No signs of improvement Korean trade data for the first 20 days of May show no signs of a turnaround in exports despite the easing of lockdowns in many trading partners. The timely nature of the Korean trade data makes them a good bellwether for the …
21st May 2020
Stocks fall, but outlook remains bleak Last week, US commercial crude stocks fell for the second week running. Digging deeper, though, reveals that the rebound in gasoline demand – which has so far underpinned much of the growing market optimism – …
20th May 2020
Slight improvement in confidence Consumer confidence rose slightly in May, suggesting that households are a little less depressed about their prospects and the wider economic outlook than they were in April. Nonetheless, the index remains very low and …
Inflation near a trough but set to remain low As energy prices are now rebounding, inflation is unlikely to fall much below the -0.2% recorded in April. Nevertheless, we do not expect it to rise back above 0.5% until at least the end of the year. About …
Significant output cuts still look unlikely Global aluminium output growth slowed further in April. However, with demand in China now picking up as its economy emerges from lockdown, the possibility of substantial output declines there appears slim. …
Food inflation the least of the ECB’s problems We suspect that harvesting and supply issues rather than stockpiling caused the increase in food inflation in April, and that these effects will persist in the summer. Nonetheless, with core inflation falling …
Easing price pressures suggest the Bank has more work to do The energy-driven slump in inflation in April is unlikely to concern the Bank of England much, but it might find the easing in underlying price pressures a little harder to ignore. And with the …
Non-residential investment will collapse Machinery orders held up surprisingly well in March but we already know from the national accounts that business investment was sputtering at the end of Q1 with much darker skies awaiting in Q2. The 0.4% m/m fall …
Economy sputters in Q1, collapse coming in Q2 The slowdown in Russian GDP growth to 1.6% y/y in Q1 almost certainly failed to capture the extent of virus containment measures as the government did not implement lockdown measures until late-March. The …
19th May 2020
Record fall in single-family housing starts The shutdown of large parts of the country meant single-family housing starts recorded their largest month-on-month fall on record in April. In the Northeast starts were down over 70% compared to February. But …
Sanguine headline figures belie hundreds of thousands of layoffs The headline labour market figures have not yet caught up with the fall in employment of between 500,000 and 1 million revealed in the timelier data for April. And we suspect that …
Chile’s recovery to be short-lived While Chile’s economy grew strongly in Q1, this was largely due to favourable base effects resulting from strikes in Q4, and hides a sharp deterioration in activity in March. We expect a steep contraction in Q2, and a …
18th May 2020
Massive slump in Q2, slower recovery than elsewhere thereafter Figures released today show the slump in Thailand’s economy was less severe than expected last quarter, but this will provide little comfort, Q2 data are set be much worse. Thailand’s economy …
Economy in recession before full force of corona containment hit The fall in output in the first quarter suggests the spread of the virus had already dealt a significant blow to economic activity in March with much worse to come in Q2. A double-digit fall …
Commercial property lending slowing, but held up by refinancing The stock of outstanding debt secured against commercial property grew again in April. But lending started to fall back in the second half of the month as demand for and supply of new …
15th May 2020
April to mark the low point, but recovery may only be gradual The 11.2% m/m fall in industrial production in April was bigger than at any point in the index’s 100-year history, including the Great Depression, the end of World War 2 and the Global …
Virus hit to consumption even worse than we thought The 16.4% m/m plunge in retail sales last month leaves sales 21% lower than in February , a slightly bigger hit to consumption from the lockdowns than we had anticipated. Even with many states now easing …
Euro-zone trade imbalances to narrow, but for the wrong reasons Euro-zone trade values fell sharply in March, and more open economies will suffer most from the drop in global demand. But the stringency and duration of virus containment measures will be a …
Bigger falls in GDP to come in Q2, with more variation between countries The Q1 GDP data confirm that virus containment measures have caused much bigger declines in activity in some euro-zone countries than in others. Over the rest of the year, we think …
Coronavirus devastates the region The batch of Q1 GDP data for Central & Eastern Europe shows that the region’s economies were in freefall at the end of March after lockdown measures were imposed. A strong start to the year meant that the data in Poland …
Recovery continues but remains highly uneven Industrial output and investment rose year-on-year in April for the first time since the COVID-19 outbreak. But retail sales and services activity continued to contract, held back by high unemployment. Growth …
Sales probably slumped even further in April March’s 9.2% m/m slump in manufacturing sales is likely to have been followed by a similar sized fall in April. While the re-opening of some plants should boost sales this month, the elevated level of …
14th May 2020
Inflation not a constraint on policy action The partial release of the WPI inflation figures for April strongly suggest that the headline rate has dropped. This supports our view that the inflation outlook shouldn’t be a concern for policymakers, whose …
Economy in deep downturn The collapse in Turkish industrial production and retail sales in March add to the evidence that, even though the government refrained from imposing draconian lockdown measures, the economy probably contracted over Q1. More timely …
Housing market activity hits all-time low With the housing market reopening, April’s slump in sales may be the market’s lowest point. But any recovery will start from a low base and face serious economic headwinds – from both weak employment and …
Unemployment rate set to approach 10% The small rise in the unemployment rate in April masks a sharp fall in employment and we still expect the unemployment rate to rise further over the coming months . The 594,000 fall in employment in April was broadly …
More promising signs for the US oil market US commercial crude stocks unexpectedly fell last week, adding to growing evidence that the US oil market has passed the worst. That said, a sustained recovery is not on the cards for some time yet. Indeed, the …
13th May 2020
Confirmation that industry is in free fall The slump in euro-zone industrial output in March came as no surprise given the extremely weak national data already published. Worse is to come in April before the sector begins to gradually recover. The 11.3% …
Falling core inflation increases pressure on the Riksbank While the Riksbank will look through the energy-driven plunge in headline inflation in April, the further fall in underlying price pressures will be harder to ignore. All told, while policymakers’ …
Record collapse in economic activity and worse to come March’s GDP figures showed that the UK economy was in freefall as soon as the coronavirus lockdown began. And with all the restrictions in place until mid-May, and then only lifted very slightly, …
This should be as bad as it gets The further fall in the Economy Watcher’s Survey (EWS) in April underlines that consumption will be extremely weak across Q2. But while all components fell to new depths, this should mark the trough in business conditions. …
Reopening will not prevent massive slump in Q2 Malaysia Q1 GDP figures were slightly better than expected but will provide little comfort, with the economy set to contract much more sharply this quarter as depressed domestic demand and an extremely weak …
Inflation locked down, worse still to come for industry This Data Response was originally sent to clients as a Rapid Response on 12 th May 2020. As a result of the Statistics Office being only partly operational due to India’s nationwide lockdown, the …
Wage growth set to slow sharply The stability in wage growth in Q1 tells us little about the impact of the virus outbreak on the labour market and a sharp slowdown over the coming quarters is likely . The cutoff date for the Q1 wage price index survey was …
Unprecedented price falls in lockdown-affected sectors The 0.8% m/m fall in consumer prices last month reflects the sharp drop in energy prices together with an unprecedented 0.4% m/m fall in core CPI. But the latter was largely due to very big declines …
12th May 2020
Things are about to get a whole lot worse The 5% y/y drop in Mexican industrial production in March is largely old news, but the breakdown of the headline figure was more noteworthy and suggests that the manufacturing sector has been hit harder than …
Factory-gate prices post steepest drop in over a decade Consumer and producer price inflation fell sharply last month, reflecting the continued weakness in demand. Price pressures are likely to ease further in the coming months, strengthening the case for …
Credit growth hits a 22-month high Credit growth accelerated further last month, a trend that will probably continue given signals from the PBOC’s Q1 monetary report published over the weekend that more stimulus measures are in the pipeline. This will …
11th May 2020
Norges Bank to look through pick-up in core inflation The food-driven jump in the core inflation rate in Norway in April will not trouble the Norges Bank. With the economy facing a slow recovery, a prolonged period of record low interest rates is on the …
Trade data show no sign of a turnaround Korean trade data for the first ten days of May show that exporters have taken a massive hit from lockdowns across the world. This bodes poorly for exporters across the rest of the region too. The timely nature of …
Record slump in employment April’s employment slump was only half as bad as feared. While the worst for GDP seems to be behind us, the unemployment rate could still rise in May, as the 1.7 million people who have dropped out of the labour force start …
8th May 2020
Unprecedented job loss illustrates extent of human tragedy The loss of 20.5 million jobs in April was largely as expected based on the tsunami of jobless claims and, although the unemployment rate only climbed to 14.7%, slightly below expectations, that …
Wage growth won’t be positive for much longer Wage growth slowed sharply in March and with the unemployment rate set to rise considerably over the coming months we think it will turn deeply negative before long. According to today’s preliminary estimate, …
Inflation collapses, 100bp cut on the cards this month The large fall in Mexican inflation to just 2.2% y/y in April (from 3.2% y/y in March) should embolden the central bank to step up the easing cycle when it meets later this month. We’ve pencilled in a …
7th May 2020
Coronavirus triggers house price drop House prices fell for a second consecutive month in April according to the Halifax index. But with low transactions activity likely to be causing extra volatility in the data, readings from the lockdown period need to …
Exports can’t defy the global downturn for long China’s exports were much stronger than anticipated in April but are likely to drop back sharply this month. In contrast, the recent resilience of imports faltered in April as inbound shipments began to play …
Only a slow recovery in prospect The largest monthly decline in production since this time series was launched in 1991 will probably be followed by an even bigger fall in April. After that, we anticipate a gradual recovery. The 9.2% m/m fall in industrial …
GDP contracts in Q1, much worse to come in Q2 The larger-than-expected contraction in the Philippines economy in Q1 suggests that the lockdown there is having a severe impact on economic activity and that growth is likely to be even worse than we feared …
Surge in exports won’t last long The massive rebound in exports in March is hardly surprising given the impact of a cyclone in February but we think weakness in global demand will weigh on export growth in the coming months. The rise in the trade balance …
Slight reprieve for stricken US oil market Although US crude stocks climbed again last week, there are promising signs that the stress in the US oil market is beginning to ease. That said, a material turnaround in conditions remains some way off . The …
6th May 2020
