We expect equities to outperform most other assets as a bubble fuelled by AI-enthusiasm continues to inflate, supported by a backdrop of resilient economic growth and monetary easing cycles. In particular, we expect US equities to continue to lead the …
30th April 2024
South Africa’s general election on 29 th May is likely to be the most consequential for its economy and financial markets since the end of Apartheid. With the ANC set to lose its majority, how should investors be preparing for the approach of coalition …
China’s PMI surveys for April suggest the economy continues to grow at a faster pace than a few months ago which is providing support for commodity demand. Today’s Politburo statement signalled that the policy support that has lifted the economy will be …
While we expect Chinese bonds and equities to make more gains in the near term, w e think the outlook further ahead is not as bright for the latter. Chinese government bonds have been quite volatile in recent days. The 10-year yield recorded on Friday one …
Is progress stalling on efforts to get inflation under control? Why are price pressures proving more stubborn than expected? When will central bankers get the genie back in the bottle? Our Global Economics team hosted an online briefing about the global …
Momentum in house prices continues The substantial shortage of existing homes for sale fueled a robust 0.4% m/m rise in house prices in February, consistent with our above-consensus call that house price growth will end 2024 at 5% y/y. The increase in the …
This is a revamped version of our quarterly Financial Risk Monitor to include commentary and analysis of our latest EM risk indicators. EM risks ease further, but fiscal risks remain acute Higher US bond yields and a stronger dollar have put some EM …
Strong Q1, but growth likely to slow in the second quarter Despite the weaker-than-expected rise in GDP in February, first-quarter growth still looks to be close to 2.5% annualised. The weaker flash estimate for March points to less momentum going into …
Wage growth now looks a little sticky too The persistence of wage growth is another reason for the Fed to take its time on rate cuts. According to the first-quarter employment cost index, civilian wages increased at a 1.1% non-annualised pace and the …
Emerging Asia Chart Pack (April 2024) …
May rate cut off the table The slightly faster-than-expected 0.2% q/q expansion in Mexico’s economy in Q1, alongside strong underlying price pressures and the delay to rate cuts in the US, mean that Banxico is all but certain to leave interest rates …
China Chart Pack (Apr. 24) …
Most analysts expect China’s inflation rate to rebound to around 2% by 2026. In contrast, we think that persistent imbalances between supply and demand will keep it close to zero for the foreseeable future. This will make it harder to manage China’s high …
Whither central bank green policy? The role of central banks in fighting climate change was amongst the varied subjects touched upon by France President Emmanuel Macron in a sprawling speech earlier this month. In addition to pondering deep rhetorical …
The Polish government’s white paper on Monday set out a scathing review of the previous government’s fiscal record and highlighted the challenges facing the public finances, but if we’ve learned anything from the report it is that the government will take …
Strong GDP data will not stop June rate cut Today’s stronger-than-expected Q1 GDP data means the euro-zone has come out of recession but, with core and services inflation both declining in April, this will not prevent the ECB from starting its easing …
Longstanding turmoil in Mexico’s state-owned oil company, Pemex, alongside newly announced export cuts, raise questions about the outlook for Mexico’s oil output. But it will not be a large enough factor to alter the global oil market balance. What’s …
This page has been updated with additional analysis since first publication. Further evidence the drag on activity from high interest rates is fading March’s money and credit figures provide further evidence that the drag from high interest rates is …
Net lending has a weak start to the year Following a dip in February, net lending to commercial property ticked up in March, but the rise of £259m was modest and entirely due to lending to standing property. Looking through the monthly volatility net …
Leadership promises continued policy support, new round of reforms The readout of the Politburo’s quarterly meeting on economic affairs has just been published by state media. The tone remained dovish, suggesting that policy will remain supportive in the …
Taiwan’s economy accelerated in y/y terms last quarter and we expect growth to remain strong over the coming year, helped by robust demand for AI-related products. Economic growth slowed in q/q terms but the strength of the economy over the past year …
A strong start to 2024 The national-level data released so far this morning suggest that euro-zone GDP, which will be published in just under an hour, will show an expansion of 0.3% q/q in Q1. All of the euro-zone’s largest economies grew in the first …
Recoveries continue The slightly better-than-expected Q1 GDP figures out of Hungary and Czechia suggest that economic recoveries had a little more momentum at the start of this year than we previously thought and that the risks to our growth forecasts for …
Underlying inflation remains stubborn, labour market still running hot RBA to hand down a final 25bp hike to mitigate upside risks Rate cuts unlikely before early next year, with only limited room for easing We expect the Reserve Bank of Australia to hike …
This report was first published on Tuesday 30 th April covering the official PMIs and the Caixin manufacturing PMI. We added commentary on the Caixin services and composite PMIs on Monday 6 th May. A touch softer but recovery still intact, for now The …
This page has been updated with additional analysis since first publication. Softness in retail sales probably won’t prevent a rate hike The weakness in retail sales last month suggests that sales volumes fell across Q1 as a whole. That said, with …
This page has been updated with additional analysis since first publication. GDP set to rebound this quarter Coupled with solid output forecasts for April and May, the strong rebound in industrial production in March suggests that the likely slump in GDP …
Despite global panic about the DM inflation outlook, we still think that price pressures in the UK are set to fade faster than most assume, opening the way for the Bank of England to cut rates more aggressively than indicated by the consensus. Our UK …
29th April 2024
José Raúl Mulino, the front-runner in Panama’s presidential election scheduled for Sunday, has pledged to reinvigorate growth. But as we’ve been arguing for some time, the economy’s time as Latin America’s growth star is coming to an end. If anything, …
Japan’s apparent intervention in support of the beleaguered yen may buy some time for the currency to stabilise, but is unlikely to lead to sustained turnaround until US interest rate expectations start to fall back. While Ministry of Finance (MoF) …
We think the Fed and most other developed markets (DM) central banks will be able to ease monetary policy this year and next more than investors currently anticipate. DM bond yields will end 2024 below their current levels, putting downward pressure on …
All the signs suggest that a second Trump administration would take a more protectionist approach to trade. Export demand in Mexico, East Asia and ASEAN would be particularly hard hit by a universal US import tariff or a dollar devaluation, and those …
Trump, the Fed, and the dollar Most of the major policy initiatives being suggested by Donald Trump’s campaign would be inflationary; whether it’s narrowing the trade deficit via tariffs or a dollar devaluation, curbing immigration or, now we learn, …
The wide divergence in global office market performance to-date has been driven by significant differences in the return to office and the impact that has had on occupiers’ leasing decisions. US markets have been the major losers, while those in …
A second Trump presidency would almost certainly lead to a protectionist lurch from the US, with profound implications for the emerging world. But which EMs would see the biggest hit to export demand? What would a more isolationist shift signal about the …
Why is productivity so weak outside the US? Productivity growth in most advanced economies has been much weaker than that in the US since the pandemic. This partly reflects the relative weakness of demand, coupled with a degree of labour hoarding which …
While expectations for interest rate cuts in the UK have been pared back in recent months amid growing inflation concerns in the US, we think the markets have gone too far in concluding that UK interest rates will still be as high as 4.00% by the end of …
The dollar is once again sending shivers through global markets as its rise again generates fearful headlines about risks to economies large and small. Central bankers are clearly getting nervous – and some have good cause to be so – but the consequences …
This page has been updated with additional analysis since first publication. Survey points to stagnant economy and still-high price pressures The weaker-than-expected EC business and consumer survey for April is a reminder that the euro-zone economy is …
This page has been updated with additional analysis since first publication. Fairly strong start to Q2 The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in April, but our regional …
The different treatment of prices collected annually is a key reason why the quarterly CPI measure rose much faster last quarter than the Monthly CPI Indicator had indicated. While it’s possible to correct some of the shortfalls of the MCI, it can’t be …
The Ministry of Finance may have intervened earlier today by selling FX reserves to halt the sharp fall of the yen. However, the economic case for foreign exchange intervention is much weaker now than it was in 2022, when the MoF last sold dollars to …
In the latest episode of The Weekly Briefing, Group Chief Economist Neil Shearing previews the coming week’s Fed meeting, tackles market talk that the next move on the US policy rate could be up, addresses an intriguing report about Fed independence and …
26th April 2024
While the headline of the Q1 NCREIF NPI data (-0.9% q/q total return) suggests we could be near the end of the price falls, we think this simply stored up bigger falls for the rest of the year. The growing share of underwater loans, as well as the far …
The US dollar is ending the week a touch softer against most currencies despite another set of hotter-than-expected US inflation figures. But the main story in currency markets this week is the ongoing drop in the Japanese yen, which hit a new low for the …
The NASDAQ 100 has shrugged off this week’s surge in real US Treasury yields amid a mixed bag of earnings reports from some of the ‘Magnificent 7’. (See Chart 1.) This suggests to us that the earlier pull-back in the index wasn’t a harbinger of a far …
SARB hawkishness continues, no rate cuts in 2024 This week, the SARB published is biannual Monetary Policy Review , which showed a Bank less confident about South Africa’s disinflation trend and reiterated a desire to move to a lower inflation target. …
Have soft landing hopes been dashed? GDP growth slows, but stronger under the hood The slowdown in first-quarter GDP growth to 1.6% annualised, from 3.4%, was more marked than expected, but it was principally due to a bigger drag from the net exports …
