It’s become clearer that the economic costs of the lockdown to contain the coronavirus will be huge. The plunge in the activity PMIs in March provide some tentative support to our view that GDP could fall by something like 15% q/q in Q2. The 1,500,000 new …
2nd April 2020
Overview – Oil prices plummeted in March under the weight of a collapse in demand and pledges from OPEC+ members to significantly raise output. Most other commodity prices also fell last month as the COVID-19 virus spread from Asia to Europe and the US. …
1st April 2020
New Zealand is now in a near-total lockdown for at least four weeks. And we wouldn’t be surprised if the lockdown lasted for two months. With no construction or non-food manufacturing taking place, activity will be hit hard. We have pencilled in a 30% q/q …
The coronavirus has spread across Emerging Europe faster than any other region in the emerging world and governments have implemented increasingly restrictive measures to contain its spread. These measures, combined with the effects of social distancing …
31st March 2020
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 Chart Book focuses on the most timely and …
27th March 2020
Latin American economies are facing a perfect storm of tightening financial conditions, low commodity prices and a collapse in services activity caused by social distancing. The fall in regional GDP this year will be as steep as it was during the Global …
The rise in yields in February suggests that even before the disruption from coronavirus worsened, investors had become more cautious. In the coming months, we expect this to hit transactions hard. As a result, yields are likely to rise at a faster pace …
The coronavirus has spread rapidly throughout the Middle East and North Africa in recent weeks and has prompted governments across the region to impose increasingly draconian containment measures. These measures, along with the collapse in oil prices, …
Activity across both industry and services is recovering as measures to contain the coronavirus have been eased. But the recovery is likely to run into the constraint of weak demand before long. The labour market is the biggest domestic concern. The …
The rapid pace of the economic and market disruptions caused by the coronavirus mean that data released in recent months probably offer little insight into the current state of African economies. Accordingly, this publication will focus on the most timely …
26th March 2020
With economic growth across the region collapsing, policy support is being ramped up aggressively. Having slashed interest rates over the past couple of weeks, central banks have begun to unveil a series of unconventional policy measures to support …
Policymakers still need to do much more to reduce the chance that the recession in the first half of the year turns into a more prolonged slump, but there is little they can do to prevent a long-lasting hit to the energy sector. Last week, WTI dropped as …
23rd March 2020
The past couple of weeks have been dominated by the financial market impact of the coronavirus pandemic, with equity markets continuing to plummet, the dollar surging and signs of strain persisting in money markets, despite the Fed’s interventions. The …
19th March 2020
It has been a dreadful few weeks for India’s economy. This started with the release of GDP data showing that growth in Q4 slowed to its weakest pace since 2013. (See Chart 1.) And hopes of a near-term recovery have been well and truly snuffed out since …
The coronavirus has unleashed a huge sell-off in financial markets that has seen the FTSE 250 fall by 40% and investors even pull their money from traditionally safe assets like government bonds. While there are many casualties, the pound has been hit …
18th March 2020
Surveys and timely data from late-February onwards show that the economy is in the midst of a deep downturn. Cinema sales, restaurant reservations and the Economy Watchers Survey all point towards consumer spending having collapsed at the end of last …
The turmoil in financial markets caused by the global spread of COVID-19 shows little sign of abating, despite policymakers’ efforts to contain the fallout. Our view remains that until evidence emerges that the spread of the virus is slowing down, risky …
17th March 2020
Overview – Energy prices have crashed in recent weeks as the coronavirus has disrupted economic activity and reduced demand. Meanwhile, on the supply side, OPEC+ failed to agree to deepen its oil output cuts. We suspect that energy prices could fall …
16th March 2020
Measures of activity and house price pressures were strong in February. But with the coronavirus set to disrupt activity and confidence over the next few months, the housing market recovery is unlikely to last beyond March. Economic indicators point to a …
13th March 2020
The real-time economic and market disruption from the coronavirus means that much of the backward-looking data released during the past month offers little insight into current developments in the world economy. Accordingly, this publication will now …
The spread of the coronavirus, and the related real-time economic and market disruption, means that a large swathe of hard and survey data released during the past month is old news. Consequently, this publication will now focus on fewer, timely and …
12th March 2020
With growing evidence that the coronavirus is turning into a pandemic, a hit to housing market activity is inevitable. No hard numbers have been released yet, but home sales are vulnerable to any disruption the virus will cause. Delaying a major purchase …
10th March 2020
February was another poor month for industrial metals. (See Chart 1.) However, prices fell by less than in January and policy loosening seems to have stabilised prices more recently. That said, the outbreak of COVID-19 is quickly becoming a global issue, …
6th March 2020
The economy started the year on a strong note, but it is only a matter of time before it succumbs to the effects of the coronavirus. To reflect the weaker global backdrop and the likelihood that measures implemented to limit the spread of the virus will …
5th March 2020
Other than a lengthening of supplier delivery times in February, there is little evidence that the shutdown in the Chinese economy has had much impact on the euro-zone economy so far. Indeed, business surveys generally point to a slight pick-up in …
4th March 2020
Overview – Commodity prices continued to fall in February as the coronavirus, which started in China, spread to most other regions of the world and sparked fears of a slowdown in global economic activity. We have revised down our forecasts of commodities …
A rise in all-property yields caused capital values to decline by 3% y/y in January. Although we expect yields to rise and rents to edge lower in the months ahead, the rate of decline in capital values is set to slow later this year. Economic indicators …
2nd March 2020
Chinese factories were slow to reopen even after the extended Lunar New Year holiday came to end. One week after most of the country officially went back to work on 10 th February, more than half of large industrial firms remained closed. That has now …
28th February 2020
Latin American currencies and equities have been among the worst performers in the emerging world this month as fears about the spread of the coronavirus have intensified. The region has limited direct economic ties with the countries suffering outbreaks …
27th February 2020
Recent news added to our general sense of pessimism about most African economies in 2020. While the region has yet to report any cases of the new coronavirus, falling commodity prices are already dealing a blow to exporters of oil and other industrial …
All-property rental growth eased across most markets in 2019, but the slowdown was concentrated in the retail sector. Admittedly, the Swiss markets remain a bright spot as prime retail rents increased in 2019. But there is no denying the retail sector in …
Concerns about the outbreak of coronavirus have taken their toll on the region’s financial markets over the past month. While the direct trade exposure of Emerging Europe to China is limited and there have been few reported cases of the virus in the …
26th February 2020
Consistent with softer economic growth, annual rental growth for office and industrial property in CEE markets slowed in Q4. However, rental growth picked up for retail, bucking the downward trend seen elsewhere in Western Europe. (See Chart 1.) And …
We estimate GDP growth in Australia continued to muddle along in Q4, edging up from 0.4% q/q in Q3 to 0.5% q/q. In New Zealand, we think a stronger contribution from net trade was offset by a decline in inventories and softer consumption growth, causing …
The past month has brought more bad news on Dubai’s economy. Markit’s Dubai PMI hit a four-year low in January and efforts to contain the coronavirus pose a threat to the Emirate’s transport and tourism sectors. And the real estate sector remains in the …
25th February 2020
While the further spread of the Covid-19 virus increases the chance of interest rate cuts, the Bank of Canada seems likely to approach the issue in the same way that it approached the US-China trade war. The Bank hinted several times last year that it was …
We still don’t have much in the way of hard data, but the figures that have been published so far suggest the coronavirus and the measures that China has taken to contain it, are having a severe economic impact. Tourist arrivals into Thailand have fallen …
Temporary disruption from the outbreak of the coronavirus should have limited macroeconomic impact on Indian industry. After all, India has a negligible supply-chain exposure to China (see Chart 1), where factory shutdowns are now having knock-on effects …
24th February 2020
Economic indicators have improved recently, but remain at low levels, meaning that the recovery in GDP growth is likely to be gradual. As a result, occupier demand is likely to continue to slow, keeping upward pressure on vacancy rates and causing rental …
21st February 2020
Although euro-zone rental value growth slowed in 2019, further falls in property yields supported capital values. Despite the soft economic backdrop, capital value growth should hold up in coming quarters. (See Chart 1.) However, a further slowdown in …
The coronavirus is severely impacting China’s economy and the incoming data suggest that this is spilling over to other economies, particularly in Emerging Asia. Tourist arrivals to Thailand are down by 50% y/y, while trade data for Korea collapsed in the …
20th February 2020
Although the Boeing shutdown and the coronavirus outbreak pose downside risks to the economy in the first quarter, there are mounting signs that underlying momentum in the economy is strengthening. We estimate the halt in 737 Max production could reduce …
19th February 2020
Given our view that investors’ expectations for further Fed rate cuts this year will be disappointed, we think that the twin rally in US equity and bond markets will end before long. After falling by about 3% in the immediate aftermath of the virus …
18th February 2020
While October’s sales tax hike and Typhoon Hagibis were partly to blame for the sharp drop in manufacturing output in Q4, the bigger picture is that any recovery this year rests on a pick-up in external demand. Japanese industrial production fell …
17th February 2020
The initial financial market reaction in Switzerland and the Nordics to the coronavirus followed the familiar pattern during times of uncertainty: the Swiss franc rose and Swiss bond yields tumbled on the back of safe-haven demand, while the Swedish krona …
13th February 2020
The new coronavirus has reshaped the global economic outlook for at least the next couple of quarters. From what data are available, it looks like the hit has been big enough for global GDP to contract this quarter. So, where the euro-zone crisis, China …
Even if the coronavirus outbreak in China is brought under control and the recent moves in equity and bond markets unwind, we think that most EM assets will not make significant gains this year. This reflects our long-held pessimistic view of China’s …
11th February 2020
A decline in apartment completions helped keep rental vacancy rates low over the latter part of 2019. But strong multifamily starts over the past couple of years suggest completions will pick-up in 2020. (See Chart 1.) That will lead to a modest rise in …
Signs of a recovery in industrial commodity demand were emerging at the beginning of 2020. Indeed, the economic data have improved and investor concern surrounding the US-China trade war has eased. But the recent coronavirus outbreak in China quickly put …
6th February 2020
House price growth and transactions picked up, as political uncertainty eased following December’s general election. In the near term, leading indicators hint at a further recovery over the remainder of Q1. But with house prices high and interest rates …
