Output from Nigeria’s oil refinery sector has been in terminal decline, inflating the fuel import bill at a time when the economy is already suffering from a shortage of hard currency. The new Dangote refinery and President Tinubu’s broader plans to …
4th January 2024
This page has been updated with additional analysis since first publication. PMIs point to recession The final Composite PMI for the euro-zone in December was revised up significantly from the flash estimate of 47.0 to 47.6, meaning that it was unchanged …
Australian household finances are in better shape than the plunge in the household savings rate would suggest. While we still think that GDP growth will slow more sharply than expected over the coming quarters, there’s a clear risk that households will …
Minutes more nuanced than expected, given post-FOMC hawkish chatter The minutes of the mid-December FOMC meeting were slightly more dovish that we were expecting – more in line with the message delivered by Fed Chair Jerome Powell in his press conference …
3rd January 2024
While SVB’s collapse in March and sharper rises in interest rates led to larger-than-expected falls in commercial real estate (CRE) values, our expectations for sector and regional winners were broadly correct. A year ago, we outlined our key calls for …
With most major bond and equity markets on track for a second down day to start the new year, it’s fair to say that financial markets have started 2024 with something of a mild hangover. While reading too much into the first couple of days in the working …
Interest rate cuts across advanced economies this year will give some boost to economic activity, although it will remain relatively subdued. Nonetheless, industrial metals demand growth will pick up. Supply growth will cap price rises for some metals, …
JOLTS data point to slower wage growth The further decline in job openings to 8.79 million in November, from 8.85 million, was a bit gloomier than expected given that the JOLTS measure had previously dropped below the level implied by the both more timely …
A version of this article appeared in the Globe and Mail on 3 rd January, 2024. Read that version here . The giant leap forward for artificial intelligence has inevitably led to concerns about the potential for mass unemployment. Tripping over …
This page has been updated with additional analysis since first publication. Modest rebound to end a dismal year Despite the modest rise in the ISM manufacturing index to 47.4 in December, from 46.7, the survey indicates that conditions in the factory …
It is no secret that strong immigration is pushing up rents but, as rent growth for new tenancies was little changed last year, this does not fully explain the surge in CPI rent inflation. The CPI measure is picking up unusually large rent increases on …
In a change to our previous forecast, we now think that the first interest rate cut from the Bank of England will happen in June this year rather than in November. We still think that interest rates will be reduced from 5.25% now to 3.00% in 2025. That’s …
Mortgage rates below 7% spur further recovery in mortgage demand Mortgage rates dropping below 7% were the catalyst for a marked uptick in mortgage applications for home purchase in December. The 7.1% m/m rise in mortgage applications for home purchase …
In the past few years, Egypt’s economy has been hit by the successive impacts of the pandemic, the war in Ukraine, and, more recently, currency devaluations. With further currency falls on the cards, high inflation, and tightening of fiscal and monetary …
Headline inflation picks up, but core inflation losing momentum The rise in Turkish inflation to 64.8% y/y in December was broadly in line with expectations and the breakdown provided some signs that underlying price pressures continue to soften. We think …
Note: Join our post-Taiwan election online briefing on Monday, 15th January to find out what the results mean for its economy and for US-China relations. Register here for the 20-minute session. In a busy electoral calendar, seven countries in Emerging …
This page has been updated with additional analysis since first publication. Factory activity likely to hold up well in 2024 The manufacturing PMI survey for December suggests that activity lost some momentum at the end of 2023. That said, we think that …
Will inflation continue its retreat into 2024? When will the Fed start easing policy, and by how much will it cut rates over the coming year? Our US team held an online briefing on the December CPI release and the outlook for inflation and Fed …
2nd January 2024
In a busy year for elections worldwide, Taiwan’s is likely to be among the most consequential. 2023 was probably Taiwan’s weakest year of economic growth since the Global Financial Crisis – and the coming year isn’t likely to be much better as external …
The past 12 months have seen marked divergence in growth across emerging markets economies, as well as the start of easing cycles among some of their central banks. How much will these trends continue into 2024? Economists from across our Emerging Markets …
Although the manufacturing PMIs have overstated the weakness of industry for a while, the big picture from December’s surveys was that global industrial activity was barely growing at the end of 2023. The forward-looking indicators point to further …
The emerging markets manufacturing PMIs for December were a mixed bag. The headline index stagnated at the aggregate EM level and remained below 50 in over half of the countries in our sample . Price pressures still seem to be easing, albeit at a slower …
We think more pain is in store for US commercial real estate as weak economic growth and high interest rates continue to take their toll. But which sectors and regions are most exposed, which will prove resilient, and when can investors expect recoveries …
Both bond and equity markets have started the year on the back foot. But, while a pause after the rapid rally in most asset prices over the last two months of 2023 would not be surprising, we think the outlook for both bond and, especially, equity prices …
The Erdogan government’s turn back to macroeconomic orthodoxy is showing early positive signs: inflation pressures have eased; the current account deficit has narrowed; and foreign investment has picked up. But is this the latest in a string of false …
We expect apartment markets to perform poorly over the next two years, with all our 17 metros seeing capital values lower at the end of 2025 than they are now. However, there will be substantial differentiation. At the top end, we think Houston apartment …
Employment growth reliant on non-cyclical sectors After the near 200,000 gain in payroll employment in November, which included the return of 47,000 workers who had been on strike, we expect a more muted 150,000 increase in December. We also anticipate a …
China PMI surveys suggest that the economy lost momentum in December, but we suspect that the surveys are not reflecting economic reality. Activity and import data all point to resilient commodity demand. Either way, the construction PMI rose again last …
Data released this morning showed that bank lending in the euro-zone picked up towards the end of last year. But we doubt that this is the start of a sustained turnaround. We expect the impact of tight monetary policy to weigh on lending and keep the …
This page has been updated with additional analysis since first publication. Further weakness in CEE, but Russia continues to overheat The manufacturing PMIs out of Central and Eastern Europe (CEE) and Turkey for December suggest that industrial sectors …
The December PMIs for most economies in Emerging Asia stood well inside contractionary territory. The outlook for manufacturing in the region remains bleak in the near term as high inventory levels, softening labour markets at home and renewed weakness in …
This report was first published on Tuesday 2 nd January, covering the official PMIs and Caixin manufacturing PMI. We added commentary on the Caixin services and composite PMIs on Thursday 4 th January. Rebound led by services and construction The official …
Housing market still set to cool Australia’s housing market showed signs of life in December. However, we still think an affordability crunch will temper house price gains in the months ahead. Allowing for seasonal swings, house prices across the eight …
Economic growth in Singapore accelerated in Q4 but the economy is set to enter a period of renewed weakness in the near term as support from external demand fades while domestic demand remains weak. According to the advanced estimate published today, GDP …
Flat prices in December confirm 2023 resilience Unchanged house prices in December ensured that over the course of 2023 they fell by much less than forecasters had expected. With mortgage rates falling, it is increasingly likely that house prices avoid …
29th December 2023
GDP growth in Vietnam picked up in Q4 but this strength is unlikely to last if, as we expect, exports weaken and commercial banks pull back on lending in response to a sharp rise in non-performing loans. With inflation likely to remain within target, we …
We expect the sharpest fall in apartment completions in 2025-26 in Boston, Denver, NYC and Seattle. Those cities will also be joined by Sunbelt markets where oversupply is already denting rents, including Austin and San Antonio. By contrast, there is …
28th December 2023
Canada Chart Pack (Dec. 2023) …
China’s economy has regained some strength recently. We expect this to continue into 2024, on the back of support from fiscal policy and a further pick-up in household spending. But with property construction likely to continue to decline and exports set …
While we got mortgage rates and lending roughly right in 2023, house prices fell by less than we expected as longer mortgage terms, strong demand from cash buyers, and tight supply came together to support them. There is little reason to think that these …
Industrial output has usually fallen rather sharply whenever firms were as pessimistic about the production outlook as they are now. That’s consistent with our view that GDP growth next year will be weaker than most anticipate. One thing that stood out …
This page has been updated with additional analysis since first publication. GDP will rebound this quarter While the November activity data were a mixed bag, they strongly suggest that the economy dodged a recession. Taking industrial production first, …
Emerging Asia Chart Pack (December 2023) …
27th December 2023
This page has been updated with additional analysis since first publication Labour market should tread water from next year The unemployment rate stayed unchanged in November, following consecutive falls in the previous two months. We think it should …
26th December 2023
Zambia secures latest IMF tranche as debt talks drag Zambia received the latest $187m tranche of its IMF deal this week as it continues to make progress with its fiscal performance despite a tough external backdrop. This may help to push long-running debt …
22nd December 2023
Data this week showed that the population jumped by 430,000 in the third quarter alone, almost as much as the official full-year permanent resident target of 465,000. Nonetheless, the November CPI data showed a much-needed slowdown in rent inflation, …
This week saw a renewed attempt from some Fed officials to push back against market expectations for interest rate cuts but, with core PCE inflation running at an annualised pace of below 2% over the past six months, this final flurry of hawkishness isn’t …
The final week ahead of the holiday period is drawing to an end with the US dollar somewhat weaker across the board. Unlike last year, the BoJ’s final policy meeting proved a(nother) damp squib, with policymakers equivocating somewhat on the timing of …
