The Monetary Authority of Singapore (MAS) kept policy on hold today and with the economy set to struggle and inflation likely to fall sharply over the coming quarters we expect today’s decision to have marked an end to the tightening cycle. The MAS …
14th April 2023
MAS keeps policy unchanged while GDP contracts The Monetary Authority of Singapore (MAS) kept monetary policy on hold today and with the economy set to struggle and inflation likely to fall sharply over the coming quarters we expect today’s decision to …
Recent data appear to confirm that economic activity held up better than feared at the start of 2023. Retail sales rose in most major economies over the first two months of the year, world industrial production was broadly stable and China’s zero-COVID …
13th April 2023
We think Peru’s central bank will keep its policy rate on hold at 7.75% (Thu.) US activity data for March may cast doubt on the case for a 25bp hike (Fri.) We expect Singapore’s central bank to leave policy unchanged (Fri.) Key Market Themes The recent …
Forecasts unchanged, lower production will support prices Despite justifying its recent production cuts on an uncertain demand outlook, OPEC did not make any changes to its 2023 global GDP or oil demand forecasts in its monthly report for March. We think …
Although the Turkish lira is at its weakest ever level against the US dollar, it would have fallen far further by now were it not for intervention by policymakers. We anticipate that the currency will depreciate sharply before long against a backdrop of …
The raft of EM CPI figures out this week show that headline inflation is, in aggregate, finally starting to fall significantly, and we expect it to decline further in the coming months. But core inflation is easing relatively slowly, and remains …
Although equity and oil prices are usually positively correlated, we think equities will struggle in the next few months and that oil prices will end this year somewhat higher than they are now. We also expect a rebound in equities across the board in …
This report has been updated with an additional table and chart of the key data. Price pressures continue to ease Saudi Arabia’s headline inflation rate slowed from 3.0% y/y in February to 2.7% y/y in March as both food and non-food inflation decreased …
Inflation nearing a peak but devaluation fears linger Egyptian inflation rose to its fastest pace since mid-2017 in March and, while there are signs it could be nearing its peak, mounting pressure on the pound presents a clear upside risk. Data released …
The fading effects of the mini-budget meant that bank lending conditions to households and businesses didn’t deteriorate any further in Q1. But the latest credit conditions survey doesn’t capture the full extent of the tightening triggered by recent …
Despite the cost-of-living crisis, the leisure sector did better than expected last year as households used the savings they had built up during the pandemic to boost spending on recreation and restaurants. But with those savings now exhausted and real …
China’s commodity imports generally rose strongly in March which we think reflects higher demand as a result of the re-opening of the economy. While April data may also be strong, we expect import volumes to soften later in the year as export demand …
Mortgage demand still the limiting factor The headline mortgage availability balance of the credit conditions survey turned positive for the first time in over a year in Q1. The collapse of SVB while the survey was in the field probably helps explain why …
The shipping industry is notable as being both a vital artery of world trade and one of the trickiest sectors to de-carbonise. This Update looks at five key questions on the near-term plans to reduce emissions from the sector and the potential …
Bank of England may yet need to generate a recession The stagnation in real GDP in February means the economy probably avoided recession in Q1. But it also increases the chances that the Bank of England will need to raise interest rates further to …
Continuing to dodge recession The stagnation in real GDP in February (consensus +0.1%, CE 0.0%) means the economy probably avoided recession in Q1. But it also increases the chances that the Bank of England will need to raise interest rates further to …
Survey undermines hopes of a spring awakening The marginal improvement in the headline prices paid and new buyer enquiries balance of the RICS Residential Survey did not alter the overarching message that prices are falling and sales slumping. While the …
This page has been updated with additional analysis and charts since first publication. Note: Join our 18th April online briefing discussing what China’s Q1 “data dump” tells us about the strength of the country’s reopening recovery. Register now . …
Resilient labour market will prompt RBA to hike rates further in May The strength in March’s labour market data will probably prompt the Reserve Bank of Australia to deliver a final 25bp rate hike next month, but unemployment will rise before long . The …
The strength in March’s labour market data will probably prompt the Reserve Bank of Australia to deliver a final 25bp rate hike next month, but unemployment will rise before long. The 53,000 rise in employment last month was much stronger than most had …
Fed uncertain about impact that banking turmoil will have on economy The minutes of the Fed’s mid-March policy meeting are, overall, arguably dovish since in the wake of the collapse of SVB and Signature Bank, “several participants noted that…they …
12th April 2023
GDP growth was probably flat in the UK in February (07.00 BST) Industrial production is likely to have risen in the euro-zone in February (10.00 BST) Catch up on today’s Drop-in on what the latest US inflation data mean for the Fed here Key Market Themes …
Sharp fall in inflation as base effects pass through Russian inflation fell sharply in March, to 3.5% y/y, as the surge in prices after the war started to fall out of the annual comparison. The 0.4% m/m increase suggests that price pressures generally …
Crude exports drop by a record amount Commercial crude stocks rose last week, owing to a record weekly fall in exports and small amounts were sold from strategic reserves. Meanwhile, implied demand for key petroleum products remains healthy for now, but …
The Bank of Canada delivered a mixed message today, noting that it is more confident inflation will decline in the next few months, but less confident that inflation will fall all the way to 2.0% as quickly as previously anticipated. Nonetheless, with the …
We expect a surge in completions and a slowdown in employment growth to push vacancy substantially higher in all markets over the next few years. That will slam the brakes on rental growth, causing an outright fall in several of the major markets as well …
The Bank of Canada delivered mixed messages today, noting that it is more confident that inflation will decline in the next few months but less confident that inflation will return to 2% as quickly as it previously anticipated. Nonetheless, with the …
We’re not convinced by the arguments currently doing the rounds that military spending in Russia artificially boosted GDP in a significant way last year. While military spending has increased further this year and manufacturing in military-oriented …
Core inflation remains elevated despite easing in shelter There were some encouraging signs in the March CPI report, including the first evidence that shelter inflation is slowing, but core prices still increased by 0.4% m/m which, on an annualised basis, …
Core inflation remains elevated despite easing in shelter There were some encouraging signs in the March CPI report, including the first evidence that housing cost inflation is slowing, but core prices still increased by 0.4% m/m which, on an annualised …
Headline CPI rate now likely to remain within target range The drop in headline consumer price inflation back to within the RBI’s 2-6% target range in March supports our view that the central bank’s hiking cycle has come to an end. Headline CPI inflation …
China’s Q1 “data dump” on 18 th April will provide the broadest take so far of the economy’s performance following the end of zero-COVID restrictions. Our China team held an online briefing shortly after the NBS release to discuss the quarterly GDP and …
Earthquakes take their toll on activity Turkish industrial production and retail sales figures for February showed that the impact of the earthquakes on the economy was larger than we and most others had anticipated. But we think this will be short-lived …
Japan has escaped the recent banking turmoil in the US and Switzerland relatively unscathed. While banks face some risks arising from their lending exposure overseas , there are no signs of liquidity stress. And unrealised losses on bonds are less of a …
Another bearish signal on Q1 business investment The fall in “core” machinery orders in February is another bearish signal on business investment last quarter. Domestic machine tool orders suggest a further fall in March, but even if “core” machinery …
Another bearish sign for business investment in Q1 “Core” machinery orders fell by 4.5% m/m in February, following a 9.5% rise in January. Orders from the manufacturing sector saw a strong 10.2% m/m rebound, largely due to a huge spike in orders from the …
We think India’s CPI inflation fell below the RBI’s upper limit of 6% in March (13.00 BST) US CPI inflation probably dropped to 5.4% in March (13.30 BST) We expect the Bank of Canada to keep its policy rate unchanged (15.00 BST) Key Market Themes Amid …
11th April 2023
We think that the recent stress in the banking sector has had little impact on the outlook for monetary policy in the euro-zone. While there were significant outflows of bank deposits in the five months ending in February, that was due to higher …
As of January, world trade had already fallen by more than 5% from its peak in September. And despite a slight boost from reopening in China, several leading indicators still point to further falls in trade in the months ahead. One upside is that this …
Brazil’s inflation drops sharply, but won’t sway the central bank The plunge in Brazilian inflation last month, to 4.7% y/y, was driven by a sharp decline in food inflation; core inflation remains high and the headline inflation rate is set to rise again …
Are European and UK commercial real estate markets facing the same level of distress as the US? Join our Property Drop-In on Wednesday, 14th February to learn more, Register here for the 20-minute session. Recent turmoil in the banking sector has …
This page has been updated with additional analysis and charts since first publication. Credit growth still strengthening Bank loan growth jumped to a 17-month high in March. And broad credit growth rose to its highest since December. Both were stronger …
Rise in core inflation makes 25bp hike in May very likely March’s inflation data make it all but certain that the Norges Bank will press on with its planned 25bp rate hike at the next meeting in May. The increase in headline CPI inflation from 6.3% in …
The Bank of Korea left interest rates unchanged (at 3.5%) for a second consecutive meeting today, and attempted to push back against expectations of a rate cut this year. But with the economy struggling badly and inflation continuing to ease, we are …
Inflation set to remain below government’s ceiling this year Producer price deflation deepened further last month to a 33-month low, and consumer price inflation dropped below 1% for the first time in over a year. The key driver was lower food and fuel …
Inflation set to remain below government’s ceiling this year Producer price deflation deepened further last month to a 33-month low, and consumer price inflation dropped below 1% for the first time in over a year. The key drivers were a decline in food …
House prices rebounded in March but we aren’t convinced that this marks the beginning of a sustained rebound. Affordability is set to become the most stretched since the early 90s and if the unemployment rate rises as rapidly as we anticipate, house …
On hold again, first cut likely in August The Bank of Korea left its policy rate unchanged (3.5%) for a second consecutive meeting today, and we don’t think it will be long before rate cuts come onto the agenda. With the economy struggling badly and …
Strong consumption momentum to carry over into Q2 Both the current and outlook readings in March hit their highest in more than a year, capping off a strong first quarter for the EWS. This is another sign that private consumption remained resilient in Q1 …
10th April 2023
