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Largest increase in new home sales in over a year The large uptick in new home sales in March is consistent with our above-consensus prediction that sales of new homes will climb to 750,000 by year end. The 8.8% rise in new home sales in March took them …
23rd April 2024
This page has been updated with additional analysis since first publication. Easing services prices may encourage BoE to cut rates in the coming months Although the unexpected rise in the composite activity PMI in April suggests the economy grew faster at …
This page has been updated with additional analysis since first publication. Limited scope for tax cuts March’s public finances figures show that public borrowing in 2023/24 came in £6.6bn higher than the OBR predicted only a month ago, casting further …
This page has been updated with additional analysis since first publication. A strong rebound in Q2 GDP is likely The composite PMI continued to rise strongly to a eight-month high in April, suggesting that a strong rebound is on the cards for Q2 GDP …
This page has been updated with additional analysis since first publication . Retail outlook still bright despite sales stalling in March Although retail sales volumes remaining unchanged in March was worse than expected (consensus forecast +0.3% m/m, CE …
19th April 2024
Inflation should receive a boost in mid-year Inflation moderated slightly in March, in line with the consensus and our forecasts. If inflation continues to move in line with the BoJ’s projections, further rate hikes may be on the cards this year. Headline …
Existing home sales drop back due to higher mortgage rates The fall in existing home sales in March was triggered by mortgage rates climbing back above 7% the month before. Even so, transactions remain above the trough at the end of last year, consistent …
18th April 2024
This page has been updated with additional analysis since first publication. Still-tight labour market gives RBA reason to be cautious The modest rise in unemployment last month doesn’t change the bigger picture that Australia’s labour market is firing on …
This page has been updated with additional analysis since first publication. Upside surprise, but big drop to below 2% still coming in April The smaller-than-expected fall in CPI inflation from 3.4% in February to 3.2% in March (BoE and consensus 3.1%, CE …
17th April 2024
This page has been updated with additional analysis since first publication. Net exports will be a drag on Q1 GDP While the trade deficit increased in March, net goods trade should contribute positively to Q1 GDP figures. But net services should have …
This page has been updated with additional analysis since first publication. Upside inflation surprise raises “higher for longer” risks Although the Q1 CPI print was a touch stronger than we had predicted, we still expect inflation to return to the RBNZ’s …
Manufacturing rallies, but hi-tech boom revised down The 0.4% m/m increase in industrial production in March was principally due to a 0.5% m/m increase in manufacturing output, which was a lot better than we had expected given the already-reported decline …
16th April 2024
Largest decline in housing starts since April 2020 Housing starts weren’t able to build on the strong performance of the previous month in March, falling by the largest monthly amount since April 2020 in the early days of the pandemic. Although some of …
On track for a June interest rate cut The March CPI data showed the third consecutive month of muted gains in the Bank of Canada’s preferred core inflation measures, suggesting that there is a growing chance of the Bank cutting interest rates at its next …
This page has been updated with additional analysis since first publication. Weaker labour market points to weaker wage growth The sharp fall in employment and the jump in the unemployment rate in February suggest that wage growth will continue to slow …
Downside risks to flash GDP estimate for February The unchanged level of wholesale sales and signs that manufacturing GDP contracted suggest that there are downside risks to the flash estimate that GDP rose by 0.4% m/m in February. The 0.7% m/m rise in …
15th April 2024
Consumption growth still rock solid The strong rise in retail sales in March and upward revision to February’s data will further support the Fed’s stance that there is no rush to start lowering interest rates. The 0.7% m/m rise in headline sales was …
This page has been updated with additional analysis since first publication. Rise in output doesn’t improve poor outlook for industry Euro-zone industrial production rose in January, but the level of output is still weak and the outlook is poor. The 0.8% …
Consumers taking their cue from gasoline prices The small decline in the University of Michigan measure of sentiment in April lends some support to our forecast that consumer spending growth will be weaker in the first half of this year. Higher gasoline …
12th April 2024
This page has been updated with additional analysis since first publication. Recovery well underway, but inflation will continue to fall The 0.1% m/m rise in GDP in February (consensus and CE +0.1%) and the upward revision to the gain in January from 0.2% …
Fed looking to slow QT by half from June According to the minutes of the Fed’s mid-March policy meeting “almost all participants judged that it would be appropriate to move policy to a less restrictive stance at some point this year if the economy evolved …
10th April 2024
Bank leaves the door open for a June interest rate cut The acknowledgment by the Bank of Canada today that “the data since January have increased our confidence that inflation will continue to come down” leaves the door open to an interest rate cut at the …
Third consecutive 0.4% m/m gain in core CPI kills June rate cut hopes Alongside the pick-up in monthly payroll employment gains, the third consecutive 0.4% m/m rise in core CPI in March pretty much kills off hopes of a June rate cut from the Fed. The …
RBNZ remains on the sidelines The RBNZ didn’t drop any hints as to when it might pivot to looser policy at its meeting today, but we still think that it will start cutting rates by August. The RBNZ’s decision to leave rates on hold at 5.50% was correctly …
Some signs of life from German industry, but outlook still poor The second consecutive large monthly rise in German industrial production in February confirms the sector has started the year on a better note. But we still expect it to struggle over the …
8th April 2024
This page has been updated with additional analysis since first publication. Virtuous cycle will continue to gain momentum in Q2 Regular wage growth spiked in February, which suggests that the virtuous cycle between prices and wages is in full swing. And …
Cracks growing in the labour market The jump in the unemployment rate in March, together with evidence of easing wage pressures, raises the chance of the Bank of Canada surprising markets with a rate cut next week, although our base case remains that the …
5th April 2024
Blockbuster report another reason for the Fed to take its time The blockbuster 303,000 increase in non-farm payrolls in March supports the Fed’s position that the resilience of the economy means it can take its time with rate cuts, which might now not …
Rebound in mortgage rates causes prices to stall The first decline in the Halifax House price Index in six months confirmed that the slight rise in mortgage rates since the start of the year has caused house prices to stall. The 1.0% m/m fall in the …
Exports and imports both surged A surge in gold exports and the end of earlier weather-related disruptions flattered the figures in February, but the trade data nonetheless point to a strengthening economy and suggest that net trade made a large …
4th April 2024
Exports and imports surge in first quarter The strong gains in exports and imports in February imply that net trade will be a negative for first-quarter GDP growth, but that appears to mostly reflect the support to import demand from strong consumer …
Mortgage rates temporarily drop below 7%, helping demand recover Mortgage rates dipping back below 7% helped mortgage applications for home purchase edge slightly higher in March. But recent increases in the 10-year Treasury yield point to mortgage rates …
3rd April 2024
This page has been updated with additional analysis since first publication. Drag on activity from high interest rates continues to fade February’s money and credit figures show the dip in mortgage rates at the start of the year boosted mortgage approvals …
2nd April 2024
RBA abandons tightening bias but rate cuts still a long way off While the RBA no longer considered raising interest rates at its March meeting, we think it will take until November for the Bank to start easing monetary policy. The Bank noted that …
Above 50.0 for the first time since September 2022 The jump in the ISM manufacturing index in March, leaving it above the theoretical 50.0 no-change level for the first time since September 2022, suggests that the sector has finally turned a corner. While …
1st April 2024
This page has been updated with additional analysis since first publication. Tankan points to sluggish recovery The slight fall in business conditions across all firm sizes in the latest Tankan suggests that a rapid recovery from the likely slump in Q1 …
Core prices moderate again, but real spending strong The slightly weaker than expected gain in core PCE prices in February will, at the margin, provide Fed officials with a little more confidence that the January surge was an anomaly. Nevertheless, the …
29th March 2024
Q1 GDP to drop sharply as industrial output slumps With industrial output falling yet again in February following the plunge in January, GDP will fall sharply in the first quarter. The 0.1% m/m decline in industrial production in February was weaker than …
Strong growth reduces urgency for interest rate cuts The broad-based strength of GDP growth in January and February means the economy almost certainly outperformed the Bank of Canada’s expectations in the first quarter and reduces the immediate risk of …
28th March 2024
This page has been updated with additional analysis since first publication. Mild recession confirmed, but recovery probably already underway The final Q4 2023 GDP release confirmed that the UK economy was in the mildest of mild technical recessions at …
This page has been updated with additional analysis since first publication. Private consumption set to trudge along The modest uptick in retail sales in February was as we had anticipated. The data confirm our view that consumer spending is likely to …
This page has been updated with additional analysis since first publication. EC Survey points to stagnant economy and still-high price pressures The EC business and consumer survey for March reinforces the message that the economy is close to recession …
27th March 2024
This page has been updated with additional analysis since first publication. Inflationary pressures are letting up, but risks linger Headline Inflation in February once again came in below the expectations of both the analyst consensus and the RBA. But …
House price growth reaccelerates in January The fairly large gain in house prices in January points to a rebound in price growth driven by the fall in mortgage rates towards the end of last year. Although its early in the year, today’s data fit with our …
26th March 2024
Earlier weakness in equipment investment fading The solid rebound in durable goods orders in February suggests that the recent decline in corporate borrowing costs is feeding through to a tentative recovery in business equipment investment. The 1.4% m/m …
New home sales disappoint in February February’s tiny drop in new home sales cut short what appeared to be the beginning of a recovery in recent months. Even though the drop was extremely small, it still potentially casts some doubt over our upbeat new …
25th March 2024
Heading for another decent quarter Despite only modest rises in retail sales volumes in January and February, the earlier strength in December means that growth should remain strong this quarter. The 0.3% m/m fall in retail sales was a little smaller than …
22nd March 2024
This page has been updated with additional analysis since first publication. Shoppers largely shrug off wet weather as retail rebound only paused Unchanged retail sales volumes in February (CE forecast 0.0% m/m, consensus -0.4% m/m), as shoppers largely …
Inflation will return to BoJ’s target by year-end The renewed jump in headline inflation in February leaves the door open for another rate hike by the Bank of Japan, but with underlying inflation moderating the case for tighter policy is weakening. The …
21st March 2024
Existing home sales accelerate despite higher mortgage rates Existing home sales rose in February which we think largely reflects the sharp fall in mortgage rates at the end of last year. But borrowing costs have been rising so far in 2024, which in the …
