Filtered by Region: G10 Use setting G10
World trade fell in April and timelier data point to a further fall in May, partly due to a sharp drop in Chinese exports which reversed all of their rebound from earlier this year. And weak demand looks set to weigh on trade in the months ahead. …
29th June 2023
Renewed slowdown in payroll growth We think employment growth remained fairly resilient in June and have pencilled in a 250,000 increase in non-farm payrolls. But that would still be a sharp slowdown from May’s surge. Mild slowdown in jobs growth May’s …
Note: We discussed the economic and policy risks around the ‘greedflation’ debate in a 20-minute online briefing on Thursday, 6 th July. Watch the recording here . The surge in inflation in advanced economies has not been driven by a widening of firms’ …
Consumer anger is mounting, executives are on the defensive and politicians are scrambling to respond. The issue of ‘greedflation’ is inflaming the public discourse around inflation – but to what extent are companies really responsible for driving up …
This page has been updated with additional analysis since first publication. Higher interest rates continue to take a toll on bank lending Higher interest rates continued to weigh on bank lending in May, particularly in the housing market. This effect …
The Calm Before the Storm The tick up in mortgage approvals in May sustained the partial recovery from the slump at the beginning of the year. (See Chart 1.) But the increase reflects earlier declines in mortgage rates and will be cut short by their more …
Inflation back under 2% The further fall in Spanish HICP inflation will provide some respite for households who have suffered a sharp hit to real household income over the last year. But it will have little sway over ECB decision-making as …
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 …
28th June 2023
NYC employment finally returns to its pre-pandemic peak Total employment growth was resilient across metros in May, recording 0.6% 3m/3m on average. That growth was led again by Boston, Las Vegas and Charlotte, with San Antonio also seeing a rise of over …
Labour market still very tight and unit labour cost growth surging Inflation plunged in May but underlying measures moderating less rapidly Bank will deliver 25bp rate hikes at each of its next three meetings While headline inflation plunged in May, …
Slowdown in inflation not fast enough to prevent further rate hikes The sharp fall in inflation in May raises the risk that Reserve Bank of Australia will not raise any further at the upcoming meeting in July, but we still think that mounting upside risks …
Overview – Strong immigration and the turnaround in the housing market raise the chance that the economy will avoid recession but, with the Bank of Canada back in hiking mode, we still judge that GDP will contract later this year. Even if recession is …
27th June 2023
New home sales soar New home sales increased for the third consecutive month in May, rising by a punchy 12.2% m/m to reach 763,000 annualised, the highest level since February 2022. This leaves them firmly above pre-pandemic levels and around 20% above …
House prices remain resilient House prices rose in April by the fastest pace in close to a year, reflecting constraints to supply as high mortgage rates have discouraged existing homeowners from moving. Although prices have shown resilience in recent …
Some improvement, but core inflation pressures still a bit too strong for comfort This page has been updated with additional analysis since first publication . While the steep declines in both headline and core inflation in May were partly due to …
Equipment investment still set for further declines The 1.7% m/m rise in durable goods orders in May was stronger than we had expected, even accounting for a big rise in the volatile commercial aircraft component. But the wider evidence still suggests …
At first glance, there’s little sign of friend-shoring among Japanese firms as they have directed a rising share of their outward foreign direct investment at China. However, this largely reflects China’s rising economic heft and firms are reducing their …
26th June 2023
Recent data fan Bank of Canada's fears The latest Summary of Deliberations gave no hint about whether the Bank of Canada will raise interest rates again at the July meeting but, with little progress yet on any of the key factors that the Bank is watching, …
23rd June 2023
June’s flash PMIs suggest that not only has activity in advanced economies slowed at the end of Q2, but the outlook has also deteriorated further. This is particularly true in the manufacturing sector, where orders have fallen sharply. Meanwhile, …
It’s been an extremely tough week for the Bank of England and its Governor, Andrew Bailey. Wednesday’s CPI release revealed the second shocking surge in core inflation in a row and appeared to confirm our view that the inflation problem is bigger in the …
In a quiet week for economic data, the biggest news was further evidence of a turnaround in housing activity, with housing starts jumping by 22% m/m in May to their highest level in a year. The sheer scale of that move did look a little suspicious and …
This page has been updated with additional analysis since first publication. Services price inflation still sticky June’s flash activity PMIs won’t do much to ease the Bank of England’s inflation fears, which suggests that yesterday’s interest rate rise …
This page has been updated with additional analysis since first publication. Sales boosted by hot weather, but drag from soaring mortgage rates yet to bite The further rebound in retail sales volumes in May suggests the recent resilience in economic …
Labour market will cool In a speech earlier this week, Deputy RBA Governor Michele Bullock noted that employment was above what the Board would consider to be consistent with its 2-3% inflation target. Indeed, jobs data released last week showed that the …
Strength in inflation not prompting a rethink A Reuters survey published before last week’s Bank of Japan meeting showed that two-thirds of analysts polled expected the Bank to scale back policy easing this year, with 43% predicting it would happen as …
This page has been updated to include additional analysis and charts. PMIs suggest economic downturn might have started in June The fall in manufacturing PMI readings in June’s flash estimates suggest the recession we’re expecting in the second half might …
This page has been updated to include additional analysis, charts and a table. Inflation should fall below 3% by year-end Nationwide inflation played out largely in line with the timelier Tokyo CPI data in May. Headline inflation fell largely due to a …
Inflation to dip below 3% by year-end Headline inflation fell nationwide largely in line with the timelier Tokyo CPI data, while once again, underlying inflation rose despite that. As falling import price inflation brings down inflation in consumer prices …
A disparate range of global central banks have delivered their latest policy rate verdicts over the past 24 hours. We think there are four key points for investors to note. First, European central banks are clearly still in hawkish moods. But while that …
22nd June 2023
Near-term risks ease, but still high Easing financial conditions, improving consumer sentiment and the stabilisation in housing suggest that the risks of an imminent recession have eased slightly. Nonetheless, our tracking models still imply that an …
The reduction in office demand due to remote work will cause a hit to NOIs on a par with, or worse than, that experienced by malls over the last six years. And in line with the experience of malls, the structural nature of this hit to demand means the 35% …
Sales remain weak As expected, existing home sales remained relatively unchanged in May, rising by +0.2% m/m to 4,300,000 annualised. Despite this marginal rise, a decline in mortgage applications for home purchase in May suggest we have further falls to …
Note: We’ll be discussing the UK inflation, growth and policy outlooks after the June CPI release on Wednesday, 19 th July . Register here to join that 20-minute online briefing. The 50 basis point (bps) interest rate rise by the Bank of England today, …
50bps and at least another 25bps hike to come The Bank of England’s decision to raise rates by 50bps, from 4.50% to a near 15-year high of 5.00%, is unlikely to be the last hike given the UK’s higher and longer lasting inflation problem. We think the …
Overview – We expect the mild recession in the euro-zone to drag on for the rest of the year. The drop-back in energy prices will provide some relief for households and companies but will be partly offset by governments withdrawing policy support. …
21st June 2023
This page has been updated with additional analysis since first publication. Broad-based resilience in spending The stronger-than-expected rise in retail sales in April suggests that household spending was resilient going into the second quarter. Both the …
Our new Dashboard allows clients to track the key housing market indicators that we follow in real time. (See here .) This Update outlines what has driven recent developments in these indicators, and our view for the rest of the year. (See also our US …
Ugly inflation print tips balance to 50bp hike tomorrow In response to May’s inflation data , released earlier today, we now expect the MPC to raise interest rates by 50bps to 5.00% at tomorrow’s meeting. A lot of attention has focussed on the fact that …
This page has been updated with additional analysis since first publication. Public finances limits the Chancellor’s room for manoeuvre Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST. …
The Reserve Bank of Australia is considering actively selling its bond holdings rather than merely letting them shrink gradually via bond redemptions. The main motivation seems to be to reduce interest rate risk on its balance sheet rather than to tighten …
Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST . Register now . A return to mortgage rates of around 6% for the first time …
20th June 2023
Strongest monthly rise in single-family starts for nearly three years Single-family starts saw the largest monthly increase in nearly three years in May, suggesting homebuilders have been responding to the recent rises in new home sales. We still expect a …
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 …
We don’t think growing enthusiasm about AI will be enough to stop the S&P 500 from declining if, as we expect, the US economy falls into recession later this year. Nonetheless, we now think the index will end this year a bit higher than we’d previously …
Note: We’re talking inflation and the BOJ, slowing Indian growth, and regional monetary easing in our Asia Drop-In on Thursday, 22 nd June. Register now . Overview – With inflation remaining very sticky, we now expect the RBA to lift the cash rate to a …
RBA will keep hiking to 4.85% The minutes of the RBA’s June meeting largely reaffirmed the Bank’s pivot to a more hawkish stance. To be sure, the Board did discuss the option of leaving rates unchanged, given the ongoing fall in households’ real …
Housing continues to shrug off high interest rates The recovery in house prices continued in May, with the sales-to-new listing ratio pointing to further gains ahead. Rising interest rates will have a more limited impact on home purchases than existing …
19th June 2023
