Europe Economics Update Euro-zone Fiscal Monitor (May) There was some good news last month for public finances in the euro-zone’s periphery as Moody’s upgraded Ireland’s sovereign debt and the EC decided to be lenient with Portugal and Spain after both... 2nd June 2016 · 1 min read
Japan Data Response Consumer Confidence (May) Households’ expectations for the next few months were little changed in May but the delay of the sales tax hike should lift spirits in coming months. 2nd June 2016 · 1 min read
Australia & New Zealand Data Response Australia Retail Sales & International Trade (Apr.) April’s international trade and retail sales data suggest that the spectacular rise in GDP in the first quarter is unlikely to be sustained in the second. Despite the narrowing in the trade deficit... 2nd June 2016 · 1 min read
RBA Watch Why interest rates may have to fall to 1% The Reserve Bank of Australia is unlikely to follow May’s 0.25% interest rate cut to 1.75% with another reduction at the meeting on Tuesday 7th June. But we still believe that rates will be reduced to... 2nd 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
RBNZ Watch New Zealand - RBNZ is not done yet The Reserve Bank of New Zealand will almost certainly cut interest rates from 2.25% to 2.00% at its next policy meeting on Thursday 9th June. Although we don’t expect the RBNZ to signal this month... 2nd June 2016 · 1 min read
Commodities Chart Pack Supply concerns defy the dollar Following the release of the Fed’s May FOMC minutes, upward revisions to US interest rate expectations and a subsequent appreciation of the dollar brought the recent rally in many commodities prices... 1st June 2016 · 1 min read
Emerging Markets Economics Update EM PMIs lacklustre but stable While the manufacturing PMIs rose in most EMs last month, the general picture is still of growth remaining rather tepid by past standards. Central Europe remains the bright spot with the PMIs there... 1st June 2016 · 1 min read
Latin America Data Response Brazil & Mexico Manufacturing PMIs (May) The drop in Brazil’s manufacturing PMI to a six-year low in May is something of a reality check after better-than-expected first quarter GDP data this morning, but in truth the PMI has been a pretty... 1st June 2016 · 1 min read
Global Economics Update Global Manufacturing PMI (May) The final purchasing managers surveys for May show that manufacturers are struggling almost everywhere. The global manufacturing PMI, published by Markit earlier today, edged down to 50.0, extending a... 1st June 2016 · 1 min read
US Data Response ISM Manufacturing Index (May) The increase in the ISM manufacturing index to 51.3 in May, from 50.8, still leaves it at a level that has historically has been consistent with GDP growth of only 2%. But the services side of the... 1st 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
US Housing Market Data Response Mortgage Applications (May) The slight fall in mortgage applications for home purchase in May looks in part to be down to some buyers bringing forward their applications to take advantage of mortgage interest rates that were... 1st June 2016 · 1 min read
Global Markets Update A fresh look at currency misalignment The Peterson Institute for International Economics (PIIE) recently published its latest semi-annual estimates of fundamental equilibrium exchange rates (FEERs). These suggest that the Colombian peso... 1st June 2016 · 1 min read
