COVID-19 vaccines have dramatically brightened the economic outlook. GDP probably still fell during the second lockdown in November, perhaps by up to 8% m/m, and the strict COVID-19 regional tier system will limit the rebound in activity in the coming …
3rd December 2020
Good news about progress on coronavirus vaccines in the past month has started, or fuelled, a number of trends which we broadly expect to last through 2021, as those vaccines help the global economy reopen and policy mostly remains supportive. The trends …
2nd December 2020
Overview – A flurry of positive news surrounding effective COVID-19 vaccines gave a lift to most commodity prices in November, as a faster easing of virus containment measures next year should provide a lift to demand. While we think that oil prices will …
1st December 2020
With rental and capital values falling at a slower pace in recent months, this had seemed to suggest that pricing was bottoming out. But the near-term outlook for most commercial property sectors has been dampened further by the second lockdown. We expect …
30th November 2020
National accounts data published over the past month or so confirm that many economies experienced record-breaking rebounds in GDP in the third quarter. However, there are significant variations across the region. Output is now back to its pre-crisis …
We have been arguing for some time that the unemployment rate would not rise as much as most believed in either Australia or New Zealand. We remain confident in those forecasts. Admittedly, the unemployment rate rose from 4.0% to 5.3% in New Zealand in …
Encouraging news about highly effective coronavirus vaccine trials has brightened Sub-Saharan Africa’s economic outlook. However, the region is facing higher barriers compared to many other parts of the world due to a lack of advance purchase agreements …
27th November 2020
Equities and bonds in emerging markets (EMs) rallied sharply on the vaccine news earlier this month, particularly outside of Asia. We think they will continue to fare well as the global economy recovers. The reaction of EM assets to the vaccine news …
The positive news on COVID-19 vaccines has provided a boost to the region’s economic outlook and this has underpinned a rally in local financial markets . The general improvement in risk appetite and the “rotation” back towards energy and financials has …
26th November 2020
The positive news on the efficacy of COVID-19 vaccines offers hope for the region’s economy. As things stand, Chile and, to a lesser extent, Mexico look well placed to benefit given their sizeable pre-orders. Purchases are relatively small in Peru and …
25th November 2020
There is no clearer sign that China’s economy is back to normal than the return to centre stage of concerns about property developers, the bad debts of SOEs and financial risks. Regulators’ tolerance for defaults ebbs and flows with their confidence in …
We continue to think that stock markets will make further headway against a backdrop of a recovering global economy and continued accommodative monetary policy, as investors increasingly focus on the rollout of effective vaccines rather than on rising …
The decline in restaurant visits in the past month suggests that over 100,000 jobs in the accommodation and food services sector were at risk even before most of the Greater Toronto Area moved into lockdown this week. The accommodation and food services …
24th November 2020
The positive news on COVID-19 vaccines in recent weeks has helped to lift the near-term outlook for the Middle East and North Africa. For the Gulf countries, oil prices have picked up with Brent crude reaching its highest level since March and we think …
Economic and property data for Q3 confirmed Switzerland and Scandinavia’s relative resilience in this pandemic. In fact, Scandinavian capital value growth improved across all sectors on an annual basis, albeit values continued to fall for retail. (See …
India’s government has not put in any pre-orders for the Pfizer and Moderna vaccines that were first to report encouraging Phase 3 trial results. But, alongside the US, India has the largest order of any country for the Oxford/AstraZeneca vaccine. (See …
Data for Q3 confirmed that while some office and industrial markets in the region recorded quarterly rental falls, weakness was still unsurprisingly concentrated in the retail sector. Core-CEE retail rents have now fallen by 15% so far this year, far …
23rd November 2020
Although the economy partially recovered in Q3, it is still operating well below capacity. Lower employment will weigh on the consumer sector over at least the next year. Office and retail have been the hardest hit sectors, with office sub-leasing …
20th November 2020
This month’s positive vaccine news has dramatically improved the near term global economic outlook, but it doesn’t fundamentally alter our dovish view on EM monetary policy. Many EMs have only small (or non-existent) purchase agreements and face …
The continued surge in COVID-19 infections across the country is prompting a growing number of states to reimpose restrictions on activity. The softer retail sales data in October indicated that this is already starting to weigh on the economy and, with …
19th November 2020
Japan is in the midst of a third wave of COVID-19. Daily infections have already reached their previous early-August peak. (See Chart 1.) Only the Hokkaido Government has responded with countermeasures so far, asking Sapporo residents to consider …
17th November 2020
As investors have digested the prospect of an effective vaccine against COVID-19, many of the patterns in financial markets which have been a feature during the pandemic have started to unwind. One example is this year’s stark underperformance of MSCI’s …
16th November 2020
The vaccine offers hope of faster growth next year than we have factored into our current forecasts. However, the recent surge in virus cases in Switzerland (see Chart 1.), the rising strain on the healthcare sector in Sweden, and steps taken to contain …
12th November 2020
The 30-year mortgage rate fell below 3% last week, but we doubt it will stay there for long. A rise in 10-year Treasury yields means mortgage rates will soon tick-up. That will weigh on housing demand, which had already been losing steam. Indeed, mortgage …
The industrial sector aside, investment activity and occupier demand failed to recover from sharp Q2 falls in Q3, even as lockdown measures were eased. Indeed, in the retail sector, the fall in prime rents gathered pace and yields edged up. In sharp …
Housing market activity is booming as pent up demand from the first lockdown is expended and buyers rush to take advantage of the stamp duty cut. There are some tentative signs, though, that the surge in house prices over the summer is starting to …
11th November 2020
Hard GDP data have confirmed that most economies saw sharp rebounds in activity in Q3 after the lockdowns of Q2. But monthly data suggest that the pace of improvement slowed during the quarter and the latest renewed tightening of restrictions in advanced …
The UK is facing up to the possibility of a festive period dominated by COVID-19 restrictions and Brexit. We think that the England-wide lockdown will shrink the economy by 8% m/m in November and that the rebound in December will be muted. (See Chart 1.) …
9th November 2020
Euro-zone economic activity looks set to slow sharply again in November and to remain weak for a while beyond that. The number of patients in intensive care units is rising rapidly (see Chart 1.) and we suspect that the new restrictions will bring the …
5th November 2020
Political developments dominating the news in Sub-Saharan Africa over the past month threaten to add to the headwinds facing economic recoveries. Protests in Nigeria that were initially focused on police brutality have morphed into broader discontent with …
29th October 2020
Recoveries in much of the emerging world were slowing even before the renewed surge in COVID-19 cases across many parts of the globe. The economies of Central & Eastern Europe will be hit hard in Q4 by their alarming outbreaks and the sizeable tightening …
China’s leaders concluded their discussions on the 14 th Five-Year Plan today. The initial post-meeting communique offered few new details but more may be revealed at a press conference tomorrow. The priorities the Plan sets will shape the country’s …
As restrictions have been lifted in both countries, activity has rebounded. Admittedly, the second draconian lockdown in Victoria will hold back the recovery in GDP in Australia in Q3 and Q4. But we expect the pace of recovery to pick up in the first half …
The latest hard activity data show that the pace of recovery eased across most of the region in August and more timely figures suggest that the trend continued in late Q3 and early Q4, indicating that the initial gains from re-opening economies are …
28th October 2020
The coronavirus outbreak across the region has gone from bad to worse. The Czech Republic has one of the highest per capita infection rates in the world and the two-week national lockdown until November 3 rd has already hit activity in certain sectors. …
The progress made towards the development of a vaccine against COVID-19 has been remarkable. Most experts now believe that a vaccine may be available by the end of this year or the first quarter of 2021. Although Asia has contained the coronavirus better …
27th October 2020
The latest OPEC oil production figures continue to show that several countries are overproducing, which is making Saudi Arabia – which has borne the brunt of production cuts – increasingly frustrated. For now, at least, countries are making compensatory …
26th October 2020
The restrictions reimposed in Ontario and Quebec this month have weighed heavily on restaurant visits, but we think overall GDP will continue to recover so long as more draconian lockdowns are avoided. The OpenTable data show that visits to restaurants …
A faster deterioration in office rents meant that all-property rental values fell at a quicker pace in September. As a result, with yields stable, all-property capital values declined less steeply. But with the rental outlook worsening amidst further …
23rd October 2020
After rebounding by 30% annualised in the third quarter, we expect a more modest 4.5% gain in GDP in the fourth. But recent data suggest the risks to that forecast could lie to the upside, with investment rebounding rapidly and the September retail sales …
22nd October 2020
The growing risk of a second national UK lockdown has spooked equity markets over the last week. We already expect the recovery to stall in Q4 and additional COVID-19 restrictions could easily throw it into reverse, which would hammer UK corporate …
New COVID-19 cases in India have dropped significantly over the past month. (See Chart 1.) Encouragingly, the share of tests returning positive has also dropped, indicating that the improvement in test results reflects a genuine drop in infections. That …
21st October 2020
The slowdown in the pace of monthly GDP growth in Norway in August was driven in large part by a fall in consumer spending. The post-lockdown spending splurge on goods appears to have peaked before spending on services was strong enough to pick up the …
13th October 2020
While retail sales have rebounded rapidly and are now above pre-virus levels in most major DMs, overall consumer spending has failed to reach the levels seen at the end of last year. (See Chart 1.) That is largely because many of the consumer services …
12th October 2020
Inflation has held up better than we had anticipated in recent months. The surge in spare capacity suggests that it could weaken more sharply as social distancing measures are relaxed. But we only expect underlying inflation average -0.2% next year. One …
Record low mortgage rates have continued to support home sales, with the pending homes sales index reaching its highest level since the series began in 2001. (See Chart 1.) But a rise in the 10-year Treasury yield implies mortgage rates will now tick-up. …
9th October 2020
The reimposition of coronavirus restrictions has caused the recovery to stall – if not go into reverse in many countries – with France and Spain most affected. There are tentative signs that the number of new cases is beginning to slow again in Spain, but …
7th October 2020
Overview – Some energy commodities such as natural gas and coal benefitted from a seasonal uplift in demand in September, but oil prices fell. We think that oil and natural gas prices will make a little more ground this year, provided that demand …
6th October 2020
Overview – Industrial metals prices fell in September on the back of the appreciation in the US dollar and fears that the re-tightening of virus containment measures in Europe and elsewhere will dampen demand growth. However, we think that …
5th October 2020
