Disapproval rating highest since Suga resignation The Cabinet Office’s disapproval rating has surpassed 50% for the first time since Fumio Kishida became Prime Minister two years ago. Surely one reason is the 5% plunge in real household disposable …
24th November 2023
Surveys point to renewed slowdown in inflation Following a rather hawkish speech by Reserve Bank of Australia Michele Bullock, the financial markets now price in a 60% chance of another 25bp rate hike at the Bank’s February’s meeting, up from 40% before …
Tensions within OPEC+ rise as threat of cut looms OPEC+ was meant to be in the spotlight this weekend but, in a surprise move, the meeting has been delayed until Thursday. The slide in oil prices and the Israel-Hamas conflict suggest that output quotas …
23rd November 2023
Post-SVB bank lending holding up well Credit where credit is due The SVB crisis back in mid-March sparked fears of a credit crunch, particularly among regional banks who are the principal source of funding for commercial real estate. Post-SVB, while the …
22nd November 2023
CBN poor communication harming credibility CBN Governor Cardoso’s press remarks this week highlighted his continued ambition to restore confidence in and the credibility of the Bank. But so far an action that would help – a clear strategy to stabilise the …
17th November 2023
The dollar is ending the week on the back foot, with the DXY index on track for its worst week since July, after this week’s US CPI print came in softer than expected. That has reinforced the growing consensus that US inflation is on track back to target …
Massa vs. Milei – the final round The final round of Argentina’s drawn-out presidential election process takes place on Sunday, pitching left-wing Peronist and current Economy Minister Sergio Massa against right-wing libertarian Javier Milei. The result …
Falling inflation prompts rate cut speculation Better inflation news prompts big market moves The release of the slightly-better-than-expected October CPI data earlier this week triggered a massive reaction in markets, with the two-year Treasury yield …
For the first time since the pandemic, the government will find itself with less fiscal room than expected when it provides an update of its plans next week. Accordingly, we doubt that the Fall Economic Statement will contain any major giveaways. Gloomy …
We’ll be discussing the UK macro and market consequences of the Chancellor’s Autumn statement at 10:00 EST/15:00 GMT on 22nd November. Register here for this 20-minute online briefing. The Chancellor, Jeremy Hunt, will want to use next Wednesday’s Autumn …
Easing inflation and stronger shekel Data out of Israel for October this week suggest that the initial impact of the conflict with Hamas on the export sector was fairly limited, that inflation pressures continued to ease and that the chances of an …
Recent export resilience unlikely to last While the Q3 GDP release disappointed this week, there was some (qualified) good news in the October trade data. Although headline export growth slowed to 1.6% y/y, from 4.3% in September, a deceleration had been …
A German constitutional court ruling this week threatens to force the government to cut its planned climate-related expenditure by €60bn or 1.2% of GDP. The decision states that it was not lawful for the government to reallocate this un-used borrowing …
Back-to-back rate hikes unlikely Bank Indonesia surprised financial markets (and us) by hiking interest rates in October. But we don’t expect it to follow through with another hike at its scheduled meeting on Thursday. The main reason BI hiked last …
Developers retreating, LGFVs taking their place In remarks published by state media last weekend, China’s housing minister, Ni Hong, discussed plans to alter the country’s real estate development model, shifting the focus from quantity to quality. There …
Commodity imports boosting trade deficit The men’s cricket team are soaring on the pitch, while the monthly goods trade deficit is doing so off it. Data released this week showed that it hit an all-time high of $31.5bn in October. That surpassed the …
Spare capacity is opening up The ABS published a flurry of data this week, which prima facie suggest the labour market is still running red hot. Nevertheless, we remain confident in our decision to call time on the RBA’s tightening cycle . That’s largely …
Saudi’s new Civil Code another step to attract FDI In a month’s time, Saudi Arabia’s new Civil Code will come into force in a bid to further entice foreign investors to the Kingdom, but more is required to hit Vision 2030 targets. The Civil Code contains …
16th November 2023
Kenya 2024 Eurobond risks fall back Kenya’s partial payment of its $2bn Eurobond will improve its chances of avoiding a sovereign default next year. Extra IMF funds and an improved balance of payment position will also help, but sticking with austerity …
10th November 2023
The Bank of Canada’s latest Summary of Deliberations was more hawkish than most probably expected, with some members of the Governing Council still seemingly arguing for further rate hikes. That said, the weak GDP data released since the Bank’s last …
Energy disinflation; credit conditions still tight Crude oil price slump to bolster disinflation Despite the ongoing war in the Middle East, crude oil prices have slumped – with the WTI benchmark down from a peak of more than $90 per barrel in late …
In an otherwise quiet week, the greenback seems set to close higher against most major currencies, reversing much of its decline following the October payrolls data release . We think the dollar’s rise is largely due to the renewed rise in US Treasury …
Copom’s inflation and fiscal worries There were two key-takeaways from the minutes to last week’s Brazilian central bank meeting, which were released earlier this week. First, despite the recent falls in inflation, Copom remains concerned about …
Inflation risks stop CEE easing cycles in their tracks Communications from central bankers across Central and Eastern Europe (CEE) this week struck a decisively hawkish tone, suggesting that interest rates could be left on hold across most of the region …
We may have to wait a bit longer for the start of the mild recession that we have been forecasting. The published quarterly growth rate of real GDP of 0.0% in Q3 implies that the economy stagnated. Although technically real GDP fell by 0.03% q/q (or £163 …
Edging away from ultra-loose policy The “Summary of Opinions” from last week’s Bank of Japan Monetary Policy Meeting released yesterday show a Policy Board increasingly confident that the long-term 2% target is coming into sight. The likelihood of …
BSP on a knife edge The Philippines central bank (BSP) hiked interest rates at an unscheduled monetary policy meeting on 26 th October, and at the time warned the upcoming data on GDP and inflation (both published this week) would be crucial in deciding …
Limited fiscal impact from grain scheme extension The latest batch of state elections in India kicked off this week. Voting started in Chhattisgarh and Mizoram on Tuesday and voters will go to the polls in Madhya Pradesh, Rajasthan and Telangana over the …
It’s been a busy week in politics on the Iberian peninsula. In Portugal, a snap election has been announced for March 2024 after Prime Minister António Costa was forced to resign amidst a corruption investigation. And after months of negotiations, Spanish …
Resilience of export volumes unlikely to last China’s exporters are doing better than the headlines suggest. Most analysis focuses on what is happening in y/y terms to export values – they have been contracting for six months. Less widely understood is …
One and done for the RBA The main event this week was the RBA delivering a widely-anticipated 25bp rate hike at its meeting on Tuesday. Our assessment is that the increase in the cash rate is essentially something of an insurance policy, aimed at ensuring …
Saudi’s FDI revision paints a slightly better picture The Saudi Press Agency released a statement on Tuesday revealing that foreign direct investment (FDI) into the Kingdom has been much stronger than previously thought. But there is still work to be done …
9th November 2023
After a remarkably slow October in currency markets – for all the fireworks in bond and equity markets, most major currencies were roughly unchanged on the month – November has started with a bang. Between a relatively dovish FOMC and a spate of softer US …
3rd November 2023
AGOA conference begins as Uganda kicked out Officials are discussing the future of a key US-Africa trade act at a conference in Johannesburg that started today. Uganda is already set to lose duty-free access to the US which, although not a major blow, is …
There is now mounting evidence that the economy is set for a renewed slowdown in the fourth quarter and that inflationary pressures from the labour market continue to ease. Although markets have already moved to price out any real chance of further rate …
Employment edged up in October but the broad-based weakness of GDP growth, the depressed business surveys and the rapidly weakening housing market all suggest that the economy is in the early stages of recession. GDP probably contracted again last quarter …
Copom cuts, but fiscal risks return to the spotlight Fiscal risks are rearing their head again in Brazil after President Lula suggested that the government may no longer aim for a balanced primary budget next year as previously pledged. Finance Minister …
Turkey’s central bank continues to impress Turkey’s central bank (CBRT) governor delivered another convincing message at this week’s Inflation Report briefing and suggested that further policy tightening will be delivered over the coming months. Governor …
ECB policymakers stressed this week that rate cuts are a distant prospect. Dutch central bank governor Knot said that rates should remain at their current “cruising altitude” for some time. And governor of the Bank of France Villeroy de Galhau noted that …
Urban households still feeling positive As always, we need to treat Indian labour market statistics with caution, but unemployment data from private think-tank CMIE released this week were noteworthy. They showed that the overall unemployment rate soared …
We can understand if the phase “the lady doth protest too much” sprang to mind when listening to the Bank of England after it left interest rates at 5.25% for the second meeting in a row on Thursday. Indeed, the Old Lady of Threadneedle Street stressed so …
Over half of cross-border settlement now in RMB Earlier this week, the People’s Bank published its annual report on renminbi internationalisation. The message from the 84-page document is that global use of China’s currency has been gaining momentum …
Headline inflation rises again Figures published this week for Korea show that headline inflation rose from 3.7% y/y in September to 3.8% last month – a third consecutive monthly rise. Inflation has now been above the BoK’s target for 31 consecutive …
Too soon to signal the all-clear Data released this week showed that the Australian consumer isn’t on the skids just yet. Indeed, with retail turnover having surged in September, sales values rose by a solid 0.8% q/q in Q3, their strongest quarterly …
Threat of yen intervention remains As we had expected, the Bank of Japan retained its 1% cap for 10-year yields at this week’s meeting . However, by downgrading that cap to a “reference” and by stopping its daily fixed-rate operations offering to buy an …
Egypt’s gas troubles after Israel cuts supplies Egyptian officials confirmed this week that imports of gas fell to zero after Israel turned off the taps, which will curtail efforts to restart LNG exports. And with gas being cut to energy-intensive …
2nd November 2023
EU ETS will help Tusk meet his climate goals Climate policy will be a key battleground in the upcoming slew of elections over the next 18 months and the climate stakes were high in Poland ahead of its recent election. Note that coal accounts for more than …
31st October 2023
Despite another week of broadly dollar-positive news, the greenback has continued to drift sideways – suggesting its rally since July is running out of steam. Even though US Q3 GDP came in at nearly 5% annualised growth, while data in Europe continued to …
27th October 2023
The string of central bank meetings across Emerging Europe this week highlighted the unique challenges that policymakers across the region are currently facing, but one common thread in all countries is that inflation risks are persisting and we think …
Food prices risk delaying Africa interest rate cuts Inflation across Africa has been falling back recently, but persistent food price pressures pose a threat to policymaker’s ambitions to start cutting interest rates. The SARB’s Deputy Governor Fundi …
