Africa Economics Update South Africa: Revising down our rand forecasts The rand’s recent falls have prompted us to downgrade our end of year forecasts. We now think that the currency will slip from 14.4/$ to 15/$ by the end of 2018 and to 15.5/$ by the end of 2019. 22nd August 2018 · 1 min read
Global Economics Update Emerging markets not a major risk for the Fed or ECB Even if emerging market assets remain under pressure this year, we don’t expect the crises in Argentina and Turkey to be replicated in other emerging economies. Meanwhile, domestic conditions in the... 22nd August 2018 · 1 min read
Africa Data Response South Africa CPI (Jul.) July’s stronger-than-expected inflation was almost entirely due to sharp rise in fuel costs. Core inflation remained stable, and we think that the SARB will keep policy on hold this year. 22nd August 2018 · 1 min read
US Economics Update Monetary Indicators Monitor (Jul.) The slowdown in narrow money growth reflects the Fed’s efforts to shrink its balance sheet and the rise in interest rates, with the latter increasing the opportunity cost of holding funds in non... 21st August 2018 · 1 min read
US Economics Update EM turmoil won’t derail the Fed’s plans There is no reason to believe that the latest bout of turbulence in emerging markets will prompt the Fed to reconsider future interest rate hikes, since the economic and financial market spillovers... 21st August 2018 · 1 min read
Emerging Markets Economics Chart Pack EM tightening cycle continues EM central banks continued to tighten monetary policy in August. Policymakers in Argentina and Indonesia raised interest rates to support their currencies amid fears of contagion from the crisis in... 21st August 2018 · 1 min read
Global Markets Update ECB purchases of Italian bonds might rise in October We suspect that, due to technical reasons, the ECB will increase its purchases of Italian government bonds in October. This might help to prevent yields from shooting up if Italy’s Government submits... 21st August 2018 · 1 min read
India Chart Pack Equities continue to scale new highs Indian equities have continued to surge in August, with the benchmark Sensex stock index rising to a fresh record high of over 38,000 today. The recent strong performance in the Sensex compared to... 20th August 2018 · 1 min read
EM Markets Chart Pack Turkey’s crisis just one of many threats to EM assets The main factor weighing on EM assets recently has been worries about contagion from the crisis in Turkey. But even if these fears subside, there are plenty of other reasons to be pessimistic about... 17th August 2018 · 1 min read
US Economics Weekly Third quarter shaping up better than expected We learned this week that much of the strength of consumption growth in the second quarter was sustained in July, suggesting that third quarter GDP growth will be stronger than we had anticipated. The... 17th August 2018 · 1 min read
Latin America Economics Weekly Brazil’s election campaign, Banxico’s prudence Campaigning for Brazil’s elections in October started this week, and market-friendly candidate Geraldo Alckmin seems to have positioned himself well to mount a challenge to the leading populists... 17th August 2018 · 1 min read
Canada Data Response Consumer Price Index (Jul.) The jump in headline inflation to 3.0% in July, from June’s 2.5%, was partly due to rising energy prices but also appeared to reflect a pick-up in general inflationary pressures. We think that the... 17th August 2018 · 1 min read
UK Economics Weekly Autumn Brexit deal less likely We have reassessed our view on the likely timing of a Brexit deal. Our working assumption is now that a deal is reached at the eleventh hour in Q1 2019, rather than in the autumn. However, we doubt... 17th August 2018 · 1 min read
Asia Economics Weekly Indonesia acts to support the rupiah, Korean job woes The authorities in Indonesia have redoubled their efforts to support the rupiah over the past week amid further downward pressure on EM currencies caused by the crisis in Turkey. Meanwhile, labour... 17th August 2018 · 1 min read
Middle East & North Africa Economics Update Egypt’s easing cycle to resume next month The Egyptian central left interest rates on hold last night, but declining inflation means that the easing cycle is likely to resume at September’s MPC meeting. And we still think that interest rates... 17th August 2018 · 1 min read
Emerging Europe Economics Weekly Lira rebounds, Putin policy wobbles The Turkish lira has recovered lost ground since Monday, although policymakers have only done the bare minimum in response to the crisis. There have been some positive noises on fiscal policy, yet... 17th August 2018 · 1 min read
