Canada Chart Pack Surveys point to higher wage inflation Wage growth remained moderate over the summer but, with labour shortages intensifying, it seems likely to accelerate sharply soon. The Bank of Canada’s third-quarter Business Outlook Survey (BOS)... 26th October 2021 · 9 mins read
China Economic Outlook Downturn setting in The economy slowed sharply in Q3. Weakness in services is already reversing as virus controls have been relaxed again. But industry and construction are on the cusp of a deeper downturn that could... 26th October 2021 · 23 mins read
Japan Economics Update Rising prices won’t prevent rebound in consumption The weaker yen and higher energy prices will reduce the purchasing power of households a bit. But with the household savings rate still very high, this won’t prevent a strong rebound in services... 26th October 2021 · 2 mins read
Capital Daily Inflation compensation, Treasury yields & the US stock market While we do not expect a tumble in the US stock market, we doubt that it will remain quite as resilient in the face of rising US Treasury yields as it has in recent weeks. 25th October 2021 · 4 mins read
Asia Data Response Singapore Consumer Prices (Sep.) While inflation in Singapore is set to rise further over the next few months, both the headline and core rate should moderate in 2022 to well within the Monetary Authority of Singapore’s (MAS) comfort... 25th October 2021 · 2 mins read
Asset Allocation Focus Examining the threat to US equities from rising wage inflation We expect rising wage inflation in the US to squeeze the profits of the non-financial corporate sector, which were a record high as a share of its output in Q2. This is one reason why we think the... 22nd October 2021 · 14 mins read
Latin America Data Response Mexico Bi-Weekly CPI (Oct.) The further rise in Mexico’s core inflation rate to a 12-year high of 5.1% y/y in the first two weeks of October, which contributed to the rise in the headline rate to 6.1% y/y, will add to the... 22nd October 2021 · 2 mins read
Emerging Markets Economics Update A closer look at the drivers of EM inflation A big chunk of the recent rise in headline inflation in EMs has been driven by a jump in energy inflation which will be transitory. But core inflation has also risen in parts of Latin America and... 22nd October 2021 · 3 mins read
Australia & New Zealand Economics Weekly Market pricing on RBA too aggressive Despite the rise in virus cases in recent weeks, strong inflation in New Zealand increases the pressure on the RBNZ to tighten policy further. While we are sticking to our forecast of a 25bp hike in... 22nd October 2021 · 6 mins read
Japan Data Response Japan Consumer Prices (Sep. 2021) Headline inflation in September turned positive for the first time this year due to spikes in fresh food and energy inflation. As the drag from mobile phone tariffs fades in the first half of next... 22nd October 2021 · 2 mins read
Global Economics Update Higher oil prices won’t stop inflation falling next year The recent upward revision to our oil price forecast does little to alter our view that inflation will fall in 2022. Even if oil prices don’t fall as we expect them to and they stay at their current... 21st October 2021 · 3 mins read
US Chart Pack Uncertainty over Fed’s reaction function We are confident in our new forecasts that GDP growth will be a disappointing 2.7% in 2022 and 2.0% in 2023, while core inflation remains elevated at close to 3%, but we are less confident in our... 21st October 2021 · 9 mins read
Australia & New Zealand Economics Focus Australia- Wage growth will approach 3% by end-2022 A renewed tightening of the labour market next year means that wage growth will accelerate further. That pick-up will be underpinned by a stronger minimum wage hike, the lifting of caps on public... 21st October 2021 · 15 mins read
Canada Economic Outlook Supply shortages limiting economic growth We now expect GDP growth to be 4.8% in 2021, rather than 5.0%, and 3.5% in 2022, down from 4.0%. Worsening labour shortages imply that spare capacity has been rapidly absorbed and point to a sharp... 20th October 2021 · 19 mins read
Canada Data Response Consumer Prices (Sep.) Inflation rose further to 4.4% in September due to both renewed supply disruptions and the easing of travel restrictions. We do not expect the various supply disruptions that are pushing up goods... 20th October 2021 · 2 mins read
Emerging Europe Economic Outlook Near-term recovery to face stronger headwinds The region has experienced a rapid recovery, but the re-opening boost has now faded and the region is likely to face stronger headwinds in the near term due to surging COVID-19 cases, rising inflation... 20th October 2021 · 28 mins read
