The recovery in global risk appetite and in commodity prices has eased strains in balance of payments across the region. But conditions remain much worse than the they were before the crisis flared up. And while many EM sovereigns have tapped global …
23rd June 2020
Lockdown measures dealt a heavy blow to economies across the region in April, but the latest data offer encouraging signs that activity has recovered quickly over the past couple of months. Economic activity in the first few weeks of June was at or above …
While the incoming economic data continue to point to a nascent recovery in aggregate EM activity, some countries are being left behind. Recent figures from parts of Asia (China, Korea, Vietnam and Taiwan) and Emerging Europe (notably Poland), where …
19th June 2020
The 17.7% m/m jump in retail sales in May showed that consumer spending is recovering far quicker than most had expected as lockdowns have eased, with headline retail sales reversing their April drop and underlying control group sales back at pre-pandemic …
18th June 2020
The recent spike in COVID-19 cases in Tokyo linked to nightlife establishments in Shinjuku underlines just how slow the road back to normality could be. Renewed outbreaks are likely to prevent a straightforward and swift economic recovery. Indeed, many …
While much of the rebound in EM currencies is now probably behind us, we think that many of them will rise a bit further against the US dollar as risky assets generally continue to recover. (See Chart 1.) We have revised up our forecasts for many emerging …
17th June 2020
Available data suggest that world GDP will fall by around 8% q/q in Q2. While China has seen some recovery, GDP in southern Europe probably fell by as much as 25% on the quarter and India appears to have seen a similar drop. (See Chart 1.) Thankfully, …
15th June 2020
The latest high frequency data indicate that economic activity in the Nordic economies has continued to recover in recent weeks, with trips to shops and restaurants now close to pre-crisis levels in Sweden, Denmark, and Norway. (See Chart 1.) Sweden’s …
12th June 2020
While the housing market has reopened, there are still limited data on the pace of improvement. Given the economic damage, uncertainty and weak pipeline of in-progress housing sales, we expect the recovery in activity to be gradual. Meanwhile, the main …
10th June 2020
By the end of May, mortgage applications for home purchase had fully reversed their earlier drop. (See Chart 1.) New home sales have also performed better than expected, with a surprise month-on-month rise in April. However, with credit conditions …
9th June 2020
Overview – The gradual easing of coronavirus-related lockdown restrictions around the world, along with falling global production, has supported the price of oil recently. By contrast, persistent oversupply and lacklustre demand continue to weigh on coal …
5th June 2020
The latest high frequency data show that economic activity has picked up a bit in the past few weeks. Consumers have been returning to the shops and restaurants. (See Chart 1.) But some sectors such as tourism and hospitality are yet to get back on their …
“Risky” assets have comfortably outperformed “safe” ones over the past month, even as evidence of the scale of the economic damage caused by the coronavirus outbreak has continued to mount. We suspect that this will continue for a while yet . We argued …
4th June 2020
While the most restrictive period of the lockdown is behind us, the measures enforcing business closures and social distancing are only being eased very gradually. According to the ONS “Business Impact of Coronavirus Survey”, the number of businesses …
Overview – May was a good month for metals prices. (See Chart 1). The ongoing revival in economic activity in China helped to lift the prices of most industrial metals, while investment demand for precious metals remained strong. We think that industrial …
3rd June 2020
Overview – The prices of most commodities rose in May on the back of the ongoing recovery in China’s economic activity and a gradual easing of lockdown conditions in the US and Europe. We think that most prices will make further gains from here, but they …
2nd June 2020
Timely data suggest that April may have been the trough for EM GDP (see Chart 1), and activity at an aggregate level should recover – albeit slowly – in the coming months. But this is likely to mask a big divergence between regions. Large parts of …
29th May 2020
Yields rose again in April and there is more of the same to come over the summer months. While rental values fell slightly, the rise in yields meant that capital values declined by 1.8% m/m in April. This saw annual returns turn negative for the first …
The coronavirus has continued to spread rapidly across much of the region, with Brazil now registering the most new cases per day of any country in the world. And on a per capita basis, the surge in Peru and Chile look particularly alarming. High …
Governments across much of Sub-Saharan Africa have moved towards lifting coronavirus containment measures in recent weeks but, with the exception of South Africa, this has much more to do with economic concerns than success in controlling the virus’ …
As the lockdowns have largely come to an end in both countries, output is starting to recover. In New Zealand, most activity is now allowed to resume, though gatherings are limited to 100 people. In Australia, states are easing restrictions at different …
The rapid spread of the coronavirus in the region means that plans to lift lockdowns have come later than in many other EMs and the damaging economic effects of social distancing have persisted. The Gulf economies have also suffered from the effects of …
28th May 2020
With new infections falling sharply across the region and with lockdowns being eased, economic activity is starting to recover. However, the latest high-frequency data that we track, including routing requests from Apple and mobility data from Google, …
Much like the rest of Europe, shifts in prime rents and yields in CEE were relatively muted in Q1. The lack of movement was mainly due to thin deal evidence and market uncertainty. But looking ahead, given that the worst hit to economic activity from the …
The coronavirus crisis has dealt a heavy blow to the economies of Emerging Europe over the past few months but the worst of the downturn now appears to have passed. As infection curves have flattened, most countries have eased lockdowns in recent weeks …
27th May 2020
The government’s annual work report published on Friday made clear that policymakers will engineer an acceleration in credit growth this year. The report didn’t offer an explicit target for aggregate financing (AFRE), the official measure of broad credit, …
Despite the contraction in economic activity in Q1, property values in Scandinavia and Switzerland held broadly steady. However, in a large part this reflected uncertainty and low deal flow, which meant that it was not possible for agents to provide a …
The Labour Force Survey shows that the number of hours worked dropped by 28% between February and April. As the bulk of the hours lost have been in relatively low-productivity sectors, GDP should not fall by that much. But we still expect a total decline …
26th May 2020
While the rally in developed market (DM) equities has lost some steam over recent weeks, we think that they will make up some further ground in the coming months provided that the global economy starts to recover. We suspect that the stock markets with a …
21st May 2020
Measures to slow the spread of the virus have had a hugely detrimental impact on the US economy. This began to hit occupier demand in Q1, but is yet to be reflected in dramatic changes in vacancy or falls in rents. Nevertheless, valuers have already …
20th May 2020
The housing market ground to a halt in response to the coronavirus lockdown, but looking ahead, restrictions on housing activity have been eased. Still, the huge hit to the economy from the virus combined with weakened buyer confidence suggests that the …
Despite a stringent lockdown that has lasted nearly two months, new recorded cases of COVID-19 in India remain on a sharp upward trajectory and hit a record high yesterday. (See Chart 1.) The true number of cases is likely to be higher still given limited …
Prime euro-zone rents and yields held broadly steady in Q1, with many agents noting it was not possible to provide a robust reassessment of values. This marked the end of period of positive rental growth and yield declines in many markets. Indeed, there …
After falling by around 6% q/q in Q1, world GDP looks set for an equally sharp slump in the second quarter. As major advanced economies are following Asia’s lead in easing containment measures, global activity has hopefully passed its trough. …
19th May 2020
The latest hard data suggest economic activity was running 20% below February levels in April, a far sharper downturn than the 2008/09 financial crisis and one compressed into just two months. (See Chart 1.) With lockdowns easing the economy is now …
Economic activity remained severely damaged by coronavirus containment efforts in early May. In particular, the retail sector usually receives a substantial boost during Golden Week but the number of restaurant goers was extremely low throughout this …
15th May 2020
The estimates of Q1 GDP that have been released so far have been subject to all manner of health warnings and are liable to be revised, potentially significantly, over the coming quarters. Nonetheless, there is a clear relationship between the severity …
14th May 2020
While EM assets, especially in Latin America and EMEA, have been among the worst hit by the fallout from the coronavirus pandemic, we think that they will regain some of the ground lost over the past few months. But even then, we expect that most will end …
13th May 2020
The impact of the coronavirus is showing up in housing market activity. Pending home sales plummeted 21% m/m in March, which points to existing home sales falling to just over 4m annualised in April. (See Chart 1.) We expect they will eventually bottom …
12th May 2020
Governments have taken their first steps towards lifting the restrictions which caused the economy to collapse in the past few weeks. As a result, high frequency indicators show some people returning to the streets in major cities and a small rebound in …
6th May 2020
While the latest data suggest that our estimate that GDP has fallen by an eyewatering 25% from peak to trough is in the right ballpark, it looks as though the most restrictive parts of the coronavirus lockdown will be eased in May rather than in June as …
5th May 2020
Overview – The prices of most commodities struggled in April against a backdrop of moribund global demand. That said, the performance of energy commodities was mixed: while Brent crude and Henry Hub gas rose in price, the other energy commodities fell. We …
While the recent outperformance of “risky” assets has faltered in the past few days, we are sceptical of the idea that it has all been built on an overly-optimistic view of the economic outlook, for two reasons . First, there have been huge disparities in …
The Latin American economies that moved early to contain the coronavirus – Chile, Colombia and Peru – are all now starting to look at ways to ease lockdown measures, which should support a gradual recovery in activity later this quarter. But lockdowns …
1st May 2020
The early signs from the Middle East and North Africa are that efforts to contain the coronavirus and the collapse in oil prices are dealing a heavy economic blow. Whole economy PMIs plunged to record lows in March, flight cancellations are widespread and …
30th April 2020
The risk of further sovereign defaults has risen across the region this month. Rwanda has joined Zambia in seeking to restructure its sovereign debt. And the collapse in oil prices will put more pressure on already fragile external and fiscal positions in …
The strict lockdowns have resulted in a massive drop in demand, but they have also been successful at ‘flattening the curve’ or reducing the number of new daily cases of Covid-19 in both countries. (See Chart 1.) The success means both countries are now …
The real-time economic and market disruption from the coronavirus means that much of the data released during the past month offers little insight into current developments in the emerging world. Accordingly, this publication will now focus on the most …
29th April 2020
There are encouraging signs that the authorities in Central Europe have brought the virus under control and policymakers are slowly starting to ease lockdown measures, which will support a recovery in activity. It's a different story in Russia where the …
Early signs of the impact of COVID-19 on property were seen in the MSCI monthly data for March. While rental values did not see much of a deterioration, yields saw their biggest rise since after the EU Referendum in 2016, causing capital values to fall by …
