Approvals bottom out, but will remain low The drop in mortgage approvals in September left them a third below their usual level in the years leading up to the pandemic as high mortgage rates put homeowners off moving and priced many first-time buyers out …
30th October 2023
Note: We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm GMT on Thursday 2 nd November . (Register here .) This page has been updated with additional analysis since first publication. Drag on lending and …
“Sick” German economy slipping back into recession The small decline in German GDP in the third quarter and upward revision to the previous two quarters means the economy is not doing quite as poorly as anticipated. But GDP has essentially been stagnant …
This page has been updated with additional analysis since first publication. Pause in the recession Preliminary data released this morning show that the Swedish economy flatlined in Q3 (0.0% q/q) after contracting sharply in the second quarter (-0.8%). …
This page has been updated with additional analysis since first publication. Surge in retail sales bolsters case for policy tightening With Australia’s retail recession likely having ended last quarter, it’s all but certain that the Reserve Bank of …
Stronger rise in core prices likely to be a blip The stronger gains in real consumption and the core PCE price index in September are a potential concern for Fed officials, but won’t be enough to convince them to resume raising interest rates next week, …
27th October 2023
CBR delivers a larger hike as fiscal risks mount Russia’s central bank (CBR) opted for a larger-than-expected 200bp interest rate hike, to 15.00%, at today’s meeting and, while policymakers seemed to signal that the tightening cycle is at an end, we think …
Economy still growing but set to weaken GDP data for Spain in Q3 were a bit stronger than expected and showed that the economy was proving more resilient in the face of high interest rates than anticipated. But the outlook is still weak. The 0.3% q/q …
This page has been updated with additional analysis since first publication. Underlying inflation set to decline further While the jump in inflation in Tokyo to a seven-month high wasn’t nearly as bad as it looks, it is consistent with our view that …
US households still the world’s spenders of last resort On its own, the stunningly-strong 4.9% annualised gain in third-quarter GDP suggests that the Fed needs to do even more to slow demand, but just as notable was the slowdown in core PCE inflation to …
26th October 2023
ECB policy rates at a plateau Today’s decision to leave interest rates unchanged, and the tone of the press release, were as expected. There is no mention of ending PEPP reinvestments early or raising banks’ reserve requirements, but in the press …
This page has been updated with additional analysis since first publication . Copom on course for another 50bp cut next week The Brazilian mid-month inflation figure for October, of 5.0% y/y, confirms that the recent rise in inflation has now passed its …
CBRT maintaining the fight against inflation Turkey’s central bank stuck to the course today as it delivered another 500bp interest rate hike, to 35%. A few more large hikes are likely to be delivered in the coming months too, which should help to turn …
The central bank (BSP) in the Philippines today raised its main policy rate by 25 bps (to 6.50%) in an out-of-cycle interest rate decision. While we had expected an interest rate hike at the upcoming scheduled meeting in mid-November, today’s out of cycle …
Economic growth in Korea was stronger than expected in Q3 but we think the economy is set to weaken in the near term as support from external demand fades while tight fiscal and monetary policy continue to curtail domestic demand. According to the advance …
Bank maintains tightening bias but next move likely to be a cut Although the Bank of Canada maintained its tightening bias today, the rest of the policy statement suggests that the Bank is growing more confident that its job is done. We continue to expect …
25th October 2023
New home sales resume upward trend Extraordinarily limited supply in the existing homes market continued to drive buyers to new homes in September. The 12.4% m/m rise in new home sales in September took them to 759,000 annualised (consensus 680,000), …
This page has been updated with additional analysis since first publication. German economy still contracting The small rise in the Ifo Business Climate Index (BCI) in October still left the index in contractionary territory, echoing the downbeat message …
This page has been updated with additional analysis since first publication. RBA to hike again as inflation surprises on the upside With price pressures being slower to abate than the RBA had anticipated, we think the Bank will deliver one final 25bp …
This page has been updated with additional analysis since first publication . Pick-up in services inflation to keep Banxico in hawkish mood The fall in Mexico’s headline inflation rate to a 31-month low of 4.3% y/y in the first half of October masked a …
24th October 2023
This page has been updated with additional analysis since first publication. Signs that recession may be underway, but services price inflation still sticky The composite activity PMI inched up from 48.5 in September to 48.6 in October after five months …
This page has been updated with additional analysis since first publication. PMIs consistent with recession and falling inflation The further decline in the euro-zone Composite PMI in October left it well into contractionary territory and the breakdown …
This page has been updated with additional analysis since first publication. Faint signs the labour market hasn’t loosened as much The labour market appeared not to loosen as much as we thought in August based on the Office for National Statistics’ (ONS) …
Weakness in sales volumes adds to recession fears The weakness of retail sales volumes in August and September suggest that consumption is stagnating at best, and that “excess demand” has faded faster than the Bank of Canada initially expected. That is …
20th October 2023
This page has been updated with additional analysis since first publication. Economy slowly coming back to life Poland’s stronger-than-expected activity data for September suggest that the economy started on its road to recovery in Q3. With inflation and …
Initial estimate points to Q3 rebound, but strong growth unlikely to be sustained GDP figures for Malaysia published today showed that the economy rebounded unexpectedly in the third quarter of the year, with y/y growth increasing to 3.3% from 2.9% the …
This page has been updated with additional analysis since first publication. The start of another retail recession The 0.9% m/m fall in retail sales volumes in September meant sales volumes fell 0.8% q/q in Q3 and suggests that after the 18-month-long …
This page has been updated with additional analysis since first publication. Buoyant economy to date increases scope for pre-election giveaways September's public finances figures continued the recent run of better-than-expected news on the fiscal …
This page has been updated with additional analysis since first publication. Inflation will only fall below 2% by end-2024 While inflation weakened in September, we think inflation will only fall below the BoJ’s 2% target by the end of next year. The …
Market grinds to a halt Existing home sales fell to their lowest level since October 2010 in September as the increase in mortgage rates to a fresh 23-year high caused buyers and sellers to withdraw from the market. A decline in mortgage applications for …
19th October 2023
Surprise hike aimed at supporting the currency In a surprise move, Bank Indonesia (BI) today hiked its main policy rate by 25bps (to 6.0%), and made clear that supporting the currency would remain its key priority over the coming months. However, with …
This page has been updated with additional analysis since first publication Fall in joblessness complicates picture for the RBA The September data suggest that the labour market could take longer to cool than the RBA currently expects. Accordingly, we …
On hold again, central bank in no rush to loosen policy The Bank of Korea (BoK) today left interest rates unchanged (at 3.5%) for a sixth consecutive meeting. The decision came as no surprise and was correctly predicted by 49 economists polled by …
Drag from net trade unlikely to persist Net trade probably was a large drag on GDP growth in Q3, but we suspect it will become less of a drag this quarter. The 4.3% annual rise in export values in September was stronger than the analyst consensus of 3.1% …
Starts rebound, but headwinds remain Single-family starts edged higher in September to 963,000 annualised from 933,000 in August and building permits also rose to a 15-month high. However, we don’t think this means single-family construction activity has …
18th October 2023
Activity improves, but slow growth set to continue The batch of South African activity data for August was a mixed bag, but the overall picture is that the economy struggled for growth in Q3. And tight policy means that growth in 2024 will be modest too. …
This page has been updated with additional analysis since first publication. Fall in inflation in September will not change ECB's tune The breakdown of euro-zone HICP inflation data for September, published today, reveals that there was a significant fall …
Inflation rise means SARB won’t cut rates until 2024 The larger-than-expected rise in South Africa’s headline inflation rate, to 5.4% y/y, in September supports our view that the Reserve Bank will only turn towards interest rate cuts from next year. The …
The failure of CPI inflation to fall in September from August’s rate of 6.7% will be a bit of a disappointment to most (consensus forecast 6.6%, CE forecast 6.8%). But at 6.7% it is still below the 6.9% rate the Bank of England projected back in August …
This page has been updated with additional analysis and charts since first publication . According to official GDP, growth more than doubled in q/q terms between Q2 and Q3, reaching a healthy 5.3% annualised rate. Our China Activity Proxy suggests that …
Further evidence of economic strength in September The 0.3% m/m rise in industrial production in September is another sign that the real economy remains in solid shape. Production was hit by a slight 0.3% m/m drop-back in utilities output, but that was …
17th October 2023
This page has been updated with additional analysis since first publication. Consumption solid heading into Q4 The unexpectedly-strong 0.7% m/m rise in retail sales in September continues the theme of consumer resilience in the face of higher interest …
This page has been updated with additional analysis since first publication. Fall in inflation to keep Bank on the sidelines The larger-than-expected falls in headline and core inflation in September should be enough to finally persuade markets that there …
German economy still in the doldrums Although the headline ZEW survey for Germany rose in October it was still very weak, while the low reading for the current conditions index supports our view that the economy is in recession. The jump in the ZEW …
This page has been updated with additional analysis since first publication. Wage growth passed its peak, but it will fall only gradually Cooling labour market conditions appeared to start feeding through into an easing in wage growth in August. That …
RBA will probably hike rates in November The minutes of the RBA’s October meeting support our view that the Bank will deliver a final 25bp rate hike at its November meeting. While the Bank decided to keep rates unchanged at that meeting, it kept …
This page has been updated with additional analysis since first publication. RBNZ to remain on hold as inflation continues to soften With price pressures on track to moderate further, we think that Reserve Bank of New Zealand won’t lift rates any higher. …
16th October 2023
September saw sharp drawback in lending The jump in lending in August proved temporary as net lending to commercial property totalled just $13.5bn in September, below the average for 2023 thus far. This took total outstanding real estate debt to $5.5trn. …
Manufacturing losing momentum The surprise fall in manufacturing sales volumes in August reduces the chance of GDP rising by any more than the initial preliminary estimate of a 0.1% m/m gain, and means a second consecutive contraction is still on the …
This page has been updated with additional analysis since first publication . Inflation accelerates once again, setting the stage for Central bank hikes Nigeria’s headline inflation rate rose again to an almost-18 year high of 26.7% y/y in September, …
