This page has been updated with additional analysis since first publication. Bleak end to a dismal year, but a better 2024 awaits The 3.2% m/m fall in retail sales volumes in December was far worse than expected (consensus forecast -0.5% m/m, CE -1.0% …
19th January 2024
GDP declined during the fourth quarter and we expect activity to remain weak in the near term amid elevated interest rates, a cooling labour market, soft foreign demand and subdued commodity prices. Today’s data release marked the second time Malaysia …
This page has been updated with additional analysis since first publication. Inflation will rebound early this year Inflation fell again in December, driven by declines in both fresh food and energy inflation. However, the bigger picture is that inflation …
18th January 2024
Reversal of November spike not a sign of weakness Note: We’ll be discussing our above-consensus forecasts for US house prices and construction in an online briefing on 23rd January at 10:00 EST/15:00 GMT. Register now . Housing starts fell last month …
November’s activity data for South Africa show that while economic headwinds are easing, growth is still very soft. Still, less electricity outages and restrictive fiscal policy should allow for a modest pick-up in growth over this year. Data released …
This page has been updated with additional analysis since first publication Labour market will turn faster than the RBA anticipates With labour market data for December disappointing expectations, we’re more convinced than ever that the RBA will take its …
Market was picking up even before latest slide in mortgage rates The December RICS Housing Market survey showed sales volumes rising and buyer demand recovering even before the further sizeable drop in mortgage rates in January. That’s encouraging for our …
17th January 2024
Manufacturing sector stagnating The muted rise in manufacturing output in December shows that the sector continues to struggle, even as consumption growth remains strong. The 0.1% m/m increase in manufacturing output in December meant that the …
Consumers end the year on a high The 0.6% m/m rise in retail sales in December may have been supported by the unseasonably mild weather, but it still means there is no sign that households are buckling under the pressure of higher interest rates with …
Policy rate left unchanged, central bank hints at cuts later in the year Bank Indonesia left its policy rate on hold at 6.00% at its meeting today, but gave further hints that provided the rupiah continued to hold up well against the US dollar, there …
This page has been updated with additional analysis since first publication. Downward trend stalls, but drop to below 2% still coming in April The unexpected rise in CPI inflation from 3.9% in November to 4.0% in December (consensus and CE forecast 3.8%) …
This page has been updated with additional analysis and charts since first publication . Recovery still shaky China’s economy lost momentum in Q4 according to the official GDP figures. But we suspect that’s because they failed to acknowledge the full …
Core inflation pressures still too strong Although the rise in headline inflation in December was mainly due to gasoline price base effects, the more worrying development is that the CPI-trim and CPI-median core measures both rose by a larger 0.4% m/m. …
16th January 2024
Tepid lending in December closes a sluggish year for activity Net lending on commercial real estate (CRE) by banks was positive again in December, rising by $4.2bn in the month. (See Table 1.) That said, the monthly change was broadly in line with the …
This page has been updated with additional analysis since first publication. Wage growth fading fairly fast Another big drop in wage growth in November supports our view that domestic inflationary pressures are fading fairly fast. But the ongoing …
Temporary rebound in sales volumes The rebound in manufacturing sales in November was broad-based but, with new orders dropping back and the manufacturing surveys weakening in December, that strength is unlikely to be sustained. The 1.2% m/m rise in …
15th January 2024
This page has been updated with additional analysis since first publication . Inflation now close to 30% y/y, CBN needs to act soon Nigeria’s headline inflation rate rose again to 28.9% y/y in December, as a weak naira continues to push up prices. …
German troubles not over yet Preliminary data published today show that German GDP contracted in Q4 and we expect it to continue to struggle this year. Today’s data release shows that Germany’s economy contracted by 0.3% in calendar year 2023, and a …
Inflation ends 2023 on a softer note Saudi Arabia’s headline inflation rate slowed from 1.7% y/y in November to 1.5% y/y in December, the weakest pace recorded since January 2022. And we expect that inflation will continue to ease at the start of this …
This page has been updated with additional analysis since first publication . The PBOC fails to deliver Despite a cut being widely expected, the MLF was again kept unchanged today – for a fifth straight month. The main factor holding the PBOC back was …
Fall in inflation won’t be sustained The small fall in Russian inflation to 7.4% y/y in December is likely to be temporary, and we still think that the central bank’s tightening cycle has further to run. We expect a 100bp rate hike (to 17.00%) next month. …
12th January 2024
NBR won’t cut rates as far as most expect in 2024 The National Bank of Romania (NBR) left its policy rate unchanged at 7.00% today and, although a monetary easing cycle seems to be drawing nearer, we think that interest rates are unlikely to be cut as far …
This page has been updated with additional analysis since first publication. Elevated headline inflation suggests no imminent rate cuts The rise in headline consumer price inflation to a four-month high in December supports our view that the central bank …
This page has been updated with additional analysis since first publication . Broad credit growth hits 7-month high, but bank lending still weak The rebound in broad credit growth remained on track thanks to a step up in government borrowing. But growth …
This page has been updated with additional analysis since first publication. Stagnation in Q4, but recovery in sight The 0.3% m/m rebound in real GDP in November (consensus and CE forecast 0.2%) increases the chances that the economy escaped a recession …
This page has been updated with additional analysis since first publication . Export volumes still due for a pullback China’s export values rose y/y at the fastest rate since April. And while export volumes only ticked up slightly, they remain near a …
This page has been updated with additional analysis and charts since first publication. Deflation set to ease gradually Smaller y/y declines in food and energy prices meant that both CPI and PPI deflation eased last month, a trend that we think will …
Consumer spending continued to tumble in Q4 The continued slowdown in household spending in November further cements our view that the RBA won’t lift rates any higher. The ABS’ monthly indicator suggests that household spending rose by 3.1% y/y in …
Core prices boosted by used vehicles & shelter The slightly bigger 0.3% m/m increases in both headline and core CPI would seem to justify the stance of Fed officials that the road back to target could be a little bumpy, but we’re not convinced. The annual …
11th January 2024
This page has been updated with additional analysis since first publication . The renewed fall in Brazil’s headline inflation rate in December, to 4.6% y/y, paves the way for another 50bp cut to the Selic rate (to 11.25%) at the central bank’s next …
On hold again, rate cuts in Q2 The Bank of Korea (BoK) left its main policy rate on hold today (at 3.5%), but with inflation cooling and growth set to struggle, we think the central bank will cut interest rates sooner than most expect. The decision was …
Inflation slowing, but will remain above target until mid-2025 Egypt’s headline inflation rate eased for a third consecutive from 34.6% y/y in November to 33.6% y/y in December. Comments last night suggest that an enhanced IMF deal is near, which is …
10th January 2024
This page has been updated with additional analysis since first publication. Fall in core inflation confirms Norges Bank is finished with rate hikes The fact that core inflation fell and the headline rate was unchanged in December confirms that Norges …
This page has been updated with additional analysis since first publication. Disinflation will pave the way for policy loosening before long With price pressures cooling in earnest, we’re growing increasingly confident in our call that the RBA will start …
9th January 2024
This page has been updated with additional analysis since first publication. Virtuous cycle will get renewed boost this year Wage growth slowed sharply in November, driven by a plunge in bonus payments. While we expect the labour market to soften in the …
Tougher times ahead for exporters Export volumes were little changed in November but the surveys suggest that tougher times lie ahead, with export orders seemingly falling fast in December. The trade surplus halved to $1.6bn in November as exports …
Falling imports and exports suggests demand softening at home and abroad The weakness of both exports and imports in November suggests that weaker growth overseas is now being matched by a softening in domestic demand too. The trade deficit shrank …
NBP has limited scope for rate cuts in 2024 The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we continue to think that the scope for monetary loosening ahead is relatively limited. While the consensus view in recent …
Sharper-than-expected rise in inflation leaves February rate cut in balance The larger-than-expected rise in Mexico’s headline inflation rate to 4.7% y/y in December was mainly due to higher non-core inflation but, even so, the odds of Banxico beginning …
This page has been updated with additional analysis since first publication. RBA will look past Black Friday spending spree Although retail sales bounced back with a vengeance in November, that result largely reflected a one-off boost from Black Friday …
This page has been updated with additional analysis since first publication. Inflation will jump again before long Inflation excluding fresh food came close to the Bank of Japan’s 2% target in December, but it will jump to nearly 3% from February and …
8th January 2024
This page has been updated with additional analysis since first publication. Euro-zone activity fell in Q4, services price pressures still look strong The data published this morning are consistent with our view that euro-zone GDP is more likely to have …
This page has been updated with additional analysis since first publication. Regional sentiment continues to recover The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally continued to rise in December and …
Entering 2024 on a slightly stronger footing South Africa’s manufacturing PMI rose to an 11-month high in December, helped by an easing of loadshedding. Alongside hopes that recent freight problems are past the worst, this chimes with our view that there …
This page has been updated with additional analysis. Rise in Swiss inflation will be reversed in January The unexpected increase in Swiss inflation in December raises some doubt as to whether rates will be cut soon. However, we suspect that the headline …
Weak ISMs should probably be taken with a pinch of salt The plunge in the ISM services index to a 7-month low in December suggests, at face value, that the economy is sliding into recession. But the poor relationship between the surveys and the hard …
5th January 2024
This page has been updated with additional analysis since first publication. Jump in wage growth a concern for the Bank The unchanged level of employment in December is consistent with the message from the business surveys that labour demand has weakened …
Employment gains still dominated by non-cyclical growth The slightly bigger-than-expected 216,000 gain in non-farm payrolls (consensus estimate was 170,000) in December coupled with a second consecutive 0.4% m/m gain in average hourly earnings means that …
This page has been updated with additional analysis since first publication. Jump in headline inflation is just a blip December’s jump in headline inflation in the euro-zone was widely anticipated and entirely due to a base-effects driven increase in …
This page has been updated with additional analysis since first publication. Construction PMIs still subdued in December The rise in the headline CIPS construction PMI from 45.5 in November to 46.8 in December was driven by the increase in the housing …
