Latin America Economics Update Counting the cost of Brazil’s credit binge Non-performing loans in Brazil will climb higher as the past decade’s debt boom continues to unwind. However, we think the cost of cleaning up the banking system should be manageable, helped in part... 7th June 2016 · 1 min read
China Economics Update Goldilocks inflation rare bright spot for policymakers For China’s policymakers worrying about overcapacity, misplaced credit and pressures on the currency, the benign inflation outlook is a rare bright spot. We think consumer price inflation in China was... 6th June 2016 · 1 min read
Europe Economics Update Target2 imbalances highlight uneven effects of QE The recent increase in Target2 imbalances does not suggest that the euro-zone is set for another crisis on the scale of 2011/12. However, it does suggest that countries in the core might be... 3rd June 2016 · 1 min read
RBI Watch Further cuts to repo rate unlikely The Reserve Bank of India (RBI) has cut its repo rate by 150bp since the start of last year, but we believe that it will now keep rates on hold not just at next week’s policy meeting but for the rest... 2nd June 2016 · 1 min read
Asia Economics Focus Domestic strength can’t keep propping up Emerging Asia Economic growth in Emerging Asia has remained remarkably steady over the past year, even as export demand has stalled. However, policy support and lower oil prices will not continue to prop up... 2nd June 2016 · 1 min read
Europe Economics Focus Do negative ECB interest rates lead to higher saving? We disagree with recent suggestions that negative central bank policy rates encourage households to increase their savings, thereby reducing demand and weighing on inflation. In fact, the opposite... 1st June 2016 · 1 min read
UK Data Response Markit/CIPS Report on Manuf. (May) & Money and Credit (Apr.) The small improvement in the Markit/CIPS manufacturing survey in May did little to change the fundamental picture of a struggling industrial sector. But we remain optimistic that the sector’s... 1st June 2016 · 1 min read
US Economics Update Monetary Indicators Monitor (Apr.) The robust growth in bank loans and the monetary aggregates is another reason to believe that second-quarter GDP growth will rebound markedly. The growth rate of our M3 measure accelerated to 4.0% in... 31st May 2016 · 1 min read
Global Economics Update Monetary aggregates and credit continue to expand steadily For all the talk of a sharp slowdown in the global economy this year, broad money and credit have been growing at a steady pace. In advanced economies as a whole, credit has increased by around 5% y/y... 31st May 2016 · 1 min read
Europe Economics Update Euro-zone Monetary Indicators Monitor (Apr.) April’s euro-zone monetary data suggest that economic growth remains fairly slow. While the full effects of the ECB’s expanded stimulus measures will not yet have been felt, we doubt that they will... 31st May 2016 · 1 min read
India Economics Update Another look at the ailing banking sector The sharp rise in non-performing loans (NPLs) in Q1 does not indicate that there has been a sudden deterioration in asset quality in India, but instead suggests a greater recognition of stressed... 30th May 2016 · 1 min read
Asia Economics Weekly Usual suspects repeating the same old mistakes By keeping monetary policy too loose for too long, Pakistan, Vietnam and Sri Lanka now face either a surge in inflation or a rise in bad debts. What’s more, central banks remain complacent about the... 27th May 2016 · 1 min read
China Economics Update What is going on with the renminbi? In trade-weighted terms, the renminbi has regained some lost ground recently. But all the headlinesare about it falling to multi-year lows against the dollar. This underlines the difficult position... 25th May 2016 · 1 min read
Europe Economics Update Eurogroup’s Greek debt pledges fall a long way short The likely disbursement of the next tranche of Greece’s third bailout may have reduced the risk of a summer flare-up of the country’s debt crisis. But with the creditors’ pledges on debt relief... 25th May 2016 · 1 min read
Emerging Europe Economics Update Hungary ends easing cycle, Turkey’s has further to run Having cut its policy rate by 15bp to 0.90% earlier today, the National Bank of Hungary’s MPC used the accompanying press release to comment that interest rates would now be left unchanged. In... 24th May 2016 · 1 min read
UK Data Response Public Finances (Apr.) The disappointing tone of the latest public borrowing figures ended the recent short run of more upbeat economic data and indicated that the Chancellor has started the fiscal year on the back foot. 24th May 2016 · 1 min read
