US Economics Weekly Fed remaining dovish as supply-side constraints mount In a relatively quiet week, the few data releases we did get added to signs that shortages are pushing up prices further and restraining the pace of economic recovery. 21st May 2021 · 6 mins read
China Economics Weekly Vaccine surge, commodity price curbs After a slow start, China’s COVID-19 vaccine rollout is now one of the world’s fastest and is currently responsible for over half of daily inoculations globally. At this pace, China could catch up... 21st May 2021 · 4 mins read
Japan Data Response Japan Flash PMIs (May) Today’s flash PMIs suggest that the manufacturing sector will continue to recover as supply shortages are starting to ease. However, the plunge in the services PMI suggests that overall economic... 21st May 2021 · 2 mins read
Capital Daily We expect recent strength in the South African rand to reverse Despite its recent appreciation against the US dollar, we expect the South African rand – like most emerging market (EM) currencies – to end this year weaker against the greenback. 20th May 2021 · 6 mins read
Canada Economics Update Bank may welcome strong loonie after inflation spike The Bank of Canada has voiced concern about the loonie although, following the signs of emerging inflationary pressures in April, it will probably be more welcoming of the disinflationary impact of... 20th May 2021 · 3 mins read
Europe Economics Focus Inflation in euro-zone to remain lower than in US Price pressures are building in the US and we think they will be longer-lasting than the Fed expects, but it is a very different story in the euro-zone. A weaker economic recovery and a flat Phillips... 20th May 2021 · 17 mins read
Middle East & North Africa Data Response Saudi Arabia Consumer Prices (Apr.) Saudi inflation rose to 5.3% y/y in April and, while we expect the headline rate to rise further over the rest of this quarter, it is set to fall sharply to 1.5-2.0% from July as the effects of last... 20th May 2021 · 2 mins read
India Chart Pack Over the worst? New virus cases in India remain extremely high, but some solace can be taken from the fact that they have dropped rapidly over the past couple of weeks back to their level in mid-April. The share of... 20th May 2021 · 9 mins read
FX Markets Update Why we still favour the US dollar over the euro Despite its recent resurgence, we continue to think that the euro will weaken against the dollar this year. 19th May 2021 · 4 mins read
Capital Daily US corporate bonds versus equities The relative valuation of stock and corporate bond markets continues to make us doubt that equities in general are in a bubble. It remains very different to the situation before collapses in the US... 19th May 2021 · 6 mins read
Canada Data Response Consumer Prices (Apr.) The large 0.6% m/m seasonally-adjusted rise in prices in April shows that the jump in inflation to 3.4% was not due to base effects alone. With firms’ selling price expectations elevated, we expect... 19th May 2021 · 2 mins read
Emerging Markets Economics Update EM food inflation: how concerned should we be? The rise in global agricultural prices in recent months has sparked concerns about a surge in EM food inflation. While it would be remiss to dismiss these, we think the impact may not be as severe as... 19th May 2021 · 3 mins read
Europe Economics Update Will the euro-zone see a US-style jump in inflation? Euro-zone inflation is likely to keep increasing as the economy re-opens, but we doubt it will rise as high as in the US. That’s because base effects will be smaller and the rebound in consumer... 19th May 2021 · 4 mins read
Africa Data Response South Africa Consumer Prices (Apr.) The jump in South Africa’s headline inflation in April, to 4.4% y/y, was driven by energy price effects but there were signs that broader price pressures are starting to build. But even so, we think... 19th May 2021 · 3 mins read
RBNZ Watch Housing mandate won’t change the Bank’s outlook While the Bank will acknowledge the new house price requirements in its remit it is unlikely to respond to them with immediate policy changes. On that basis we expect the RBNZ to keep policy settings... 19th May 2021 · 8 mins read
Japan Economics Update Producer price jump unlikely to boost inflation much Producer prices are rising the most in years, but this largely reflects global supply shortages that should abate as vaccines are rolled out. We expect consumer price inflation to average a muted 0.6%... 19th May 2021 · 2 mins read
