Economy losing further momentum Polish activity data for October showed that the economy lost a bit more momentum at the start of Q4. Our GDP Tracker points to growth slowing to around 3.6% y/y, from 3.9% y/y in Q3. Activity in the industrial sector …
25th November 2019
Germany is not out of the woods yet November’s Ifo Business Climate Index suggests that Q3’s small increase in German GDP was not the beginning of a recovery. We think that the economy will contract in the coming quarters. On the face of it, the increase …
Mixed signals from retail sales September’s small fall in retail sales suggests that consumers are still cautious about their finances. But the jump in building material and garden equipment sales shows that the improving housing market is feeding through …
22nd November 2019
Slight pickup, but policymakers will still cut in December Inflation ticked up in the first half of November in both Brazil and Mexico, but we doubt that this will be enough to dissuade policymakers from cutting their key interest rates in December. We …
PMIs chime a worrying tone for Q4 The first set of regular flash PMIs for the UK will only stoke fears that the economy is heading for a further slowdown at the end of the year. Indeed, even though we think that the PMIs are probably overstating the …
Economy slowing in Q4 The small decline in the euro-zone Composite PMI for November confirms that the economy is still struggling. One silver lining is that the pace at which German industrial output is contracting appears to be slowing. But the weakness …
Economy continues to splutter along Nigeria’s non-oil economy strengthened a touch in Q3, but headline growth remained very weak. Without significant policy change, we expect that the economy will continue to struggle in 2020. National accounts figures …
Manufacturing sector remains in the doldrums The manufacturing PMI edged up in November but has yet to break out of the range it’s hovered in since the start of the year. However, the recent improvement in the global manufacturing PMI suggests that the …
Free childcare cancels out tax hike price boost The muted rise in inflation in October supports our view that the recent sales tax hike won’t derail consumer spending. And while underlying inflation should weaken further as spare capacity mounts, the Bank …
Recovery to continue as policy is loosened The pick-up in Peruvian GDP growth from 1.2% y/y in Q2 to 3.0% y/y in Q3 probably marks the beginning of a sustained economic recovery. While GDP growth over this year as a whole is likely to be just 2.5%, we …
21st November 2019
Homes sales edge up, but faltering confidence rules out sustained growth Existing home sales saw a marginal rise in October, but the gain wasn’t enough to reverse September’s dip and sales are still below their level in 2017. With the inventory of homes …
Brexit preparations force spending higher The worst October for the public finances for five years won’t prevent whoever wins the election embarking on a fiscal splurge. Borrowing appears to have been higher than expected due to Brexit preparations, and …
Base effects mask underlying weakness The jump in annual Swiss industrial production growth in Q3 was skewed by base effects and masks weakness in those sectors most exposed to Germany. As Germany’s industrial recession looks set to drag on, we expect …
Weak recovery ahead The revised estimate of Singapore GDP showed that the economy bounced back a little last quarter, but while we expect this recovery to continue in the quarters ahead, it is likely to be slow going. According to today’s revised …
SPR release prevents a drawdown US commercial crude stocks rose, in large part due to a significant outflow from the strategic reserve. That said, we expect stocks to remain relatively high as the economy slows and demand falters . The EIA’s weekly US …
20th November 2019
Inflation to fall next year With headline and core inflation unchanged at close to target in October, the likelihood of the Bank of Canada cutting interest rates in December has fallen. A 0.3% m/m seasonally adjusted rise in consumer prices caused …
Economy growing at a solid pace The batch of Russian activity data for October suggest that the economy started Q4 on a firm footing following Q3’s stronger-than-expected 1.7% y/y expansion. But with inflation likely to fall further, this is unlikely to …
Global production may have turned a corner Global aluminium output ticked up on a monthly basis in October, in large part due to the ongoing ramp-up of new capacity in Bahrain. It now looks likely that global production will be broadly flat this year as …
Inflation slips again Weak inflation figures have increased the risk of another rate cut at tomorrow’s MPC meeting. But with inflation set to pick up over the coming months, we expect that the rate will remain on hold. Figures released this morning showed …
Domestic demand weathered tax hike well Import volumes fell much less in October than after the 2014 sales tax hike, supporting our view that the tax hike will dent domestic demand less this time around. Export volumes also fell in monthly terms and we …
Single-family building permits hit 12-year high A steady rise in new home sales since the start of the year helped single-family building permits reach a 12-year high in October. A gradual move toward constructing starter homes, which are in short supply, …
19th November 2019
Manufacturing will continue to struggle Temporary factors help to explain the decline in manufacturing sales in September, but the business surveys suggest that growth in the sector will remain weak. The 0.2% m/m fall in manufacturing sales was at least …
Inflation to return to positive territory at start of 2020 Consumer prices in Saudi Arabia declined at their slowest pace so far this year in October and the headline rate is likely to return to positive territory soon. The prospect of fresh fiscal …
Inflation picks up again, rate cut now unlikely Food prices pushed up Nigerian inflation in October, suggesting that policymakers will leave their key rate on hold next week. Monetary conditions will probably still be loosened using unconventional means. …
18th November 2019
Weak growth to continue GDP growth in Thailand only managed to nudge up in Q3, and with global growth set to drag on exports we expect the economy to remain sluggish in the quarters ahead. Growth edged up to 2.4% y/y in Q3, from 2.3% in Q2. The outturn …
Slump in autos & utilities will soon be reversed The 0.8% m/m plunge in industrial production last month was almost entirely due to the strike at GM and a weather-related fall in utilities output . With the strike now over, and much of the country hit …
15th November 2019
Consumption growth continues to slow gradually The 0.3% m/m rise in retail sales in October illustrates that while consumer spending growth is slowing gradually, it remains a relative bright spot. We expect real consumption growth to slow to between 2.0% …
Slowdown in growth has further to run GDP growth in Malaysia slowed in the third quarter, and we think the economy is likely to lose more steam in the quarters ahead due to headwinds from tighter fiscal policy and a weak external environment. GDP growth …
Higher production boosts crude stocks US commercial crude stocks rose, in part owing to higher domestic production but there was also a significant outflow from the strategic reserve. We think that above-trend US stocks will remain a factor weighing on …
14th November 2019
Germany avoids a technical recession, for now While the second estimate of Q3 GDP for the euro-zone was unchanged, and Germany narrowly avoided a technical recession, we think that the cyclical downturn in the region still has further to run. Our forecast …
Disappointing start to Q4 October’s fall in retail sales volumes was especially concerning as stores refrained from raising prices at all. This heightens the risk that consumer spending growth could slow in Q4 from Q3’s 0.4% q/q, adding further woe to the …
Mixed performance across the region The Q3 GDP data for Central & Eastern Europe showed that while regional GDP growth slowed to its weakest pace in over three years, growth remained strong in Hungary and Poland. But with euro-zone weakness likely to take …
Industrial recovery to gather pace The rebound in Turkish industrial production in September suggests that the economy ended Q3 on a firmer footing and more timely evidence points to a further recovery in the coming months. The economy as a whole is …
Headline WPI inflation drops to 40-month low Wholesale price inflation is not the preferred measure of inflation for India’s policymakers, but the fact that the headline rate dropped to a 40-month low in October won’t go unnoticed. Another rate cut in …
Housing market activity faltering Against the uncertain political backdrop and with the economy weakening, the RICS survey data point to a weak near-term outlook for the housing market. Indeed, with house prices already very high and set to stay that way, …
The slowdown resumes Activity and spending slowed across the board last month, more than reversing the uptick at the end of Q3. With further weakness on the horizon, we think additional policy stimulus is due before long. Growth in industrial production …
Unemployment rate to rise further The sharp fall in employment will be causing concern for the RBA and we think the unemployment rate has further to rise in the coming months. The sharp 19,000 fall in employment in October was the largest decline in three …
Downside risks to Q4 GDP diminishing The slowdown in GDP growth in the third quarter isn’t too worrying as it reduces the chances of a slump in output after October’s sales tax hike. As such, we reiterate our view that the Bank of Japan will keep interest …
No sign of tariff impact The larger 0.4% rise in consumer prices last month was mainly due to higher gasoline prices, with little sign of the September tariffs pushing up prices of consumer goods. If anything, underlying price pressures appear to be …
13th November 2019
Recovery gains momentum The pick-up in Russian GDP growth to 1.7% y/y in Q3 appears to have been driven by a turnaround in the agricultural and wholesale trade sectors. But even though growth has strengthened, falling inflation means the central bank’s …
Inflation above-target for first time since mid-2018 The first above-target inflation reading since July last year should not push the Reserve Bank of India off its rate-cutting course. While the headline figure is being driven by a spike in food prices …
Industrial recession to drag on Although euro-zone industrial production edged up in September, the sector still fared very poorly in Q3 overall and the business surveys suggest that the region’s industrial recession has further to run. The 0.1% m/m rise …
Easing inflation leaves door open to interest rate cuts October’s consumer price inflation figures will do nothing to affect the Bank’s view – expressed at its meeting earlier this month – that interest rates will most likely be raised eventually if there …
Riksbank to tighten policy despite low inflation Despite October’s increase in CPIF inflation, underlying inflation in Sweden remains below target and serves as proof that the economy is not ready for the Riksbank’s planned rate hike in December. While …
Wage growth will slow to 2.0% soon The slowdown in wage growth in the third quarter doesn’t come as a complete surprise to the RBA and we still expect the Bank to wait until February before cutting rates again. The 0.5% quarterly rise in the wage price …
Resilient in the face of weak GDP growth After GDP growth disappointed expectations yesterday, the smaller than expected fall in employment in the three months to September was something of a relief. At the margin, the figures reduce the immediate need …
12th November 2019
Norwegian economy to stay in a class of its own This morning’s release of Q3 GDP data from Norway confirms that the economy is faring much better than its Nordic peers. The economy looks set to lose some pace in the coming months but we do not think it …
Gloom in industry deepens The downturn in India’s industrial production deepened in September with the result that, on this measure, industry contracted slightly across Q3 as a whole. More policy easing is likely in order to turn the economy around. Data …
11th November 2019
Manufacturing headwinds will grow Mexican industrial production stagnated in September, and problems in the auto sector probably caused conditions to deteriorate further in October. This adds to the pressure for policymakers to cut their key rate in …
Burst of growth in Q3 doesn’t change picture of economy in limbo While the burst of growth means that the economy avoided a recession in Q3, it’s pretty clear that underlying growth is soft and that the risks to our Q4 GDP forecast of 0.2% q/q are to the …
