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 …
11th January 2024
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 …
Lower mortgage rates see house prices jump in December The big 1.1% m/m increase in the Halifax house price index confirms that falls in mortgage rates are translating into renewed increases in house prices. Given further recent falls in mortgage rates, …
Office-based jobs contractions focused in Midwest and West Coast Total employment growth in November across our 30 metros was weak compared with the rest of 2023, growing by 0.3% 3m/3m once seasonally-adjusted. On average, office-based jobs contracted for …
4th January 2024
Rebound in inflation won’t last The jump in Germany’s headline inflation rate in December came as no surprise as it was driven by energy price subsidies introduced more than a year ago. With core inflation continuing to trend down, it should not affect …
Rise in mortgage approvals set to continue The rise in mortgage approvals in November was little surprise given the sharp drop back in mortgage rates since July. Given recent further falls in swap rates, mortgage rates are likely to continue to fall from …
Strong November lending, but subdued investment volumes Net lending to commercial property increased for the ninth consecutive month in November, but that wasn’t reflected in investment volumes which dropped further. But throughout H1 2024 we expect …
This page has been updated with additional analysis since first publication. PMIs point to recession The final Composite PMI for the euro-zone in December was revised up significantly from the flash estimate of 47.0 to 47.6, meaning that it was unchanged …
This page has been updated with additional analysis since first publication. Lower mortgage rates will ease the squeeze, but still some pain to come November’s money and credit data suggest that the recent falls in mortgage rates will stimulate new …
Minutes more nuanced than expected, given post-FOMC hawkish chatter The minutes of the mid-December FOMC meeting were slightly more dovish that we were expecting – more in line with the message delivered by Fed Chair Jerome Powell in his press conference …
3rd January 2024
This page has been updated with additional analysis since first publication. Modest rebound to end a dismal year Despite the modest rise in the ISM manufacturing index to 47.4 in December, from 46.7, the survey indicates that conditions in the factory …
Mortgage rates below 7% spur further recovery in mortgage demand Mortgage rates dropping below 7% were the catalyst for a marked uptick in mortgage applications for home purchase in December. The 7.1% m/m rise in mortgage applications for home purchase …
Headline inflation picks up, but core inflation losing momentum The rise in Turkish inflation to 64.8% y/y in December was broadly in line with expectations and the breakdown provided some signs that underlying price pressures continue to soften. We think …
This page has been updated with additional analysis since first publication. Factory activity likely to hold up well in 2024 The manufacturing PMI survey for December suggests that activity lost some momentum at the end of 2023. That said, we think that …
This page has been updated with additional analysis since first publication. Further weakness in CEE, but Russia continues to overheat The manufacturing PMIs out of Central and Eastern Europe (CEE) and Turkey for December suggest that industrial sectors …
2nd January 2024
Economic growth in Singapore accelerated in Q4 but the economy is set to enter a period of renewed weakness in the near term as support from external demand fades while domestic demand remains weak. According to the advanced estimate published today, GDP …
Flat prices in December confirm 2023 resilience Unchanged house prices in December ensured that over the course of 2023 they fell by much less than forecasters had expected. With mortgage rates falling, it is increasingly likely that house prices avoid …
29th December 2023
This page has been updated with additional analysis since first publication. GDP will rebound this quarter While the November activity data were a mixed bag, they strongly suggest that the economy dodged a recession. Taking industrial production first, …
27th December 2023
This page has been updated with additional analysis since first publication Labour market should tread water from next year The unemployment rate stayed unchanged in November, following consecutive falls in the previous two months. We think it should …
25th December 2023
This page has been updated with additional analysis since first publication. Rate cuts approaching The weaker-than-expected monthly GDP figures raise the risk that the economy contracted again this quarter and are another reason to think that the Bank of …
22nd December 2023
This page has been updated with additional analysis since first publication. Post-pandemic inflation is over; Fed rate cuts coming soon The confirmation that core PCE prices rose by just 0.06% m/m in November means that, over the past six months, core …
This page has been updated with additional analysis since first publication. Dose of festive cheer for retailers, but unlikely to last into new year The 1.3% m/m rebound in retail sales volumes in November may have paused the recent retail woes as Black …
This page has been updated with additional analysis since first publication. Mildest of mild recessions may have begun in Q3 The final Q3 2023 GDP data release shows that the mildest of mild recessions may have started in Q3. But whether or not there is a …
This page has been updated with additional analysis since first publication. Inflation will only return to 2% by end-2024 The plunge in inflation in November was broad-based, but with the large drag from energy prices turning into a boost as energy …
21st December 2023
Consumption growth better than feared The strong rise in retail sales volumes in October suggests that consumption growth will accelerate this quarter. That presents an upside risk to our forecast that GDP will edge down again, although we remain …
Leaving the door open for one more hike Turkey’s central bank (CBRT) delivered a 250bp interest rate hike, to 42.50%, at today’s meeting and didn’t close the door on the tightening cycle. We’ve now pencilled in one more 250bp hike at the next meeting in …
This page has been updated with additional analysis since first publication. Recovery stalls in November Poland’s activity data for November suggest that the economic recovery stalled last month, but we think that this is only a temporary blip. We still …
Bank Indonesia left its policy rate unchanged at 6.0% today for a second consecutive meeting, but in its press conference hinted at the possibility of rate cuts in the second half of next year. However, with economic growth set to struggle and inflation …
This page has been updated with additional analysis since first publication. Still scope for pre-election splash in Spring Budget We doubt November’s public finances figures will prevent the Chancellor from unveiling a further pre-election fiscal splash …
Trough in existing home sales behind us: Existing home sales recovered somewhat in November from the 13-year low reached in October, as falling mortgage rates brought more buyers and sellers into the market. That chimes with the pickup in mortgage …
20th December 2023
This page has been updated with additional analysis since first publication. Collapsing domestic inflationary pressures may mean BoE cuts rates earlier For the second month in a row, the falls in CPI inflation from 4.6% in October to 3.9% in November …
This page has been updated with additional analysis since first publication. Net trade will make a positive contribution to Q4 growth Even though the trade deficit narrowed in November, goods trade will probably be a drag on GDP growth this quarter. …
19th December 2023
