Little sign of goods price pressures easing Final inflation data for October confirm that price pressures strengthened and became more broad-based. Unlike in the US and UK, there is little sign that goods inflation has passed its peak. While headline …
17th November 2022
Recent policy announcements have raised hopes that the property downturn may be coming to an end. But while the measures made public so far reduce some of the downside risks by giving developers and their creditors a little breathing room, they fall short …
The central bank of the Philippines (BSP) today raised its main policy rate by a further 75bps (to 5.0%), and we think further tightening is likely in the near term. But with inflation having probably peaked, headwinds to the recovery mounting and the …
More hikes coming in Indonesia Bank Indonesia (BI) today raised interest rates by a further 50bps (to 5.25%) and we think further hikes are likely as the central bank looks to support the rupiah and clamp down on inflation. While a rate hike today was …
Further hikes likely in the near term, but tightening cycle to be over by early next year The central bank of the Philippines (BSP) today raised its main policy rate by a further 75bps (to 5.0%), and we think further tightening is likely in the near term. …
Unemployment rate to rise sharply next year Australia’s labour market held up well in October, consistent with our expectations for a near-term acceleration in wage growth and a further 100bps of rate hikes by the RBA. But we think employment will start …
Deficit to narrow by end-2022 The trade deficit widened but stayed below the record high in August, but with the yen strengthening significantly in recent weeks, the deficit should narrow later this quarter. Export values rose by a slower 25.3% y/y …
Yen rally to help narrow trade deficit The trade deficit widened but stayed below the record high in August, but with the yen strengthening significantly in recent weeks, the deficit should narrow later this quarter. Export values rose by a slower 25.3% …
16th November 2022
Weak new home sales weigh on housing starts The plunge in new home sales in Toronto in September points to further falls in housing starts, although there are at least some signs that the worst may be behind us for home sales and that the pressure on …
We suspect the underperformance of US equities that has accompanied the US dollar’s slump so far this month will become a feature from mid-2023, as the currency eventually comes under sustained pressure. Since the end of October, MSCI’s USA Index has …
More declines in store for commercial crude oil stocks Oil prices were little swayed by the latest EIA data showing the biggest decline in commercial crude stocks in about three months last week, given that the data were similar to industry data released …
We think US housing starts fell in October on the back of rising mortgage rates (15.00 GMT) We expect the central banks of Indonesia and the Philippines to raise rates Clients can sign up here for our Drop-In on the UK Autumn Statement (16.00 GMT) Key …
Euro-zone industrial production and GDP have been stronger than we had expected so far this year. Several factors have contributed to this, but one of them is the distortions to Ireland’s economic statistics. The picture in the rest of the euro-zone is …
Economy stabilising Russia’s economy appeared to stabilise in Q3 as the 4% y/y contraction in GDP reported by Rosstat today is consistent with output rising marginally in seasonally-adjusted q/q terms. That said, there’s little sign in the latest monthly …
The negative correlation between the US dollar and the price of oil has reasserted itself in recent months, and we think it will persist as the looming global recession pushes the dollar higher and oil price lower. Although the price of oil hasn’t risen …
The small increase in vacancy in Q3 supports our view that the rental market is turning a corner and makes us increasingly confident in our call that rents will fall next year. Conditions remain tighter in the homeowner market. But higher interest rates …
The “global” pledge to cut methane emissions by 30% this decade is a worthy aim, but the fact that the world’s biggest emitters have not signed up is far from helpful, and many of the obvious ways to reduce emissions should happen in spite of …
Consumers refuse to buckle under weight of higher rates The strength of underlying retail sales despite higher borrowing costs is encouraging, but manufacturing is slowly succumbing to the global malaise. The consumer is hanging in there, with retail …
Core inflation pressures better than they look Although the annual rates of CPI-median and CPI-trim edged up in October, the 3-month annualised rates that the Bank of Canada is now focussed on declined. As that for CPI-median is now in the 1% to 3% …
Manufacturing close to stagnation In contrast to the earlier news of consumer resilience, there are signs of a deterioration in the manufacturing sector, with output rising by only 0.1% in October, September’s gain cut from 0.4% to 0.2%, and downward …
Core inflation pressures better than they look Headline inflation was unchanged at 6.9% in October and the CPI-median and CPI-trim measures of core inflation increased, but the latter was mainly due to unfavourable base effects. It appears that the …
Consumer refuses to buckle under weight of higher borrowing costs The US consumer is hanging in there under the weight of rapidly rising borrowing costs, with retail sales increasing by a solid 1.3% m/m in October. Admittedly, sales last month were …
Foreign capital inflows into EM financial markets have risen sharply so far this month, as investor risk appetite has improved. But with the global economy set to enter recession, we aren’t convinced that this will last as EMs are likely to find it more …
Economy now entering slower growth The slowdown in GDP growth in Israel in Q3, to 2.1% q/q annualised, was in line with expectations as private consumption contracted and net trade exerted a drag. We think Israel’s economy will hold up better than other …
September’s hard activity data out of South Africa were a mixed bag, but it looks like the economy narrowly avoided another contraction in Q3 (and thus a technical recession). Even so, with headwinds mounting, economic activity is likely to stay subdued …
Morocco has been hit hard by the spillovers from the war in Ukraine and, while its external strains aren’t anywhere near as sever as those in Egypt and Tunisia, we think the authorities will need to resume their shift to a more flexible exchange rate …
This checklist helps clients keep track of the key economic and public finances forecasts announced during the Chancellor’s Autumn Statement at 11.30am on Thursday 17 th November. We will send a Rapid Response shortly after the speech, we are hosting a …
Malaysia heads to the polls on Saturday for a general election which, if the latest opinion polls are correct, will lead to a further period of unstable and fractured politics. This reduces the chances of meaningful economic reforms being passed and …
Broad-based strength in labour market and inflation to prompt 75bp hike next week Rates to peak at 5.0% by April With inflation set to drop back, RBNZ will cut rates in late-2023 With the labour market and inflation going from strength to strength and …
The recent surge in rental growth to a record high has been widely reported, but the usual explanations are unsatisfactory. Population indicators don’t suggest a sudden rise in demand, and there is little evidence of landlords selling up. Instead, we …
Inflation may have peaked, but battle not yet won It’s possible that the big leap in CPI inflation from 10.1% in September to a new 40-year high of 11.1% in October will mark the peak. But core inflation may yet rise further, which is why we think the …
CPI inflation may have peaked, but inflation battle is not yet won It’s possible that the big leap in CPI inflation from 10.1% in September to a new 40-year high of 11.1% in October (consensus 10.7%, BoE 10.9%) will mark the peak. But core inflation may …
Wage growth will peak at 3.5% by mid-2023 Wage growth climbed above 3% in Q3 for the first time since 2013 and we expect it to climb further to 3.5% by the middle of next year. The 1.0% q/q rise in hourly wages excluding bonuses was above the analyst …
Losing streak has further to run Weakness in the manufacturing sector led to “core” machinery orders falling for a second consecutive month in September. Worse still, machine tool orders indicate that the two-month losing streak, rare as it is, hasn’t …
Imminent rebound in orders to be soft “Core” machinery orders fell for a second consecutive month in September due to weakness in manufacturing orders. While the usual see-saw patterns in orders point to a rebound that should materialise in October’s …
15th November 2022
Strong Q3 to be followed by sharp slowdown The stronger-than-expected 1.6% q/q expansion in Colombia’s GDP in Q3 took output further above its pre-pandemic trend and means that Colombia is on course to be a regional outperformer in 2022. That said, there …
Higher utility prices probably pushed UK CPI inflation higher in October (07.00 GMT) We think US retail sales increased by 1.3% last month… (13.30 GMT) … but we expect industrial production to have risen by a more-muted 0.2% (14.15 GMT) Key Market …
Even as Central London office vacancy rates rose to a 12-year peak in Q3, annual rental growth ticked-up to a three-year high. That marks a reversal from the situation prior to COVID-19, when a tight market failed to spark a strong rise in rents. But we …
This week’s G20 summit in Bali, Indonesia, has so far exceeded low expectations. There is broad condemnation of the war in Ukraine and bilateral talks between China and the US seem to have been amicable. But with the meeting dominated by geopolitical …
Manufacturing sales volumes set to fall further Manufacturing sales volumes edged down in September and, with the business surveys continuing to weaken and inventory levels now looking unusually high, they are likely to fall further. We expect weaker …
Fresh upwards pressures pushing up inflation Data out of Nigeria showing a pick-up in inflation to 21.1% y/y in October offered little sign that price pressures are abating. And that’s before the effects of recent flooding and currency weakness have fully …
Recovery in sentiment won’t prevent recession The rebound in the ZEW and other sentiment indicators in November does not change the fact that the German economy is firmly headed for recession. The rise in the ZEW economic sentiment indicator from -59.2 …
A mixed performance in Q3, but recessions on the horizon Q3 GDP figures for Central and Eastern Europe were generally a bit better than we had expected, but pockets of weakness were beginning to emerge as the Czech and Hungarian economies both …
The eve of recession Euro-zone GDP growth slowed to just 0.2% q/q in Q3 and with all of the timelier surveys pointing downwards, the economy looks set to fall into recession in Q4. Nevertheless, surveys of firms’ hiring intentions suggest that the …
This webpage has been updated with additional analysis, table, and chart of key data. Inflation passed its peak Saudi inflation eased a touch from 3.1% y/y in September to 3.0% y/y in October (Consensus: 3.0% y/y; CE: 2.8% y/y) and we think the headline …
Although credit growth in advanced economies remained strong in September, it has largely been used to help economies cope with the effects from rising costs and inflation. But lending criteria is now tightening and demand for loans – particularly …
Labour market looks like it may be turning a corner September’s labour market figures reveal further signs that the labour market is becoming less tight. That may alleviate some of the pressure on the Bank of England to repeat November’s 75 basis point …
Rise in core inflation will keep Riksbank in hawkish mode Another bigger-than-expected increase in core inflation, to 7.9% in October, will keep the Riksbank focused on slowing demand when policymakers meet next week. We expect a further 75bp rate hike, …
