In one line: Nasty, especially in the core, but it’ll get better soon.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The Fed’s hawkish dotplot is likely to have a short shelf life; the data will force faster easing than they expect.
- The May core CPI slowdown was deep-rooted; we expect just 0.20% average gains through year-end.
- CPI data signal a 0.16% rise in the core PCE deflator, but we will finalize our estimate after today’s PPI.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil — Extending losses amid uncertainty
- Mexico — Increased political risk rattling markets
- Colombia — Struggling amid fiscal uncertainty
Andrés Abadía (Chief LatAm Economist)Latin America
- The Bank of Thailand left its policy rate at 2.50%; dissenting votes for a 25bp cut fell to one, from two.
- Growth is the area that is most likely to disappoint, relative to the MPC’s rose-tinted expectations…
- …Its reasons for optimism are short-lived in nature; we still consider two 25bp cuts this year possible.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- China’s CPI inflation was unchanged, as slowing core inflation was offset by firming food prices.
- Producer deflation eased sharply on faster upstream reflation, which bodes well for industrial profitability.
- More stimulus will be needed to kick-start domestic demand; we reiterate our call for an MLF cut in June.
Kelvin Lam (Senior China+ Economist)China+
- The EU is about to hit Chinese EV producers with tariffs, but this is not a full-blown trade war.
- Services inflation is rising, judging by German May CPI, but leading indicators point to weakness soon.
- German bond yields should fall between now and end-2024, but they will rebound next year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We think unchanged GDP month-to-month in April signals a strong underlying trend.
- GDP held steady despite erratic and rain-disrupted sectors slicing 0.4pp off month-to-month growth.
- We upgrade our growth forecast to 0.4% quarter-to-quarter in Q2, above the MPC’s 0.2% call.
Rob Wood (Chief UK Economist)UK
- In one line: Manufacturing remains under strain and the near-term outlook is difficult.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Hit by increased food prices, due to the floods in the south.
Andrés Abadía (Chief LatAm Economist)Global
- In one line: Hit by increased food prices, due to the floods in the south.
Andrés Abadía (Chief LatAm Economist)Latin America
A partial recovery, but still a downbeat picture.
Oliver Allen (Senior US Economist)US
- In one line: Not as bad as feared, labour market is easing and wage growth will follow.
Rob Wood (Chief UK Economist)UK
Indonesia’s Ramadan demand this year ends with a whimper
Malaysian retail sales growth slows in April, despite friendly base effects
We’ll swallow the Philippines' big April deficit, as imports showed signs of life
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- US - September easing remains a decent base case, despite May payrolls
- EUROZONE - Domestic political risk returns to Eurozone financial markets
- UK - Labour market data help the chances of an August rate cut
- CHINA+ - China’s exports turn the corner; on track for modest growth this year
- EM ASIA - An August RBI rate cut seems both so close and yet so far
- LATAM - Brazil’s economic momentum hits a speed bump after promising Q1
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The high core PCE prints in Q1 will force the Fed to revise up its Q4 forecast, and cut one easing.
- A jump in used car and vehicle insurance prices probably drove a 0.3% increase in the May core CPI...
- ...But core services CPI inflation likely slowed further, indicating monetary policy is tight enough.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil faces an uphill inflation battle amid multiple headwinds, despite relatively subdued core pressures.
- The floods, BRL sell-off and fiscal woes have intensified the COPOM’s inflation challenges.
- Mexico’s industry is struggling due to a manufacturing slump, while construction remains resilient.
Andrés Abadía (Chief LatAm Economist)Latin America
- We see the recent diesel-subsidy rationalisation in Malaysia as a net negative for retail sales growth...
- ...The impact on inflation is likely to be stronger, pushing the headline rate above 3% from June.
- Retail sales growth in Indonesia plunged into the red in April; this year’s Ramadan splurge was limp.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- Le Pen’s RN is on track to become the biggest party in the National Assembly, but without a majority.
- What is the ECB watching over the summer to determine its move in September? We list the key data.
- Inflation data will support a rate cut in September, but what about wages, margins and productivity?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The labour market appears to be easing gradually, with employment likely flat and unemployment rising.
- Slowing underlying pay momentum is being masked by the temporary boost from April’s NLW hike.
- A gradually easing labour market, and falling inflation, will allow the MPC to cut Bank Rate in August.
Rob Wood (Chief UK Economist)UK
