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In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
Bernie Sanders still favourite to win Super Tuesday Democratic primaries held in 15 states Central bank of Malaysia likely to cut rates, while RBA remains on hold Euro-zone headline inflation probably slowed in February as oil prices fell (10.00 GMT) Key …
We think that China’s manufacturing PMI fell to its lowest level on record in February (Mon.) Bernie Sanders is on course to win the “Super Tuesday” primaries (Tue.) We forecast a 230,000 gain in US non-farm payrolls (Fri.) Key Market Themes The S&P 500 …
28th February 2020
In our view, the coronavirus epidemic would have to get much worse for central banks to deliver more rate cuts that investors now anticipate. As such, we think that government bond yields in most developed economies are more likely to rise than fall …
27th February 2020
We think that China’s GDP will contract in Q1 in y/y terms for the first time since the 1990s US consumption growth probably remained subdued at the start of the year (13.30 GMT) We forecast that Canada’s GDP rose by only 0.2% annualised in Q4 (13.30 GMT) …
The economic fallout from the coronavirus outbreak is likely to be particularly severe for a number of frontier markets. Due to its deep integration into global supply chains, Vietnam’s economy will be disrupted more than most by China’s factory closures. …
The growing possibility that the COVID-19 virus will have a widespread and lasting impact on the global economy increases the downside risks to our forecasts for equities and bond yields. Until recently, the most likely scenario appeared to be that the …
26th February 2020
Central bank of Korea likely to cut its policy rate by 25bp, to 1.00% The euro-zone Economic Sentiment Indicator probably held steady in February (10.00 GMT) We think that US GDP growth will be confirmed at 2.1% annualised in Q4 (13.30 GMT) Key Market …
Lagarde’s speech may contain clues to the ECB’s likely response to the coronavirus outbreak We think that South Africa’s budget will include tax rises and spending cuts US new homes sales probably picked up in January (15.00 GMT) Key Market Themes …
25th February 2020
The spread of coronavirus may be slowing in China, but cases elsewhere are rising fast We think that US consumer confidence rebounded in February (15.00 GMT) Final GDP estimate is likely to confirm that Germany’s economy stagnated in Q4 (07.00 GMT) Key …
24th February 2020
Euro-zone composite and manufacturing PMIs probably fell sharply in February (08.30 GMT) We expect the UK PMIs to show that the economy has started to turn a corner (09.30 GMT) Canada’s retail sales are likely to have risen a bit in December (13.30 GMT) …
20th February 2020
We think that the central bank of Egypt will lower its policy rate by 50bp, to 11.75% China’s 1-year Loan Prime Rate likely to be cut by 10bp, to 4.05% (00.30 GMT) Consumer confidence in the euro-zone probably deteriorated in February (15.00 GMT) Key …
19th February 2020
While the euro has already fallen to its lowest level in nearly two years against the US dollar, we think that it will drop a bit further during the rest of 2020, pushed down by several factors including a weaker economic outlook and looser monetary …
UK inflation probably rose to 1.8% in January, but the increase is likely to be fleeting We expect Turkey’s central bank to cut its one-week repo rate by 75bp (11.00 GMT) FOMC minutes may provide details on Fed’s strategy review and balance sheet plans …
18th February 2020
Given our view that investors’ expectations for further Fed rate cuts this year will be disappointed, we think that the twin rally in US equity and bond markets will end before long. After falling by about 3% in the immediate aftermath of the virus …
China’s central bank likely to loosen policy further UK Chief Negotiator due to give a speech in Brussels (Mon., 18.45 GMT) The UK unemployment rate probably edged up a bit in December (Tue., 09.30 GMT) Key Market Themes We don’t expect Japan ’s economy …
17th February 2020
We think that the greenback will remain strong this year, even if some of its recent strength may unwind. The dollar has started the year on the front foot : since 1 st January it has appreciated by about 3% on average against other G10 and 2% against …
Sanders the frontrunner for Democratic nomination ahead of Nevada caucuses We expect Chinese banks to pass on the recent PBOC rate cut to their borrowers (Thu.) Coronavirus outbreak likely to have weighed on euro-zone business activity in February (Fri.) …
14th February 2020
We think that the recent rebound in the yields of many developed and emerging market government bonds will generally continue in the rest of this year, if the coronavirus epidemic is contained. By contrast, we expect EM currencies, which have not …
13th February 2020
We think that Germany’s GDP contracted in Q4 (07.00 GMT) US retail sales probably rose in January thanks to unusually-warm weather (13.30 GMT) We expect policymakers in Mexico and Peru to cut interest rates Key Market Themes The surprise change of …
We think that US core inflation edged down in January (13.30 GMT) Mexico’s central bank likely to cut rates, but its easing cycle may be near its end (19.00 GMT) Fed nominees highlight Trump’s dovish push (15.00 GMT) Key Market Themes While there is a …
12th February 2020
Even if the coronavirus outbreak in China is brought under control and the recent moves in equity and bond markets unwind, we think that most EM assets will not make significant gains this year. This reflects our long-held pessimistic view of China’s …
11th February 2020
Bernie Sanders is expected to win the New Hampshire Democratic Primary Central banks in New Zealand and Sweden will probably keep rates on hold We think that euro-zone industrial production fell by 2.6% m/m in December (10.00 GMT) Key Market Themes It is …
While Chinese equities and bond yields might return to their levels of early-January if the coronavirus epidemic is contained, our bearish view of China’s economy suggests to us that they and the renminbi will go back down before the end of the year. It …
Jerome Powell’s testimony likely to reiterate that the Fed intends to keep policy unchanged Bernie Sanders favourite to win the New Hampshire Democratic primary UK GDP probably contracted in Q4 last year, but we expect a rebound in Q1 (09.30 GMT) Key …
10th February 2020
China’s inflation data may offer clues about the impact of the virus (Mon.) We think that UK GDP contracted in Q4, but the latest data point to a rebound (Tue.) US consumption probably bounced back in January (Thu.) Key Market Themes January’s employment …
7th February 2020
Bernie Sanders is still a long way from the White House, but several of his policies look very negative for US equities. If his support continues to climb that could start to weigh on the US stock market. It remains up for debate whether Bernie Sanders or …
We wouldn’t be surprised if the recent recovery of EM equities continued over the coming weeks, with the stock markets of those countries that fell furthest following the outbreak of the coronavirus making up lost ground. Nonetheless, we wouldn’t expect …
6th February 2020
Germany’s industrial production probably contracted again in Q4 (07.00 GMT) The central bank of Russia is likely to cut its policy rate by 25bp, to 6.00% (10.30 GMT) We forecast that US non-farm payrolls increased by 185,000 in January (13.30 GMT) Key …
Impeachment trial to end with President Trump’s acquittal later on Wednesday Central banks in Brazil and the Philippines likely to cut their policy rates by 25bp … … while policymakers in the Czech Republic will probably leave rates on hold Key Market …
5th February 2020
Central banks of Brazil, Thailand and Iceland are all likely to cut their policy rates by 25bp We forecast that euro-zone retail sales dropped by 1.2% m/m in December (10.00 GMT) The US ISM non-manufacturing index probably rose in January (15.00 GMT) Key …
4th February 2020
US Democratic nomination kicks off, with Sanders the frontrunner in Iowa The RBA is likely to stand pat for now, but we think that it will soon resume its easing cycle Provincial debt saga may set the tone for Argentina’s sovereign debt talks Key Market …
3rd February 2020
Although there remains significant political uncertainty in many euro-zone countries, we doubt that this will prevent most government bond yields from falling a bit further this year. Expectations for monetary policy often have the biggest influence on …
We think both of the US ISM surveys rebounded in January (Monday & Wednesday) Brazil’s central bank will probably cut its policy rate on Wednesday We forecast a solid 185,000 gain in US non-farm payrolls in January (Friday) Key Market Themes As the clock …
31st January 2020
The market impact of the coronavirus outbreak in China has escalated over recent days, and increasingly resembles last year’s trade-war-driven turmoil in May and August. But unless the fallout from the epidemic escalates significantly, it is hard to see …
China’s official PMIs might give us an idea of the impact on confidence from the virus outbreak We think that Italy’s economy stagnated in Q4 (09.00 GMT) … … but growth in France and Spain probably held up better Key Market Themes The Bank of England left …
30th January 2020
We think that the Bank of England will defy expectations for a rate cut (12.00 GMT) January’s euro-zone sentiment survey will probably point to a weak Q1 (10.00 GMT) US GDP growth is likely to have ticked down in Q4 (13.30 GMT) Key Market Themes A sharp …
29th January 2020
Official talks between Argentina’s new government and the IMF over the future of its record-breaking bailout started this month but, with the government having already restructured some of its local law debts, the need for urgent external financing has …
Weaker underlying price pressures probably pushed Australia’s inflation down (00.30 GMT) We expect the Fed to leave rates on hold on Wednesday, and throughout 2020 (19.00 GMT) Chile’s central bank likely to keep its policy rate at 1.75% (21.00 GMT) Key …
28th January 2020
China’s ban on outbound travel likely to have significant impact on the rest of EM Asia Central banks in Hungary and Pakistan likely to keep rates on hold US headline durable goods probably fell in December as aircraft sales slumped (13.30 GMT) Key Market …
27th January 2020
After a stellar 2019 for most risky assets, we think that they will generally make only small gains in 2020. Admittedly, our forecasts assume that the effects of the coronavirus outbreak on markets will eventually unwind, since we simply don’t know how it …
BoE is likely to defy expectations for a rate cut; the Fed will also probably stand pat We estimate that US GDP growth slowed to 2.0% annualised in Q4 (Thursday) China’s official PMI might give us an idea of the impact on confidence from the flu outbreak …
24th January 2020
Despite lingering uncertainty around the next phase of the UK’s exit from the EU, we think that there is more upside for sterling, Gilt yields, and UK equities. The UK is set to leave the EU on 31 st January, but the risk of a disorderly end to the …
ECB and Norges Bank likely to keep policy settings unchanged at their respective meetings We think that both imports and exports increased in Japan in December (Wed., 23.50 GMT) Consumer confidence in the euro-zone probably improved a bit in January …
22nd January 2020
While we have altered our forecasts for ECB policy this year, we are still more dovish than investors about the outlook for interest rates in the euro-zone. As such, we continue to think that government bond yields in the region will fall back and that …
21st January 2020
Bank of Japan likely to leave its policy settings unchanged at its meeting on Tuesday We think that Taiwan’s GDP grew by 2.8% y/y in Q4 (08.00 GMT) The UK unemployment rate probably remained at 3.8% in November (09.30 GMT) Key Market Themes Although the …
20th January 2020
We think that China’s loan prime rate edged down by 5bp in January (Monday) ECB will probably keep its deposit rate at -0.5%, but we expect a cut later this year (Thursday) Central banks in Norway, Canada, Malaysia and Nigeria are also likely to leave …
17th January 2020
While the dollar looks overvalued on most metrics, and has risen significantly over recent years, we don’t think that it is very overvalued. In our view, its valuation will not stop it from strengthening a bit further over the next couple of years. …
Optimism about a Phase One deal has driven the rally in Chinese equities and the renminbi since late 2019. But now that the deal has been signed, this ought to be fully discounted in the markets. And with a Phase Two deal unlikely anytime soon, if at all, …
16th January 2020
We think that activity growth in China held steady in December (02.00 GMT) US housing starts are likely to have risen last month (13.30 GMT)… … But industrial production probably fell (14.15 GMT) Key Market Themes Despite renewed appetite for risk …
