US Economics Update Monetary Indicators Monitor (May) The monetary data reveal a sharp slowdown in M1 growth in May, to its weakest pace since early 2016. But this isn’t a serious concern. Our measure of M3 broad money continued to expand at a decent... 5th July 2018 · 1 min read
Emerging Markets Economics Update EM central banks move into tightening mode The recent spate of rate hikes in the emerging world probably marks the start of a sustained tightening cycle over the next 18 months – the first such cycle since 2011. This has more to do with... 5th July 2018 · 1 min read
UK Economics Chart Pack Signs of a rebound in Q2 The improvement in all three Markit/CIPS PMI surveys in June provided further signs that the economy has rebounded after the weak start to the year. Indeed, the all-sector PMI rose from 54.3 in May to... 5th July 2018 · 1 min read
India Economics Update Inflation Monitor (Jun.) Headline consumer price inflation is likely to have stayed well above target in June, due in large part to core inflation remaining elevated by the standards of the recent past. We think that this... 5th July 2018 · 1 min read
Bank of Canada Watch Bank set to raise rates despite growing risks Despite a host of negative developments since the Bank of Canada signalled in May that an interest rate rise was imminent, policymakers still seem eager to raise rates. While we now expect the Bank to... 4th July 2018 · 1 min read
Emerging Europe Economics Update Romanian central bank tightening policy via the backdoor Although the National Bank of Romania left its key policy rate unchanged today, the Bank is using open market operations to tighten monetary conditions. We think that policymakers will return to... 4th July 2018 · 1 min read
Middle East & North Africa Economics Update Egypt: should we worry about rising public FX debt? The sharp rise in the Egyptian government’s foreign currency debt over the past few years is not yet a major cause for concern – the risk of a destabilising fall in the pound appears to be low and the... 4th July 2018 · 1 min read
Global Markets Update Protectionism not the only headwind for EM currencies Emerging market (EM) currencies have mostly recovered a little ground against the dollar today. But the bigger picture is that they have generally been weakening for some time now, and in our view... 3rd July 2018 · 1 min read
Japan Economics Update Plunging unemployment not enough for the BoJ The recent plunge in Japan’s jobless rate suggests that wage growth will pick up faster than we had been anticipating. But we suspect that unemployment is now close to a floor so wage growth may never... 3rd July 2018 · 1 min read
Nordic & Swiss Economics Update Tighter monetary policy on the way in Sweden The Riksbank looks very likely to raise interest rates in December. We think that the Bank will then raise interest rates more quickly in 2019 and 2020 than investors expect, causing the krona to... 3rd July 2018 · 1 min read
Emerging Europe Data Response Turkey CPI (Jun.) The much stronger-than-expected rise in Turkish inflation in June, to 15.4% y/y, is likely to prompt the central bank to hike interest rates, perhaps by 100bp, at its meeting later this month. 3rd July 2018 · 1 min read
Australia & New Zealand Economics Update RBA’s global and housing concerns grow Growing concerns about the global trade dispute and the deepening domestic housing downturn mean that the Reserve Bank of Australia will probably leave interest rates at 1.5%, as it did at today’s... 3rd July 2018 · 1 min read
US Data Response ISM Manufacturing Index (Jun.) The increase in the ISM manufacturing index in June is a clear sign that, for now at least, the strength of the domestic economy is more than offsetting any increased uncertainty on trade policy... 2nd July 2018 · 1 min read
UK Data Response UK Markit/CIPS Manufacturing PMI (Jun.) June’s manufacturing PMI suggests that the sector has rebounded from a disappointing Q1. And the forward-looking balances provided some encouragement that the outlook for the sector has improved. 2nd July 2018 · 1 min read
Latin America Economics Weekly BCB plays down rate hikes, Mexico goes to the polls A victory for left-wing populist Andres Manuel Lopez Obrador (Amlo) in Mexico’s presidential vote this weekend looks priced in. The market reaction is likely to take its cue from the performance of... 29th June 2018 · 1 min read
UK Economics Weekly Rate hike on its way, but a dovish shift further ahead? There was nothing in the comments made by MPC members this week, nor in the latest data releases, to make us alter our view that the MPC will raise interest rates on August 2 nd. Admittedly, Jonathan... 29th June 2018 · 1 min read
