Core inflation pressures continue to ease While base effects helped to pull headline inflation sharply lower in March, there were also some encouraging signs in core inflation, as the average three-month annualised gain in CPI-trim and CPI-median fell to …
18th April 2023
Note: We discussed our revamped FCIs and took your questions on global financial conditions in a 20-minute online briefing on Thursday, 20 th April . Watch the recording here . We have revamped our financial conditions indices (FCIs) for advanced …
Bank Indonesia (BI) today left interest rates unchanged (at 5.75%), and appeared to signal that further rate increases this year were unlikely. With inflation falling and growth easing, we expect interest rates to be left on hold for the remainder of the …
So far at least, that’s what we’ve seen. CMBS spreads have blown out, with option-adjusted spreads on triple-B CMBS rising from just over 300 basis points in early 2022 to more than 900 bps last week. Simultaneously, anecdotal evidence suggests lenders …
On hold for the rest of the year Bank Indonesia (BI) kept its main policy rate unchanged today (at 5.75%), and appeared to signal that further rate increases this year were unlikely. With inflation falling and growth easing, we expect interest rates to be …
Wage growth eases further, but slowly The labour market became a bit less tight in February and wage growth continued to ease, albeit slowly. That leaves the Bank of England with a tough call on whether to raise interest rates further. Tomorrow’s release …
Wage growth easing albeit slowly The labour market became a bit less tight in February and wage growth continued to ease, albeit slowly. That leaves the Bank of England with a tough call on whether to raise interest rates further. Tomorrow’s release of …
Inflation concerns will prompt a final 25bp rate hike in May The minutes of the RBA’s April meeting reinforce our view that the decision to leave rates on hold did not signal an end to the Bank’s tightening cycle. Indeed, the Board did discuss the case …
This page has been updated with additional analysis and charts since first publication. Growth on course to hit 6% this year GDP rebounded more quickly than expected in Q1 thanks to a rapid return to normality following last year’s virus disruptions. …
China’s Q1 GDP data may show robust q/q growth (03.00 BST) We expect Indonesia’s central bank to leave policy unchanged (08.20 BST) Sign up here for our Drop-In on China’s post-lockdown recovery (09.00 BST) Key Market Themes Q1 earnings reports from US …
17th April 2023
While US equity REITs are a long way from discounting the “best of times” for US commercial real estate (CRE) over the coming quarters, listed real estate stocks in Europe appear braced for something not far off the “worst of times”. That is a difference …
As the dust settles on March’s banking sector turmoil, there’s intensifying focus on how credit is being affected by heightened fear. But, with lags in data and established market indicators giving only partial views, are investors getting a clear picture …
The increasingly diverse array of creditors to debt-distressed EM governments – and the difficulties in getting China and Western lenders to see eye to eye – is already gumming up sovereign debt restructurings. And despite some positive noises from the …
Recent events have highlighted that meeting regulatory capital and liquidity requirements does not guarantee that banks will be financially stable. The forthcoming EU bank stress test results should give a better idea of the banks’ health, but those tests …
March’s net commercial real estate (CRE) lending slowed sharply following SVB’s collapse early in the month. Lending against multifamily fell for the first time in 18 months, driven by a reduction in small banks’ exposure. Along with a softening in …
A higher corporate tax would reduce corporate sector surpluses and could stimulate demand if the additional revenue were used to finance higher public spending or transfers to households. But the tax would have to be raised to implausibly high levels to …
Shift towards cheaper homes challenges statisticians The divergence between the Nationwide and Halifax House Price Indices (HPIs) of late has cast some doubt on the direction of house prices. A struggle to adjust the statistics for a shift towards cheaper …
Central banks in Australia and New Zealand have taken starkly different approaches to managing the inflation-unemployment trade-off in their countries. Despite being behind the curve on interest-rate hikes relative to other advanced economy central …
Neil Shearing Group Chief Economist The acute phase of last month’s banking crisis — which some, channelling the US College Basketball tournament, have dubbed “March Madness” — has passed. The sense of panic has abated and markets have calmed. Measures …
Bank of Canada Governor Tiff Macklem used his press conference this week to push back against expectations for interest rate cuts later this year. That partly reflects the Bank’s less downbeat assessment of the economic outlook, but the nascent rebound in …
14th April 2023
Despite a bounce today, the US dollar is set to end the week lower against most currencies and around its weakest level, in aggregate, in a year. This partly reflects that, even though Treasury yields are set to end the week higher following today’s …
UK headline CPI probably fell in March, though core pressures remain strong (Wed.) We expect the PBOC to keep its 1-Year Loan Prime Rate on hold next week (Thu.) Flash PMIs for the euro-zone may point to a continued expansion in April (Fri.) Key Market …
Overview – We have made substantial downgrades to our metro-level forecasts this quarter. The outlook for office-based employment growth has been hit by tech sector struggles, weighing on demand in many western markets. We have also pushed through bigger …
The strength of the March CPI data may be enough to persuade the Fed to squeeze in a final 25bp rate hike at the early-May FOMC meeting. But with mounting evidence that economic growth is weakening again, we doubt that strength will last much longer. Core …
Commodity prices received a boost from expectations that the Fed is nearing the end of its tightening cycle and the weaker US dollar this week, but we think that it is only a matter of time before the economic slowdown we forecast in developed economies …
The outlook for economic activity remains poor due to the impact of high inflation, tight monetary policy and weak external demand. Sweden is already in a recession, not least thanks to the slump in its property sector. And while Norway and Switzerland …
Lula’s 3.0: an inauspicious start Brazil’s president Lula marked his first 100 days in office this week and, while there’s been a bit more enthusiasm from investors for Brazilian assets in the past few days, there hasn’t really been much for investors to …
Glimmers of hope have emerged this week about unlocking the stalemate over the global debt restructuring framework, with encouraging signs for negotiations in Zambia and Ghana. But we fear that the measures considered are more of a workaround that don’t …
Further evidence of fading economic momentum The 0.5% m/m fall in manufacturing output in March provides more evidence of a loss of economic momentum going into the second quarter. While the return of temperatures to seasonal norms last month appears to …
How will the ructions in the banking sector be reflected in the data? Tracking the credit impact of March’s events isn’t as straightforward as it appears, says Group Chief Economist Neil Shearing . He talks to David Wilder about how to cut through the …
Manufacturing outlook remains challenging After a bright start to the year, manufacturing activity weakened in February. While that was partly due to temporary factors that are likely to be quickly reversed, the surveys point to a challenging outlook. The …
Global sugar prices have surged by over 20% since the start of the year as production estimates in several key producers have been downgraded. We think the supply picture is unlikely to change by much over the next months and will keep prices elevated. …
Sales saved by online strength Retail sales fell by 1.0% m/m in March, adding to the evidence that the strong start to the year was partly due to the unseasonably mild winter weather. With control group sales only falling by 0.3% m/m last month, …
Note: Join our Tuesday 18 th April online briefing discussing what China’s Q1 “data dump” tells us about the strength of the country’s reopening recovery. Register Now . The rebound has exceeded most expectations Mixed data have contributed to differences …
Further evidence of fading economic momentum The 0.5% m/m fall in manufacturing output in March provides yet more evidence of a significant loss of economic momentum going into the second quarter. While the return of temperatures to seasonal norms last …
Surge in household incomes unlikely to be sustained The UK economy has continued to be more resilient to the twin drags of higher inflation and higher interest rates than we thought. Real GDP was flat in February despite an extra drag from the strikes. …
Financial market strains have eased over recent weeks, though some pockets of uncertainty remain and our sense is that the risk of further problems emerging in the coming months remains high. Since the forced takeover of Credit Suisse by rival UBS three …
Sales boosted by online strength Retail sales fell by 1.0% m/m in March, adding to the evidence that the strong start to the year was partly due to the unseasonably mild winter weather. With control group sales only falling by 0.3% m/m last month, …
Headline inflation falling, but little else to cheer for The raft of March inflation data released across Emerging Europe this week showed that the regional disinflation process is now well underway, but that core price pressures remain incredibly strong. …
Data point to positive growth in Q1 The latest official activity data suggest that the euro-zone economy posted a small expansion in Q1. Admittedly, retail sales fell in February, continuing the downward trend they have been on for over a year. But lower …
This week, Swiss legislators voiced their concerns about the collapse of Credit Suisse and its takeover by UBS. While the vote to reject the Credit Suisse rescue package will not affect the takeover itself, or the government guarantees provided, it has …
Small rebound in confidence suggests no big hit from bank turmoil The small rebound in the University of Michigan consumer sentiment index in early April suggests that the easing of the crisis in the banking sector has reassured consumers. Nevertheless, …
After a strong 2022, we expect Warsaw offices to face a more difficult time ahead. Falling employment and hybrid working practices will limit any revival in demand after 2023 and leave rents underperforming both the CEE and wider European averages. The …
Difficult balancing act for the Philippines The US and the Philippines this week began their largest-ever joint military exercises, with 17,000 troops taking part. The exercises follow an agreement in February that provided the US with four more …
India becomes home to world’s largest population According to UN projections, India will today become home to the world’s largest population, displacing China from the number one spot. In truth, the exact timing of the transition is unknown: it may even …
Core inflation dips below 9% The fall in Sweden’s measure of core inflation to 8.9% in March suggests that it may now be passed its peak. But it is still much higher than the Riksbank had anticipated at its February meeting and does not change our view …
On April 13 th a three-member panel delivered its review of Australia’s migration system to the Home Affairs minister, Claire O’Neil. Although the review is unlikely to be published before next month, it is already stoking debate over whether the ongoing …
The Monetary Authority of Singapore (MAS) kept policy on hold today and with the economy set to struggle and inflation likely to fall sharply over the coming quarters we expect today’s decision to have marked an end to the tightening cycle. The MAS …
Ueda has his eye on wage growth Bank of Japan Governor Kazuo Ueda noted in his inaugural press conference this week that more time is needed to see if wage growth can be sustained at a level where it will support inflation at or above the 2% target. So …
