Global Economics Update Credit growth still strong in the US, and rebounding in China Broad money growth has slowed somewhat in the four major advanced economies in recent months. However, bank lending to the private sector, which is a better guide to economic prospects, has generally... 17th February 2016 · 1 min read
UK Economics Update No need for the UK to join the negative rate club Talk of a UK interest rate cut has resurfaced in recent weeks, following the deterioration in global market sentiment and the moves by other central banks to cut rates. There is certainly scope for... 17th February 2016 · 1 min read
Europe Economics Update Reaction to Riksbank’s rate cut won’t deter ECB The adverse reaction to the decision by Sweden’s Riksbank to lower its policy rate further below zero illustrates investors’ concerns about the impact of negative interest rates on banks’... 17th February 2016 · 1 min read
Africa Data Response South Africa Consumer Prices (Jan.) South African inflation accelerated to 6.2% y/y in January in what we believe is the beginning of a food price-driven inflationary spike. Elevated inflation will add to dilemma facing the SARB. 17th February 2016 · 1 min read
Nordic & Swiss Economics Update Reaction to Riksbank’s rate cut won’t deter ECB The adverse reaction to the decision by Sweden’s Riksbank to lower its policy rate further below zero illustrates investors’ concerns about the impact of negative interest rates on banks’... 17th February 2016 · 1 min read
US Economics Update Fed unlikely to follow others in adopting negative rates Although a number of other central banks have now adopted negative policy rates, the chances of the Fed following suit are pretty small. Even if US economic conditions deteriorated, we suspect that... 16th February 2016 · 1 min read
Asia Economics Update Bank of Korea to maintain wait and see stance The Bank of Korea (BoK) left its policy rate unchanged at a record low of 1.50% today against a backdrop of heightened financial market volatility. While we can’t rule out a rate cut in the coming... 16th February 2016 · 1 min read
China Data Response Bank Lending & Broad Credit (Jan.) Today’s data point to a sharp acceleration in credit growth going into 2016. This is consistent with our view that growth is more likely to pick up than slow over the coming quarters. 16th February 2016 · 1 min read
Global Markets Update If 2004 was a conundrum, 2016 is even more of a puzzle Eleven years ago, Alan Greenspan described the behaviour of bond markets as a “conundrum” in testimony to the Senate. This was because long-term yields had trended lower, even as the US FOMC had... 15th February 2016 · 1 min read
China Economics Update PBOC still far from exhausting reserves The idea that the People’s Bank is running out of FX reserves doesn’t stand up to scrutiny. But the fact that many take it seriously is a sign of how far sentiment has swung against China. 15th February 2016 · 1 min read
Japan Economics Update Will a stronger yen derail the BoJ’s efforts to hit 2% inflation? The recent appreciation of the yen, even if sustained for longer, should not have a major impact on external demand nor consumer prices. However, it will lower corporate profits and could reduce firms... 15th February 2016 · 1 min read
Japan Data Response GDP (Q4 Preliminary) Japan’s economy shrank last quarter for the second time over the past year. While activity is set to pick up in coming months ahead of next year’s sales tax hike, the bigger picture is that spare... 15th February 2016 · 1 min read
US Economics Weekly Domestic price pressures continue to mount Futures markets now expect the Fed to leave rates unchanged for all of this year and anticipate a single 25 basis point hike next year. In contrast, we expect the Fed to begin raising rates again in... 12th February 2016 · 1 min read
Europe Economics Weekly Is the debt crisis back? There are ominous signs that the turmoil in financial markets is starting to have bigger effects on the euro-zone. While Q4’s GDP figures showed growth maintained its pace at the end of last year, the... 12th February 2016 · 1 min read
Global Economics Update Are negative rates doing more harm than good? In principle, cutting policy rates into negative territory should boost growth and inflation. But central banks have not communicated these benefits clearly, and the hesitant way in which they have... 12th February 2016 · 1 min read
UK Economics Update Deflation Watch: Oil price falls won’t prevent inflation pick-up January’s consumer prices figures should show a continuing movement away from deflation. While falling oil prices are being passed through to lower fuel prices at the pump, fuel price deflation will... 12th February 2016 · 1 min read
