a long way below its pre-crisis level, and lagging the industrial rebounds elsewhere in the euro-zone. We think the sector will resume its recovery in the coming …
Rising inflation to prompt pause in monetary easing Russian inflation edged up to 3.7% y/y in September and we think that it will rise a bit further over the coming months, which is likely to prompt the central bank to pause its easing cycle at its …
6th October 2020
Exports should begin to catch up soon The trade deficit widened further in August, as imports continued to rebound at a faster pace than exports but, with domestic production continuing to ramp up and overseas demand also recovering, we doubt this marks …
