India Economics Update RBI tightening cycle has further to run The RBI hiked the repo rate by 50bps to 4.90% today, as we had anticipated, and made substantial upward revisions to its near-term inflation forecasts. Further tightening will follow over the coming... 8th June 2022 · 3 mins read
India Economics Update Drop in inflation in May will prove fleeting Headline CPI inflation in India is likely to have dropped in May, primarily due to base effects. But beyond May, we expect inflation to resume rising, reaching over 8% by August. The RBI is likely to... 7th June 2022 · 3 mins read
Japan Economics Update Are the demographic headwinds strengthening? A falling fertility rate and declining employment among retirement age workers pose downside risks to our long-term forecasts for Japan’s labour force and GDP growth. However, with the female... 7th June 2022 · 4 mins read
Japan Data Response Japan Wages & Household Spending (Apr. 22) While regular wage growth is approaching its pre-pandemic peak, it won’t reach the 3% the Bank of Japan is aiming for anytime soon. More positively though, with overtime working hours reaching levels... 7th June 2022 · 2 mins read
Japan Economics Weekly Rising prices won’t prevent solid rebound in Q2 The renewed drop in industrial production and the weakness in retail sales volumes in April has raised concerns that Japan’s recovery will continue to disappoint. However, with consumer prices rising... 3rd June 2022 · 5 mins read
India Economics Weekly Resilient economy reinforces case for frontloading GDP data for Q1 released this week showed that the economy weathered the Omicron wave pretty well, and the timelier data suggest a solid performance so far in Q2. That said, there were also further... 3rd June 2022 · 4 mins read
China Economics Weekly Show us the money The State Council has expanded on its call for policy support for the economy to be stepped up. But nothing has been done about the funding strains faced by local governments who bear much of the... 2nd June 2022 · 8 mins read
RBI Watch MPC to frontload monetary tightening We think the MPC will follow its off-cycle rate hike last month with a 50bp hike to the repo rate (to 4.90%) at the conclusion of its upcoming meeting on Wednesday 8 th June. Beyond next week, the... 2nd June 2022 · 7 mins read
Emerging Markets Economics Update A modest recovery in EM manufacturing The S&P Global EM Manufacturing PMI for May suggests that the easing of virus-related disruptions in China supported a small rebound in EM manufacturing last month, but the sector remains very weak... 1st June 2022 · 2 mins read
Commodities Update Weak China demand won’t hold back oil prices Despite a rise in May, China’s PMIs still point to weak Chinese demand, which will continue to weigh on industrial metals prices. However, the war in Ukraine will remain the bigger driver of energy... 1st June 2022 · 2 mins read
China Economics Update We think the renminbi will fall further While it has rebounded over the past couple of weeks, we expect the renminbi to resume its fall against the US dollar as China’s economy underwhelms, interest rate differentials continue to shift... 1st June 2022 · 4 mins read
India Economics Focus Policymakers will turn to financial repression Policy tightening by the RBI is putting public finances stretched by the pandemic under further strain. While an increase in debt financing costs is inevitable, we expect the government and RBI to... 1st June 2022 · 10 mins read
India Data Response Manufacturing PMI (May) India’s manufacturing PMI held steady in May, but there are further signs of price pressures becoming more intense last month. That supports our view that the RBI will frontload its policy tightening. 1st June 2022 · 2 mins read
China Data Response China Caixin Manufacturing PMI (May) The Caixin manufacturing index published today rebounded last month thanks to the easing of virus containment measures. Taken together with the official survey, they suggest that a recovery in... 1st June 2022 · 3 mins read
India Data Response GDP (Q1) Indian GDP data for Q1 (Q4 of FY21/22) show that activity held up much better during the Omicron outbreak than during previous virus waves. The economy is well-placed for strong growth over 2022 as a... 31st May 2022 · 2 mins read
China Data Response China Official PMIs (May) The official PMIs add to broader evidence that activity has started to rebound as containment measures were rolled back. That said, the recovery is likely to remain tepid amid weak external demand and... 31st May 2022 · 3 mins read
