RBI Watch Three cuts in a row The MPC is likely to use the current low rate of headline inflation as justification for a third consecutive rate cut at the conclusion of its policy meeting on Thursday 6th June. But with a growing... 30th May 2019 · 1 min read
Emerging Europe Chart Pack Monetary tightening comes into focus Emerging Europe has been one of the few parts of the emerging world where attention has centred on monetary tightening (rather than loosening) in the past month. A rise in core inflation to multi-year... 29th May 2019 · 1 min read
Asia Chart Pack Who is winning the trade war? With the trade war between the US and China continuing to escalate, a clear winner is starting to emerge: Vietnam. Since around the middle of last year, Vietnam’s exports to the US have shot up by... 29th May 2019 · 1 min read
Latin America Economics Update Argentine inflation close to a peak Argentine inflation is close to a peak and should ease in the coming quarters. But bringing inflation down to single digits will require a reduction in wage indexation, improvements in the central... 28th May 2019 · 1 min read
RBA Watch Rates may fall to 0.75% The Reserve Bank of Australia (RBA) has telegraphed that it will cut interest rates to 1.25% in June and we think it will follow up with another 25bp cut in August. But we suspect that further easing... 28th May 2019 · 1 min read
UK Economics Weekly Prime Minister May falls, CPI inflation rises The announcement by the Prime Minister that she will resign appears to have generated even more political uncertainty for the Bank of England to deal with. The Bank will be thankful, then, that... 24th May 2019 · 1 min read
Latin America Data Response Brazil IPCA-15 (May) The softer-than-expected mid-month inflation Brazilian figure for May, of 4.9% y/y, suggests that the headline rate has now peaked, and we think it will fall back below the central bank’s target in... 24th May 2019 · 1 min read
Japan Data Response Consumer Prices (Apr.) The surge in April’s headline inflation was accompanied by an acceleration in underlying inflation, which rose to its highest in almost three years. However, we suspect that underlying inflation will... 24th May 2019 · 1 min read
Latin America Economics Update Further weakness in store for the Colombian peso The Colombian peso has been the worst performing EM currency so far this month and we expect it to fall by another 8% or so against the dollar by year-end. The resulting rise in inflation is likely to... 23rd May 2019 · 1 min read
Emerging Markets Economics Update What to make of the rise in EM food inflation? Headline EM inflation has risen in the last few months due to a sharp jump in food inflation. African Swine Fever could keep food inflation in China high into next year, although supply shocks... 23rd May 2019 · 1 min read
UK Economics Update Don’t write off higher inflation Yesterday’s revelation that inflation in April rose above the Bank of England’s 2% target captured the headlines, but inflation was actually weaker than we had expected. A closer inspection suggests... 23rd May 2019 · 1 min read
Latin America Data Response Mexico Bi-Weekly CPI (May) Having risen in the last few months, Mexican inflation was unchanged at 4.4% y/y in the first half of May, supporting our view that the recent increase in the headline rate was temporary. We expect... 23rd May 2019 · 1 min read
Middle East & North Africa Chart Pack Lebanon stuck between a rock and a hard place The outlook for Lebanon’s economy is going from bad to worse. The most immediate threat is that the country could find itself caught in the crosshairs amid escalating tensions between the Gulf... 22nd May 2019 · 1 min read
US Chart Pack Weakness of core inflation to prove persistent Fed officials have dismissed the recent weakness of core inflation, which has fallen to only 1.6% on the PCE measure, as being driven by transitory factors. Methodology changes resulted in a sharp... 22nd May 2019 · 1 min read
Europe Economics Update Falling inflation expectations another worry for ECB The recent fall in financial market measures of inflation expectations may be a bit misleading, and is not matched by a comparable fall in households’ inflation expectations. But it is nonetheless... 22nd May 2019 · 1 min read
UK Data Response Consumer/Producer Prices & Public Finances (Apr.) CPI Inflation rose back above the Bank of England’s 2% target in April for the first time since December. And while we suspect that inflation is likely to remain above 2% for the rest of the year, as... 22nd May 2019 · 1 min read
