ECB Watch At least one, and probably two, more 25bp hikes to go A 25bp interest rate rise next week, taking the deposit rate to 3.5%, looks like a done deal. We think that the ECB will also hint at a likely 25bp increase at the meeting in July and will emphasise... 8th June 2023 · 9 mins read
Emerging Markets Economics Update Lessons from the “early hikers”: inflation remains sticky A handful of EM central banks were quick out of the blocks to tighten monetary policy in 2021 and one of the key lessons of the past year or so is that underlying inflation pressure is still proving... 8th June 2023 · 5 mins read
Latin America Economic Outlook Rate cuts coming, but easing will be gradual The region’s strong start to the year is unlikely to be sustained and we expect growth across Latin America to come in weaker than most expect this year and next. Inflation will continue to fall, but... 8th June 2023 · 21 mins read
Latin America Rapid Response Mexico Consumer Prices (May) Headline inflation in Mexico dropped to a 21-month low of 5.8% y/y in May and will continue to decline over the coming months. That said, the strong labour market and rapid wage growth mean that... 8th June 2023 · 2 mins read
US Fed Watch Higher for longer There appears to be enough support on the FOMC for a pause at next week’s meeting, but the statement and new projections will make clear that this is not the end of the hiking cycle. We now expect... 7th June 2023 · 8 mins read
Event Drop-In: Unpacking the Fed, ECB and BoE June meetings 15th June 2023, 3:00PM BST What will major advanced economy central banks decide at their June meetings, and how will those decisions be messaged?
Latin America Rapid Response Brazil IPCA (May 2023) The fall in Brazilian inflation to 3.9% y/y in May, alongside the government’s new fiscal framework, has strengthened the arguments in favour of near-term monetary easing. But with inflation set to... 7th June 2023 · 2 mins read
Australia & New Zealand Economics Update Cash rate of 4.85% will push economy into recession In response to the hawkish shift by RBA Governor Lowe and the further acceleration in unit labour cost growth, we now expect the Bank to lift the cash rate to 4.85% by September. That aggressive... 7th June 2023 · 6 mins read
Europe Economics Focus The outlook for euro-zone services inflation We think that lower commodity prices and improved global supply conditions will bring euro-zone services inflation down from 5% in May to about 3.5% by the middle of next year. Further falls seem... 6th June 2023 · 11 mins read
UK Economics Update Why is the UK economy lagging behind? Many of the factors that explain the UK’s chronically weak GDP growth since the pandemic, such as the shrinking of the UK’s workforce and low export growth, won’t disappear any time soon. This... 6th June 2023 · 6 mins read
Australia & New Zealand Economics Update RBA to lift cash rate to 4.35%, cuts only in Q2 2024 The Reserve Bank of Australia lifted the cash rate by 25bp today and the hawkish tone of the statement suggests that the risks to our terminal rate forecast of 4.35% are tilted to the upside. Indeed... 6th June 2023 · 3 mins read
Europe Data Response Switzerland CPI (May.) Another sharp fall in headline and core inflation in May brought Switzerland within touching distance of the 0-2% range the SNB equates with price stability. But with recent comments from Chairman... 5th June 2023 · 2 mins read
Emerging Europe Data Response Turkey Consumer Prices (May) The fall in Turkish inflation to 39.6% y/y in May was largely driven by a sharp fall in energy prices, while core inflation increased. Bringing inflation down sustainably will require a major policy... 5th June 2023 · 2 mins read
Japan Economics Update Why are job vacancies so low in Japan? Job vacancies haven’t surged in Japan because the participation rate has risen since the start of the pandemic and there hasn’t been a “Great Resignation” amongst Japanese workers. With the labour... 5th June 2023 · 3 mins read
Latin America Economics Weekly Andes adjusting, tight job markets in Brazil & Mexico Data out this week suggest that Colombia’s economy has started to undergo an adjustment process, which is set to continue over the course of this year and next and underpins our forecast that growth... 2nd June 2023 · 8 mins read
Africa Economics Weekly Tinubu takes first steps, SA power projects progress In a positive early move, Nigeria’s President Bola Tinubu removed fuel subsidies in his first week in power. But it looks like the fiscal savings will be spent, leaving public debt on an upwards... 2nd June 2023 · 7 mins read
