Asia Economics Update Can Sri Lanka avoid default? Falling foreign exchange reserves, a declining currency and a high level of foreign currency debt mean the risk of a sovereign default in Sri Lanka is growing. While the country should be able to... 16th September 2021 · 5 mins read
US Fed Watch Fed still preparing ground for QE taper We think the sharp slowdown in employment growth in August and broader signs of weakness in the incoming activity data mean the Fed will hold off formally announcing a QE taper at its September... 15th September 2021 · 8 mins read
China Economics Update Property crunch will be followed by lasting decline The root of Evergrande’s troubles – and those of other highly-leveraged developers – is that residential property demand in China is entering an era of sustained decline. Relaxation of regulatory... 15th September 2021 · 5 mins read
Nordic & Swiss Central Bank Watch Stage set for hawkish tweaks to Riksbank’s exit strategy The momentum in the Swedish economy, and jump in inflation in August, gives the Riksbank plenty to ponder at next week’s policy meeting. While repo rate hikes are not on policymakers’ agenda, the... 14th September 2021 · 5 mins read
India Economics Update Three points on banking sector liquidity Measures by the Reserve Bank to drain banking sector liquidity have caught attention over the past few days. But with liquidity still abundant, interbank rates at the very bottom of the rate corridor... 14th September 2021 · 2 mins read
Emerging Europe Economics Update CBR slows down tightening, cycle nearing an end Russia’s central bank (CBR) slowed down its monetary tightening cycle with a 25bp interest rate hike, to 6.75% at today’s meeting and the accompanying communications suggest that there may be just one... 10th September 2021 · 3 mins read
China Data Response China Bank Lending & Broad Credit (Aug.) Credit growth dropped in August to its slowest pace since December 2018. With the PBOC now shifting gears to a slightly more supportive stance, credit growth may level off in the coming quarters. But... 10th September 2021 · 2 mins read
China Economics Weekly Evergrande credit risks, border controls China’s banking system has large enough capital buffers to absorb an Evergrande collapse provided that the PBOC steps in to backstop the interbank market. Meanwhile, the one-sided reopening of the HK... 10th September 2021 · 5 mins read
UK Economics Shortages stifling activity and boosting inflation The broadening of the recent product and labour shortages appears to be holding back activity and adding to the upward pressure on inflation. The risk is twofold. First, these shortages may prevent... 9th September 2021 · 8 mins read
Europe Economics Update ECB slows purchases but keeps policy ultra-loose The ECB today confirmed that it will slow its asset purchases slightly but this is a long way from a “full taper”. We think inflation will drop even further than the ECB expects over the medium term... 9th September 2021 · 3 mins read
Middle East & North Africa Economics Weekly Algosaibi deal, Egypt and COVID, UAE Projects of the 50 One of Saudi Arabia’s largest conglomerates, the Algosaibi group, is on the cusp of securing a debt restructuring agreement with its creditors, a sign that recent reforms are helping to speed up... 9th September 2021 · 7 mins read
Emerging Markets Financial Risk Monitor Evergrande & frontier sovereign debt risks build The combination of large foreign-currency debt burdens, low FX reserves and weakening currencies means that the risk of sovereign defaults in Sri Lanka and Tunisia is growing. Elsewhere, China’s... 9th September 2021 · 6 mins read
Africa Economics Update Ethiopia: debt risks loom larger with escalating conflict Ethiopia’s escalating internal conflict has reignited concerns about the country’s public debt position. While debt dynamics may not look that worrisome on the surface, the political situation... 8th September 2021 · 5 mins read
Capital Daily Despite RBA tapering, we expect a weaker Australian dollar Despite today’s decision by the Reserve Bank of Australia (RBA) to taper its asset purchases, we think the Australian dollar will weaken against the US dollar over the remainder of the year. 7th September 2021 · 7 mins read
Europe Chart Pack Rise in inflation is not over Headline inflation came in higher than our above-consensus forecast in August and, at 3.0%, reached its highest level for a decade. It is likely to rise a bit further in the coming months: producer... 6th September 2021 · 11 mins read
Canada Economics Weekly GDP shrinks, opinion polls shift The unexpected contraction in second-quarter GDP comes at a bad time for Prime Minister Justin Trudeau, with support for the ruling Liberal Party falling further this week and projections now pointing... 3rd September 2021 · 5 mins read
