Inflation hits 31%, but CBN likely to hold fire on further rate hikes Nigeria’s headline inflation accelerated to a higher-than-expected 31.7% y/y in February and the naira’s latest sharp falls mean it will continue to march towards 35% y/y over the …
15th March 2024
This page has been updated with additional analysis since first publication . Rebound in credit growth blown off course Bank loan growth in China decelerated to its slowest pace on record in February, while broad credit growth reversed most of its recent …
BoJ set to unwind negative rates next week A preliminary tally published by the Japanese Trade Union Confederation (RENGO) today showed that pay hikes in this year’s spring wage negotiations (Shunto) reached 5.28%, up sharply from 3.6% last year and the …
Global outperformance set to continue This week we published our Q2 India Economic Outlook . The key point is that while growth is likely to moderate over the coming quarters, India will remain a global outperformer. We are forecasting GDP growth of 7% in …
This Global Markets Focus looks at whether Chinese equities’ recent rally heralds the start of something larger and more sustained. It argues that they could continue to do well over the next year or two, both in absolute terms and relative to many other …
Property downturn set to weigh on iron ore prices As our China team explains here , the downturn in China’s construction sector has barely started but once it does happen, it could knock off one percentage point from GDP growth. Australia got a glimpse of …
Will 2024 mark the end of the downturn in the European commercial real estate market? And how strong will the recovery be when it comes? Our European commercial property team held a 20-minute briefing all about the market outlook. During this 20-minute …
14th March 2024
Inflation in Switzerland has surprised most other forecasters, including the SNB, this year by falling to just 1.2% in February, which was the ninth month in a row that it has been below 2%. We think this will encourage the SNB to reduce the policy rate …
Interest rates unchanged at 5.25% and BoE to keep hawkish guidance But data not the guidance counts We think rates will fall to 3.00% in 2025 rather than to 4.00% as investors expect At the policy meeting on Thursday 21 st March, the Bank of England will …
It is no surprise that the confidence of US consumers is closely aligned to the health of the stock market these days. After all, the share of households that own equities is the highest in at least three decades. With that in mind, the recent surge in …
Higher inflation a cost to Egypt’s policy shift The fall in the Egyptian pound last week has raised concerns of a fresh surge in inflation, which wasn’t helped by February’s strong reading. However, while we may see another acceleration in March, we think …
Inflation in Norway has fallen more quickly than Norges Bank expected, so at next week’s meeting it is likely to signal that it will cut interest rates sooner than it previously expected, perhaps in Q3. And we think there’s a good chance that it will make …
Recent years have sharpened investor focus on identifying risks and vulnerabilities across the EM world as the pandemic, the Ukraine war and the surge in US rates have exposed vulnerabilities, hammered EM currencies and triggered several defaults. But how …
“New Three” Chinese exports = must-watch data …
Weakness in control group sales suggests January fall wasn’t all due to weather The 0.6% m/m rebound in retail sales in February appears to reflect the unwinding of the drag on sales from the winter storms in early January, but the details suggest that …
Temporary rebound in sales volumes Lower prices mean that the muted 0.2% m/m rise in manufacturing sales in January was better than it looked, with sales volumes rising by a much stronger 1.1%. That strength was entirely due to the resumption of …
Germany's economy is in “troubled waters” and doing “dramatically badly” – and those are just the assessments of its economy minister. But are the recessionary conditions in the euro-zone’s biggest economy merely a cyclical blip or signs of deeper …
There are so many uncertainties that it remains unwise to get carried away by the potential economic boost from the latest wave of weight loss drugs. Nonetheless, if use of the drugs continues to grow rapidly, it could ultimately give a significant boost …
A Biden-Trump rematch is now all but inevitable on November 5 and polls are pointing to a tight race. With Donald Trump threatening to raise tariffs, his team talking about scrapping the Inflation Reduction Act, and the presumptive Republican nominee …
We expect global crude production to rise by around 2.5% in 2025 as the unwinding of OPEC+ voluntary supply cuts stretches all through next year. But non-OPEC+ oil producing nations will also play their part in raising supply even if we think US oil …
The revival of prime retail rental growth in 2023 ended a three-year rental decline for the sector. This likely marks the end of retail’s rental woes and we have nudged up our prime rent forecast for this year, but we doubt there will be a return to the …
We expect the divergence in growth prospects observed in EM Q4 GDP data to be a running theme over the next couple of quarters too. Specifically, we think that some of last year’s outperformers, including Brazil and Mexico, will struggle as one-off tail …
Inflation nudges up as rents continue to rise The increase in Saudi Arabia’s headline inflation rate to 1.8% y/y in February is the highest reading since August and it could creep to above 2.0% y/y in the coming quarters. The bigger picture, however, is …
Sweden CPI (February) Rapid disinflation sets up May rate February's inflation data will strengthen policymakers' conviction that they can begin to cut interest rates in May. The fall the Riksbank’s target CPIF measure of inflation, which excludes the …
Increase in supply could stall prices Note: Our UK Housing economists will be setting out their updated forecasts and answering client questions in a Drop-In at 0930 GMT this morning, Thursday, 14th March . Register here for the 20-minute online …
13th March 2024
Most major equity markets and currencies in Latin America have lagged those in other regions since the start of the year, and we expect their underperformance to continue for some time. As equity markets in the US are making new all-time highs, there are …
Our latest Latin America Chart Pack is embedded below. Activity in the region slowed to a crawl at the end of last year and, while a recovery will take hold in the coming quarters, growth will disappoint consensus expectations. The disinflation process …
The ECB’s new operational framework for implementing monetary policy, announced this afternoon, was largely in line with our expectations and has no immediate implications for monetary policy. But it does mean that the Bank will maintain a portfolio of …
This page has been updated with additional analysis since first publication. Inflation picks further, rates to stay high for some time The rise in Russian inflation to 7.7% y/y in February highlights that price pressures in the economy remain strong and …
Our updated remote worker preference scores again highlight Nashville as the most attractive metro for remote workers, while San Jose is the least attractive. The winners continue to be predominantly in the South, reflecting relatively low living costs …
The winner of Russia’s election may be a foregone conclusion but the outlook for its oil and gas sector isn’t. A tightening of sanctions is an ever-present risk and the outcome of the war is uncertain. Our central case is that sanctions don’t prevent …
Recent data leave Fed still seeking “greater confidence” that inflation is heading to 2% New SEP likely to be marginally more hawkish We still expect first rate cut in June and 200bp of easing in total Data dependence will remain the order of the day at …
Global Economics Chart Pack (March 2024) …
The devaluation of the Nigerian naira earlier this year appears to have brought it much closer to fair value, which will help to put the balance of payments on a more stable footing. The key now is for the CBN to allow the naira to move in line with …
The online share of retail sales is still above its pre-pandemic trend, but a closer look suggests that is perhaps not as bad for the retail sector as it looks. For example, the share of online clothing sales has declined over the past year, which implies …
Overview – India retained its title as the world’s fastest-growing major economy last year and we expect further strong growth over the coming years. That would put India on course to become the world’s third largest economy within the next couple of …
This page has been updated with additional analysis since first publication. Output to continue falling Euro-zone industrial production fell in January and is likely to continue contracting in the coming months due to weak demand. The 3.2% m/m decrease in …
Improved valuations suggest that the price correction in prime property is almost done. However, with little scope for bond yields in continental Europe to fall from here and property-to-bond yield spreads still narrow compared to the recent past, we …
This page has been updated with additional analysis since first publication. UK economy has probably already exited recession Note: We will be discussing whether the next government will move the dial on the economy in a 20-minute online briefing at 3pm …
We’ll be discussing the outlook for inflation, monetary policy and the implications of higher Japanese rates for domestic and global financial markets in a 20-minute online briefing at 8am GMT/4pm SGT on 19th March . (Register here .) Shunto results in …
Stronger-than-expected US core CPI data did not trigger as big a reassessment in rate expectations as they did last month in financial markets, and we still forecast the Fed to start easing policy around June. Given our view that it will eventually …
12th March 2024
Reshoring still more myth than reality Although it has been a priority for the last three administrations, the reshoring of lost manufacturing jobs remains more myth than reality. There has been a significant boom in the construction of hi-tech …
The impact of a second Trump presidency on Mexico’s economy would depend to a large extent on whether the USMCA deal remains intact or Mexico finds itself subject to US import tariffs. If the latter, Mexico would be one of the most affected EMs. And even …
The latest data from major advanced economies typically show that unemployment rates are rising and pay pressures are easing. While wage growth is still too high for comfort in most cases, we suspect that further signs of a slowdown will support the case …
Note: Our UK Housing economists will be setting out their updated forecasts and answering client questions in a Drop-In on Thursday, 14th March . Register here for the 20-minute online briefing. The more granular detail of mortgage lending in Q4 …
The timeliest data support our long-held view that the euro-zone economy will remain close to recession in the first half of the year. Beyond that, we think growth will be much lower than the consensus or the ECB are forecasting. However, the labour …
We expect oil prices to edge lower in the second half of 2024 as OPEC+ starts to unwind its production cuts. However, the Israel-Hamas war, and associated risks to supply, will act as a floor under prices. Natural gas and coal prices will also fall owing …
