The May CPI data were a step back after the run of soft core price readings in the first quarter. The broader evidence stills seems supportive of a July interest rate cut, but the next CPI release for June, to be released in the run up to that meeting, …
28th June 2024
Biden debate woes leave Trump ahead Trump’s conviction vs Biden’s lack of conviction Joe Biden’s faltering debate performance leaves Donald Trump as the narrow favourite to win this November’s presidential election. There isn’t an alternative Democratic …
Africa Chart Pack (June. 2024) …
Failed coup, economy on the ropes The news on Wednesday that armed soldiers had tried to storm Bolivia’s presidential palace in an attempted coup seemed to hark back to the Latin America of the 1970s (as well as a James Bond film of the 2000s). The …
Supply-side reform won’t fix consumer weakness This week, the government published guidelines on creating “new consumption scenarios” with the aim of “coordinating the expansion of domestic demand while deepening supply-side structural reforms”. We’ve …
Heading for a slightly stronger second quarter The solid rise in GDP in April and preliminary estimate of a small increase in May leave the economy on track to perform better than the Bank of Canada expected this quarter, but not by enough to have any …
We’re just two days from the first round of the French legislative election. (All of our election coverage can be found here .) Voting closes on Sunday at 8pm Paris time (7pm BST) and polling organisations should release estimated results shortly …
How could the French election result impact CEE? The surprise decision by French President Macron to announce early parliamentary elections (with the first round taking place this Sunday) has led to a period of turbulence in European bond markets. The …
The Dallas Fed survey of oil and gas firms released this week revealed deep dissatisfaction with the Biden administration. While there was little of note in the closely trailed headline numbers – participants indicate that oil and natural gas production …
Inflation fading, consumers faltering The core PCE deflator increased by only 0.08% m/m in May and, even allowing for some modest upward revisions to the gains in earlier months, that was enough to pull the annual core inflation rate down to 2.57%, from …
South Africa: cracks already showing in the GNU Disagreements between the South Africa’s largest party, the ANC, and its main partner in the government of national unity (GNU), the DA, over cabinet posts reinforces our point that the coalition is fragile …
It is striking how calm UK financial markets have been ahead of next week’s general election. As we set out in our UK Markets Chart Pack , while investor concern over the result of the French elections has led to a near-30 basis points (bps) rise in …
Further economic weakness in Korea Korea’s economy weakened markedly in May. Data published today show that retail sales fell by 0.2% m/m last month, a second consecutive monthly fall. With the labour market cooling and high interest rates weighing on …
The UK offers a microcosm of green fiscal issues The issue of paying for the green transition has been a recurring theme in the run-up to the forthcoming UK election; the watering down of Labour’s flagship climate policy earlier this year, which had …
More to plunge in inward FDI that meets the eye The Q1 2024 Balance of Payments data released this week has refocused attention on the slump in net foreign direct investment (FDI) inflows. In the four quarters to Q1, net FDI inflows dropped to US$26.5bn, …
Services inflation remains high Inflation figures for France, Italy and Spain suggest that euro-zone headline inflation edged down in June, while core and services inflation held broadly steady. This supports our view that the ECB will cut rates only …
This page brings together our analysis of how Donald Trump's return to the White House will affect the outlook for emerging economies. Use the Table of Contents on the right to navigate. All of our analysis on the election, including the implications for …
China’s economy has regained some momentum in recent quarters and should continue to do relatively well in the near-term. Consumers remain cautious, and a slew of policy measures aimed at supporting the ailing property sector has done little to boost new …
This page has been updated with additional analysis since first publication. Stronger economy good news for whoever is Prime Minister next Friday The upward revision to Q1 GDP growth from 0.6% q/q to 0.7% q/q (consensus forecast 0.6% q/q) suggests whoever …
Yen sliding to multi-decade lows The yen continued its descent this week, climbing above the 160 mark against the dollar that triggered foreign exchange intervention in late-April . It has not been this weak since 1986. The Ministry of Finance this week …
A narrower path The release of hotter-than-expected CPI data this Wednesday sent shockwaves through financial markets. Indeed, investors are now pricing in a nearly 40% chance of 25bp rate hike by year-end, whereas at the start of the week they thought …
Industrial output set to fall yet again The strong rebound in industrial production in May suggests that Japan’s economy turned a turner this quarter, but if output falls as much as firms are expecting this month, that strength won’t last. The 2.8% m/m …
This website has been updated with additional analysis since first publication. Rebound in underlying inflation allows BoJ to hike rates further The continued fall in the job-to-applicant ratio isn’t translating into a higher labour market and the bulk of …
Rates on hold again, but a dovish tilt Mexico’s central bank left rates unchanged at 11.00% today, but there was a surprising dovish shift in the Board’s communications – despite the post-election fall in the peso. A small reduction in the policy rate …
27th June 2024
The slight increase in mortgage rates since the beginning of the year appears to have reached a tipping point for demand. At the same time, the supply of homes being put up for sale has increased. This combination of softening demand and more ample supply …
The last US tech bubble inflated in a different way to this one. A comparison of the two leads us to conclude that this bubble will continue to inflate , despite the recent wobble in Nvidia’s share price . To re-cap, forward twelve month (FTM) earnings …
We expect a 200,000 increase in non-farm payrolls in June. The unemployment rate probably edged back down to 3.9%, while we expect a renewed slowdown in wage growth. The reacceleration in non-farm payroll growth to 272,000 in May was at odds with other …
News that some top-rated CMBS in both the US and Europe are set to make losses is in line with our previous view that distress will ramp up in 2024. But, to date, the troubled securities have all been backed by some of the worst-performing assets across …
If the polls are correct and Labour wins the election, the policies it implements and when it implements them will depend in part on the ‘headroom’ against the fiscal rules it is given by the Office for Budget Responsibility (OBR). We suspect the next …
Egypt needs to adapt to keep the lights on Daily blackouts in Egypt have returned as gas shortages intensify and, while the government can afford to spend its way out of the issue for now, climate risks require a permanent shift in strategy. Temperatures …
Durable Goods & Advance Economic Indicators (May 2024) The small fall in core orders and larger fall in underlying capital goods shipments leaves prospects for second quarter business equipment investment weaker than we had expected. The 0.1% m/m rise in …
Monday marks the 30 th anniversary of the introduction of Brazil’s currency, the real, as part of a stabilisation plan (the Plano Real ) which successfully tamed runaway inflation. For other EMs facing similar problems, most notably Argentina, the key …
CNB cuts by larger-than-expected 50bp, but delivers hawkish guidance The decision by the Czech National Bank (CNB) to deliver another 50bp cut to its policy rate today, to 4.75%, was a dovish surprise to most analysts (although not ourselves). That said, …
The Emerging Markets Economic Outlook contains analysis and forecasts for the seven emerging regions we cover: China, India, other Emerging Asia, Latin America, Emerging Europe, the Middle East & North Africa and Sub-Saharan Africa. It also contains …
Overview – Growth in Sub-Saharan Africa is set to accelerate over the next couple of years, helped by a more favourable external environment as well as falling inflation and interest rates. But tight fiscal policy will constrain the recovery and our …
Rates on hold, CBRT sticks to hawkish message The decision by the Turkish central bank (CBRT) to leave its main policy rate on hold again today, at 50.00%, was widely expected, and the continued hawkish communications support our view that interest rate …
Table of Key Forecasts Global Overview – The global economy seems to be heading into recovery mode as the adverse effects of the previous surge in inflation subside. Real incomes are recovering in most advanced economies and China is feeling the benefits …
The stability of UK financial markets ahead of the UK general election is striking when compared to the sharp moves in French asset prices ahead of the French legislative elections. It’s probably because the UK election result isn’t in doubt and the …
Overview – We forecast most commodities prices to fall next year – despite falling interest rates and faster global GDP growth – as numerous supply constraints ease and a crunch in Chinese construction begins to cloud the outlook for industrial metals. …
The upcoming French election continues to loom over euro-zone financial markets and the euro. We think it would take a worst case scenario in which France’s fiscal outlook worsens materially to generate a sustained fall in the euro. That is a plausible …
This page has been updated with additional analysis since first publication. EC Survey points to economic growth stagnating The EC business and consumer survey for June is consistent with weak growth in euro-zone GDP and suggests that price pressures …
A strong end to Q2 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional growth strengthened at the end of Q2, with our regional-weighted measure of sentiment rising to a two-year high in June. …
May’s data show a continued gradual increase in money and lending growth, though both remain slow. While the ECB’s loosening cycle is now underway, money and lending growth are set to remain subdued. The ECB’s previous monetary tightening caused the …
A soft start to 2024 for office demand and weak jobs outlook in Benelux suggest that recent rental outperformance will not last. With supply also rising, we think prime rental growth will slow to around the euro-zone average in the coming years. Prime …
This page has been updated with additional analysis since first publication. Riksbank pauses but will probably cut again in August The Riksbank’s decision to leave rates unchanged was as expected and does not suggest that policymakers are regretting their …
Dovish BSP hints at first rate cut in Q3 The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), but dropped clear hints that rate cuts were coming soon. We are sticking with our view that the central bank will cut …
While the labour market held up initially as job vacancies started to fall, fewer job openings are now pushing up the unemployment rate in earnest and we expect it to rise from 4% now to 5% by 2026. According to data released by the Australian Bureau of …
Although it’s showed little signs of it lately, we still expect the yen to rebound against the dollar. The yen’s recent struggles have left it its weakest level against the US dollar since the 1980s. Given that the USD/JPY rate has breached 160, where the …
26th June 2024
New home sales fall to six-month low The 11.3% m/m decline in new home sales in May will steal all the headlines, but it largely reflected a significant upward revision to the April sales number, leaving us somewhat confused at the overall health of the …
