Flash GDP figures showed that Saudi Arabia’s economy contracted in Q1 on the back of OPEC+-agreed oil output cuts, but growth in the non-oil economy remained strong. The “voluntary” oil production reductions announced last month will continue to weigh on …
9th May 2023
While the hiking cycles of all major central banks will soon be in the rear-view mirror, most of their impact on activity lies on the road ahead. Based on the latest national accounts data, we estimate that there is still plenty of scope for higher …
We think migration patterns of footloose workers will continue to play the largest role in driving the rental outlook across metros. But rent as a share of income will also have a bearing, weighing on prospects in major markets such as NYC, LA and Boston, …
China’s commodity imports were generally weak in April. We suspect that import volumes generally could soften a bit further as any reopening effect on commodity demand fades and export demand deteriorates owing to sluggish growth in the rest of the world. …
Inflation drops, but 25bp hike next week still more likely than not The drop in Mexico’s headline inflation rate, to 6.3% y/y in April, was broad-based and will provide some comfort to officials at the central bank that price pressures are finally easing. …
More dovish consensus emerging The record of the Riksbank’s April policy meeting underlines that there was unanimous agreement to slow the pace of rate hikes in future. After the 50bp hike in April, the Bank is likely to raise rates by 25bp at the end of …
While world trade fell further in February, the available data point to a rise in March, especially due to a strong rebound in China. But that rebound looks to have already reversed in April. And with high interest rates set to weigh on demand for goods …
Prices slip in April, but remarkably resilient overall The small slip in the Halifax House Price index in April bought it a little more in line with the Nationwide figures. But prices remain remarkably resilient to the largest rise in mortgage rates since …
This page has been updated with additional analysis and charts since first publication. Exports set to struggle further China’s export volumes partially reversed March’s jump last month. Shipments of most consumer goods declined due to weak global demand …
Gloomy wage growth outlook in H2 2023 Wage growth held steady in March from February, as a further slowdown in regular and overtime pay growth was offset by a decent increase in volatile payments. We still see further scope for wage growth to slow this …
More scope for wage growth to slow Labour cash earnings rose by 0.8% for the third consecutive month, broadly in line with our 0.7% forecast and far below the average 1.8% increase across 2022. As we had expected, regular earnings growth slowed from 0.8% …
The recent turmoil in the banking sector doesn’t appear to have triggered a severe further tightening in credit conditions, but since lending standards were already being tightened to a degree only previously seen during recessions, the lack of any …
8th May 2023
Note: We’ll be discussing the upcoming Thai general election and the country’s near to long-term economic risks in a 20-minute online briefing at 09:00 BST/16:00 SGT on 11th May. Register now. Provided Thailand’s general election on 14 th May does not set …
Fed’s Senior Loan Officer survey likely to show tightening in bank lending standards (Mon.) We expect the downward trend in US core inflation to have resumed in April (Wed.) The Bank of England looks likely to hike interest rates by another 25bp (Thu.) …
5th May 2023
Note: We’ll be discussing the economic and market risks around the upcoming Turkish presidential and parliamentary elections on at 09:00 EDT/14:00 BST on 10 th May . Register now. Despite a bumper week for economic data, currency markets remain in limbo. …
Most commodity prices, but especially energy and industrial metals, fell this week. Concern about demand in advanced economies, particularly in the US due to the banking sector problems, contributed to the declines. What’s more, China’s April PMIs …
Colombia: inflation worries taking centre stage We had warned a few weeks ago that Colombia’s central bank (BanRep) was too sanguine on inflation risks and this week’s communications suggest that policymakers are coming round to our view. At last …
Concern about banks and the US debt ceiling will keep the gold price historically high in the next few months. However, once these worries fade, we think that longer-term headwinds will come into play. At around $2,010 per ounce today, the gold price …
April’s inflation data provided little sign that underlying price pressures are easing. Admittedly, the core rate edged down from 5.7% y/y in March to 5.6%, which was the first decline in 15 months. But that was entirely due to a decline in core goods …
Following the renewed concerns about regional US banks this week, markets are again pricing in interest rate cuts from the Bank of Canada later this year. From a domestic perspective, however, the strength of the local real estate board data in April and …
Our central scenario is that Italy’s public debt-to-GDP ratio will decline gradually in the long-run. However, the government will need to maintain sizeable primary budget surpluses to make that happen. The European Commission has recently made a series …
Sovereign dollar bond spreads have widened across Sub-Saharan Africa this week and are signalling further debt distress. In much of the region, spreads over US Treasuries are above or near the 1,000bp-mark – a commonly-used threshold for distress. This is …
The April employment report showed that while jobs growth remains solid enough, it is still trending lower and the surveys suggest activity growth is slowing too. With ongoing concerns over regional banks looking more likely to result in a further …
While home sales have plummeted, house prices have fallen just 3% so far and eked out a small gain in February. We think this reflects the role that tight supply is playing in this downturn, with the number of homes for sale at record lows. Given supply …
April strength offset by downward revisions to earlier months The 253,000 gain in non-farm payrolls in April suggests that the labour market remains resilient despite the banking sector turmoil and broader signs of an economic slowdown. That said, the …
Pound standing to attention for King’s Coronation Note: We’ll be discussing the Bank of England’s May decision in an online briefing at 10:00 EDT/15:00 BST on Thursday, 11 th May . Register Now . The Coronation of King Charles III means the UK is on show …
Labour market conditions easing despite unchanged unemployment rate The decline in full-time positions in April means that the large rise in total employment was weaker than it looks. Hours worked only crept up during the LFS reference week and, given the …
Note: We’ll be discussing the economic and market risks around the upcoming Turkish presidential and parliamentary elections on at 09:00 EDT/14:00 BST on 10 th May . Register now. Turkey’s election race heats up Opinion polls are now painting a clearer …
Labour market resilient, but small cracks emerging The decline in full-time positions in April means that the large rise in total employment was weaker than it looks. Hours worked only crept up during the LFS reference week and, given the public sector …
April strength offset by downward revisions to earlier months The 253,000 gain in non-farm payrolls in April suggests that the labour market remains resilient despite the banking sector turmoil and broader signs of an economic slowdown. Nevertheless, that …
Hard data released this week paint a more downbeat picture of the euro-zone economy than the latest surveys. Three points are worth highlighting. First, the data confirm that the 0.1% q/q rise in euro-zone GDP in Q1 masks a greater weakness in domestic …
Note: We’ll be discussing the upcoming Thai general election and the country’s near to long-term economic risks in a 20-minute online briefing at 09:00 BST/16:00 SGT on 11th May . Register now. Headline and core inflation both falling The April …
The April PMIs , the last of which was published today, suggest that while the reopening rebound in manufacturing stalled last month, the recovery in services was still going strong. That’s also the takeaway from the five-day Labour Day holiday which …
Divergence opens up between housing and commercial construction The April CIPS Construction PMI showed a growing divergence between the housing and commercial sectors, with activity in the latter seeing a gradual recovery while the former declined to a …
Although rent growth has been resilient, as the Swedish economy enters recession and employment contracts, we think the recent slowdown in Stockholm office occupier demand will persist. And with new office supply set to reach record highs in the next few …
Business surveys released this week suggest that Sweden’s economy started Q2 on the back foot. The Manufacturing PMI for April was unchanged at a very low level (45.5), consistent with output falling. And although the Services PMI rose, it was still close …
PMIs continue to be at odds with hard data The PMI surveys for April released this week suggest that both the manufacturing and services sectors in India started Q2 on a strong footing. The manufacturing PMI reached a 4-month high while the services PMI …
Headline inflation falls sharply, but core rate unchanged Falling headline inflation in Switzerland will provide relief to consumers but does not change the picture for the SNB. Underlying price pressures remain near all-time highs, which will convince …
The Thai economy is poised for recovery this year, but before that the country faces a contentious general election on 14th May which could be a trigger for fresh political unrest. Beyond the near term, the country’s economic potential looks set to be …
We think that the tailwinds supporting the rebound in the euro against the US dollar have largely run their course, and still forecast the EUR/USD rate to return to parity as advanced economies fall into recessions later this year. Even after falling …
Economic growth in Indonesia was unchanged at 5.0% y/y in the first quarter of the year, but we think growth will slow over coming months as tight monetary policy and weaker exports drag on activity. Before the pandemic GDP growth was very close to 5.0% …
Wage pressures bubbling up Data released earlier in the week showed that pay increases under newly-inked enterprise bargaining agreements (EBAs) have started to surge in Australia. Employees covered by new EBAs received an annualised pay hike of 3.0% in …
Growth likely to slow ahead The economy grew by 5.03% y/y in the first quarter of the year, which was almost the same pace of expansion as that in Q4 2022 (5.01%), but we expect growth to slow in the coming quarters as tight monetary policy and weaker …
Pay at small firms not keeping up with large firms While wage growth has been very strong by historical standards in recent months, wages have risen faster for employees of larger firms than at smaller firms. (See Chart 1.) Chart 1: Labour Cash Earnings …
Euro-zone retail sales probably fell again in March (10.00 BST) We think growth in US non-farm payrolls moderated to 180,000 in April (13.30 BST) While in Canada, we expect employment to have risen by 25,000 last month (13.30 BST) Key Market Themes The …
4th May 2023
The manufacturing PMIs for April suggest that industrial activity softened in most EMs last month and that external demand generally remained weak. The one crumb of comfort is that price pressures eased further last month. The aggregate Emerging Market …
Will 4.50% be the peak? Markets and economists have come round to our view that rates will rise to 4.50% 4.50% may well be the peak Risk is that resilient economy and sticky inflation prompt rise to 4.75% or 5.00% With the financial markets and other …
