India's economy is showing signs of coming off the boil and, with inflation lodged within the RBI’s target range, a resumption of the tightening cycle looks unlikely. However, the onset of a severe El Niño is a looming threat and presents a key risk to …
19th July 2023
Stretched affordability and a weakening economy will weigh on housing market activity this year, causing home sales to remain low. While house prices have recovered in recent months, we expect declines to resume later this year. Even so, affordability …
17th July 2023
The following is a presentation that Kiran Raichura gave to the NCREIF Summer Conference in Chicago on 12th July, 2023. … What does the new normal mean for real …
While the resilience in economic activity looks to have continued in May, the latest surveys point to GDP growth slowing in June. And in China, the post-reopening rebound appears to have already fizzled out. Meanwhile, the significant tightening in …
14th July 2023
Our latest Chart Pack on the Middle East and North Africa is embedded below. Economic growth across the region will be much weaker this year than last and our forecasts are generally below the consensus. The latest round of OPEC+ oil output cuts will …
12th July 2023
Underlying inflation is set to fall through the coming quarters as the price shock from the war in Ukraine and the yen selloff last year dissipates. What’s more, the economy is set to enter a mild recession in the second half of the year, dragged down by …
11th July 2023
The further increase in mortgage rates to around 6% has left affordability particularly stretched in London. On top of the shift to remote working, which has allowed buyers to consider more affordable areas, that is likely to mean that buyer demand in …
10th July 2023
We expect the RBA to lift rates to 4.85% by November, while the RBNZ's tightening cycle is likely already over with its cash rate now at 5.50%. With house prices now 18% below their January 2022 peak, we think New Zealand's housing downturn has run its …
We think the euro-zone economy will remain in recession over the coming quarters, and the subsequent recovery will be sluggish due to the lagged impact of monetary policy tightening as well as tight fiscal policy. Headline euro-zone inflation will …
7th July 2023
The acceleration in core CPI inflation in May combined with the reacceleration in wage growth in April shows that domestic inflationary pressures are still strengthening and interest rates will need to rise further. Admittedly, higher interest rates were …
6th July 2023
The risk is that interest rates rise above our current peak forecast of 5.25%. Persistent core inflation has driven up UK market interest rate expectations and has lifted the 2-year gilt yield above its peak after the “mini-budget”. But we think there is …
3rd July 2023
China’s reopening recovery is struggling for momentum and quarter-on-quarter growth will be subdued for the rest of the year. But with policymakers likely to step up support soon, the economy should still make some headway. … China Chart Pack (Jun. …
30th June 2023
The latest monthly activity data suggest that most economies struggled in the second quarter of the year. While tourism arrivals are continuing to rise, there are signs in a few places that the recovery is starting to level off, with international …
29th June 2023
Risk premia have fallen across the region over the past month. In the region’s largest economy, Nigeria, that has come on the back of a marked policy shift since President Tinubu took office in late-May. Costly fuel subsidies have been removed and the …
28th June 2023
Investors generally revised down their interest rate expectations across Central and Eastern Europe (CEE) over the past month, partly reflecting weaker-than-expected inflation prints and more dovish communications from central bankers. Investors are now …
Higher mortgage rates have not only priced many buyers out of the market altogether, but also reduced the size of mortgage those still able to buy can take out. (See Chart 1.) The latest surge in mortgage rates to almost 6% means that, for the same …
Central bank meetings this month suggest that we’re now on the brink of an EM monetary easing cycle. In China, the Loan Prime Rates were lowered in response to flagging growth. And elsewhere, some central banks whose tightening cycles were particularly …
27th June 2023
It’s been a good month for Latin American currencies, particularly the Brazilian real and the Colombian peso, which should help the disinflation process across the region. This is one reason behind the recent dovish shift by the region’s central banks. …
The hit to tourism in the region from the COVID-19 pandemic finally appears to be over. Receipts and arrivals are now back to, or even above, seasonal norms in almost all countries. This will be welcome news for Saudi Arabia as the annual Hajj pilgrimage …
All-property yields have seen no movement for the past two months and combined with resilient rental growth that means capital values have held firm since March. (See Chart 1.) But stubbornly high inflation has led to a resurgence in interest rates and …
22nd June 2023
This new Chart Pack has been designed to replace our Chart Book in response to client feedback to make our insights more accessible, and with more options to incorporate them into your workflow. Use the menu at the top of the viewer to navigate around the …
20th June 2023
The investment boom in new hi-tech manufacturing plants is unprecedented, but that boom still hasn’t fed through into higher output or employment in hi-tech manufacturing and investment in IT equipment has been muted in recent quarters. Software …
While headline CPI prints have been encouraging in recent months, policymakers will be nervous about the stickiness of core inflation. Average headline inflation in major advanced economies had dropped from 8.5% late last year to below 6% in April, and …
14th June 2023
The seven-month run of house price declines recently ground to a halt, with the Case-Shiller index showing an increase in prices in both February and March. This was partly driven by the temporary boost to demand at the start of the year from declining …
9th June 2023
The euro-zone has fallen into recession, albeit only by the finest of margins – the economy contracted by 0.1% q/q in both Q4 last year and Q1 this year. The consensus view is that the worst is now behind us and that growth will accelerate, presumably in …
Overview – Most commodity prices have moved lower over the past month as concerns about demand loomed large and the US dollar strengthened. We think that prices will continue to struggle over the next few months, but energy and metals prices should rise …
7th June 2023
Aside from the US stock market – which is being propped up by a handful of big name stocks and a serious dose of AI fever – most risky assets have struggled over the past month or so . (See Chart 1.) We don’t think that owes much to the back-and-forth …
1st June 2023
Growing evidence that UK price pressures are becoming increasingly domestically generated has driven up market interest rate expectations and at one point pushed the 10-year gilt yield up to 4.38% in late May, close to its peak seen after the …
The US dollar has rebounded in recent weeks as resilient US economic data and renewed hawkish noises from the FOMC have revived the “higher for longer” narrative, shifting relative interest rate expectations back in favour of the US. There is probably …
31st May 2023
Recent gains in the US stock market have been unusually narrow, and we don’t think the conditions are yet in place for a broad-based rally. A striking fact about the recent gains in US equities is that they have been driven by a remarkably small number of …
There has been further evidence over the past month that resilient export growth, weak domestic demand and lower energy prices have helped to improve current account positions across Central and Eastern Europe this year. This has been particularly …
The renminbi strengthened sharply against the US dollar in response to China’s move away from zero-COVID. But the currency has since reversed much of those gains and is now approaching 7.10/$, its weakest level since December. Optimism over China’s …
30th May 2023
As in the euro-zone, the rise in prime property yields in Scandinavia slowed sharply in Q1 after the surge in H2 2022. Along with decent gains in rents, where Oslo offices and industrial saw the fastest growth, this meant that the decline in capital …
26th May 2023
Central banks in the region’s two largest economies, Nigeria and South Africa, both hiked interest rates this month and, whereas attention elsewhere is turning to rate cuts, the risks seem to be tilted towards further increases in both countries. …
25th May 2023
The results of elections in major EMs over the past month have increased macroeconomic policy risks. Most notably in Turkey , President Erdogan now has the edge ahead of a second-round presidential election run-off next week. Hopes of an opposition …
The flash Q1 GDP figures for Saudi Arabia showed the economy grew at its weakest pace in two years at the start of 2023, reflecting the cut in oil production in line with the OPEC+ decision in October. And the even more recent voluntary output reductions …
24th May 2023
Metro level data for Q1 2023 showed the slowdown in occupier demand was widespread, with no market consistently outperforming across the sectors in terms of absorption. While office and industrial asking rents continued to grow, they did so at a slower …
The turnaround in the housing market, with sales and prices rebounding in April, has raised hopes that construction will hold up despite elevated borrowing costs. Media reports suggest that buyer enquiries for pre-construction projects have rebounded, …
A strong rebound in tourism provided a big boost to growth in Thailand and Hong Kong last quarter, which along with China, were the three best-performing countries in Emerging Asia in Q1. But for the rest of the region, the GDP figures painted a …
In contrast to the rest of Europe, CEE yields not only rose, but increased more sharply in Q1 than the previous quarter. (See Chart 1.) Strong rental growth cushioned the blow to all-property capital values, but that did not prevent a partial reversal …
The resilience of the April activity data and apparent stabilisation in housing have raised hopes that a recession may yet be avoided this year. That said, forward-looking indicators suggest that the huge rise in interest rates and tightening of bank …
23rd May 2023
The latest activity figures suggest that most Latin American economies held up better than we’d thought in the first few months of 2023. Mexico and Colombia made surprisingly strong starts to the year while Chile ’s economy appeared to be gathering some …
The past month has brought some encouraging news on the inflation front. Consumer price inflation dropped sharply in April to an 18-month low, keeping the headline rate comfortably within the RBI’s 2-6% target range. Both energy and food price inflation …
22nd May 2023
The economy has been relatively resilient so far, but with the banking turmoil set to weigh on activity, we continue to expect a recession this year. Slower growth has already translated to softer occupier demand across all property sectors. This will …
19th May 2023
The larger than anticipated rebound in mortgage approvals in March and a slowdown (or even partial reversal) of house price falls suggested that the housing market downturn may have ended much earlier than we anticipated. The unwinding of some of the …
Capital value falls slowed in Q1 as the surge in euro-zone all-property yields cooled. But, with rent growth decelerating across all sectors, the increase in yields was still enough to drive another 4% q/q fall in capital values. (See Chart 1.) Although …
Overview – Most commodity prices have moved lower over the past month as concerns about demand have intensified and risk appetite has soured. We think prices will continue to struggle over the next few months as tight monetary policy feeds into slowdowns …
16th May 2023
Australia’s house prices have rebounded over the last couple of months and most leading indicators suggest that the recovery has legs. However, we doubt that a sustained recovery is on the cards. While false dawns in the housing market are rare, they did …
15th May 2023
Q1 GDP releases have confirmed that the major economies avoided recession at the start of the year and some of the more recent survey data suggest that this resilience continued into Q2. The composite PMI output index for developed economies rose from …
12th May 2023
Governor Ueda presided over his first policy meeting late last month and opted to keep all monetary policy settings, including Yield Curve Control (YCC), completely unchanged. To be sure, Mr Ueda also announced that the Bank will conduct a thorough review …
11th May 2023
