Global Economics Update Unemployment outlook points to faster rate hikes in US than UK Having declined in lock-step with one another over the past three and a half years, we think the unemployment rate is likely fall more rapidly in the US than in the UK between now and the end of 2017... 24th June 2015 · 1 min read
UK Economics Update How much further can unemployment fall? At 5.5%, the unemployment rate is getting close to past estimates of its ‘natural rate’, i.e. the rate at which further falls become incompatible with the inflation target. Indeed, the stronger labour... 24th June 2015 · 1 min read
Emerging Markets Economics Chart Pack EMs can weather Fed lift-off – problems could come later With a Fed rate hike sometime this year now widely anticipated, we suspect that any volatility in EM markets when the Fed finally raises rates should prove short-lived. The much bigger risk for... 23rd June 2015 · 1 min read
Emerging Europe Economics Update Hungary’s easing cycle nearing an end The press release accompanying today’s decision by the National Bank of Hungary to lower its policy interest rate by 15bp to 1.50% hinted that the easing cycle has a little further to run. We have... 23rd June 2015 · 1 min read
US Chart Pack Evidence mounts of a big second-quarter rebound There is now a wide mix of evidence showing that, after a very weak start to the year, the economy is booming again. May is turning out to be a particularly strong month: Existing home sales hit a six... 23rd June 2015 · 1 min read
Emerging Europe Economics Update Turkey keeps rates on hold, but hikes looking increasingly likely The Turkish central bank kept its key interest rates on hold today, but the accompanying statement suggested that the MPC remains too sanguine on the inflation outlook and the risks posed by the large... 23rd June 2015 · 1 min read
India Chart Pack Tentative signs of recovery Some of India's latest activity data are showing signs of improvement. For example, industrial production has accelerated over the past few months. Measures of expenditure and income tell a similar... 23rd June 2015 · 1 min read
India Economics Update Rupee likely to weaken only gradually The Indian rupee has rallied in the past few days, but we expect the currency to come under some pressure as the US Fed begins to tighten policy later this year. However, given the huge improvement in... 22nd June 2015 · 1 min read
US Economics Weekly Rates to rise more rapidly than Fed's projections imply Our working assumption is still that the Fed will end up raising the fed funds rate three times this year, taking it to a range of between 0.75% and 1.00% by year-end. But we wouldn't be completely... 19th June 2015 · 1 min read
Canada Data Response Consumer Prices (May) & Retail Sales (Apr.) While May's inflation figures are consistent with the Bank of Canada's forecast, the incoming data suggest that the real economy is still underperforming. If economic growth undershoots the Bank's... 19th June 2015 · 1 min read
Europe Economics Update Capital controls likely, but they can’t prevent Grexit Accelerating deposit outflows from Greek banks and the ECB’s reluctance to fill the gap with further emergency loans have increased the likelihood that capital controls are imminent. We discuss the... 19th June 2015 · 1 min read
UK Economics Weekly Grexit risks highlight need for MPC to nurture recovery The odds of Greece defaulting on its debt, and possibly exiting the euro-zone too, seem to be growing by the day. However, as we have stressed before, the UK’s direct economic and financial exposures... 19th June 2015 · 1 min read
DM Valuations Monitor Treasuries vulnerable to a reassessment of Fed policy The path of the federal funds rate that is implied by the yields of US Treasuries is much gentler than the one that we project. This leads us to forecast that the 10-year yield will end 2015 higher... 19th June 2015 · 1 min read
Global Markets Update New forecasts for US Treasuries We have revised up our end-2015 and end-2016 forecasts for the 10-year US Treasury yield by 50bp each, to 3.0% and 3.5%. Our previous forecasts for the yield, which is now around 2.3%, had been based... 19th June 2015 · 1 min read
Japan Economics Weekly Deflationary threat from cheaper oil far from over Only a small part of the recent plunge in energy prices has been passed on to consumers in Japan, in large part because firms rather than households are the biggest users of oil and they have not... 19th June 2015 · 1 min read
Global Economics Update Reviewing the lessons from past devaluations Devaluations have generally had a more positive impact on growth in economies which have a lot of spare capacity, where monetary conditions have been excessively tight and where a debt write-off is... 18th June 2015 · 1 min read
