UK Economic Outlook Soaring inflation to trigger a recession A rise in CPI inflation from the 40-year high of 9.1% in May to a peak of 12% or higher in October will reduce real incomes by enough to mean that a recession now seems inevitable. Our forecast that... 18th July 2022 · 27 mins read
Japan Economic Outlook BoJ will reduce pressure on Yield Curve Control Supply shortages and continued virus caution will result in a weaker recovery in Japan than most anticipate. With wage growth sluggish too, the Bank of Japan won’t see a need to lift its policy rates... 18th July 2022 · 18 mins read
Capital Daily Chinese equities still face many headwinds We think that several data releases and events over the past week or so lend some support to our view that China’s stock markets will continue to struggle. 15th July 2022 · 8 mins read
Australia & New Zealand Economics Weekly RBA will deliver 75bp rate hike next month With consumer spending resilient, the labour market tightening far faster than anyone had anticipated and inflation set to surge further in Q2, we now expect the Reserve Bank of Australia to deliver a... 15th July 2022 · 5 mins read
Europe Economic Outlook Recession won’t stop aggressive ECB tightening The euro-zone looks on course to fall into a mild recession in the coming quarters. Real incomes are falling, business sentiment has plummeted and growth in the region’s export markets is slowing... 14th July 2022 · 29 mins read
Australia & New Zealand Data Response Australia Labour Market (Jun. 2022) The sharp fall in the unemployment rate in June is consistent with our view that the Reserve Bank of Australia will need to tighten monetary policy more aggressively than most anticipate. 14th July 2022 · 2 mins read
Global Economics Chart Pack Product shortages ease as activity weakens Recent data suggest that global economic activity was even weaker than we initially thought in Q2, with GDP probably contracting in several major economies including the euro-zone, UK and China. The... 13th July 2022 · 13 mins read
US Economics Focus Is a recession coming soon? We think that the economy is well-placed to handle higher interest rates and anticipate a period of weak economic growth rather than an outright recession: Rate-sensitive spending is a relatively... 11th July 2022 · 17 mins read
Capital Daily Headwinds growing again for US bonds and equities June’s US Employment Report lends support to our forecast that the Federal Reserve will raise interest rates by more than is currently discounted in markets, pushing up Treasury yields this year. And... 8th July 2022 · 7 mins read
Canada Data Response Labour Force Survey (Jun.) The surprise fall in employment in June appears to reflect seasonal effects and, with wage growth surging to 5.2% y/y, the Bank of Canada will follow through next week on its hint of a larger 75 bp... 8th July 2022 · 3 mins read
US Data Response Employment Report (Jun.) The strong 372,000 gain in non-farm payrolls in June appears to make a mockery of claims the economy is heading into, let alone already in, a recession. That may be enough to solidify the case for... 8th July 2022 · 2 mins read
Europe Economics Update German wage settlements likely to keep inflation high Very high inflation and low unemployment are driving German unions to seek big pay rises in this year’s collective negotiations. We think nominal pay growth will be in the region of 4-5% this year and... 7th July 2022 · 4 mins read
India Economic Outlook More frontloading to come Strong economic growth and surging inflation have prompted the RBI to kick-start its hiking cycle and we think the central bank will continue to frontload policy tightening. In all, we think the repo... 7th July 2022 · 19 mins read
Australia & New Zealand Economic Outlook Housing downturn raises recession risks With inflation rising even further than we had anticipated, both the RBNZ and the RBA will slam harder on the brakes than most anticipate. We expect policy rates to peak around 3.5% in both countries... 7th July 2022 · 25 mins read
Europe Chart Pack Inflation pressures remain intense The latest data suggest that underlying inflationary pressures in the euro-zone remain intense. Although core inflation edged down from 3.8% in May to 3.7% in June, this appeared to be down to... 6th July 2022 · 10 mins read
Bank of Canada Watch A more forceful 75 bp hike The recent acceleration in wage growth and rise in long-run inflation expectations leave little doubt that, despite the drop back in commodity prices, the Bank of Canada will follow through with a... 6th July 2022 · 6 mins read
