Nearing the peak in US commercial crude stocks Despite a hefty fall in US crude oil production, commercial crude stocks rose to another record high last week. Nevertheless, we expect crude stocks to start to fall over the coming weeks as refinery …
17th June 2020
Strong housing demand boosts single-family building permits Single-family housing starts were unchanged in May but, helped by strong housing demand, building permits posted their largest month-on-month gain in 30 years. With more of the country opening …
Core inflation to remain higher than elsewhere The further fall in inflation to -0.4% in May was unexpected but most likely marked the trough. As gasoline prices rebounded further in June and some items are likely to increase in price as restrictions on …
Inflation rising slowly but surely The slight increase in Nigerian inflation in May, to 12.4% y/y, will probably be followed by further rises over the coming months, but we still think that more interest rate cuts lie in store later this year. Figures …
Persistently weak inflation to prompt regular QE expansions May’s further fall in inflation is probably only the beginnings of a prolonged period of very soft price pressure that we think will prompt the Bank of England to announce a total of £350bn more …
Pockets of export sector benefiting from pandemic demand The strength of the pharmaceutical and electronics sectors has helped Singaporean exports to outperform and is one reason why we are revising up our GDP growth forecast for 2020 from -8.0%, to …
May should prove nadir for trade Import values fell much more than export values in May but that was mostly due to lower crude oil prices. Across Q2, net trade provided a sizeable drag on GDP growth. However, conditions should improve over the coming …
Spending recovering quickly post-lockdown; production will follow The 17.7% m/m rebound in retail sales in May indicates that, as the lockdowns were eased in many states, activity started to recover more quickly than we – and others – had been …
16th June 2020
Perverse surge in hourly wage growth won’t last beyond Q2 The surge in nominal hourly labour costs growth in Q1 primarily reflects a collapse in hours worked as lockdowns restricted economic activity at the end of the quarter. This is likely to be …
Headline ILO unemployment figures not capturing full force of downturn The labour market figures for April suggest that the unemployment rate may not increase quite as far as we had anticipated. Even so, bigger rises are almost certainly on the way as the …
April marked the low, but recovery to be slow The 29% m/m slump in manufacturing sales in April was larger than expected and supports our below-consensus forecast that GDP contracted by 45% annualised in the second quarter. The fall was larger than the …
15th June 2020
Inflation not a constraint on policy action Wholesale price inflation data for May show a broad-based easing in price pressures. This reinforces our view that inflation shouldn’t be a barrier to further policy loosening, and we expect the RBI to further …
Economy no longer contracting year-on-year State-led infrastructure construction jumped last month and pushed up growth in fixed asset investment and industrial production. Meanwhile, growth in services activity turned positive and suggests that overall …
Commercial property lending started to fall in late May Debt secured against real estate fell in May. While this was mostly driven by a decline in outstanding residential loans, weekly data show that debt secured against commercial property flattened out …
12th June 2020
Lockdown severely curtails monthly data This Data Response was originally sent to clients as a Rapid Response on Friday 12 th June 2020. As a result of the Statistics Office being only partly operational due to India’s nationwide lockdown, the headline …
A long, slow climb from the April trough The collapse in euro-zone industrial output in April will have been partly reversed in May and June, but the recovery will be much more gradual than the slump. Nobody would dispute Eurostat’s observation that the …
Activity falls off a cliff in April The plunge in Turkish industrial production and retail sales in April suggests that the economy suffered a almighty hit to GDP in Q2 – we expect the economy to suffer one of the largest contractions across major EMs of …
Lockdown reduced economic output by 25% At its peak in April the lockdown reduced economic output by 25%, making the coronavirus crisis by far the deepest recession on record. The peak-to-trough fall in GDP was 7% in both the Global Financial Crisis and …
Industrial collapse may prompt additional stimulus The 25.1% m/m collapse in Mexico’s industrial production in April suggests that Mexico’s economy suffered a hefty blow in Q2. Although this may mark the bottom for industry, it will add pressure for …
11th June 2020
Pick-up in Swedish inflation not a game changer The rise in Swedish inflation in May ties in with signs that the economy has got off comparatively lightly by virtue of its light-touch lockdown. That said, the May figure was skewed in part by temporary …
Surveyors point to modest fall in house prices May’s RICS survey points to a modest fall in house prices. But the rest of the survey is harder to interpret. It suggests that activity fell from April’s already very low level, despite lockdown restrictions …
Signs of a nascent recovery Korean trade data for the first ten days of June suggest that the external environment improved slightly at the start of this month. We suspect this will mark the start of a long and slow recovery. The timely nature of the …
US gasoline demand a relative bright spot in otherwise bleak market A jump in crude oil imports was the primary driver behind the rise in crude US stocks last week. And despite the continued revival in gasoline demand, product stocks crept higher. …
10th June 2020
Falling inflation still driven by only a handful of categories The further fall in core consumer prices in May was mainly driven by continued declines in travel-sensitive categories including airline fares and motor vehicle insurance. There is still …
Inflation at lowest rate in over 20 years The decline in Brazilian inflation to a multi-decade low of 1.9% y/y in May will give Copom plenty of room to cut interest rates when it meets next week. We’ve pencilled in a 50bp cut at that meeting, to 2.50%, …
Credit growth continues to accelerate A jump in government bond issuance helped push credit growth to a 21-month high in May. The acceleration in credit growth has further to run and will add fuel to the economic recovery. Chinese banks extended …
Door swings open for easing cycle to resume The fall in Egyptian inflation to 4.7% y/y in May leaves the headline rate well below the lower bound of the central bank’s target range and, with policymakers’ focus shifting away from supporting the pound to …
Currency-driven inflation boost to fade in H2 Recent falls in the krone contributed to the pick-up in core inflation in Norway in May, but this effect is likely to fade in H2. Accordingly, the Norges Bank will be in no rush to tighten monetary policy. The …
Underlying inflation close to bottoming out Consumer price inflation slipped further last month due to falling food prices, while subdued demand continued to weigh on factory gate prices. But food prices aside, the recent decline in inflation could be …
Slump in orders points to sharp fall in business investment The large fall in machinery orders in April supports our forecast that non-residential investment will slump in Q2. With business confidence subdued, a recovery before the end of the year is …
Rising inflation unlikely to throw Banxico off course The pick-up in Mexican inflation to 2.8% y/y in May, from 2.2% y/y in April, is unlikely to deter the central bank from continuing its easing cycle. We expect a 50bp rate cut at its meeting later this …
9th June 2020
High LTV lending edged down in Q1 High LTV lending was already edging down before the coronavirus hit, as competitive pressures among banks plateaued. But lenders have since withdrawn such loans en masse, owing to fears of a house price collapse. So we …
GDP will recover slowly after huge fall in Q2 The sharp fall in GDP in Q1, confirmed by data released this morning, will pale in comparison to the contraction in Q2. We think it will then take several years for the economy to return to its pre-crisis …
Wages falling already Wage growth turned negative in April at the height of efforts to contain the virus, and we expect wages to fall further over the coming months. According to today’s preliminary estimate, labour cash earnings growth fell from +0.1% to …
April the weakest month, followed by slow recovery The slump in April was even bigger than the previous record set only a month ago. While the data should improve from May onwards, output probably won’t get back pre-coronavirus levels for at least two …
8th June 2020
Weak external demand catches up with exports Export growth turned negative last month as lockdowns abroad weighted on global demand. And the ongoing domestic recovery failed to keep import growth from slipping further. A global recovery and further ramp …
Recovery will be slow going The upward revision to Q1 GDP displayed in the revised estimate is cold comfort given that output is plummeting this quarter. We expect GDP to fall by another 9% this quarter. According to the second estimate released today, …
Easing inflation strengthens the case for further rate cuts Russian inflation eased to 3.0% y/y in May and the underlying picture is that inflation has been much weaker than many expected just a few months ago. Price pressures are likely to remain muted …
5th June 2020
Rise in payrolls suggests economy bouncing back quicker than anticipated The surprise 2.5 million rise in payroll employment last month indicates that the process of rehiring began sooner than the jobless claims figures suggested . With more states moving …
Rises in employment and hours worked suggest GDP increased in May The 290,000 increase in employment bodes well for GDP in May, particularly with hours worked increasing at an even faster rate. Employment is likely to rise by even more in June as further …
House prices edge down as lockdown is eased According to the Halifax index, house prices fell for a third consecutive month in May as lockdown was eased. But the fall of 0.2% m/m was very gradual. That supports our view that house prices will see a modest …
Auto plant closures hit trade; claims still edging lower The international trade deficit widened to $49.4bn in April, from $42.3bn, as exports slumped by a massive 20.5% m/m, outpacing a 13.7% m/m decline in imports. The closure of motor vehicle …
4th June 2020
Trade volumes unlikely to recover quickly Exports and imports should start to rise in May following the record slumps in April but, with export orders still weak and the rail freight data showing further declines, the recovery looks set to be very slow. …
Things can only get better April’s euro-zone retail sales data confirm that household consumption growth took a beating at the start of the second quarter. There should be a sharp, though partial, rebound in May as lockdowns were eased, followed by a …
PMIs confirm activity is returning only gradually The rebound in May’s all-sector PMI suggests the economy is now on the long road to normality. But the PMI echoes the message from the high frequency data that the recovery will be protracted. At 40.7 and …
Gradual recovery in property construction May’s rise in the construction PMI suggests that April was probably the low point for activity. The improvement was driven both the commercial and residential sectors. Looking ahead, with lockdown gradually being …
Swiss deflation here to stay; Sweden set to outperform The further decline in Swiss inflation in May came as no surprise, but April’s private sector production data from Sweden add to signs that the economy has reaped some benefit from its light-touch …
Consumption to rebound but exports to remain weak The slump in retail sales in April should be followed by a strong rebound as restrictions are eased. However, both exports and imports will remain weak as the border closure weighs on services trade. The …
SPR buying only a temporary solution to oversupply US commercial crude stocks fell last week entirely because strategic crude stocks rose strongly. Nevertheless, falling imports and the ongoing rise in refinery activity suggest that the oversupply in the …
3rd June 2020
Home purchase demand continues to surge Mortgage applications for home purchase have risen in each of the past seven weeks, and in May were up 2.7% y/y. With the unemployment rate at a record high, that strength in demand is surprising. Record low …
