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Oil spikes, but won’t knock the BoE off course On its own, the jump in oil prices from $72 per barrel (bp) on Monday to a one-month high of $79pb due to the conflict in the Middle East (see here and here ) isn’t enough to have a bearing on how fast the …
4th October 2024
Labour market strength rules out another 50bp rate cut Looking at the labour market strength evident in September’s Employment Report, the real debate at the Fed should be about whether to loosen monetary policy at all. Any hopes of a 50bp cut are long …
After months of speculation, investors will find out how the UK Chancellor plans to balance tax, spending and investment decisions as the new government tries to fill a fiscal hole and support the economy. Our economists were online shortly after Rachel …
This could be a Budget statement that defines the UK economy’s performance through the rest of this decade. The new Labour government warns of having to clean up a fiscal mess left by its predecessors, but also speaks of investing for long-term economic …
Is the US facing a hard landing, a soft landing or no landing? Have stimulus announcements fundamentally changed the China equities story? How should investors trade risks around the US election? Raymond James CIO Larry Adam joins Group Chief Economist …
A potential blow to property investors The headlines continue to be dominated by reports that the Australian government is considering paring back existing housing tax concessions. On Monday, Treasurer Jim Chalmers confirmed that he did ask his department …
Tankan upbeat, BoJ cautious The August activity data were a mixed bag, with retail sales rising for the fifth consecutive month but the 3.3% m/m plunge in industrial output was much weaker than expected. What’s more, firms’ production forecasts don’t …
We continue to believe that core PCE inflation will return to the 2%target on a sustained basis early next year, as labour market conditions gradually ease. Up until recently we would also have argued that the risks to that view lay mostly on the …
3rd October 2024
While we have been talking up the prospects for retail, malls remain the underperforming subsector in our forecasts. But that covers a wide range of likely performance. Indeed, as luxury retailers expand to class A malls while anchors shutter stores in …
Service sector on fire; but price pressures could be rebounding The surge in the ISM services index to a 17-month high of 54.9 in September, from 51.5, is a good reminder that the contrasting weakness in manufacturing is not a systemic threat to the …
The federal budget foresees an unusually large jump in cash outflows that don’t feed into the underlying cash balance in 2024/25. However, the actual boost to activity will be much smaller than the budget suggests and it will have run its course in …
The euro-zone has stalled, the US labour market is cooling and China has only belatedly announced stimulus measures. The world economy is entering what our latest Global Economic Outlook describes as “a soft patch” – but for how long and how soft? And …
2nd October 2024
Sharp fall in mortgage rates lifts applications The impact of lower mortgage rates was finally evident in mortgage applications in September, with applications for home purchase rebounding to a three-month high. With mortgage rates falling to little more …
One way the US election could influence the UK economy would be if Donald Trump won and delivered on his pledge to put a 10% tariff on UK exports being sent to the US. We suspect the impact on UK activity from such a policy would be small (and perhaps …
We expect the RBNZ to move its easing cycle up a gear and cut the Official Cash Rate by 50bp at its meeting next week. What’s more, given the Bank’s tendency to loosen policy aggressively, we think the policy rate will eventually be slashed to 2.25%, …
In addition to indicating that goods price pressures eased in September, the latest batch of manufacturing PMIs suggest that global industry slowed sharply towards the end of Q3. But with interest rates falling in DMs and more stimulus on the way in …
1st October 2024
The August JOLTS data provides some reassurance against fears that labour market conditions will deteriorate further, while the sharp fall in the private quits rate suggests that core services inflation will moderate. The rebound in the job openings rate …
Apartment markets are turning a corner, and we now expect the sector to outperform over the five year forecast. As new supply drops back from the second half of next year, we expect a mixture of Southern metros and the major markets to see the greatest …
Overview – We are not expecting the planned fiscal policies of the government to derail the economy – we expect GDP to grow by 1.0% this year and by a decent 1.5% in both 2025 and 2026. Instead, the main influence of the government’s plans to raise public …
This page has been updated with additional analysis since first publication. Consumer rebound not as strong as it seems The solid pickup in retail sales in August was driven in part by temporary factors, meaning that the underlying momentum behind …
Tankan points to continued recovery This website has been updated with additional analysis since first publication. The slight rise in business conditions across all firm sizes in the latest Tankan suggests that the robust rebound in activity in Q2 will …
Slowdown in house-price growth has further to run With new listings rising rapidly, the housing market is shifting in favour of buyers. Accordingly, we think house price growth will ease further in the months ahead. Allowing for seasonal swings, house …
The economy is stuck in a period of below-potential GDP growth, with previous interest rate hikes weighing on consumer spending and investment. This will keep downward pressure on core inflation, which we expect will reach the Bank of Canada’s 2% target …
30th September 2024
The strike by Israel in Lebanon that killed Hezbollah’s leader represents a major escalation of hostilities in the Middle East and all eyes are now on the next actions by Israel and Iran. On its own, this escalation would point to higher oil prices and …
This page has been updated with additional analysis since first publication. Fading drag on credit from higher interest rates is supporting the economy August’s money and lending data provide further evidence that the gradual improvement in credit demand …
This page has been updated with additional analysis since first publication. Softer rebound in activity, but another major downturn unlikely Q2 GDP growth of 0.5% q/q was a bit weaker than the previous estimate of 0.6% q/q, but the ONS also confirmed …
This page has been updated with additional analysis since first publication. House prices rise in Q3 and will rise further next year September’s 0.7% m/m rise in Nationwide house prices suggests that August’s 0.2% m/m fall was just a blip and that the …
While banks have issued more housing loans that don’t meet APRA’s serviceability guidelines over the last couple of years, we aren’t convinced that this poses significant risks to financial stability. The Australian Prudential Regulation Authority’s …
Economic recovery lost some pace in Q3 While the plunge in industrial production in August creates some downside risks to our forecasts, the continued strength in consumer spending is encouraging. According to the preliminary estimate, industrial …
China’s leadership finally took action this week to staunch the economy’s bleeding with a flurry of stimulus announcements and pledges to do more. But will it be enough? Group Chief Economist Neil Shearing talks to David Wilder about whether the outlook …
27th September 2024
GDP-GDI gap resolved Leading up to this week’s annual revisions to the national accounts, we were attuned of the risk that the expenditure-based real GDP measure might be revised lower to match up with the income-based real GDI, given the wide gap that …
Worrying signs in the CFIB Business Barometer Although the CFIB Business Barometer covers only small firms, in recent years the survey indicators have provided a fairly accurate steer to economic conditions. The headline index fell to 55.0 in September …
Government hinting about more investment The government appears to be laying the ground for a rise in public investment in the Budget on 30 th October. This week the Chancellor said “growth is the challenge and investment is the solution.” That was …
Core price pressures easing; Q3 consumption growth solid As we calculated based on the earlier price data releases, the core PCE deflator increased by a muted 0.13% m/m in August, with the headline deflator up by 0.09% m/m. Admittedly, although the …
Stronger monthly GDP growth will be short lived Although the rise in GDP in July was stronger than expected, the preliminary estimate of unchanged GDP in August suggests that the momentum was short lived and puts third-quarter growth on track to surprise …
BoJ set to press ahead with "stupid" rate hikes Japan won’t have its first female Prime Minister after all as former defense minister Shigeru Ishiba won the runoff in the LDP leadership election against economic security minister Sanae Takaichi. In …
Cuts still won't come as soon as markets expect As expected, the RBA left rates unchanged at its meeting this Tuesday. Reading between the lines, however, the Bank does appear to have toned down its hawkish bias somewhat. Indeed, it’s worth noting that …
UK 2024 October Budget …
25th September 2024
We think labour market conditions continued to ease in September, with a 100,000 rise in non-farm payrolls and the unemployment rate edging up to 4.3%. Payroll gain to ease further The 142,000 rise in non-farm payrolls in August was stronger than the July …
26th September 2024
GDP revision shows stronger income growth; core orders rally At first glance the annual revision to the national accounts doesn’t appear to have had much of an impact – with second-quarter GDP growth left unchanged at 3.0% and core PCE inflation unchanged …
This summer’s falls in the share prices of companies involved in producing AI chips have prompted some to question whether the AI revolution will be quite the game-changer it has been built up to be. But it is important to separate the impact of AI on …
The flex industrial subsector outperformed most other property types over the last cycle. Its underlying characteristics mean demand and returns will continue to be healthy ahead, though the winning metros are likely to remain those closest to clusters of …
Small fall in new home sales not a worry New home sales dropped back slightly in August, which always seemed likely after the 10% surge in transactions the month before, driven by pent-up buyers responding to lower borrowing costs. Still, new home demand …
Your one-stop-shop guide to global monetary policymaking includes two-year policy rate forecasts for all the major DM and EM central banks plus links to our latest meeting previews and reactions. If you have subscriber access to the data underlying this …
From pivotal central bank decisions to the most closely watched data, this is your guide to the key events and market-moving releases for the coming week. Click on the button above to view in full-screen mode. … Week-ahead …
Explore our forecasts to end-2026 for GDP growth, inflation, policy rates and commodity prices. To explore our policy rate forecasts in more detail, please visit our Central Bank Hub dashboard. If you have subscriber access to the data underlying this …
