Indian GDP data due to be released on Friday are likely to show only a small contraction in annual growth in Q4 2020, and high-frequency indicators point to a relatively strong start to 2021. Indeed, our in-house mobility tracker suggests that activity …
24th February 2021
We still expect emerging market (EM) “risky” assets and currencies to make further gains this year, despite growing concerns about another “taper tantrum”. EM assets and currencies have made significant gains since their troughs last year. And we think …
23rd February 2021
Dollar bond issuance in the Gulf has got off to a quick start this year with Saudi Arabia, Oman, and Bahrain selling a total of $10.25bn of bonds in the past month. If oil prices continue to rise, as we expect, budget deficits will narrow and reduce …
While the mood in EM financial markets has soured a little of late, from an economic standpoint, the past month has brought several positive developments. First, Q4 GDP data released so far have generally been better than expected. Recoveries have been …
The pandemic has thrown up many surprises for the Canadian economy, the latest of which is the speed at which oil production has rebounded. Even though global fuel demand remains weak amid ongoing global travel restrictions, the Canada Energy Regulator’s …
While virus restrictions have weighed on retail markets across Europe, the hit has been particularly severe in CEE. Indeed, core-CEE prime retail rents fell by an eye-watering 20% last year, the sharpest drop since our series began in 2007. (See Chart 1.) …
Office and industrial yields edged lower in Q4 as the recovery in Scandinavian investment took hold. (See Chart 1.) However, the pandemic continued to weigh on occupiers, with retail rents declining further in most markets and office rents taking a hit in …
22nd February 2021
The strong rise in output in Q4 2020 to just 1.2% below Q4 2019 levels bolsters our view that Japan’s economy will be back to the level it reached before the tax hike and close to its pre-virus path by mid-2022. (See Chart 1.) Daily virus cases have …
The economy has started 2021 on a stronger footing than we anticipated. The 5.3% surge in retail sales last month underlined just how quickly stimulus cheques fed through to stronger spending on big-ticket items, while loosening virus restrictions are …
19th February 2021
Fiscal and monetary stimulus have kept economic growth solid and will support a continued recovery. While this bodes well for occupier demand, structural factors have weighed heavily on the office and retail sectors. That weakness is set to persist this …
18th February 2021
In our view, central banks’ cautious approach to tightening means that the yields of 10-year government bonds will rise only slowly in the next few years, even as the global economy recovers further. Since the last DM Markets Chart Book on 16 th December, …
Despite the sharp hit to economic activity, euro-zone prime commercial property values were comparatively unscathed last year, falling by just 2%. (See Chart 1.) However, this hides large differences in performance across the sectors. Indeed, industrial …
16th February 2021
There are clear signs that the end of the stamp duty holiday is causing the housing market to slow. In January the RICS reported a sharp drop in new buyer enquiries and seller instructions, and house prices edged down for the first time since last summer. …
Higher oil prices will provide a boost to energy inflation in most countries over the coming months (see here ), including in Switzerland and the Nordics. In Sweden and Norway, the energy component will be additionally boosted by a spike in electricity …
12th February 2021
Mortgage rates rose to a 12-week high in the first week February, and a further rise in the 10-year Treasury yield to 1.5% means they will increase to around 3.2% by the end of the year. Alongside surging house prices and record low inventory, that …
Global growth slowed throughout the fourth quarter and most economies entered the new year on a weak footing. We have limited hard data for 2021 so far, but timely surveys and our high-frequency Mobility Trackers are generally consistent with a further …
10th February 2021
Our forecast that the euro-zone economy rebounds strongly hinges on Covid-19 restrictions being lifted by the middle of the year. Unfortunately, vaccine supply shortages, distribution problems and concerns about variants could force governments to keep …
4th February 2021
After having been boosted by stockbuilding ahead of the end of the Brexit transition period on 31 st December, exports and imports were always going to fall in January. But the added drags of COVID-19, the new Brexit customs procedures and the surge in …
3rd February 2021
Extreme speculative movements in the prices of a handful of stocks and of silver have generated a lot of headlines over the past month. But those surges have not been reflected in the performance of risky assets more generally, many of which have taken a …
2nd February 2021
Underlying inflation picked up strongly in New Zealand in Q4, with core inflation rising above the mid-point of the RBNZ’s 1-3% target band. That supports our view that the RBNZ will not cut rates further. But we expect strong house price growth and a …
1st February 2021
Short-term funding costs for banks have risen sharply during the past couple of weeks. The 7-day depository repo rate (DR007), which has been flagged by the PBOC as a key benchmark and focus of monetary policy, jumped over 100 basis points to a two-year …
29th January 2021
Governments across Sub-Saharan Africa seem to have mixed plans for fiscal policy this year. There are signs that policymakers in some countries – including Nigeria, Ghana and perhaps Kenya – will continue to provide stimulus in 2021, reducing the risk of …
28th January 2021
The surge in COVID-19 cases and tightening of containment measures across most of the region are likely to bring the economic recovery in Latin America to a standstill in Q1. High-frequency mobility indicators have stayed well below their pre-Christmas …
Headline inflation has crept higher in most countries across Emerging Asia over the past few months and looks set to rise sharply over the first half of this year due to a rebound in energy price inflation caused by the recovery in global oil prices. …
27th January 2021
10-year gilt yields haven’t been significantly dragged higher by 10-year US Treasury yields because, unlike their US counterparts, break-even inflation rates in the UK have not been boosted by expectations of a big fiscal stimulus, a rise in inflation and …
Governments across the Middle East and North Africa have begun the roll out of COVID-19 vaccines with parts of the Gulf making a particularly strong start. The UAE and Bahrain have already administered vaccines to around 26% and 8% of their populations, …
26th January 2021
Canada will receive only enough doses of the Pfizer and Moderna vaccines to provide the equivalent of one dose to 16% of the population by the end of the first quarter. By contrast, even in the unlikely event that there is no further improvement in the …
The roll-out of COVID-19 vaccines is getting underway across EMs, but in many cases progress has been slow-going . In the meantime, many countries are suffering from worsening outbreaks. New cases are high and/or rising across Latin America (see Chart 1), …
22nd January 2021
Russia and Poland have been regional outperformers in recent months due the relatively light-touch containment measures in the former and the strength of export-orientated sectors in the latter. But Turkey’s recovery has come off the boil and strict …
A return to rental growth and stronger capital value growth in December hint to a turnaround in UK commercial property. But this was a surprising development and we think it is too early to call the recovery given the headwinds in early 2021. With virus …
Recent data show the current wave of virus infections weighing on the economy, with retail sales falling again in December and the labour market recovery stalling. We think fourth-quarter GDP growth slowed to 4.5% annualised, but the relatively softer end …
21st January 2021
The Reserve Bank of India (RBI) is set to tighten regulation of non-bank financial companies (NBFCs) over the coming weeks. Alongside stricter audits of many smaller lenders, the RBI is likely to require NBFCs to maintain larger buffers of liquid assets. …
Our forecast for a 1.5% q/q fall in consumption in Q1 rests on the assumption that some businesses in virus hotspots will be forced to close in order to contain Japan’s most severe wave of the pandemic yet. But signs that new infections may already have …
20th January 2021
House price growth surged to 8.4% y/y in October, as booming home sales have combined with record low inventory to boost values. But that rise in prices has already offset the improvement to affordability provided by record low mortgage rates. (See Chart …
15th January 2021
The latest data suggest that activity was more resilient in Q4 than we had previously feared, with GDP in Norway and Sweden likely to have grown relative to the previous quarter, for example. That said, mobility data indicate that retail activity was hit …
14th January 2021
While the economic fallout will not be as severe as it was with the first lockdowns, the surge in virus cases will weigh on activity in Q1. Vaccine rollouts should provide a boost to the global recovery, but not until the second half of the year. …
12th January 2021
Overview – The prices of industrial metals continued to surge in December, capping off a strong 2020. However, we expect that prices will fall this year as growth in China’s demand slows on the back of the gradual withdrawal of fiscal stimulus and tighter …
8th January 2021
The extension of lockdowns has dashed hopes of an early rebound in economic activity. Instead, the economy is likely to contract in the first quarter of this year. After falling quite steeply at the end of last year, the number of new virus cases in the …
7th January 2021
Overview – Energy commodity prices for the most part ended 2020 on a high, buoyed by strong seasonal demand, an increase in investor risk appetite and a weaker US dollar. And while energy commodities were the underperformer in 2020, they should be the …
Overview – Commodity prices rose in December in spite of a tightening of COVID-19 restrictions in a number of developed economies, which will weigh on commodities demand at the start of this year. Markets seem to be focusing on a brightening demand …
5th January 2021
COVID-19 has wreaked havoc on the world economy, which is set to contract the most since WWII this year. China has not been immune – it is on track for its slowest growth since the Mao era – but set against the gloomy global backdrop, its economic …
23rd December 2020
COVID-19 has ravaged India’s economy in 2020, and GDP is all but certain to have suffered its largest slump on record this year. But there are reasons for optimism as the year draws to a close. Several activity indicators point to a continued recovery in …
The province-wide shutdowns recently announced in Ontario and Quebec raise the downside risks to our near-term forecasts, although the start of the coronavirus vaccination program last week provides a reason to be hopefully about prospects in 2021. The …
22nd December 2020
Korea , Hong Kong, Malaysia and Thailand are all experiencing major new outbreaks of the virus, which pose a significant downside risk to our relatively upbeat GDP forecasts for these countries for 2021. The lesson from Vietnam , which experienced a big …
The 7.9% q/q recovery in consumption in Australia in Q3 still left it 6.8% below pre-virus levels. Even excluding Victoria, consumption only recovered to around 4.5% below pre-virus levels. And since the huge stimulus payments continued and labour income …
The latest national accounts data from Sub-Saharan Africa tell a story of the good, the bad and the ugly. South Africa’s economy mounted a surprisingly strong recovery in Q3, and a solid rebound in Nigeria’s non-oil sector more than offset weakness in the …
18th December 2020
Rental falls slowed and capital values returned to growth in November, suggesting that we may be too pessimistic in predicting further falls in values. But, with tight virus restrictions remaining and structural shifts weighing on the rental outlook, we …
Positive vaccine news has not changed our view that monetary policy in many emerging markets (EMs) will generally remain loose for some time yet. That is a key reason why we still expect EM local currency government bonds yields to stay low by historical …
After falling in May and June, house prices shrugged off the collapse in GDP and the decline in employment to surge in the second half of the year. (See Chart 1.) As a result, annual house price growth in Q4 is on track to be just over 6%, the strongest …
The OPEC+ agreement earlier this month to increase oil supply will mean that downturns in hydrocarbon sectors across the Gulf will start to ease. And, of course, the Gulf countries will also benefit from higher prices – Brent crude broke through $50pb …
