Japan Chart Pack GDP will soon be back at pre-virus path The strong rise in output in Q4 2020 to just 1.2% below Q4 2019 levels bolsters our view that Japan’s economy will be back to the level it reached before the tax hike and close to its pre-virus path... 22nd February 2021 · 10 mins read
Asia Data Response Korea Trade (1st – 20th Feb.) Korean exports are performing very strongly so far this month, even accounting for the seasonal distortions from the Lunar New Year. This strength is likely to continue in the short term at least, as... 22nd February 2021 · 2 mins read
UK Data Response Public Finances (Jan.) January’s poor borrowing figures are likely to set the tone for the next few months as the third COVID-19 lockdown keeps many businesses closed. But the Chancellor should resist the urge to try to... 19th February 2021 · 3 mins read
Japan Economics Weekly Economy entered lockdown with strong momentum The pick-up in GDP in Q4 was stronger than most had anticipated. And while it still left output 2.9% below the peak reached ahead of 2019’s sales tax hike, other economic data released this week are... 19th February 2021 · 6 mins read
Global Economics Focus Challenges of big central bank balance sheets are manageable One legacy of the pandemic is a huge expansion in central banks’ balance sheets. Fears that this will automatically boost inflation are overdone. So, too, are worries that central banks will provoke a... 17th February 2021 · 25 mins read
Japan Data Response Jpn Trade (Jan. 2021) & Machinery Orders (Dec. 2020) While some of the rise in exports in January was likely due to the timing of the lunar new year, they should have continued to rise faster than imports across this quarter, with net trade likely to... 17th February 2021 · 3 mins read
India Economics Update External position looks secure The narrowing in India’s goods trade deficit in January is likely to soon reverse as the recovery in domestic demand and oil prices pushes up imports. But while this means that India’s recent current... 16th February 2021 · 2 mins read
Europe Economics Focus Pandemic has improved Italy’s debt dynamics The COVID-19 crisis has led to something of a paradox: Italy’s public debt ratio has risen, but the probability of default has fallen. That’s largely because BTP yields are likely to stay far lower... 11th February 2021 · 15 mins read
Europe Economics Update Should the ECB write off government debt? A debt write-off would wipe out much of the recent increase in public debt burdens and give the ECB more scope to expand its balance sheet in the future. But the fiscal benefits for euro-zone... 9th February 2021 · 6 mins read
UK Economics Focus COVID-19 legacy may be higher inflation and bigger public deficits Our view that the recovery from the COVID-19 pandemic will be quicker and more complete than most forecasters expect suggests that the economic legacy of the crisis may not be a permanently smaller... 8th February 2021 · 19 mins read
Australia & New Zealand Data Response Retail Sales (Dec./Q4) The decline in retail sales in December largely just reflects the impact of Black Friday sales. Given the reopening of the Victorian economy in Q4 consumption probably still rose strongly in the... 5th February 2021 · 2 mins read
Emerging Markets Economics Update FX intervention: echoes of “currency wars” The announcement of FX purchase programmes by several EM central banks has evoked comparisons with the “currency wars” that followed the Global Financial Crisis. One lesson from this period is that FX... 4th February 2021 · 5 mins read
Australia & New Zealand Data Response Australia International Trade (Dec. 2020) December’s rise in exports partly reflects higher commodity prices and with goods import volumes above pre-virus levels, we think that net trade won’t be a big contributor to GDP growth over coming... 4th February 2021 · 3 mins read
Australia & New Zealand Chart Pack Strong labour markets point to tighter policy Underlying inflation picked up strongly in New Zealand in Q4, with core inflation rising above the mid-point of the RBNZ’s 1-3% target band. That supports our view that the RBNZ will not cut rates... 1st February 2021 · 11 mins read
Asia Data Response Korea Trade (Jan.) Korean exports remain elevated at the start of this year, buoyed by shipments of electronics and autos. While some of this strength may fade later in the year, Korea’s external sector is still set for... 1st February 2021 · 2 mins read
China Chart Pack Surge in interbank rates a hawkish signal from PBOC Short-term funding costs for banks have risen sharply during the past couple of weeks. The 7-day depository repo rate (DR007), which has been flagged by the PBOC as a key benchmark and focus of... 29th January 2021 · 13 mins read
