The risks to our forecast that CPI inflation will rise from 1.5% in April to a peak of 2.6% in November before dropping back in 2022 are increasingly on the upside. Rises in shipping costs and global agricultural commodity prices as well as shortages of …
10th June 2021
Rising global price pressures have pushed inflation up in Switzerland and Sweden this year, but their central banks look set to leave policy on hold. In contrast, inflation in Norway has been falling recently (see Chart 1) and yet its central bank is …
9th June 2021
Both new and existing home sales dropped back in April and the May pending home sales index points to further declines in existing sales over the next couple of months. (See Chart 1.) House price growth of over 13% y/y and a rise in mortgage rates since …
8th June 2021
The economic outlook has brightened as the virus has subsided and governments have permitted people to return to the shops and restaurants as well as to travel a bit more freely. However, manufacturers are struggling to keep up with booming demand due to …
4th June 2021
Overview – May was a strong month for the prices of most metals, but we suspect that this may be as good as it gets. After all, if we’re right in expecting economic growth in China to slow in the second half of this year, the prices of most industrial …
3rd June 2021
Overview – Cold weather in parts of the northern hemisphere helped push up the prices of coal and natural gas last month, while oil prices also rose. We still think that average energy prices will be higher this year than last but expect the prices of …
2nd June 2021
Overview – Prices generally rose in May, bolstered by signs of recovery in the global economy – led by the US – and stronger commodities demand. While prices could make further gains in the near term, we expect the prices of most commodities to be in …
State media announced today that China’s family planning policy will be relaxed to allow all families to have three children, up from the current limit of two. This comes shortly after China’s once-a-decade census showed that its population is aging even …
31st May 2021
Australian Treasurer Josh Frydenberg noted in October that the Government would not pursue budget repair until the unemployment rated was comfortably below 6%. However, the unemployment rate fell much more rapidly ahead of the May Budget than almost …
Capital growth was solid in April at 0.5% m/m, although that reflected a slight reduction from the rate seen in March. Looking ahead, we expect the recovery in economic activity to continue which will support demand for commercial property. However, …
28th May 2021
Capital value growth improved in Scandinavia and Switzerland in Q1, helped by the easing of virus restrictions and by the improvement in economic activity towards the end of the quarter. The uptick in the pace of Scandinavian industrial capital value …
Currencies of the two biggest economies in Africa have had contrasting fortunes recently, with Nigeria’s official naira exchange rate recently devalued but the South African rand soaring on the back of higher metals prices. Nigerian policymakers have …
27th May 2021
The jump in inflation to 3.4% in April was stronger than most forecasters expected and, with firms’ selling price expectations rising again in May, there seem to be further upside risks to inflation over the rest of the year. We expect inflation to …
We forecast that emerging market (EM) equities will make further gains between now and end-2022 as the global economy recovers further. However, they have lost a bit of ground to developed market (DM) equities recently and we doubt they will perform much …
The strength of inflation and expectations for a strong economic recovery have prompted a clear hawkish shift among Central European central banks. In Hungary, the MNB has set in motion the start of a tightening cycle in June and used its meeting this …
Headline inflation rates have increased in almost all countries in the region since the turn of the year reflecting a combination of price pressures as economies re-open, higher food inflation and tax changes, as well as unfavourable base effects created …
Political risks have intensified in the Andes this month, which could be part of a broader trend throughout the region. In Colombia, the protests against tax reforms have pushed policymakers away from the fiscal austerity measures required to repair the …
26th May 2021
The fall in all-property rents, dragged down by office and retail sectors, meant that annual capital value growth remained in negative territory in Q1, despite the surprise fall in yields. (See Chart 1.) Looking ahead, while the faster pace of the …
The economic outlook for much of Emerging Asia has deteriorated in recent weeks in response to a sudden jump in COVID-19 infections. Daily cases are surging in Thailand and Malaysia, and while the overall numbers remain low, Taiwan, Singapore and Vietnam …
While inflation fears have taken some steam out of the US stock market rally recently, we still think that equities in the US, and elsewhere, will make further gains over the next couple of years. Much of the focus in the markets over the past few weeks …
20th May 2021
With the faster pace of vaccination paving the way for a rebound in economic activity, the prospects for occupier markets have improved. However, structural changes mean that the recovery in the office and retail sectors will be gradual. In contrast, we …
New virus cases in India remain extremely high, but some solace can be taken from the fact that they have dropped rapidly over the past couple of weeks back to their level in mid-April. The share of tests returning positive has fallen too. Encouragingly, …
The severe waves of COVID-19 that afflicted Emerging Europe and Latin America earlier in the year are now subsiding and the near-term economic outlook there has brightened. But several Asian economies have become the focus of concern instead. India …
19th May 2021
Off the back of the weak Q1 GDP data, we now expect output to only rise 2% across 2021. The economy is unlikely to recover much in Q2 as cases are close to record highs and calls for a nationwide state of emergency growing. Moreover, only 4% of the …
The strength of demand coupled with supply constraints have made shortages of many goods even worse, with the inventory to sales ratio falling to a record low in March. (See Chart 1.) The surge in job openings and share of employers saying they are …
18th May 2021
Near-term inflationary pressures appear to be building. Some of this reflects factors that are likely to be only temporary, such as the “reopening inflation” associated with the easing of virus-related restrictions. We also think the broad-based rally in …
17th May 2021
The economic recovery looks well-set, which should support occupier markets. However, structural change in the office sector means that occupier demand continues to fall, even while the beleaguered retail sector is showing improvement. Both of those …
13th May 2021
The Riksbank will look through the recent pick-up in consumer price inflation in Sweden, which rose above the Bank’s 2% target in April for the first time since May 2019. After all, the energy-driven increase in the headline CPIF rate will be temporary, …
Mortgage rates have edged down since the end of March, but that didn’t prevent a fall in the share of households who see now as a good time to buy a home to a record low in April. (See Chart 1.) House price growth of 12% y/y, and record low inventory, …
12th May 2021
We’ve been more optimistic than most about the economic outlook since it was announced in November that COVID-19 vaccines were effective. But now that the COVID-19 restrictions are being removed, it looks as though the rebound in activity may be even …
11th May 2021
Although we forecast that that the “rotation” in equity markets generally has further to run, as COVID-19 is contained and economies re-open, we project that developed market (DM) Real Estate Investment Trusts (REITs) will continue to underperform DM …
6th May 2021
After contracting again in the first quarter of this year, prospects for the second quarter have improved because the pace of vaccination has accelerated. At its recent pace, the euro-zone is on track to have vaccinated 70% of the adult population by …
The Q1 industrial profits data published this week were very strong. Net profits continued rise rapidly and are now 50% higher than they were two years ago. Only a third of this is due to higher sales. Instead, the bulk of the increase has come from …
30th April 2021
The sharp rises in copper and iron ore prices this month will have given a much-needed boost to African producers such as Zambia and South Africa. Gold also traded higher in April compared to March, supporting recoveries in the likes of Côte d’Ivoire, …
29th April 2021
The ratio of homes under construction to population growth is at a record high, reflecting both the strength of housing starts and the weakness of immigration. (See Chart 1.) While the boom in construction might seem like a much-needed response to the …
House prices are now surging in both countries. House price cycles in the Australian housing market tend to lag those in New Zealand a little, which is consistent with the forward indicators pointing to a rapid lift in the pace of annual Australian price …
Third virus waves held back recoveries in most countries in Q1, but the good news is that they appear to have peaked as new daily COVID-19 cases have fallen since mid-March. Russia has so far avoided a third wave and easing pressures on health systems …
28th April 2021
The Gulf economies, as well as Morocco, lead the way when it comes to COVID-19 vaccination programmes in the region. The UAE, Bahrain, and Qatar have provided at least one dose to more than half of their population, while Morocco, Saudi Arabia and Kuwait …
A jump in new virus cases in Thailand is already showing signs of holding back the recovery and could jeopardise plans to reopen the crucial tourist sector. Despite its initial success in containing COVID-19 – there have so far been fewer than 200 deaths …
Inflation is above target in Brazil and Mexico, with Chile set to follow in the coming months, but only in the former is the central bank likely to respond with (further) interest rate hikes. Brazil’s case reflects a combination of high inflation, a …
27th April 2021
Our view that the economy’s recovery from the COVID-19 crisis will be faster and fuller than most expect is consistent with UK equity prices continuing to rise over the next couple of years. Admittedly, UK equities have lagged their international …
22nd April 2021
A turnaround in returns during March hinted at a brighter outlook, though this mainly reflected favourable base effects. We think both structural and cyclical headwinds remain and do not see this as the start of a sustained recovery. With restrictions …
21st April 2021
New COVID-19 cases have surged in the emerging world, with India, Emerging Europe and Latin America particularly hard hit. Social distancing measures have been tightened in many countries, which will weigh on activity. The early evidence suggests that the …
Tokyo, Hyogo and Kyoto are soon expected to join Osaka in asking the central government to declare a third state of emergency. While together those four prefectures only generate a third of national output, the experience during the second state of …
Our in-house mobility tracker suggests that the surge in virus infections in India is now weighing on activity. (See Chart 1.) This is likely to become more pronounced as the outbreak has become more widespread, causing several state assemblies to tighten …
The latest round of stimulus cheques and the easing of restrictions are driving a renewed resurgence in demand, with retail sales jumping by nearly 10% in March and the regional manufacturing surveys rising to their highest level since the 1970s. (See …
19th April 2021
The world economy lost considerable momentum in the first quarter as resurgences of the virus and tighter lockdown measures weighed on activity. The lesson from Q4 last year was that households and businesses have adapted to lockdown measures to a …
16th April 2021
The partial unwinding in the reflation trade in recent weeks has stopped the decline in the Swiss franc in its tracks. Having depreciated against both the US dollar and the euro since the start of this year, the franc rose against both currencies in …
14th April 2021
Overview – Strong growth in industrial demand helped push up the prices of energy commodities used primarily in power generation last month, but oil prices slipped back. We continue to expect average energy prices to be higher this year than last, …
12th April 2021
Mortgage rates rose further in March, with the 30-year rate now up 50bps compared to the start of the year. Recent stability in the 10-year Treasury yield means mortgage rates are likely to move sideways over the next couple of weeks, but we expect they …
9th April 2021
