The Weekly Briefing

How did a UK recession just get more likely?

Neil Shearing on a UK CPI "horrorshow" and what we're expecting from upcoming euro-zone inflation. Plus, climate change vs GDP and what would a US default look like?

Whatever happened to the China "growth miracle"?

Mark Williams revisits our 2018 warning of 2% China growth, Neil Shearing addresses the inflation-housing market intersection and Liam Peach gives an update on a surprising Turkish election result.

Special: What's wrong with the UK economy (and what will it take to fix it)?

Paul Dales and Ruth Gregory discuss the cyclical and structural problems that have held back the UK's post-pandemic recovery and are weighing on its long-term outlook.

How worried should we be about the debt ceiling?

Andrew Hunter and Jonas Goltermann discuss the macro and market risks around the debt ceiling standoff while Neil Shearing explains why the best of China's recovery is behind us.

How likely is an economic soft landing?

Neil Shearing discusses whether Jerome Powell's optimism about a potentially benign ending to the tightening cycle is warranted. Plus, Liam Peach and William Jackson talk Turkey ahead of crunch elections.

Is China finally willing to budge on debt talks?

William Jackson and Mark Williams discuss China's role in EM debt restructuring talks while Jenny McKeown talks to Paul Dales about the inflation outlook ahead of the week's big central bank decisions.

Just how tight are financial conditions?

Simon MacAdam discusses the worrying message that our Financial Conditions Indices have about the economic outlook while Neil Shearing explains how central banks are likely to respond to the latest activity data.

Special: How much trouble is globalisation in?

Julian Evans-Pritchard, our Head of China Economics, talks to Steven Altman, Director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management, about what lies ahead for globalisation in an age of economic fragmentation.

Where will bank turmoil blowback show up in the data?

Neil Shearing on how to spot where banks are tightening credit following the March turmoil plus Shilan Shah on how India can unlock its demographic dividends.

How will the bank turmoil come back to bite?

Paul Ashworth on the US economy's looming credit crunch and recession, Leah Fahy on the lessons from ageing populations and our Asia team on regional bank vulnerabilities.

Why is everyone worried about commercial real estate?

With investors on the hunt for the next source of instability, Neil Shearing discusses the risks around bank exposure to commercial real estate. Plus, Brad Saunders warns of an unprecedented fall in wheat consumption.

Special: Does the turmoil end with the Credit Suisse deal?

As the dust began settling on a hastily arranged takeover of Credit Suisse by UBS, we briefed clients on what’s next. In these excerpts from the briefing, you’ll hear them discuss key issues, including why even deeper recessions loom.

Has enough been done to end the turmoil?

We explore whether a UBS takeover of Credit Suisse is enough to end the crisis. Plus, the head of our Climate Economics coverage on the end of the relationship between emissions and economic growth and why India will become the world’s biggest polluter.

PODCAST

The SVB Crisis – What are the risks from here?

These special excerpts from our online client briefing ahead of the New York open on 13th March take in the impact on Fed strategy, the regulatory question and global contagion risks.

SVB's collapse – An isolated case or the next financial crisis?

Was Silicon Valley Bank's failure an isolated case of bad balance sheet management, or does it point to the start of another financial crisis? As policymakers scrambled to shore up market confidence ahead of the Monday open, Group Chief Economist Neil Shearing discussed what SVB means for the broader economic and policy outlook.

Do labour market mysteries point to higher-for-longer rates?

Labour market conditions matter hugely for how much further central banks across advanced economies have to go to whip inflation. The challenge is in understanding how they're evolving as pandemic-era distortions take their time to fade. In this episode, we discuss what’s going in labour markets in advanced economies and what this means for policy, with special focus on February non-farm payrolls.

Why will India rise but China stall?

By mid-century, India will have risen to become the world’s third biggest economy. But China will remain at number two, despite forecasts that it is set to overtake the US. Our latest Long Run Economic Outlook shows how the global economy will be reshaped by intense US-China competition, but also by major demographic shifts and the widespread adoption of productivity-boosting technologies.

One year on – How has the war changed Europe's economies?

Russia invaded Ukraine a year ago this week, prompting a torrent of prediction about how much this singular moment would change Europe’s economies forever. 12 months later, we discuss how the war in Ukraine has – and hasn’t – altered Europe’s economic picture. Plus, our UK team explains how big the coming wave of corporate insolvencies will be and how it will affect the UK’s long-term economic outlook and our EM team explores the crunch presidential election in Nigeria.

How have EMs avoided an old-school debt crisis?

EM central banks were raising rates even as their advanced economy peers were still debating whether inflationary forces were “transitory”. In the latest episode, Group Chief Economist Neil Shearing discusses what’s changed in EMs since crises past. Plus, our EM on the latest in the Adani Group crisis and why India's banks could be vulnerable.

Special: What's really happening in the US economy?

A stunning January jobs report has shifted the narrative around the US economy. But has the fundamental story really changed? And does the economic picture justify the market’s bullish start to 2023 or have investors been partying in the face of a recession? This is all about what’s really happening in the US economy, what the Fed is likely to do, and what this all means for US equities, bonds and the dollar.

Are economies through the worst?

Forecasts are being revised up, the global tightening cycle is slowing down and markets are cheering. But are economies really looking better? Group Neil Shearing reviews the recent data as he lays out why the isn’t an entirely feelgood story. Also, Tom Mathews explains why long-standing buyers of US Treasuries may not have the appetite they once did and discusses what this means for the outlook for yields.

How are economies faring ahead of the week's big rate decisions?

It's a big week for markets, with December payrolls due and the Fed, the ECB and the Bank of England all set to deliver their first policy decisions of the year. Group Chief Economist Neil Shearing discusses what to expect, showing how the economic landscape has shifted since these institutions last voted on rates and highlighting the scope for any surprises.

What does the world economy look like after globalisation?

Headlines have been dominated by talk of what follows this most recent era of globalisation, forming the basis of this year’s Davos meetings and a major new IMF paper. It’s a theme we’ve been discussing with clients for months, leading up to and following last October’s publication of our work on the fracturing of the global economy. Here's what the world economy looks like in an age of fracturing.

Special: How bad could it get for property markets in 2023?

In this special episode on property, we discuss how bad it can get for the US, UK and European markets in 2023 as recessions take hold, while our US Commercial Property team highlight the latest findings of our US metro rankings. Plus, with property accounting for nearly 40% of global carbon dioxide emissions, what can the sector do to help the climate challenge?

How much of a game changer is China's reopening?

China’s economy was tied down under the government’s tough zero-COVID regime. And then it wasn’t. The virus appears to have ripped through much of China’s urban population in the wake of the dramatic policy U-turn by Beijing, setting the stage for a dramatic rebound in economic activity this year. But how big will it be, and what will it mean for the global economy?

Could a "petroyuan" dethrone King Dollar?

Here's how a discussion about 2023 risks ends up taking on the idea of a "petroyuan" as a threat to US dollar supremacy. Group Chief Economist Neil Shearing also talks about China's abandonment of zero-COVID and what that means for the global outlook. Plus, our China team explains what's been happening on the ground in China following Beijing's stunning policy U-turn and what that means for the economic outlook.

Special: The Bank of Japan makes its move – what happens now?

The Bank of Japan's last policy meeting of 2022 was a big one, with a surprise announcement of changes to its yield curve control policy. In this special episode, Marcel Thieliant, who leads our Japan coverage, spoke to David Wilder shortly after the announcement about out what the Bank has done, whether it is sustainable and what it means for the Japanese policy outlook.

Will 2023 be another rollercoaster year for economies and markets?

Say what you want about 2022, but it wasn’t a dull year. After 12 months of geopolitical upheaval, the biggest inflationary spike in decades, central bankers going full Volcker and giant swings in financial markets, what will 2023 bring? Neil Shearing, our Group Chief Economist and Chief Markets Economist John Higgins discuss what to expect in the coming year.

Is this endgame for the global monetary tightening cycle?

Last week was a relatively quiet one for markets. The same won’t be said about this coming week. US inflation data and a slew of central bank decisions will give investors plenty to chew over as they scan for signs that the end of monetary tightening cycles could finally be looming into view. Will policymakers at the Fed, the ECB and/or the Bank of England give the market what it wants?

What do collapsing shipping costs mean for inflation?

Global shipping costs are now falling as quickly as they rose in 2020-21. What’s behind the plunge, and is this what’s needed to bring down global inflation rates? In this episode of The Weekly Briefing, Simon MacAdam and Leah Fahy from our Global Economics team get to grips with the rise and fall – and potential disinflationary impact – of shipping costs.

Will the global economy dodge a recession?

Recent data releases suggest the global economy is holding up better than anticipated by gloomy forecasts but, as Group Chief Economist Neil Shearing explains, it's far too soon to open the champagne. Plus, EM sovereign debt may be in better shape than in the past, but households and corporate borrowing has surged and they now face a sharp rise in debt service costs – are they going to be able to cope?

Is the dollar rally done and dusted?

This year's dollar rally has been one for the ages, but recent weeks have seen it come off the boil. Is it just a taking a breather or has there been a more fundamental shift? Our FX team discuss the rally's drivers and whether anything has changed in recent weeks to support the idea that the surge is finally over. Also, Group Chief Economist Neil Shearing explains what the latest economic data have to say about the policy outlook.

Why can't China just ditch zero-Covid?

Despite the rumours, the Chinese government isn't about to abandon zero-COVID. Although new measures to tweak the rules raise hopes of a near-term end to the draconian policy, Mark Williams and Julian Evans-Pritchard explain the many difficulties involved in doing so – including the fact that the economy would likely suffer, rather than get a boost, from scrapping it.

What will the global recession look like?

Central bankers are driving the global economy into its steepest downturn in four decades, barring the GFC and the pandemic. But which economies will be hardest hit and how will the onset of recession change the inflation-monetary tightening calculus? Jennifer McKeown, the head of our Global Economics coverage, discusses our Q4 Global Economic Outlook and why risks are skewed to the downside.