The metals-intensive nature of green technologies will add to demand for a host of industrial and battery metals, with green demand for copper and aluminium likely to grow twice as quickly as traditional demand for both metals has in the past. That said, …
23rd May 2024
Rates to stay on hold throughout the year Turkey’s central bank left its main policy rate unchanged at 50.00% again today and the statement continued to emphasise the need to keep interest rates high for a prolonged period. While the consensus view is for …
We don’t think the pick-up in euro-zone negotiated wage growth in Q1 will stop the ECB from cutting interest rates in June. But the continued strength of pay pressures reduces the chance of the ECB cutting rates rapidly in the second half of the year. The …
Survey provides support for summer rate cut Today’s May flash PMI survey will have provided the Bank of England with some comfort after yesterday’s stronger-than-expected inflation data for April. Crucially, the further fall in the services output prices …
Retail sales disappoint Poland’s activity data for April revealed that retail sales growth softened a bit more than expected last month, but that the weakness in industry in March was just a temporary blip. On balance, we remain comfortable with our …
This page has been updated with additional analysis since first publication. Recovery continuing The PMIs for May suggest that the euro-zone economy continued to expand in Q2 while price pressures eased but remained high in the services sector. The ECB is …
UK election 2024 …
The Bank of Korea left its policy rate on hold today (at 3.5%) and appeared to indicate that interest rates would not be cut until it was confident that inflation would fall back to target. Given our view that price pressures will ease further over the …
India has made impressive progress in raising its share of global high-end electronics exports over the past few years. But, worryingly, it has failed to capture any additional market share in the lower-end manufactured goods which are typically more …
On hold, but easing likely before year-end The decision by the Bank of Korea to leave the policy rate unchanged (at 3.5%) today came as no surprise, of more interest will be the tone of the central bank’s statement and Governor Rhee’s press conference. …
FOMC stresses higher for longer The minutes of the Fed’s early May policy meeting are, not surprisingly given the backdrop of data releases ahead of that meeting, somewhat hawkish. The resilience of economic growth and employment, and particularly the …
22nd May 2024
We’ll be discussing what the election means for the economy and financial markets in a 20-minute online briefing at 9.30am BST on Thursday 23rd May. (Register here .) The general election on Thursday 4 th July, which the Prime Minister announced today, …
The winner of the UK general election – which has been called for 4th July – will inherit an economy suffering from stagnant growth, high levels of debt and the highest tax burden in 70 years. Can they turn things around? During the briefing, Chief UK …
While GDP growth in the Andean economies will be stronger this year than last, the opposite is likely to be the case in Brazil and Mexico. Core services inflation, which central banks are paying close attention to, is showing signs of easing. But with …
While stronger-than-expected inflation data from the UK have led us to push back a bit our forecast for the start of the Bank of England’s easing cycle, we still project many more rate cuts than most anticipate. This feeds into our view that Gilt yields …
Weak investment activity and continuing cap rate rises in Q1 fit with our view for another tough year for real estate. All-property values are now down by 17% from their mid-2022 peaks. But we still think cap rates need to climb by c. 80-100 bps to reach …
Existing home sales slide in April, with further falls likely ahead The drop in existing home sales in April will be followed up by further falls in the coming months, supporting our view that the recovery in transactions we expect this year will be …
The results of India’s multi-week general election on 4th June aren’t expected to hold many surprises about the country’s next government, with polls suggesting Narendra Modi will win an unprecedented third term. But what influence could this election …
After exiting recession in Q1, Saudi Arabia’s economy should continue to expand over the rest of this year on the back of strong private non-oil growth and higher oil output. But next month’s OPEC meeting is likely to be a close call and if the group (led …
Inflation eases, but rate cuts still some way off South Africa’s headline inflation rate eased further to 5.2% y/y in April but the Reserve Bank will want to see more evidence that inflation and, crucially, inflation expectations are coming under control …
Europe Commercial Property Chart Pack (Q2 2024) …
Economic growth strengthened across Emerging Europe in Q1, and leading indicators suggest that it has picked up further in most countries in Q2. With inflation likely to rise (or stay) above central banks’ targets in the second half of this year, the …
BI on hold, cuts by year-end Bank Indonesia today left interest rates unchanged (at 6.25%) and the comments from the press conference suggest this marks the end of the tightening cycle. Following April surprise hike, today’s decision came as no …
This page has been updated with additional analysis since first publication . Limited scope for tax cuts April’s public finances figures got the new 2024/25 fiscal year off to a shaky start and cast further doubt on the Chancellor’s ability to unveil big …
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST today. (Register here .) This page has been updated with additional analysis since first publication. Stickiness of services inflation makes …
Although it left rates unchanged at its meeting today, the RBNZ indicated that interest rates may have to stay higher for longer. However, we think the Bank is overstating the upside risks to the inflation outlook. Accordingly, we still think there’s a …
RBNZ signals rate cuts may have to wait Although the RBNZ suggested that there was a high bar for further policy tightening, the Committee stated that interest rates may have to remain at their current restrictive level well into 2025. In our view, the …
The latest data indicate that capacity pressures have continued to ease, a trend that should continue over the coming quarters. However, it will be a while before policymakers can be confident that they have broken the back of inflation. Accordingly, we …
The sharp rise in Brazil’s goods exports and the widening of the trade surplus since 2019 have been a point of strength for the economy. But we think these will reverse course before long. This feeds into our below-consensus GDP growth forecasts and our …
21st May 2024
Despite the hawkish rhetoric from central bankers over the last few days, we still expect long-dated government bond yields in most developed markets (DM) to fall over the next year or so. 10-year government bond yields across DMs have generally been …
The latest apartment rent data are consistent with our view that rental growth will be sluggish this year. Although single-family rent growth has fared better, we suspect it will soon start to slow again. Zillow reports that apartment rents continued to …
Another large hike, MPC feels it is winning inflation battle The Central Bank of Nigeria delivered a larger-than-expected 150bp hike to its policy rate, to 26.25%, at its meeting today, reinforcing Governor Cardoso’s recent comments that officials will …
The slight easing of inflationary pressures in April and softer activity data are consistent with the Fed cutting interest rates in September. Although it is taking a little longer than expected, we believe that core inflation is on course to fall back to …
Easing in core inflation is being sustained The fourth consecutive 0.1% m/m average increase in the Bank of Canada’s preferred core price measures in April will give the Bank confidence that the further easing in core inflation is being sustained. That …
Easing cycle about to enter a slower phase The decision by the Hungarian central bank (MNB) to cut its base rate by 50bp again today, to 7.25%, will be followed by more cautious monetary easing over the rest of this year. We currently forecast just 100bp …
The strong pick-up in Andean economies at the start of this year confirms that their painful rebalancing process has run its course. GDP growth will be stronger this year than last – unlike in Brazil and Mexico. Chile is likely to be a regional …
Some of the structural problems in China’s economy have their roots in its excessively high savings rate (and underconsumption). For many other EMs, savings rates are also a problem but for the opposite reason – they’re too low . This is particularly so …
This page has been updated with additional analysis since first publication. Construction outlook is poor Euro-zone construction output rose slightly in March but we think the sector will struggle over the coming months. The 0.1% m/m rise in construction …
RBA is done tightening policy The RBA continued to tout the line that all options are on the table as far as its next move is concerned. However, we still expect the Bank’s next move to be down, not up. The minutes of the RBA’s May meeting confirmed that …
The US dollar has been on the back foot amid the renewed rally in “risky” assets. While we think US stocks will soon re-establish the lead among global equities, we doubt US equity outperformance would benefit the dollar much. After reaching a …
20th May 2024
India has been the star performer among major EMs over the past several quarters and the latest data suggest that the strength of economic activity has continued through to the general election. Headline inflation is grinding back to the RBI’s 4% target …
The political turmoil in Vietnam, which has led to a number of key leaders being sacked from their posts, is undermining the country’s reputation for stability, which until now has been one of its key selling points to foreign investors. The political …
Future global macro markets leadership …
14th May 2024
A strong start to the year The 1.9% q/q rise in Chile’s GDP in Q1 confirms that the economy is gathering momentum following a weak 2023 and has prompted us to revise up our (once above consensus) 2024 GDP growth forecast to 2.8% (from 2.3%). It also …
The death of Iran’s President Ebrahim Raisi yesterday creates greater uncertainty over the succession planning for the next Supreme Leader. But, taking a step back, the balance of political power within Iran means that there is unlikely to be a major …
If there was any lingering doubt as to whether the ECB could cut rates ahead of the Fed, they have surely been extinguished by a series of recent remarks by central bankers. Speaking at an event in Amsterdam last week Klaas Knot, the head of the Dutch …
Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks large variation in prospects at the country level, with many EMs experiencing a reversal of last year’s fortunes. While we expect the EM monetary …
