For consumers, it’s the camera lenses on the outside that may draw them to Huawei's Mate 60 Pro. For those tracking shifts in the global macro narrative, it’s the chip inside the sanctioned Chinese firm’s newest flagship phone that’s most interesting. In …
10th September 2023
Over the last year or so, spreads over sovereign yields have narrowed to their lowest since the euro-zone debt crisis. But while these are expected to widen again over the next year, mostly thanks to falling bond rates, they look set to stay well below …
13th September 2023
This page has been updated with additional analysis since first publication. Recession may have begun The 0.5% m/m fall in real GDP in July (consensus and CE forecasts both -0.2% m/m) could possibly mean that the mild recession we have been expecting has …
Data on cell phone usage suggest that cities with a high share of professional, scientific and technical occupations and long commute times are typically associated with poorer downtown recoveries. That is in line with our existing views, but also implies …
12th September 2023
Our view on UK inflation vis-à-vis the US suggest s that bond yields are set to fall back by more in the former , adding downward pressure on sterling. Today’s mixed UK Labour market data prompted only modest falls in Gilt yields and sterling, as it …
When the ECB Governing Council announces the results of its operational review later this year, it is likely to say it will continue to use the deposit rate as its key policy tool . We also expect the ECB to establish a new framework for lending reserves …
There’s little evidence in the investment and trade data so far to back up the commonly-cited narrative that Mexico is experiencing a “nearshoring” boom. The one sector where there are some signs of this is industrial real estate, which suggests that it’s …
New home sales have brushed off a collapse in overall housing demand, rising 23% in the first half of 2023. More competitive pricing will be providing some support to sales, but the primary factor is the chronic shortage of existing homes for sale, …
After a strong 2022, annual office rental growth has slowed in Italy in H1 2023. And given the contraction in employment we are forecasting, together with increased supply, we think prime rents will largely stagnate both in Milan and Rome until 2025. …
This page has been updated with additional analysis since first publication. Headline CPI rate drops, but food inflation threat is not over yet The drop in headline consumer price inflation in August should provide some welcome relief for the RBI. But …
This page has been updated with additional analysis since first publication Another 50bp cut on the cards despite rise in inflation The rise in Brazilian inflation to 4.6% y/y in August won’t prevent the central bank from delivering another 50bp cut, to …
The Q2 Mortgage Lenders and Administrators statistics showed that higher rates are limiting lending and making it more difficult than ever for single-income households to get onto the housing ladder. Meanwhile, arrears took a step up as another cohort of …
Often-breathless debate around AI can leave investors bewildered as to what this emerging technology will actually mean for the global economy and markets. It’s a debate which has lacked a consistent and comprehensive framework for thinking through AI’s …
Little sign of the economy slowing Industrial production softened a touch in Turkey in July but retail sales continued its recent run of strength and adds further support to the view that the economy is not yet slowing in response to the recent policy …
This page has been updated with additional analysis since first publication. Strong wage growth suggests the Bank will raise rates further The tightness of the labour market continued to ease in July. But the further rise in wage growth will only add to …
Another step up in the Chinese and Japanese authorities’ efforts to prop up their faltering currencies has given the renminbi and the yen a bit of a boost today. Alone, these measures are unlikely to prove the start of a lasting turnaround: we continue to …
11th September 2023
The G20 summit which concluded yesterday in New Delhi supported our view that the global economy is fracturing into US and China-led blocs, and that India still leans to the former. While the statement was light on explicit policies, calls to increase …
The recent weakness of Gross Domestic Income (GDI) is only partly because it includes the losses now being incurred by the Federal Reserve. Even after excluding those, GDI paints a much weaker picture of recent economic performance than GDP. As GDI has …
Industry continuing to hold up well, for now Mexico’s industrial sector posted a slightly larger-than-expected 0.5% m/m increase in output in July and the survey evidence suggests that activity continued to hold up well in August. But we still think that …
The devastating earthquake that hit Morocco on Friday evening has severe humanitarian consequences, but, from a purely economic standpoint, it should only have a small and short-lived impact on GDP. The spillovers are also set to be limited on Morocco’s …
The financial press is full of hot takes about how AI will revolutionise our lives, for better or worse. They are fuelling an often-breathless debate around this emerging technology that can leave investors bewildered as to what AI will actually mean for …
We no longer expect the economy to enter a recession. But with real disposable incomes falling, we expect domestic demand to remain sluggish. Meanwhile, falling import prices and extension of energy subsidies should bring inflation down before long. While …
The quantitative tools that the PBOC relied on to pump up credit growth during previous downturns have become ineffective due to weak demand. That leaves interest rates as the main avenue for monetary support. But bank lending rates need to decline to a …
Core inflation edges down but Norges Bank to raise rates next week Norway’s inflation rate came in broadly in line with the Norges Bank’s expectations in August, suggesting that policymakers will go ahead with their plan to raise rates from 4.0% to 4.25% …
This page has been updated with additional analysis since first publication . Turning a corner thanks to policy support China’s bank loan growth stabilised in August after declining for three consecutive months, and broad credit growth edged up from …
Disinflationary pressures easing CPI exited deflation in August, and PPI rose for the first time in nine months. Core inflation remained unchanged after hitting a 11-month high in July, while services inflation rose to its highest in 18 months. We expect …
Prices will remain buffeted by weak global economic growth and a strong dollar, at a time of mounting supply risks and some policy stimulus in China. These conflicting pressures suggest that prices will be fairly rangebound in the coming months. In …
8th September 2023
Inflation still some way from its peak The further rise in Russian inflation to 5.2% y/y in August is a sign that the economy is bumping up against capacity constraints and we think it will continue to increase over the coming months. The central bank …
Although upward pressure on the 10-year Treasury yield has abated a bit, the big picture is that it has risen by ~80bp on net in the past four months. While some of this rise has reflected a reassessment in the market of how quickly the Fed will cut rates …
The US dollar looks set to end the week higher against nearly all other major currencies. Remarkably, the DXY Index is set for an eight consecutive weekly rise, something that has rarely occurred since 1990. (See Chart 1.) And while that index is …
In his speech this week, Governor Tiff Macklem sounded much more confident that the Bank will be able to meet its 2% inflation target. The latest labour market and local housing data suggest that may still be possible without a recession. Policy rate has …
Policy mistakes risk being repeated in Nigeria Recent interventionist actions from Nigeria’s central bank and government have heightened our fears that growing political pressures are undermining policy reforms. This could see Nigeria’s inflation and …
It was a mixed week for commodity prices as they faced conflicting pressures in the form of the appreciation of the US dollar, mounting supply risks and signs of some resilience in China’s demand. Although the stronger dollar has probably acted as a lid …
Higher energy prices not a game changer for the Fed Crude oil prices up, wholesale gasoline down? The further rise this week in the WTI crude oil price to a 10-month high of $87 a barrel, from a recent low of less than $70 in late June, has raised …
Sheinbaum follows in Amlo’s footsteps Former Mexico City mayor Claudia Sheinbaum was unveiled as the ruling Morena party’s presidential candidate this week and with her facing off against the main opposition candidate Xóchitl Gálvez in next June’s …
It’s no surprise that the reverberations from the revisions to GDP announced by the Office for National Statistics (ONS) last week continued into this week because the upward revisions were so big. As we noted at the time, we estimate that the level of …
Christine Lagarde and her colleagues will have some new and gloomy data releases to contemplate when they gather in Frankfurt next week. First, revised data published on Wednesday show that the euro-zone eked out only a 0.1% increase in GDP in Q2 as …
Group Chief Economist Neil Shearing flew from London to Singapore intending to talk global macro with clients there. Instead, his discussions were dominated by the chaos of the UK's political economy. He calls in (on an occasionally spotty line) from …
2nd October 2022
Globalisation isn't dead, but it is undergoing a fundamental shift which will reshape the global economy and markets in the years ahead. Group Chief Economist Neil Shearing discusses The Fracturing of the Global Economy, our major new research project, …
1st November 2022
The Communist Party 20th Congress will accelerate a huge personnel reshuffle throughout the party and the state apparatus, affecting key policymakers including central bank governor Yi Gang, Guo Shuqing, the chief bank regulator, and Liu He, a Vice …
31st October 2022
David Wilder talks to Group Chief Economist Neil Shearing about the latest on the central bank war on inflation. They discuss what signs of persistently high core numbers mean for expectations for how far and fast interest rates need to rise and the role …
A slew of central bank decisions last week highlighted a range of policy dilemmas at this stage of the tightening cycle, from the impact of higher rates on teetering housing markets to the threat that even hints of a slower pace of hikes triggers a market …
7th November 2022
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 …
11th November 2022
This year’s has been a dollar rally for the ages, but recent weeks have seen the currency come under pressure. That’s fuelling talk that the greenback is finally past the peak with only downside ahead. Jonas Goltermann and Jonathan Petersen from our FX …
18th November 2022
Recent data releases suggest the global economy is holding up better than anticipated by gloomy forecasts (including ours). But it's far too soon to breathe a sigh of relief. In this latest episode of The Weekly Briefing, Group Chief Economist Neil …
25th November 2022
China's zero-COVID policy is under mounting strain as the economy reels and public anger grows. The government is responding but will it be enough to bring relief to China's economic outlook and its beleaguered public? And what do record infection numbers …
1st December 2022
The Ever Given made worldwide headlines when it became stuck in the Suez Canal in March 2021. The cargo ship's dilemma symbolised global supply chain disruptions that were reflected in a record surge in shipping costs. But those costs are now falling as …
2nd December 2022
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 …
10th December 2022
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? In this special …
16th December 2022
