This is our first US Commercial Property Metros Chart Book, which forms part of a set of publications that extends our existing analysis to a wider set of metros. As well as greater coverage of office and apartment metro markets, this publication also …
24th February 2022
The easing of Omicron waves, and loosening of restrictions, across Latin America will have given a lift to recoveries in recent weeks, but the fallout from the Russia-Ukraine crisis presents a fresh headwind to the region. While the recent surge in global …
Sharp falls in property yields and an improvement in rental growth pushed CEE all-property values in Q4 up almost 5% q/q, the strongest quarterly growth rate since 2007. (See Chart 1.) This was largely driven by the strength of industrial, but office …
Homeowners appear to be pressing ahead with plans to move house even though stamp duty is now fully reinstated. Transactions inevitably dipped last October as sales were rushed through in September to take advantage of the tax relief. But since then, they …
23rd February 2022
The evidence of broadening inflationary pressures and the further rise in oil prices suggest that the balance of risks to our inflation forecast lies to the upside. The January consumer price data showed a surprisingly large rise in headline inflation, to …
Net portfolio outflows from Indian financial markets have picked up over recent weeks as the growing prospects of war between Ukraine and Russia and tighter global monetary policy have caused risk appetite to sour. Outflows from the equity market have …
There was a material improvement in the Scandinavian and Swiss property markets over 2021. Prime office and industrial capital value growth accelerated. And while prime retail values still declined, this was at a slower pace than in 2020. Oslo was an …
21st February 2022
Yields on 10-year Swiss government bonds have moved in lockstep with those of Bunds since the start of the pandemic, and thus followed their German counterparts above zero in January. (See Chart 1.) While the Swiss yield has dropped back a bit since …
Services spending jumped to only 3% below its pre-virus level in Q4 2021 despite having begun the quarter on a weak footing with curfews still in place for bars and restaurants across many regions in October. (See Chart 1.) It will have been knocked …
The threat of sanctions has weighed on Russia’s stock market recently, but even if tensions abated we wouldn’t expect it to make big gains over the next couple of years. Russia’s equities have been volatile lately, but the big picture is that the tensions …
18th February 2022
While economic indicators point to slower growth this year, investors have so far been unperturbed, piling into the market in Q4 and driving record quarterly and annual investment totals. That was led by record activity in industrial and apartments, which …
The further rise in CPI inflation to 7.5% in January and hawkish comments from Fed officials have seen markets rush to price in a series of aggressive interest rate hikes this year. But recent weeks have also brought tentative signs that better news on …
17th February 2022
Euro-zone commercial property markets ended 2021 on a stronger note. Prime rental growth picked up in the office and industrial sectors, while retail rents held steady for the third consecutive quarter. Combined with further declines in property yields, …
Even if tensions between Russia and Ukraine abated, we wouldn’t expect risky assets to gain all that much over the rest of this year and next, mainly because we think ongoing monetary tightening would continue to keep a lid on any rally. Risky assets have …
16th February 2022
While data from the past month have been consistent with global economic activity picking up some pace towards the tail end of 2021, timely data point to a weak turn of the year as the Omicron wave took its toll. For example, virus caution and government …
11th February 2022
Rising inflation has put major DM central banks under pressure and interest rate expectations have risen. But most emerging markets look relatively well placed to weather a period of DM policy tightening. Current account deficits are generally small or in …
We estimate that the leap in utility prices and hike in taxes on 1 st April will reduce real household disposable incomes over the next two years by a cumulative £80bn. The resulting 2.0% decline in real incomes in 2022 will be the largest on record. (See …
10th February 2022
House prices and rents both boomed in 2021, but are set for a quieter 2022. Mortgage rates are now rising and we expect the 30-year rate will end the year at around 4%. Combined with the rise in house prices that will push mortgage payments as a share of …
8th February 2022
Both we and the market are now discounting 100bp of ECB rate hikes by the end of 2023. (See Chart 1.) And given the sequencing set out by Christine Lagarde, it seems likely that net asset purchases will end in Q3 this year at the latest. There are a …
Waves of the Omicron variant that spread across the region in December have subsided sharply in recent weeks. In South Africa, cases have fallen by over 85% since their mid-December peak, and the latest outbreaks have receded with similar speed elsewhere …
31st January 2022
It is possible that equity prices will continue to struggle in the near term if central banks send more signals that they are willing to raise interest rates further in order to control inflation. But without a significant economic downturn or recession …
Millions of people traditionally travel across China to spend this evening, the eve of Lunar New Year, with their families. The tradition has been severely disrupted by the pandemic. Last year, amid a flare-up in COVID infections, local governments …
Central banks in the Gulf will have to raise interest rates in line with the Fed (which we expect to hike four times both this year and next) by virtue of their dollar pegs, adding to headwinds facing non-oil sectors. Outside the Gulf, the main risk is …
28th January 2022
New Zealand’s inflation surged to a 30-year high of 5.9% in Q4. And while Australia’s 3.5% was much lower, it is well above the RBA’s 2-3% target band. Trimmed mean inflation is about one percentage lower, but business surveys suggest it will rise further …
Industry across Emerging Europe turned a corner in Q4 as auto production rebounded strongly. This comes amid signs that supply shortages are starting to ease; our proprietary shortages dashboard suggests that product shortages may have peaked. We think …
27th January 2022
The Omicron variant is spreading quickly across Asia. Daily virus numbers are now at record levels in Korea, Singapore and the Philippines. However, the economic impact of Omicron is shaping up to be much smaller than previous virus waves. Restrictions, …
The rapid spread of the Omicron variant in India has caused economic activity to weaken so far in 2022. But the damage has been much less severe than during the previous two outbreaks. (See Chart 1.) Perhaps unsurprisingly, airport traffic has been one of …
Political risk will be a major theme once again in Latin America this year, although recent developments have given cause for cautious optimism. Chilean President-elect Boric’s appointment of Mario Marcel , the current Central Bank Governor, as the next …
25th January 2022
The Bank of Canada’s fourth-quarter Business Outlook Survey showed firms’ wage expectations at a record high, which suggests that wage growth could accelerate to far above the pre-pandemic norm this year. (See Chart 1.) With little sign yet of a rebound …
The jump in transactions during the pandemic was larger in London than other regions as the market didn’t experience the same drop in supply as elsewhere. That reflected many existing homeowners adjusting to remote working by moving further afield, giving …
Skyrocketing infections and a 10-day isolation requirement for close contacts of positive cases have resulted in a wave of staff absences in Japan. Domestic carmakers already struggling with chip shortages appear to have been among the first victims of …
24th January 2022
The surge in Omicron infections means more people were self-isolating in early-January than at any time since the beginning of the pandemic, although the impact that will have on employment and output remains uncertain. Furthermore, with cases now falling …
#Commercial property ended last year strongly. Annual rental growth climbed to a five-year high, while annual total returns crossed the 20% level. This was largely the result of dynamism in industrial, though all sectors saw positive annual returns, even …
21st January 2022
The Riksbank has learnt from its past tendency to project rate hikes that never arrive. But the single repo rate rise by end-2024 that it currently projects is stretching the limits of plausibility in the other direction. Of course, policymakers will …
17th January 2022
The Omicron variant of COVID-19 is causing new virus cases to surge in the emerging world. (See Chart 1.) Many EMs are reporting record daily cases or that new infections are rising sharply. South Africa ’s experience offers some hope – cases are now …
14th January 2022
There were signs that supply shortages were starting to ease in some places at the tail end of 2021. World trade was its strongest since shortages began to bite a year ago and industrial production had picked up too, especially in the auto industry as …
Housing market activity had a strong end to 2021, with sales and starts both rising. However, after a brief dip due to concerns over Omicron, mortgage rates resumed their upward trend and reached a nine-month high by the end of the year. A further rise in …
11th January 2022
Euro-zone inflation reached 5.0% in December, which is likely to be the peak. Unless oil and gas prices surge again in 2022, which seems unlikely, energy inflation will plummet – we forecast the contribution of energy to headline inflation to drop from …
Overview – Two themes have dominated commodity markets at the turn of the year: the ongoing shortage of energy commodities and the global rise in cases of COVID-19. On the former, we think that shortages will start to ease meaningfully later this year, …
7th January 2022
The economy gained momentum at the start of the fourth quarter and we have revised up our forecast for fourth-quarter GDP growth to 5.5% annualised, from 4.0%. Given the rapidly deteriorating coronavirus situation, however, we have revised down our …
23rd December 2021
The continued strength of the housing market after the end of the stamp duty holiday shows that it was far more than the tax break that kept prices surging in 2021. The three key drivers of demand - low mortgage rates, high household saving, and a …
The Omicron has lifted new virus cases to a record high, though hospitalisations remain low. (See Chart 1.) We estimate that there are around 2000 hospital beds available for Covid-19 patients in New South Wales, where cases are rising most rapidly, of …
While many central banks have continued to tighten monetary policy over the past month, the People’s Bank of China (PBOC) has gone in the opposite direction. We think the easing cycle in China has further to run, and that this will contribute to a further …
22nd December 2021
Recoveries across Latin America have lost momentum in Q4 even though, unlike in other regions such as Europe, new COVID-19 cases generally remain low and containment measures are still light-touch at this stage. The situation could get worse if the …
Q4 is shaping up to be strong in line with our forecast. Mobility data point to another sizeable rebound in consumer spending, and strong export data and optimistic firm forecasts suggest that industrial production has bounced back sharply. (See Chart 1). …
Most countries in Emerging Asia have now recorded cases of Omicron, and the experience from elsewhere in the world suggests that it is only a matter of time before there is widespread community transmission of the new variant. Many places have already …
The People’s Bank purchased nearly $6bn in foreign exchange last month, by our estimate. That’s not much in the context of China’s cross-border trade and investment flows. But it was the biggest purchase in six years. Then, earlier this month, while …
2021 is on course to be a relatively good year for most investors. Admittedly, it has not been entirely without its casualties. Equities in China and much of Latin America, for example, have struggled, against a backdrop of growing political risks. …
21st December 2021
The Omicron variant has supercharged the seasonal wave of virus cases sweeping parts of the US, adding to the existing headwinds to consumption growth over the coming months. (See Chart 1.) In contrast to governments in Europe, however, there are still …
While we have raised our end-22 and end-23 forecasts for the S&P 500, we still expect gains in the index to be smaller over the next two years than they have been in 2021 and on average over the past decade . After rising sharply in October, the S&P 500 …
