Pantheon Macroeconomics - Pantheon Macroeconomics aims to be the premier provider of unbiased, independent macroeconomic intelligence to financial market professionals around the world.

Search Results: 5504
Pantheon Macroeconomics aims to be the premier provider of unbiased, independent macroeconomic intelligence to financial market professionals around the world.

Sorry, but our website is best viewed on a device with a screen width greater than 320px. You can contact us at: info@pantheonmacro.com.

Website Search

Search Results

5504 matches for " c":

27 Aug 2019 Mexico's Economy Underwhelmed in the First Half Will it Improve (Publication Centre)

Mexican GDP was unchanged quarter-on-quarter in Q2, according to the final report, a tenth worse than the preliminary reading.

27 Aug 2019 India Growth Worries are Overblown... Expect a Q2 Rebound (Publication Centre)

India's GDP report for the second quarter, due on Friday, is likely to show a decent rebound in growth from the first quarter.

27 April 2018 Mexico and Argentina had Good First Quarters, but Risks Remain (Publication Centre)

This week's Mexican retail sales report for February offered more support to our view that domestic conditions improved at the end of Q1.

27 Aug 2019 Trump is Making it Impossible for China to Negotiate (Publication Centre)

It's pretty clear now that the President is not a reliable guide to what's actually happening in the China trade war, or what will happen in the future.

27 August. 2015 Dudley, Channelling Yellen, Signals September is (Nearly) Out (Publication Centre)

It's hard to imagine that Fed Vice-Chair Dudley would choose to say yesterday that he finds the case for a September rate hike "less compelling than it was a few weeks ago" without having had a chat beforehand with Chair Yellen. Mr. Dudley pointed out that the case "could become more compelling by the time of the meeting", depending on the data and the markets, but he also argued that developments in markets and overseas economies can "impinge" on the U.S., and that there "...still appears to be excess slack in the labor market". These ideas, especially on the labor market but also on the impact of events overseas, are not shared by the hawks, but we can't imagine Mr. Dudley disagreeing in public with Dr. Yellen. We have to assume these are her views too.

27 December 2018 The President is the Problem, not the Federal Reserve or Jay Powell (Publication Centre)

The biggest single problem for the stock market is the president.

27 August. 2015 Mr. Praet's Dovish Comments Don't Signal Easing Next Week (Publication Centre)

ECB board member Peter Praet fired the first shot across the markets' bow yesterday following this week's turmoil. Speaking to journalists in Germany, Mr. Praet noted "increased downside risk of achieving a sustainable inflation path towards 2%," and assured investors the current QE program is fully flexible, and can be readily adjusted in response to an adverse development in inflation expectations. We don't think, though, this is a pre -cursor for additional easing at next week's ECB meeting.

27 April 2018 Did the ECB Just Tell Markets to Look Extra-Closely at the Q2 Data? (Publication Centre)

Yesterday's ECB meeting was comfortably uneventful for markets.

27 April 2018 Korean GDP Rebounds Unspectacularly after Q4 Distortions (Publication Centre)

Korean real GDP growth rebounded to 1.1% quarter-on-quarter in Q1, after GDP fell 0.2% in Q4. Growth in Q4 was hit by distortions, thanks to a long holiday in October, which normally falls in September.

27 Apr. 2016 Services Driving Mexico's Growth, Despite Many Obstacles (Publication Centre)

Mexico's National Institute of Statistics--INEGI-- will release preliminary GDP data for Q1 on Friday. We are expecting good news, despite the tough external and domestic environment. According to the economic activity index--a monthly proxy for GDP-- growth gained further momentum in Q1, based on data up to February.

27 Apr. 2016 FOMC Statement Today Likely to Offer Little to Rate Hawks (Publication Centre)

A rate hike today would be a surprise of monumental proportions, and the Yellen Fed is not in that business. What matters to markets, then, is the language the Fed uses to describe the soft-looking recent domestic economic data, the upturn in inflation, and, critically, policymakers' views of the extent of global risks.

27 Apr. 2016 Breaking News: Bund Yields are Going Up, and Could Rise Further (Publication Centre)

On the face of it, the 25 basis points increase in 10-year German yields this month is modest. But the sell-off has reminded levered investors that trading benchmark securities in the Eurozone is not a one-way street. When yields are close to zero, investors also use leverage to enhance returns, and this increases volatility when the market turns.

27 April 2017 How Much Further Can Mortgage Rates Fall? (Publication Centre)

Growth in households' disposable incomes has been supported in recent years by falling debt servicing costs. The proportion of households' incomes absorbed by interest payments fell to a record low of 4.5% in Q4 last year, down from 4.7% a year ago and a peak of 10% in 2008.

27 April 2017 The Path to Implementing Huge Tax Cuts Looks Insurmountably Steep (Publication Centre)

The tax plan released by the administration yesterday was so thoroughly leaked that it contained no real surprises. The border adjustment tax is dead -- not that we thought it would have passed the Senate in any event -- and the centerpiece is a proposed cut in the corporate income tax rate to 15% from 35%.

27 April 2018 Households' Borrowing is Slowing, Highlighting Their Renewed Caution (Publication Centre)

The squeeze on real wages has just ended and GfK's consumer confidence index hit a 11-month high in March.

27 April 2017 Today's ECB Meeting Will be a Snoozer for Markets (Publication Centre)

It's always dangerous when risk assets rally strongly into an ECB meeting, but we doubt that investors have much to fear from today's session in Frankfurt. We think the central bank will leave its main refinancing and deposit rates at 0.00% and -0.4% respectively.

27 Feb. 2015 External Positions Highlight The Brazil-Mexico Performance Gap (Publication Centre)

Federal Reserve Chair Janet Yellen's testimony this week reinforced our view that the first U.S. rate hike will be in June. The transition to higher U.S. rates will require an unpleasant adjustment in asset prices in some LatAm countries.

27 Feb. 2015 M1 growth is sending a very bullish on the Eurozone economy (Publication Centre)

Economic data in the Eurozone are sending an increasingly upbeat message on the economy. Yesterday saw a barrage of numbers, but the most startling of them was the continued acceleration in the money supply.

27 February 2019 More Patience from Powell, Despite the Recovery in the Stock Market (Publication Centre)

Fed Chair Powell's semi-annual Monetary Policy Testimony yesterday broke no new ground, largely repeating the message of the January 30 press conference.

27 February 2019 Consumer Sentiment Signal better EZ Consumption Data in H1 (Publication Centre)

Yesterday's consumer sentiment data in the two major euro area economies were mixed, but they still support our view that a rebound in EZ consumption growth is underway.

27 February 2019 Brazil's External Accounts Likely will Remain a Bright Spot this Year (Publication Centre)

Brazil's external accounts are well under control, despite the wider deficit in January, mainly driven by seasonal deterioration on the trade account.

27 February 2019 What to Expect from China's Annual "Two Sessions" Next Week (Publication Centre)

China's annual "two sessions" conference is due to start on Sunday, with the economic targets for this year set to be made official over the course of the meetings.

27 Jan. 2015 Don't Panic over Greece, a solution between the Troika and Syriza will be found (Publication Centre)

The landslide victory by anti-austerity party Syriza in Greece this weekend will increase uncertainty in coming months. The coalition between Syriza and the Independent Greeks will prove a tough negotiating partner for the EU as both parties are strongly in favor of pushing the Troika to significant concessions on any future bailout terms this year.

27 Jan. 2016 FOMC Likely to Warn Again of External Risks, and do... Nothing (Publication Centre)

Today's FOMC announcement will be something of a non-event. Rates were never likely to rise immediately after December's hike, and the weakness of global equity markets means the chance of a further tightening today is zero.

27 Jan. 2015 Falling Oil Sector Capex a Wild Card for Durable Goods Orders (Publication Centre)

We would like to be able to argue with confidence that today's December durable goods orders report will show core capital goods orders rebounding after three straight declines, totalling 3.4%.

27 February 2018 The Q4 Surge in the Trade Deficit is set for a Substantial Reversal (Publication Centre)

The closer we look at the startling surge in imports in the fourth quarter, the more convinced we become that it was due in large part to a burst of inventory replacement following the late summer hurricanes.

27 February 2018 Indefinite Xi-ism will mean Spikes in Volatility, as big Decisions Roll Out (Publication Centre)

The Chinese Communist Party looks set to repeal Presidential term limits, meaning that Xi Jinping likely intends to stay on beyond 2023.

27 February 2017 How Quickly Will Core Capital Goods Orders Rebound? (Publication Centre)

Orders for non-defense capital goods, excluding aircraft, have risen in six of the past seven months. In the fourth quarter, orders rose at a 4.7% annualized rate, in contrast to the 5.3% year-over-year plunge in the first half of the year.

27 Feb. 2015 Temporary Factors Distorting Inflation and Orders Data (Publication Centre)

The solid 0.2% increase in January's core CPI, coupled with the small upward revision to December, ought to offer a degree of comfort to anyone worried about European-style deflation pressures in the U.S.

27 February 2017 Will the Surge in Equity Prices Support Consumption? (Publication Centre)

Last week's GDP figures illustrated that the economy is extremely vulnerable to a slowdown in households' spending. Our chart of the week, on page three, shows that consumers were alone in making a significant positive contribution to GDP growth last year.

27 February 2017 A Big Difference Between Today's French Yield Panic and 2012 (Publication Centre)

This remains a tumultuous time for EZ bond investors. The twists and turns of the French presidential election campaign continue to shove markets around. Marine Le Pen's steady rise in thepolls has pushed French yields higher this year.

27 February 2018 Brazil's Low Inflation in Mid-February Ushers in Bets for a Final Rate Cut (Publication Centre)

Brazil's inflation rate remained well under control over the first half of February. We see no threats in the near term, indicating that more stimulus will be forthcoming from the BCB.

27 February 2017 Banxico Faces Real Pressures, but bad News is Priced-In to the MXN (Publication Centre)

Mexico's policymakers are battling two opposing forces. First, inflation pressures are rising, on the back of the one-time increase in petrol prices and the lagged effect of the MXN's sell-off in Q4. These factors are pushing short-term inflation expectations higher, even though the MXN has remained relatively stable since President Trump took office and has risen by about 6% against the USD year-to-date.

27 Apr. 2015 Could higher inflation upset bunds in the second quarter? (Publication Centre)

Monitoring bond markets in the Eurozone has been like watching paint dry this year. Yields across fixed income markets in the euro area were already low going into QE, but they have been absolutely crushed as asset purchases began in February.

27 Apr. 2015 Accelerating high-wage job growth to lift hourly earnings? (Publication Centre)

We have argued for some time that the hourly earnings data, which take no account of changes in the mix of employment by industry or occupation, have been depressed over the past year by the relatively rapid growth of low-paid jobs.

26 October 2017 Q3 GDP Will Spur a Rate Hike Next Week, but a Growth Relapse Looms (Publication Centre)

The pick-up in GDP growth in Q3 means that we now expect a majority of MPC members to vote to raise interest rates next week.

26 October 2017 Politburo Appointments Ensure Policy Continuity, Nothing More (Publication Centre)

The Chinese Communist Party revealed the new members of its top brass yesterday, with the line-up ensuring policy continuity.

26 Oct. 2015 What Has to Happen for the Fed to Hike in December? (Publication Centre)

A rate hike from the Fed this week would be a gigantic surprise, and Yellen Fed has not, so far, been in the surprise business. It would be more accurate to describe the Fed's modus operandi as one of extreme caution, and raising rates when the fed funds future puts the odds of action at close to zero just does not fit the bill.

26 October 2017 The Capex Rebound Promised by the NFIB is Reaching the Hard Data (Publication Centre)

After three straight 1.3% month-to-month increases in core capital goods orders, we are becoming increasingly confident that the upturn in business investment signalled by the NFIB survey is now materializing.

26 October 2017 The ECB Will Signal its Intention to Extend and Reduce QE Today (Publication Centre)

The ECB will keep its main refinancing and deposit rates unchanged at 0.00% and -0.4% today, but we think the central bank will satisfy markets' expectations for more clarity on the QE program next year.

26 October 2018 It Would Take a Lot to Turn the ECB Away from Ending QE in Q4 (Publication Centre)

The ECB kept its cool yesterday, at the headline level, amid crashing stock markets, volatile BTPs and souring economic data.

26 October 2018 Inventories and Consumption Drove up Q3 Growth Q4 will be Slower (Publication Centre)

We have tweaked our third quarter GDP forecast in the wake of the September advance international trade and inventory data; we now expect today's first estimate to show that the economy expanded at a 4.0% annualized rate.

26 Oct. 2015 PMIs Point to Firm GDP Growth Ahead in the Eurozone (Publication Centre)

Friday's PMIs gave the first hint of Q4 growth in the Eurozone, and continue to tell a story of a stable cyclical recovery. The composite PMI in the Eurozone rose 54.0 in October from 53.6 in September, mainly due to a rise in the services index, to 54.2 from 53.7. Assuming the PMI remains unchanged over the remainder of the quarter, the survey indicates solid GDP growth of 0.4%-to-0.5% quarter-on-quarter in Q4.

26 Oct. 2015 MPC Can't Wait too Long After the U.S. Fed Raises Rates (Publication Centre)

Markets currently judge that U.K. interest rates will rise about six months after the first Fed hike. But the Bank of England seldom lagged this far behind in the past. Admittedly, the slowdown in the domestic economy that we expect will require the Monetary Policy Committee to be cautious. But wage and exchange rate pressures are likely to mean six months is the maximum period the MPC can wait before following the Fed's lead.

26 Nov. 2015 The Chancellor Leaves the Fiscal Shackles Firmly in Place (Publication Centre)

The Chancellor used the Autumn Statement to shift the composition of the fiscal consolidation slightly away from spending cuts and towards tax hikes. But in overall macroeconomic terms, he changed little. The fiscal stance is still set to be extremely tight in 2016 and 2017, ensuring that the economic recovery will lose more momentum.

26 May. Second Estimate of Q1 GDP to Highlight Brexit Risk Damage (Publication Centre)

This morning's second estimate of Q1 GDP likely will restate the preliminary estimate of a 0.4% quarter-on-quarter rise, confirming that the economic recovery has lost momentum since last year. Meanwhile, the new expenditure breakdown is set to show that growth remained extremely dependent on households and will bring more evidence that businesses held back from investing, ostensibly due to Brexit concerns.

26 November 2018 Mexico's Economy Had a Good 2018 Will it Pivot to an Ugly 2019 (Publication Centre)

Mexico's economic picture remains positive, although the outlook for 2019 is growing cloudy as the economy likely will lose momentum if AMLO's populist approach continues next year.

26 November 2018 Tariffs are Hurting the U.S. and China Escalation Would be Excruciating (Publication Centre)

It is becomingly increasingly clear that the trade war with China is hurting manufacturers in both countries.

26 Oct. 2015 Mexico's Private Consumption is the Key Driver of the Upswing (Publication Centre)

The tumultuous political and economic crises in Brazil continue to feed off each other, grabbing most of the LatAm headlines. Sentiment will remain depressed, and volatility and uncertainty will persist, hampering any real signs of stabilization in the near-term. The Pacific Alliance countries, by contrast, managed to grow at relatively solid rates during the first half of this year, after absorbing the hit from falling commodity prices.

26 November 2018 The Coming Year won't Provide Much Respite for Asian Economies (Publication Centre)

The past year has been difficult for Asian economies, with trade wars, natural disasters, and misguided policies, to name a few, putting a dampener on growth.

26 October 2018 Plunging Korean Investment Activity Cancels-out Gains Elsewhere in Q3 (Publication Centre)

Korea's GDP growth in Q3 was a miss. Quarter- on-quarter growth was unchanged at 0.6%, below the consensus for a 0.8% rise.

26 October 2018 The MPC won't Seek to Make Waves Next Week (Publication Centre)

Expectations that the MPC will raise Bank Rate again soon have taken a big knock over the last two weeks.

26 September 2018 Brazil's External Accounts Will Remain Resilient the BRL Will Help (Publication Centre)

Brazilian financial assets lately appear to be responding only to developments in the presidential election race and external jitters.

26 September 2018 Will Higher Energy Prices Prevent Inflation from Falling Further? (Publication Centre)

The rise in oil prices to a four-year high of $82 will slow the pace at which inflation falls back over the next year only modestly.

26 September 2017 Brazil's Labor Market is on the Mend, But Challenges Persist (Publication Centre)

The Brazilian labour market is slowly healing following the severe recession of 2015-16. The latest employment data, released last week, showed that the economy added 35K net jobs in August, compared to a 34K loss in August 2016.

26 September 2018 Is China Really Deleveraging, and can it Last? (Publication Centre)

After years of rapid increase, China appears finally to have stabilised its ratio of private non-financial to GDP ratio.

26 September 2018 Is the French Economy Still on Track For a Rebound in H2 (Publication Centre)

Yesterday's barrage of French business sentiment data was mixed.

26 September. 2016 When Will Manufacturing Shake off the Summertime Blues (Publication Centre)

We're still no nearer to a definitive answer to the question of what went wrong in the manufacturing sector over the summer, when we expected to see things improving on the back of the rebound in activity in the mining sector, rising export orders and an end to the domestic inventory correction. Instead, the August surveys dropped, and September reports so far are, if anything, a bit worse.

26 September. 2016 Mexico's Consumers Spent Freely in July, But Momentum Is Slowing (Publication Centre)

Mexican consumers started the third quarter strongly, supporting our relatively upbeat view for the economy in the near term. Private consumption represents about 70% of Mexico's GDP, one of the consumption shares in the EM world, so the strength of spending is hugely important.

26 September 2017 Japanese Manufacturing Regaining Momentum on External Demand (Publication Centre)

Mr. Abe yesterday called a snap general election, to be held on October 22nd; more on this in tomorrow's Monitor. For now, note that the election comes at a reasonably good stage of the economic cycle, hot on the heels of very rapid GDP growth in Q2, while the PMIs indicate that the economy remained healthy in Q3.

26 September 2017 Is the Most Important Data--Wage Growth--Forecastable? (Publication Centre)

Markets will be hyper-sensitive to U.K. data releases following the MPC's warning that it is on the verge of raising interest rates.

26 October. 2016 Consumer Energy Price Rises Are in the Pipeline (Publication Centre)

Sharp falls in energy prices have been a boon for consumers, freeing up considerable funds for discretionary purchases. Domestic energy and motor fuel absorbed just 4.7% of consumers' spending in Q2, the lowest proportion for 12 years and well below the 6.7% recorded three years ago.

26 October. 2016 The German Economy Fired on All Cylinders at the Start of Q4 (Publication Centre)

Yesterday's IFO survey confirmed that the private business sector in Germany was off to a flying start in Q4. The headline business climate index rose to 110.5 in October, from 109.5 in September, lifted mainly by a rise in the expectations index to a 30-month high of 106.5.

26 October. 2016 Soybean Exports Set to Hold Down the Trade Deficit, Again (Publication Centre)

Today's September international trade report will be the third to be distorted by hugely elevated soybean exports. The surge began in July, when soybean exports jumped by $3.6B--that's a 220% month-to-month increase--to $5.2B.

26 September 2016 PMIs Point to Slower EZ GDP Growth, but Details are Confusing (Publication Centre)

Friday's PMI data in the Eurozone added to the evidence that GDP growth is slowing, after a cyclical peak last year. The composite PMI in the euro area slipped to a 21-month low of 52.6 in September, from 52.9 in August.

26 September 2017 Dudley Follows the Yellen Line, December Hike Increasingly Likely (Publication Centre)

New York Fed president Dudley toed the Yellen line yesterday, arguing that the effects of "...a number of temporary, idiosyncratic factors" will fade, so "...inflation will rise and stabilize around the FOMC's 2 percent objective over the medium term.

26 September 2017 Another Marginal Dip in the IFO, and Murky Politics in Germany (Publication Centre)

Yesterday's IFO survey in Germany sent a marginally more downbeat message than the strong PMIs last week. The IFO business climate index fell to 115.2 in September, from 115.9 in August, its second straight monthly dip.

27 Jan. 2016 The Curious Case of Missing Equity Earnings in the Eurozone (Publication Centre)

Eurozone investors continue to look to the ECB as the main reason to justify a constructive stance on the equity market. Last week, the central bank all but promised additional easing in March, but the soothing words by Mr. Draghi have, so far, given only a limited lift to equities. Easy monetary policy has partly been offset by external risks, in the form of fears over slow growth in China, and the risk of low oil prices sparking a wave of corporate defaults. But uncertainty over earnings is another story we frequently hear from disappointed equity investors. We continue to think that QE and ZIRP offer powerful support for equity valuations in the Eurozone, but weak earnings are a key missing link in the story.

27 Jan. 2016 Will Mexico's Household Spending Remain the Bright Spot in 2016? (Publication Centre)

Mexico's economy continues to bring good news, despite the tough external environment for all EM economies. According to the economic activity index, a monthly proxy for GDP, growth gained further momentum in Q4. Activity rose 2.7% year-over-year in November, supported by stronger services activities, which expanded 0.3% month-to-month. The services sector has been the main driver of the current cycle, growing 3.8% year-over-year in November, bolstering our optimism about the domestic economy in the near-term.

27 November 2018 In the Shale New World, Lower Oil Prices Mean Slower U.S. Growth (Publication Centre)

The last time oil prices fell sharply, from mid-2014, when WTI peaked at $107, through early 2016, when the price reached just $26, the U.S. economy slowed dramatically.

27 November 2018 Do Q3's Healthy Sales Data Signal Further Strength in Mexico (Publication Centre)

Improving fundamentals have supported private spending in Mexico during the current cycle.

27 November 2017 Economic Growth Set to Rise Next Year, but Pain Will Follow in 2019 (Publication Centre)

We have argued for some time that the revival in nonoil capex represents clear upside risk for GDP growth next year, but it's now time to make this our base case.

27 November 2018 The Trend in Mortgage Lending Still is Downward, Despite October's Rise (Publication Centre)

Mortgage approvals by the main high street banks rose to a four-month high of 39.7K in October, from 38.7K in September, according to trade body U.K. Finance.

27 November 2018 What's the Risk of a Technical Recession in Germany (Publication Centre)

Last week's detailed Q3 GDP data in Germany verified that GDP fell 0.2% quarter-on-quarter, down from a 0.5% rise in Q2, a number which all but confirms the key story for the economy over the year as a whole.

27 Oct. 2015 Capital Goods Orders are Stabilizing, at Least - Oil Hit Fading (Publication Centre)

The durable goods numbers were among the first short-term indicators to warn clearly of the hit to manufacturing from the rollover in oil sector capex, which began last fall. The trend in core capital goods orders was rising strongly before oil firms began to cut back, with the year-over-year rate peaking at 11.9% in September. Leading capex indicators in the small business sector remained quite robust, but just nine months later, core capex orders were down 6.4% year-over-year, following annualized declines of more than 14% in both the fourth quarter of 2014 and the first quarter of this year.

27 Oct. 2015 Are the Foundations of the Recovery in House Prices Secure? (Publication Centre)

House prices look set for another growth spurt, pushing the house price-to-earnings ratio--the most widely used measure of valuation sustainability--close to levels seen shortly before the late-2000s crash. But we don't place much store by the price-to-earnings ratio. Better, more reliable indicators suggest that a higher level of house prices will prove sustainable.

27 November 2017 The Outlook for Consumers' Spending is Deteriorating (Publication Centre)

Developments over the last month have heightened our concern about the near-term outlook for households' spending.

27 November 2017 China Instigates Another Friday Reform, Import Tariffs are Cut (Publication Centre)

Since the Party Congress last month, China has made a number of bold moves in multiple policy fields, with a regularity that almost implies the authorities are working through a list.

27 May. 2015 After the Surge - A Positive Trend in EZ Household Consumption? (Publication Centre)

Data today will likely show that consumer sentiment in the Eurozone remains firm. In Germany, we expect a slight dip in the advance headline GFK confidence index to 9.8 in June, from an all-time high of 10.1 in May.

27 March 2019 Part Two Q&A from our Meetings Last Week RMB Stability (Publication Centre)

The main thing on investors' minds is how much more pain the global economy has to take as a result of China's slowdown.

27 May. 2015 Mexico Set for Gradual Improvement After Weak Q1? (Publication Centre)

Mexico's external accounts remain solid, despite adverse global conditions over the past year. The current account decreased to USD9.5B, or 3.2% of GDP, in the first quarter, just down from 3.3% a year earlier. Shortfalls of USD10.3B in the income account and USD4.7B in goods and services--mostly the latter--were again the key driver of the overall deficit.

27 May. 2016 French Consumers are in Good Shape, but Q2 Spending Will Slow (Publication Centre)

We think today's consumer sentiment survey in France will show that the headline index was unchanged at 94 in May. The survey's forward looking components have weakened modestly in recent months, due to declines in households' outlook for their financial situation and standard of living in the coming 12 months.

27 November 2017 Brazil's Politics and Economy are Both Heading in the Right Direction (Publication Centre)

President Temer seems to be advancing on his reform agenda.

27 May. 2016 Mr. Temer Starts to Deliver - Fiscal Measures are Positive, Overall (Publication Centre)

Recent political and economic developments in Brazil make us more confidence in our forecast of a gradual recovery. On Wednesday, interim President Michel Temer scored his first victory in Congress, winning approval for his request to raise this year's budget target to a more realistic level. Under the new target, Brazil's government plans to run a budget gap, before interest, of about 2.7% of GDP this year.

27 Oct. 2015 Upbeat IFO Survey, Despite Dip in Headline Business Climate Index (Publication Centre)

Economic sentiment in the Eurozone's largest economy stayed solid at the start of the fourth quarter, despite subdued manufacturing and poor investor sentiment. The headline IFO business climate index fell slightly to 108.2 in October from 108.5 in September, due to a fall in the current assessment index. The expectations index rose, though, to 103.8 from 103.5 last month pointing to a resilient outlook for businesses and solid GDP growth in coming quarters.

27 October 2017 Korean GDP Rebounds on Exports and Mr. Moon's Fiscal Spending (Publication Centre)

Korean real GDP growth rebounded to 1.4% quarter-on-quarter in Q3, from 0.6% in Q2. The main driver was exports, with government consumption also popping, and private consumption was a little faster than we were expecting.

27 September 2017 Winter is Coming for the Mortgage Market (Publication Centre)

Figures yesterday from U.K. Finance--the new trade body that has subsumed the British Bankers' Association--showed that the mortgage market recovered over the summer.

27 September 2017 Venezuela's Economic Woes Continue, and the Clock is Ticking (Publication Centre)

Venezuelan bond markets have been on a rollercoaster ride this year, with yields rising significantly in response to heightened political uncertainty and then declining when the government pays its obligations or when protests ease.

27 September 2017 Is Abe Pulling a May? Consumption Tax and BoJ Head are at Stake (Publication Centre)

The last few years have thrown up surprise after surprise for establishment parties. Mr. Abe's Liberal Democrat Party is about as establishment as they come.

27 September 2018 China's Macro Stance is Loosening is it Business as Usual (Publication Centre)

In yesterday's Monitor, we laid out how conditions last year were conducive to Chinese deleveraging, and how the debt ratio fell for the first time since the financial crisis.

27 September 2018 Fed Confirms December Rate Hike (Publication Centre)

The Fed is on course to hike again in December, with 12 of the 16 FOMC forecasters expecting rates to end the year 25bp higher than the current 2-to-21⁄4%; back in June, just eight expected four or more hikes for the year.

27 September. 2016 Current Account Improving in Brazil, But Momentum is Fading (Publication Centre)

Brazil's external accounts have recovered dramatically this year, and we expect a further improvement--albeit at a much slower pace--in the fourth quarter. The steep depreciation of the BRL last year, and the improving terms of trade due to the gradual recovery in commodity prices, drove the decline in the current account deficit in the first half.

27 September 2018 What to Expect From Today's 2019 Budget Headlines in Italy (Publication Centre)

Today is a busy day in the Eurozone economic calendar, but we suspect that markets mainly will focus on the details of Italy's 2019 budget.

27 September 2017 A Stable and Solid Outlook for Private Investment in France (Publication Centre)

French business sentiment cooled marginally at the end of Q3. The headline manufacturing confidence index dipped to 110 in September, from 111 in August, though the overall business sentiment gauge was unchanged at 110.

27 September 2016 The Surging IFO Points to a Resilient German Economy in Q3 (Publication Centre)

Yesterday's IFO survey in Germany was a big relief for markets, in light of recent soft data. The main business climate index jumped to 109.5 in September, from 106.3 in August, the biggest month-to-month increase since 2010.

27 October 2017 Third Quarter Growth Should be Solid, Despite the Hurricanes (Publication Centre)

We expect today's first estimate of third quarter GDP growth to show that the economy expanded at a 2.4% annualized rate over the summer.

27 October 2017 The ECB Announces Reduced QE Next Year, and Markets Like It (Publication Centre)

The ECB broadly conformed to markets' expectations today. The central bank maintained its key refinancing and deposit rates at 0.00% and -0.4% respectively, and delivered the consensus package on QE.

27 October 2017 Will Future Increases in the National Living Wage Fuel Inflation? (Publication Centre)

The Annual Survey of Hours and Earnings, which contains granular detail on wages and provides a useful cross-check on the regular average weekly wage earnings--AWE--data, was published yesterday.

27 October. 2016 Consumers' Spending in Germany will Continue to Slow, Modestly (Publication Centre)

Yesterday's consumer confidence report in Germany was soft, in contrast to surging business sentiment data earlier in the week.

27 October. 2016 GDP Set to Exceed the Consensus in Q3, But Underwhelm Thereafter (Publication Centre)

Today's preliminary estimate of Q3 GDP looks set to indicate that the Brexit vote has had little detrimental impact on the economy so far.

27 October. 2016 Core Capex Orders Set for Third Straight Gain as Oil Hit Fades? (Publication Centre)

The headline durable goods orders number for October, due today, likely will be depressed by falling aircraft orders, both civilian and military. Boeing reported orders for 55 civilian aircraft in September, compared to only three in August, but a hefty adverse swing in the seasonal factor will translate that into a small seasonally adjusted decline.

27 March 2019 Mortgage Lending Still is Heading for a Roller Coaster Year (Publication Centre)

The mortgage market still is defying gravity. U.K. Finance initially reported yesterday that house purchase mortgage approvals by the main high street banks collapsed to 35.3K in February, from 39.6K in January.

27 March 2019 COPOM Minutes, Hard Data and Political Risks Point to Stable Rates (Publication Centre)

The COPOM meeting minutes, released yesterday, brought a balanced message aimed at curbing market pricing of further rate cuts, in our view.

27 June 2018 Aircraft Set to Depress May Durable Orders, but the Core Story is Better (Publication Centre)

We were wrong about headline durable goods orders in April, because the civilian aircraft component behaved very strangely.

27 June 2017 Mexican Economic Growth Will be Sustained over the Second Half (Publication Centre)

Economic activity in Mexico during the past few months has been relatively resilient, as external and domestic threats appear to have diminished.

27 June 2017 Japanese Inflation to Hold up as Food Prices Counterbalance Energy (Publication Centre)

Japanese services price inflation edged down in May as the twin upside drivers of commodity price inflation and yen weakness began to lose steam. We expect wage costs to begin edging up in the second half but this will provide only a partial counterbalance.

27 June 2018 China Turns to the RRR to Sustain the Debt Clean-up Amid Fed Hikes (Publication Centre)

In yesterday's Monitor, we laid out the prime causes of China's weekend announcement, cutting the reserve requirement ratio.

27 June 2018 Is the EU About to Adopt a Poison-Pill Defence on Migration (Publication Centre)

Judging by the media coverage of the Europe's "migrant crisis", you would think that the number of North African asylum seekers arriving at EU's southern borders is soaring.

27 June 2019 Are Rising Jobless Claims a Drag on German Consumer Sentiment (Publication Centre)

Yesterday's consumer sentiment data provided further evidence of a strengthening French economy, amid signs of cracks in the otherwise solid German economy.

27 June 2018 Mexico's Soft Retail Sales Will Change Course Soon, for the Better (Publication Centre)

Mexico's private spending stumbled at the start of the second quarter.

27 June 2017 Higher Interest Rates won't be Needed to Rein in Consumer Credit (Publication Centre)

Speculation has grown that the Bank of England will announce measures today to calm the recent strong growth in consumer credit, when it publishes its bi-annual Financial Stability Report.

27 June 2017 Flat Capex Orders won't Stop the Labor Market Tightening Further (Publication Centre)

The flat trend in core capital goods orders continued through May, according to yesterday's durable goods orders report. We are not surprised.

27 January 2017 Trump's Plans Will Collide With Reality, But Mexico Will Suffer (Publication Centre)

U.S. President Trump on Wednesday signed an executive order aimed at delivering on his campaign pledge to build a wall on the U.S.-Mexico border. The executive order also includes measures to boost border patrol forces and increase the number of immigration enforcement officers. As previous U.S. presidents have discovered, however, signing an executive order is one thing and fulfilling it is something else. President Obama, for instance, signed an executive order to close the Guantanamo detention facility on his second day in office.

27 January 2017 GDP Growth Will Slow This Year as Consumers Retrench (Publication Centre)

The preliminary estimate of GDP showed that the economy finished 2016 on a strong note. Output increased by 0.6% quarter-on-quarter, the same rate as in the previous two quarters. The year-over-year growth rate of GDP in 2016 as a whole--2.0%--was low by pre-crisis standards, but it likely puts the U.K. at the top of the G7 growth leaderboard. We cannot tell how well the economy would have performed had the U.K. not voted to leave the EU in June, but clearly the threat of Brexit has not loomed large over the economy.

27 July 2017 China's Reform Scorecard Part 2: Tax Revenues (Publication Centre)

In yesterday's Monitor, we outlined how the government's plans to allow more migrants to register in cities could help counterbalance the effects of aging and put a floor under medium-term property prices.

27 July 2017 GDP Growth Will Remain Weak in 2017, Keeping the MPC Inactive (Publication Centre)

GDP rose by 0.3% quarter-on-quarter in Q2, according to the ONS' preliminary estimate, confirming that the economy has fundamentally slowed since the Brexit vote. The modest growth has reduced further the already-small risk that the MPC will raise interest rates at its next meeting on August 3.

27 July. 2016 Can Fiscal Stimulus be a Silver Bullet for the Eurozone Economy? (Publication Centre)

Global economic growth continues to fall short of expectations, and the call for aggressive fiscal stimulus is growing in many countries. This is partly a function of the realisation that monetary policy has been stretched to a breaking point. But it is also because of record low interest rates, which offer governments a golden and cheap opportunity to kickstart the economy. One of the main arguments for stronger fiscal stimulus is based on classic Keynesian macroeconomic theory.

27 July 2017 Greece is Back in the Market, but the Timing is Not the Best (Publication Centre)

The strengthening EZ economy increasingly looks like the tide that lifts all boats. The Greek economy is still a laggard, but recent news hints at a brightening outlook. Last week, S&P affirmed the country's debt rating, but revised the outlook to "positive" from "stable."

27 June 2019 Deal or No Deal Fed Cut or No Fed Cut What Does the PBoC Do (Publication Centre)

In this Monitor, befitting these uncertain times, we set out the decision tree facing Chinese policymakers.

27 June 2019 Mortgage Lending Likely to Remain Impervious to Brexit Uncertainty (Publication Centre)

Data from trade body U.K. Finance show that mortgage lending has remained unyielding in the face of heightened economic and political uncertainty.

27 March 2018 Consumers' Spending Constrained by Cashflow, not Confidence (Publication Centre)

Whichever way you choose to slice the numbers, consumers' spending is growing much more slowly than is implied by an array of confidence surveys.

27 March 2018 A Good Start to Q1 for Mexico and Colombia, Fears are Easing (Publication Centre)

Recent upbeat economic reports have mitigated the downside risks we had been flagging to our growth forecast for Mexico for the current quarter.

27 March 2017 Mexico - Under Short-Term Inflation Pressures, and Hoping for Growth (Publication Centre)

The balance of risks to activity in Mexico this year is still tilted to the downside, even though recent data have been mixed. Key indicators show that the manufacturing sector is gathering strength on the back of lagged effect of the MXN's sell-off last year, and the improving U.S. economy.

27 March 2018 PBoC Independence on the Line, but Leaders are of one Mind for now (Publication Centre)

Guo Shuqing, head of the newly formed China Banking and Insurance Regulatory Commission, has been named as Party Secretary for the PBoC.

27 March 2018 The Housing Market Remains Fragile, Limiting the MPC's Options (Publication Centre)

Yesterday's figures from trade body U.K. Finance showed that January's pick-up in mortgage approvals was just a blip.

27 March 2019 Can the Fed Engineer Sustained Non-in ationary Wage Growth (Publication Centre)

The Fed wants price stability--currently defined as 2% inflation--and maximum sustainable employment.

27 March 2019 All Set for a Rebound in German Consumption Growth in H1 (Publication Centre)

German retail and consumer sentiment data for March have been mixed this week, but broadly support our call that growth in consumption should pick up soon.

27 March 2017 Eurozone PMI Data are Sizzling, but can they be Trusted? (Publication Centre)

Friday's advance Eurozone PMI reports capped a fine quarter for the survey. The composite PMI jumped to a 80-month high of 56.7 in March, from 56.1 in February, rising to a cyclical high over Q1 as a whole.

27 March 2017 Could the MPC Adopt a "One and Done" Hike Strategy? (Publication Centre)

A series of events have forced markets and analysts to re-evaluate their assumption that Bank Rate will remain on hold throughout 2017. First, the minutes of the MPC's meeting had a hawkish tilt.

27 June. 2016 Brexit Constrains Fed, but Limited U.S. Fallout Means December is Live (Publication Centre)

By the close on Friday, the initial reaction in U.S. markets to the U.K. Brexit vote could be characterized as a bad day at the office, but nothing worse. Not a meltdown, not a catastrophe, no exposure of suddenly dangerous fault lines.That's not to say all danger has passed, but the first hurdle has been overcome.

27 June. 2016 A Post-Brexit EU is Weakened, But Not Destined for a Collapse (Publication Centre)

The ECB's statement following the panic on Friday was brief and offered few details. The central bank said that it is closely monitoring markets, and that it is ready to provide additional liquidity in both euros and foreign currency, if needed. It also said that it is in close coordination with other central banks.

27 Mar. 2015 Banxico Still Eyeing a Rate Hike After the Fed Moves in June (Publication Centre)

This week's economic data for the Mexican economy have been encouraging, especially for Banxico, which left its main interest rate unchanged yesterday at 3.0%. Inflation remained on target for the second consecutive month in the first half of February, and the closely-watched IGAE economic activity index--a monthly proxy for GDP--continued to grow at a relatively solid pace, despite the big hit from lower oil prices.

27 Mar. 2015 Credit Growth is Improving, But the Periphery is Being Left Behind (Publication Centre)

Money supply data continue to support the continuation of cyclical recovery in the Eurozone. M3 growth accelerated to 4.0% year-over-year in February from a revised 3.7% in January. Revisions, however, mean that momentum in the beginning of the year was not as solid as we thought.

27 March 2017 Stronger Global Growth set to Boost U.S. Export Performance (Publication Centre)

It has been difficult to be an optimist about U.S. international trade performance in recent years. The year-over-year growth rate of real exports of goods and services hasn't breached 2% in a single quarter for two years.

27 Mar. 2015 No Hit from Oil Sector's Troubles Yet - Gains Elsewhere Offsetting? (Publication Centre)

We argued in the Monitor yesterday that the plunge in capital spending on equipment in the oil sector could cost about 300K jobs over the course of this year. Adding in the potential hit from falling spending on structures, which likely will occur over a longer period, given the lead times in the construction process, the payroll hit this year could easily be 500K, or just over 40K per month.

26 May. 2016 EZ Short-Term Yields Could Rise Abruptly as Inflation Rebounds (Publication Centre)

Short-term interest rates in the Eurozone continue to imply that the ECB will lower rates further this year. Two-year yields have been stuck in a very tight range around -0.5% since March, indicating that investors expect the central bank again to reduce its deposit rate from its current level of -0.4%. This is not our base case, though, and we think that investors focused on deflation and a dovish ECB will be caught out by higher inflation.

26 May. 2015 Is Core Inflation Really Rising, or are the Recent Gains Just Noise? (Publication Centre)

After four straight above-trend increases in the core CPI, you could be forgiven for thinking that something is afoot. It's still too soon, though to rush to judgment. The data show three previous streaks of 0.2%-or-bigger over four-month periods since the crash of 2008, and none of them were sustained.

25 September 2017 China Downgraded but Risk of a Default is Slim, China is a Saver (Publication Centre)

S&P downgraded Chinese government debt last week to A+ from AA- yesterday, following a Moody's downgrade last May.

25 September 2017 Argentina's Economy is Improving, Good News for Macri and Markets (Publication Centre)

Argentina's economy continues to recover steadily.

25 Sept. 2015 Yellen Defends Orthodoxy: Policy Lags Mean Rates to Rise this Year (Publication Centre)

Fed Chair Yellen set out a robust and detailed defense of the orthodox approach to monetary policy in her speech in Amherst, MA, yesterday afternoon. Her core argument could have come straight from the textbook: As the labor market tightens, cost pressures will build. Monetary policy operates with a "substantial" lag, so waiting too long is dangerous; the "...prudent strategy is to begin tightening in a timely fashion and at a gradual pace".

25 September 2017 Has Sterling's Rally Now Run Its Course? (Publication Centre)

The speed of sterling's rally this month has caught us by surprise.

25 September 2018 Has China Stemmed the Decline of Productivity Growth (Publication Centre)

Amid all the trade tensions, it's easy to lose sight of the big picture for China.

25 September 2018 The Government has 99 Problems, but the Fiscal Deficit Ain't One (Publication Centre)

August's public finances figures, released last week, were an unwelcome but manageable setback for the Chancellor.

25 September 2018 Mexico's Inflation Edged Lower in mid-September Pressures are Tame (Publication Centre)

Inflation in Mexico surprised to the downside in late Q3, supporting our core view that it will continue to fall gradually over the coming months.

25 Sept. 2015 Mexico's Recovery Still in Place, And Brazil's Woes Deepening (Publication Centre)

The state of the Mexican economy is still favorable, despite the slowdown over the last few quarters. This week, the IGAE economic activity index--a monthly proxy for GDP--rose 2.0% year-over-year in July, a relatively solid pace, but down from 3.2% in June, and 2.6% in the first half. All these data suggest that economic activity failed to gather momentum at the beginning of Q3 after a disappointing first half of the year.

25 Sept. 2015 Economic Sentiment is Holding Up amid Investor Angst (Publication Centre)

The two main national surveys--IFO and INSEE-- both beat consensus forecasts yesterday, supporting our story of that economic sentiment is holding up relatively well in the face increasing investor anxiety. In Germany, the main IFO business climate index rose marginally to 108.5 from a revised 108.4 in August, boosted by an increase in the expectations index to a six-month high of 103.3, up from 102.0 in August. The IFO expectations index points to real GDP growth rising 0.5%-to-0.6% quarter-on-quarter in Q3.

25 October 2018 What's the Target Mr. Draghi Headline or Core Inflation (Publication Centre)

The ECB will not make any major changes to policy today.

25 October 2018 The Bank of Japan Turns its Attention to Real Estate Risks (Publication Centre)

The Bank of Japan's biannual Financial System Report was published earlier this week.

25 October 2017 Xi Immortalised in Constitution but is Wang's Retirement a Precedent? (Publication Centre)

The end of China's Party Congress can feel like an endless exercise in reading the tea leaves.

25 October 2018 Winter is Coming for the British Housing Market (Publication Centre)

Mortgage approvals by the main high street banks dropped to a five-month low of 38.5K in September, from 39.2K in August, according to trade body U.K.Finance.

25 October. 2016 Encouraging rebound in October EZ PMIs (Publication Centre)

PMI data in the Eurozone rebounded convincingly in October, as the composite index rose to a 10-month high of 53.7, from 52.6 in September. The gain fully reversed the weakness at the end of Q3.

25 October. 2016 Consumers Confidence is High, but Expect an October Correction (Publication Centre)

Recent consumer confidence numbers have been strong enough that we don't need to see any further increase. The expectations components of both the Michigan and Conference Board surveys are consistent with real spending growth of 21⁄2-to- 3%, which is about the best we can expect when real income growth, after tax, is trending at about 21⁄2%.

25 October. 2016 Can the Government Afford to Sacrifice the City? (Publication Centre)

When you read between the lines of its public statements on Brexit, the Government appears to be prioritising controlling immigration over maintaining unfettered access to the single market, much to the chagrin of the financial sector.

25 September 2018 US Home Prices are Still Rising, but Momentum is Slowly Fading (Publication Centre)

In recent months we have argued that housing market activity has peaked for this cycle, with rising mortgage rates depressing the flow of mortgage applications.

26 Apr. 2016 Aircraft Will Lift March Durables, but Early Easter Will Depress Core (Publication Centre)

The good news in today's March durable goods report is that a rebound in orders for Boeing aircraft means February's 3.0% drop in headline orders won't be repeated. The company reported orders for 69 aircraft in March, compared to just one in February.

26 April 2019 Disinflation Pauses in Brazil and Mexico, Central Banks Sidelined (Publication Centre)

Rising inflation is pressuring some LatAm central banks to take a cautious stance at a time when growth is subpar, particularly in the two biggest economies of the region.

26 April 2018 Upgrade to our 2018 China GDP Forecast, Very Bearish to Bearish (Publication Centre)

In yesterday's Monitor, we suggested that China's monetary policy stance is now easing.

26 April 2018 March Trade and Durable Orders Data to Boost Q1 GDP Forecasts? (Publication Centre)

The key data today, covering March durable goods orders and international trade in goods, should both beat consensus forecasts.

26 April 2019 First Quarter Growth Likely was Very Respectable, Q2 Should be Good too (Publication Centre)

We're expecting to learn today that the economy expanded at a 2.6% annualized rate in the first quarter, rather better than we expected at the turn of the year--our initial assumption was 1-to-2%--and above the consensus, 2.3%.

26 April 2019 Will an Inventory Unwind Stymie the Economy in Q2? (Publication Centre)

The economy's resilience in the first quarter of this year, in the midst of heightened Brexit uncertainty, can be attributed partly to a boost from no-deal Brexit precautionary stockpiling.

26 August. 2015 Solid Net Trade Lifts German GDP in Q2, but Payback Likely in Q3 (Publication Centre)

The IFO did its part to alleviate the stock market gloom yesterday, with the business climate index rising slightly to 108.3 in August from 108.0 in July. The August reading doesn't reflect the panic in equities, though, and we need to wait until next month to gauge the real hit to business sentiment. The increase in the headline index was driven by businesses assessment of current output, with the key expectations index falling trivially to 102.2 from a revised 102.3 in July. This survey currently points to a stable trend in real GDP growth of about 0.4% quarter-on-quarter, consistent with our expectation of full year growth of about 1.5%.

26 Aug 2019 Powell's Speech no Match for the Blizzard of Trump Tweets (Publication Centre)

After three days of jaw-dropping actions from President Trump, the position seems to be this: The U.S. will apply 15% tariffs on imported Chinese consumer goods, rather than the previously promised 10%, effective in two stages on September 1 and December 15.

26 April 2018 Higher Energy Prices won't Stop Inflation Falling Further this Year (Publication Centre)

The contribution of energy prices to CPI inflation is set to increase over the coming months, following the pick-up in Brent oil prices to $74 per barrel, from $65 at the beginning of March.

26 April 2018 All Set for a Dovish ECB Meeting Today? (Publication Centre)

The ECB will leave its main refinancing and deposit rates at 0.00% and -0.4% unchanged today, and it will also maintain the pace of QE at €30B per month.

26 Apr. Is the Recovery in Consumer Spending Coming Off the Boil? (Publication Centre)

The slowdown in retail sales in the first quarter and the recent pick-up in the number of retailers seeking protection from creditors begs the question: are consumers retrenching, or just spending their money elsewhere?

26 Apr. 2016 Focus on the Positive Details in Yesterday's German IFO Survey (Publication Centre)

Yesterday's German IFO survey suggests that economic momentum in the Eurozone's largest country remained modest at the start of Q2. The headline business climate index fell trivially to 106.6 in April, from 106.7 in March, lower than the consensus expectation of an increase to 107.2.

26 April 2017 The Surge in Spending on Building Materials Can't Last Forever (Publication Centre)

Across all the major economic data, perhaps the biggest weather distortions late last year and in the early part of the year were in the retail sales numbers, specifically, the building materials component. Sales rocketed at a 16.5% annualized rate in the first quarter, the biggest gain since the spring of 2014, following a 10.2% increase in the fourth quarter of last year.

26 April 2017 French Business Confidence is Solid, but Manufacturing Fell in Q1 (Publication Centre)

French manufacturing confidence soared at the start of Q2. The headline INSEE index jumped to a six-year high of 108 in April, from an upwardly revised 105 in March. The headline was flattered by a big increase in the "past activity" index, but the survey's leading indicators also improved.French manufacturing confidence soared at the start of Q2. The headline INSEE index jumped to a six-year high of 108 in April, from an upwardly revised 105 in March. The headline was flattered by a big increase in the "past activity" index, but the survey's leading indicators also improved.

26 April 2017 Weaker Growth in Tax Receipts Adds to Slowdown Signs (Publication Centre)

March's public sector borrowing figures brought more signs that the economy has lost considerable momentum this year. Borrowing, on the PSNB excluding public sector banks measure, came in at £5.1B in March, up slightly from £4.3B in March 2016.

26 April 2017 Poor Q1 Data Puts Pressure on BanRep to Cut Rates Rapidly (Publication Centre)

Colombia's economy activity is deteriorating rapidly, suggesting that BanRep will have to cut interest rates on Friday. Incoming data make it clear that the economy has moved into a period of deceleration, painting a starkly different picture than a year ago.

25 October 2017 Preliminary GDP Will Put Little Pressure on the MPC to Raise Rates (Publication Centre)

Today's preliminary estimate of Q3 GDP is the last major economic report to be released before the MPC's meeting on November 2.

25 October 2017 EZ PMIs Stepped Back at the Start of Q4, but Still Signal Solid Growth (Publication Centre)

Yesterday's advance PMI reports in the euro area signal that economic momentum slowed slightly at the start of Q4.

25 Mar. 2015 LatAm Central Banks Will Exploit Market's View on Fed's Stance (Publication Centre)

The Colombian economy--the star of the previous economic cycle in LatAm--is now slowing significantly, due mostly to strong external headwinds. Exports plunged by 40% year-over-year in January, down from -29% in December, with all of the main categories contracting in the worst performance since 1980.

25 Mar. 2015 China's slowdown a threat to U.S. Industry even when ISM revives (Publication Centre)

We have argued over the past couple of years that if you want to know what's likely to happen to U.S. manufacturing over the next few months, you should look at China's PMI, rather than the domestic ISM survey, which is beset by huge seasonal adjustment problems.

25 June. 2015 Germany Needs Stronger Private Investment to Drive the Recovery (Publication Centre)

The chaos in Greece was identified as the main culprit for yesterday's soft IFO report. The headline business climate index fell to 107.4 in July, down from 108.1 in May, driven by declines in respondents' views on the current economy and their expectations for the future. We expected a dip in the he adline IFO, but we were surprised by the fall in the manufacturing sub-index, given the firmer PMI earlier this week.

25 Mar. 2015 PMIs point strengthening cyclical recovery (Publication Centre)

Evidence is mounting that the cyclical recovery in the Eurozone accelerated further in the first quarter. The Composite PMI in the euro area rose to 54.1 in March, up from 53.3 in February, taking the quarterly average to 53.3, its highest level since the second quarter of 2011. Combined with latest available retail sales and industrial production data, this is consistent with real GDP growth in the euro area accelerating to about 0.4-to-0.5% quarter-on quarter in the first quarter, from 0.3% in Q4.

25 March 2019 Argentina's Economic Recession is Easing, but Political Risk is a Drag (Publication Centre)

Argentina's Q4 GDP report, released last week, underscored the severity of the recession, due to the currency crisis and the subsequent tighter fiscal and monetary policies.

25 March 2019 For an Inflation Proponent, PM Abe Sure is Making it Hard to Achieve (Publication Centre)

Japan's CPI inflation was unchanged, at 0.2% in February.

25 March 2019 Dark Clouds over Manufacturing in the EZ, but Services are Stable (Publication Centre)

On a headline level, the key message from the Eurozone PMIs was little changed on Friday.

25 June 2019 Markets Relatively High Inflation Expectations Aren't Warranted (Publication Centre)

Financial markets' inflation expectations have risen sharply since the spring. Our first chart shows that the two-year forward rate derived from RPI inflation swaps has picked up to 3.8%, from 3.5% at the end of April.

25 June 2019 Acharya's Resignation Won't Alter Policy, but Highlights the RBI's Flaws (Publication Centre)

The Reserve Bank of India was hit by another shock resignation yesterday, with Deputy Governor Viral Acharya confirming his early departure in late July, before the next meeting in August, and well before his term was scheduled to end at the close of this year.

25 July. 2016 EZ Sentiment Looks Resilient in the Face of Brexit...For Now (Publication Centre)

Friday's July PMI reports presented investors with a rather confusing story. The composite PMI in the Eurozone fell trivially to 52.9 in July, from 53.1 in June, despite rising PMIs in Germany and France. The final data on 3 August will give the full story, but Markit noted that private sector growth outside the core slowed to its weakest pace since December 2014.

25 July 2019 Today's Array of Data Could Shift the Needle on Q2 GDP Growth (Publication Centre)

The June durable goods, trade and inventory reports today, could make a material difference to forecasts for the first estimate of second quarter GDP growth, due tomorrow.

25 June 2018 Banxico Hikes Preventively, the Next Move Will Depend on the MXN (Publication Centre)

Mexican policymakers voted unanimously last Thursday to hike the main rate by 25bp to 7.75%, the highest since early 2009.

25 June 2018 In the Race to the BoJ's Inflation Target, our Money is on the Glacier (Publication Centre)

Japan's headline inflation will be volatile for the rest of the year, thanks to movements in the noncore elements.

25 June 2019 A New Fall in Mexican Services is Setting the Stage for a Poor Q2 (Publication Centre)

Data released yesterday in Mexico strengthened the case for interest rate cuts this year.

25 June 2018 Imports Still Falling as the Hurricane Surge Continues to Unwind? (Publication Centre)

The latest data from container ports around the country are consistent with our view that imports are still correcting after the surge late last year, triggered by the hurricanes.

25 March 2019 The Fundamentals are at Odds with the Curve, no Recession Near (Publication Centre)

The commentariat was very excited Friday by the inversion of the curve, with three-year yields dipping to 2.24% while three-month bills yield 2.45%.

25 March 2019 The Long-Awaited Soft Brexit Pivot is Now Getting Underway (Publication Centre)

We expect MPs this week to take a big step towards a soft Brexit, which has been our base case since the referendum.

25 Nov. 2015 IFO Repeats Message from PMIs: German Economy is in Good Form (Publication Centre)

Survey data in Germany continue to tell an upbeat story on the economy. The IFO business climate index rose to 109.0 in November from 108.2 in October, lifted by gains in both the expectations and current assessment indexes. The IFO tends to be slightly over-optimistic on GDP growth, but our first chart shows that the survey points to upside risks in the fourth quarter.

25 Nov. 2015 Do September's Weak Sales Data Signal Trouble in Mexico? (Publication Centre)

Improving fundamentals have supported private spending in Mexico during the last few quarters. This week's soft retail sales report does not change the picture of a strong underlying trend in consumption. Sales were weaker than expected, falling 1.1% month-to-month in September, but this followed a 1.5% jump in August, and average gains of 1.1% in the previous three months. Mexican retail sales are much more volatile than in most developed economies, and we have been expecting mean reversion following rapid gains during the first half of the year and most of Q3.

25 May. The Chancellor is Still Headed for a Mid-Parliament Fiscal Crunch (Publication Centre)

April's public finances show that borrowing still is falling more slowly than the Chancellor had envisaged. This casts further doubt over whether he will be able to keep his pledge to run a budget surplus before the end of this parliament in 2020.

25 Nov. 2015 Privatisations Conceal Underlying Health of Public Finances (Publication Centre)

The Chancellor is likely to announce plans for additional public sector asset sales in today's Autumn Statement, to help arrest the unanticipated rise in the debt-to-GDP ratio this year. But privatisations rarely improve the underlying health of the public finances, partly because assets seldom are sold for their full value. And the Chancellor is running out of viable assets to privatise; the low-hanging, juiciest fruits have already been plucked.

25 November. 2016 Brazilian Inflation is Easing, but in Mexico, it is Heading North (Publication Centre)

This week's November mid-month inflation reports in Brazil and Mexico underscored their divergent trends. Inflation pressures are steadily falling in Brazil, but in Mexico, the pass-through from the MXN's sell- off is driving up inflation and inflation expectations.

25 October 2017 September Durable Orders are Hard to Call, Thanks to the Hurricanes (Publication Centre)

We have been very encouraged in recent months to see core capital goods orders breaking to the upside, relative to the trend implied by the path of oil prices.

25 November. 2016 Don't Bank on Hammond Being Able to Use His Fiscal Headroom (Publication Centre)

The Chancellor hinted in the Autumn Statement that the fiscal consolidation might not be as severe as it appears on paper because he has built in some "fiscal headroom". By that, Mr. Hammond means that he could borrow more and still adhere to his new, self-imposed rules.

25 May. 2016 Trade Deficit Set for April Rebound, but the Future Looks Brighter (Publication Centre)

A widening core trade deficit is the inevitable consequence of a strengthening currency and faster growth than most of your trading partners. Falling oil prices have limited the headline damage by driving down net oil imports, but the downward trend in core exports since late 2014 has been steep and sustained, as our first chart shows. The deterioration meant that trade subtracted an average of 0.3 percentage points from GDP growth in the past three quarters.

25 May. 2016 Growth in Mexico Consumers' Spending Remain Resilient (Publication Centre)

Improving consumer fundamentals continue to underpin growth in private spending in Mexico, according to retail sales and inflation reports published this week. March retail sales were much stronger than expected, jumping 3.0% month-to-month, after averaging gains of 0.8% in the preceding three months. And sales for the three months through February were revised up marginally.

25 May 2017 Is it Time to Tell a Less Upbeat Story on the Eurozone Consumer? (Publication Centre)

Markets cheered soaring business surveys in the Eurozone earlier this week, and recent consumer sentiment data also have been cause for celebration. The advance GfK consumer confidence index in Germany rose to a record high of 10.4 in June, from 10.2 in May.

25 May 2017 Balance Sheet Run-off set to Start in the Fall, but Slowly (Publication Centre)

The FOMC minutes confirmed that most FOMC members were not swayed by the weak-looking first quarter GDP numbers or the soft March core CPI. Both are considered likely to prove "transitory", and the underlying economic outlook is little changed from March.

25 May 2017 Second Estimate of Q1 GDP to Confirm Sharp Slowdown (Publication Centre)

We expect the second estimate of Q1 GDP, released today, to restate that quarter-on-quarter growth slowed to just 0.3%, from 0.7% in Q4. The second estimate of growth rarely is different to the first.

25 May 2018 Aircraft Likely Drove up April Durable Goods Orders, Core Softer? (Publication Centre)

We see significant upside risk to today's headline durable goods orders numbers for April.

25 May. 2016 German Domestic Demand Growth to Slow in Q2, After a Solid Q1 (Publication Centre)

Detailed GDP data yesterday showed that the domestic German economy fired on all cylinders in the first quarter. Real GDP rose 0.7% quarter-on-quarter in Q1, up from 0.3% in Q4, lifted by strong investment and spending. Domestic demand rose 0.8%, only slightly slower than the 0.9% ris e in the fourth quarter. Net exports fell 0.3%, a bit better than in Q4, when gross exports fell outright.

25 May 2018 Brazil's Inflation Remains Low, Mexico's GDP Brings Positive News (Publication Centre)

In a relatively light week in terms of economic indicators in Brazil, the inflation numbers and the potential effect of the recent BRL sell-off garnered all the attention.

26 August. 2015 U.S. ISM Will Follow China's PMI, But Not Yet - Services ISM Strong (Publication Centre)

The decline in China's unofficial PMI, which has dropped to a six-year low, signals increasing troubles ahead for U.S. manufacturers selling into China, and U.S. businesses operating in China. This does not mean, though, that the U.S. ISM will immediately fall as low as the Caixin/Markit China index appears to suggest in the next couple of months. Our first chart shows that in recent years the U.S. manufacturing ISM has tended hugely to outperform China's PMI from late spring to late fall, thanks to flawed seasonals.

26 August. 2016 Brazil's Market-set Prices Remain Sticky, Rate Cuts to be Postponed? (Publication Centre)

According to Brazil's mid-August inflation reading, which is a preview of the IPCA index, overall inflation pressures are easing. But some price stickiness remains, due to inertia and temporary shocks, despite the severity of the recession and the rapid deterioration of the labour market in recent months.

26 June 2018 Treat Surveys Pointing to Faster Wage Growth Sceptically (Publication Centre)

This was supposed to be the year that wage growth finally would pick up and signal clearly to the MPC that the economy needs higher interest rates.

26 June 2018 The German Economy is No Longer Firing on All Cylinders (Publication Centre)

The verdict from the German business surveys is in; economic growth probably slowed further in Q2.

26 June 2018 RRR Cut is More Evidence the PBoC Switching to an Easing Bias (Publication Centre)

The PBoC cut the reserve requirement ratio by 0.5pp for almost all banks on Sunday, effective from July 5th.

26 June 2019 COPOM is Ready to Cut Rates, but Only if Politicians Don't Mess Up (Publication Centre)

Politics in Brazil has been busy in recent days, with local media reporting several items of interest.

26 June 2019 Green Shoots in Semiconductors, but they aren't Out of the Woods (Publication Centre)

Major central banks in Asia, particularly those operating in export-oriented economies, have recently been pinning their future policy moves on the prospects of a specific industry, namely semiconductors.

26 June 2019 Services and Construction Will Lift French Capex in Q2, and in H2 (Publication Centre)

The INSEE's manufacturing sentiment data in France are slightly confusing at the moment.

26 June 2019 June's Very Weak CBI Distributive Trades Survey is no Cause for Alarm (Publication Centre)

News websites are emblazoned with the headline that retail sales are falling at their fastest rate since the 2008-to-09 recession.

26 June 2018 Low Inventory Still Lifting Home Prices Ignore So Case Shiller Data (Publication Centre)

Today brings more housing market data, in the form of the Case-Shiller home price report for April.

26 June 2018 GDP Growth will Slow Sharply in Argentina in the Second Half (Publication Centre)

Data released last week confirm that the Argentinian economy was resilient at the start of the year, but downside risks to growth have increased.

26 July. 2016 The German Economy Stalled in Q2, But Should Rebound in Q3 (Publication Centre)

The German statistical office will supply a confidential estimate to Eurostat for this week's advance euro area Q2 GDP data. Our analysis suggests this number will be grim, and weigh on the aggregate EZ estimate. Our GDP model, which includes data for retail sales, industrial production and net exports, forecasts that real GDP in Germany contracted 0.1% quarter-on-quarter in the second quarter, after a 0.7% jump in Q1.

26 July 2019 Mr. Draghi Readies his Monetary Policy Bazooka for one Last Time (Publication Centre)

Markets were all over the place yesterday in response to the messages from the ECB.

26 July. 2016 What Impact Would QE Have on Gilt Yields? (Publication Centre)

We think that the higher inflation outlook means that the MPC will dash hopes of unconventional stimulus on August 4 and instead will opt only to cut Bank Rate to 0.25%, from 0.50% currently. The minutes of July's MPC meeting show, however, that the MPC is mulling all the options. As a result, it is worth reviewing how a QE programme might be designed and what impact it might have on bond yields.

26 June 2017 Banxico's Hiking Cycle is Likely Over, While the BCB eyes a 100bp (Publication Centre)

Banxico raised its benchmark interest rate by another 25bp to 7.0% at last Thursday's policy meeting. This hike follows nine previous increases, totalling 375bp since December 2015, in order to put a lid on inflation expectations and actual inflation. Both have been lifted this year by the lagged effect of the MXN's weakness last year, the "gasolinazo", and the minimum wage increase in January.

26 June 2017 Keep Calm and Carry On Expecting Further Inaction from the MPC (Publication Centre)

Mark Carney's assertion that "now is not yet the time to raise rates" fell on deaf ears last week. Markets are pricing-in a 20% chance that the MPC will increase Bank Rate at the next meeting on August 3, up from 10% just after the MPC's meeting on June 15, when three members voted to hike rates.

26 June 2017 Japan Surprises on the Upside as the Economy Accelerates into Q2 (Publication Centre)

Japanese data continue to come in strongly for the second quarter. The manufacturing PMI points to continued sturdy growth, despite the headline index dipping to 52.0 in June from 53.1 in May. The average for Q2 overall was 52.6, almost unchanged from Q1's 52.8, signalling that manufacturing output growth has maintained its recent rate of growth.

26 June. 2015 Mexico's Economy Improves in April - Oil Distorts the Picture (Publication Centre)

The underlying state of the Mexican economy is still positive, despite recent signs of a modest slowdown. The IGAE economic activity index--a monthly proxy for GDP--rose 2.1% year-over-year in April, a relatively solid pace, but down from 2.8% in March, and 2.6% in Q1.

26 June. 2015 Rapid Income Gains and Lower Saving Mean Strong H2 Spending (Publication Centre)

the past few observations make clear. Real spending jumped by 0.5% in March, rebounding after its weather-induced softness in February, before stalling again in April. Then, in May, the s urge in new auto sales to a nine-year high lifted total spending again, driving a 0.6% real increase.

26 May 2017 The ECB is in a Trap of its Own Making in EZ Private Debt Markets (Publication Centre)

We have warned that the ECB' decision to add corporate bonds to QE would lead to unprecedented market distortions. Evidence of this is now abundantly clear. The central bank has bought €82B-worth of corporate bonds in the past 11 months, and now holds more than 6% of the market. Assuming the central bank continues its purchases until the middle of next year, it will end up owning 13%-to-14% of the whole Eurozone corporate bond market.

26 March 2019 Part One Q&A from our Meetings Last Week BoJ Easing Options (Publication Centre)

Meetings are a nice way to stress test our base case stories and gauge what questions are important for clients.

26 March 2019 Is a Snap General Election Inevitable? (Publication Centre)

Speculation that another general election is imminent has intensified in recent weeks.

26 May 2017 Mexican Consumption Will Slow as Tighter Financial Conditions Bite (Publication Centre)

Consumers' spending in Mexico was relatively resilient at the end of Q1, but we think it will slow in the second quarter. Data released this week showed that retail sales rose a strong-looking 6.1% year-over-year in March, well above market expectations, and up from 3.6% in February.

26 May 2017 Soft GDP Shows Sterling's Drop to be the Least Successful Ever (Publication Centre)

The second estimate of Q1 GDP made for grim reading. Quarter-on-quarter GDP growth was revised down to 0.2%--the joint-slowest rate since Q4 2012--from the preliminary estimate of 0.3%.

26 May. 2015 BCB Stresses its Duty to Fight Inflation, Despite the Recession (Publication Centre)

Brazil's central bank is desperately trying to get a grip on inflation. It has raised the Selic rate by 225bp, to 13.25%, in just the last six months, and real rates now stand at a hefty 5.0%. And, at last, we are seeing tentative signs that policymakers and the government, after hiking rates and adjusting regulated prices, are making some headway.

26 May. 2015 All Eyes on the U.S. and the FOMC for Next Big Move in the Euro (Publication Centre)

The euro has so far defied the most bearish forecasters' predictions that it is on track for parity with the dollar. Currencies can disregard long-run parity conditions, however, for longer than most investors can hold positions.

26 March 2019 Consumers are Cash-Rich and Confident Don't Worry About Them (Publication Centre)

When Fed Chair Powell said last week that the "surprise" weakness in the official retail sales numbers is "inconsistent with a significant amount of other data", we're guessing that he had in mind a couple of reports which will be updated today.

26 March 2019 Banxico's Easing Cycle is Near Inflation is Converging to its Target (Publication Centre)

Data released in recent days are confirming the story of a struggling economy and falling inflation pressures in Mexico, strengthening our base case of interest rate cuts over the second half of the year.

26 Mar. 2015 How Far Will Capital Goods Orders Fall as the Oil Sector Shrinks? (Publication Centre)

The rollover in core capital goods orders in recent months has been startling. In the three months to February, compared to the previous three months, orders for non-defense capital goods fell at a 7.6% annualized rate.

26 June. 2015 The ECB Will Fight to Maintain "Normality" in EZ Bond Markets (Publication Centre)

The impasse between Greece and its creditors has roiled Eurozone bond markets, but the ECB is likely ready to restore calm, if necessary. We think a further widening of short-term interest rate spreads would especially worry the central bank, as it would represent a challenge to forward guidance. For now, spreads remain well below the average since the birth of the Eurozone, even after the latest increase.

26 Mar. 2015 Survey Data Point to a Recovery for German Investment in Q1 (Publication Centre)

The IFO survey released yesterday provides further evidence that the cyclical recovery in Germany's economy continued in the current quarter. The headline business climate index rose to 107.9 in March from 106.8 in February, lifted by increases in both the current assessments and expectations index.

26 March 2018 Favourable Inflation Outlook in Brazil and Mexico, but Politics is a Risk (Publication Centre)

In a week of important global events, local factors remained in the spotlight in Brazil, with a more benign data flow and the central bank statement reducing the likelihood of an imminent end to the easing cycle.

26 March 2018 Tariffs Remain a Sideshow, the Real war is for Tech Ownership (Publication Centre)

President Trump made official his plan to impose tariffs on up to $60B of annual imports from China, as well as limitations on Chinese investments in the U.S.

26 March 2018 Market Sell-offs have Stayed the MPC's Hand Before, Why Not Again? (Publication Centre)

The MPC held back last week from decisively signalling that interest rates would rise when it meets next, in May.

26 July 2019 Mexico's Economy is Under Strain, But Falling Inflation is its Last Hope (Publication Centre)

We remain negative about the medium-term growth prospects of the Mexican economy.

26 July 2019 A Guide to Gauging How Much No- Deal Brexit Risk is Priced-in (Publication Centre)

In our view, the chances of a no-deal Brexit on October 31 have not surged just because Boris Johnson has become Prime Minister and is gesticulating wildly at the Despatch Box.

26 February 2018 Is the Economy's Speed Limit Higher than the MPC Thinks? (Publication Centre)

November's interest rate rise, which took investors by surprise, was triggered in part by the MPC slashing its estimate of trend growth to 1.5%, from an implicit 2.0%.

26 February 2018 Inflation in Mexico is Starting to Fall Rapidly, but Banxico will Hike in April (Publication Centre)

Mexico's inflation is finally falling, giving policymakers room for manoeuvre.

26 February 2018 Look for the Forest Among the Trees in the EZ Core Inflation Data (Publication Centre)

Friday's final CPI report in the Eurozone confirmed that inflation dipped marginally in January, by 0.1 percentage points, to 1.3%.

26 February 2018 Non-Core Inflation Complicates BoJ Policy, Mr. Kuroda's Legacy at Stake (Publication Centre)

Japan's CPI inflation has risen sharply in recent months, driven by non-core elements. The headline faces cross-currents in coming months, but should remain high, posing problems for BoJ policy.

26 February 2018 The Era of Abnormally Low U.S. Long Real Yields is Coming to an End (Publication Centre)

After many years in which the phrase "twin deficits" was never mentioned, suddenly it is the explanation of choice for the weakening of the dollar and the sudden increase in real Treasury yields since the turn of the year, shortly after the tax cut bill passed Congress.

26 February 2019 The Impending China Trade Deal will Pose Questions for the Fed (Publication Centre)

A trade deal with China is in sight. President Trump tweeted Sunday that the planned increase in tariffs on $200B of Chinese imports to 25% from 10%, due March 1, has been deferred--no date was specified-- in light of the "substantial progress" in the talks.

26 February 2019 A U.S. China Trade Deal is in Sight Trump's Huawei U-Turn is Positive (Publication Centre)

Nothing is done until it's done, and, in the case of Sino-U.S. trade talks, even if a deal is reached, the new normal is that tensions will be bubbling in the background.

26 Feb. 2016 The Foundations of the U.K. Recovery are Remarkably Fragile (Publication Centre)

The preliminary estimate of a 0.5% quarter-on-quarter rise in GDP in the fourth quarter of 2015 was left unrevised, but that was the only nugge t of good news from yesterday's second GDP release. The expenditure breakdown hardly could have looked more troubling.

26 Feb. 2016 Growth in Narrow Money is Robust, but Slowing Noticeably (Publication Centre)

Yesterday's money supply data gave some respite after last month's disappointing slowdown. Broad money growth--M3--rose to 5.0% year-over-year, from 4.7% in December, but the details were less encouraging. The rebound was solely due slower declines in medium-term deposits, short-term debt issuance, and repurchase agreements.

26 August. 2016 No Clear Steer Likely From Yellen Today, After the Spring Debacle (Publication Centre)

Chair Yellen's speech at Jackson Hole at 10am Eastern time today has the potential to move markets substantially, but that's not our core expectation. It's more likely, we think, that Dr. Yellen will stick to the core FOMC view, which remains that "only gradual increases" in rates will be required, and that rates are "likely to remain, for some time, below levels that are expected to prevail in the longer run".

26 August. 2016 EZ Economic Bulls Checked by IFO and INSEE Business Surveys (Publication Centre)

Yesterday's IFO survey in Germany was a nasty downside surprise for markets. The business climate index slipped to 106.2 in August, from 108.3 in July, well below the consensus forecast for a modest rise. In addition, the expectations index slid ominously to 100.1, from a revised 102.1 in July.

26 Feb. 2015 Downside Risks for January CPI and Durable Orders? (Publication Centre)

Two key reports today, on January consumer prices and durable goods orders, have the power to move markets substantially. We think both will undershoot market expectations, though we would be deeply reluctant to read too much into either report; both are distorted by temporary factors.

26 Feb. 2015 GDP growth will pick up in the Eurozone this year (Publication Centre)

Hard economic data for the first quarter will appear over the next few weeks, but the EC sentiment survey later today gives a useful overview of how the euro area economy started the year.

26 Feb. 2016 Core PCE Inflation Set to Jump - Fed Target is Within Reach in 2016 (Publication Centre)

All eyes will be on the core PCE deflator data today, in the wake of the upside surprise in the January core CPI, reported last week. The numbers do not move perfectly together each month, but a 0.2% increase in the core deflator is a solid bet, with an outside chance of an outsized 0.3% jump.

26 Feb. 2016 A Tale of Two Current Account Paths, Adjusting to New Realities (Publication Centre)

Brazil's external accounts continue to be the country's bright spot, having improved considerably in recent quarters. The unadjusted current account deficit for January, USD4.8B, was lower than expected and much smaller than the USD12.2B shortfall a year earlier.

26 February 2019 Weak Industrial Output will Continue to Hurt the Mexican Economy in Q1 (Publication Centre)

Data released yesterday confirmed that the Mexican economy ended Q4 poorly; policymakers will take note.

26 February 2019 Your Guide to the New HICP Inflation Data in the Eurozone (Publication Centre)

For a central bank already fighting for every decimal in its attempt to convince markets that underlying inflation is slowly edging higher, the recent shift in HICP methodology drives home an increasingly problematic issue.

26 July 2017 China's Reform Scorecard Part 1: Labour Market and Demographics (Publication Centre)

Over the next 18 months we expect to see interest rates break out further on the upside. Initially, we expect developed market growth to be resilient to that.

26 January 2018 Q4 Growth Likely Near 3%, but Real Uncertainties in Trade, Inventories (Publication Centre)

need to add docMea culpa: We failed to spot the press release from the Commerce Department announcing the delay of the release of the advance December trade and inventory data, due to the government shutdown.

26 January 2018 Mexico's Inflation Prospects Are Improving, but Banxico Will Hike (Publication Centre)

Mexico's inflation is heading down. Wednesday's advance CPI report showed that inflation pressures are finally fading, following temporary shocks in recent months, and the end of the "gasolinazo" effect.

26 July 2017 Preliminary GDP to Confirm Growth Remained Sluggish in Q2 (Publication Centre)

Today's preliminary estimate of GDP likely will show that the economy continued to struggle in response to high inflation, further fiscal austerity and Brexit uncertainty.

26 July 2018 June Durable Orders Likely Hit by a Quirk in the Aircra Component (Publication Centre)

We're braced for a hefty downside surprise in today's durable goods orders numbers, thanks to a technicality.

26 July 2018 Today Will be a Copy Paste Job for Mr. Draghi and the ECB (Publication Centre)

Last month, the ECB set the scene for the majority of its key policy decisions over the next 12 months.

26 July 2018 The Climate Still isn't Right for Mortgage Lending to Recover (Publication Centre)

House purchase mortgage approvals by the main high street banks continued to recover in June, rising to a nine-month high of 40.5K, from 39.5K in May. June approvals, however, merely matched their postreferendum average, and the chances of a more substantial recovery are slim.

26 January 2018 Korean Exports hit a Perfect Storm in Q4 but Should Rebound in H1 (Publication Centre)

Korean GDP unexpectedly declined in Q4, for the first time since the financial crisis, falling 0.2% quarter-on-quarter after a 1.5% jump in Q3.

26 January 2017 Will Today's Data Shift Fourth Quarter GDP Growth Forecasts? (Publication Centre)

Three of today's economic reports, all for December, could move the needle on fourth quarter GDP growth. Ahead of the data, we're looking for growth of 1.8%, a bit below the consensus, 2.2%, and significantly weaker than the Atlanta Fed's GDPNow model, which projects 2.8%.

26 Jan. 2015 Banxico on Hold, Thanks to Slowing Inflation--But No Easing (Publication Centre)

Mexican inflation fell sharply in the first two weeks of January, dipping by 0.2% from two weeks earlier, thanks to lower energy prices and a reduction in long-distance phone tariffs. Telecom reform explains about 15bp of the headline reduction.

26 Jan. 2015 All Eyes on ECI - Nothing Matters More to the Fed than Wages (Publication Centre)

This week is, potentially, hugely important in determining the Fed's near-term view of the real state of the labor market and its approach to monetary policy over the next few months. The key event is the release of the fourth quarter employment cost index, which could make a material difference to perceptions of the degree of wage pressure.

26 Jan. 2015 Greece needs debt relief regardless of new government (Publication Centre)

The first exit poll published at 18.00 CET on Sunday evening points to a landslide victory for Syriza, and the real possibility that the party could form a majority government. Counter-intuitively, the prospects for Syriza here depend upon how the smaller parties do.

26 Jan. 2016 Housing Wealth About to Breach the Pre-Crash Peak (Publication Centre)

Sometime very soon, likely in the second quarter of this year, the stock of net housing wealth will exceed the $13.1T peak recorded before the crash, in the fourth quarter of 2005. At the post-crash low, in the first quarter of 2009, net housing equity had fallen by 53%, to just $6.2T. The recovery began in earnest in 2012, and over the past year net housing wealth has been rising at a steady pace just north of 10%. With housing demand rising, credit conditions easing and inventory still very tight, we have to expect home prices to keep rising at a rapid pace.

26 Jan. 2016 The Collapse in Oil Prices Won't Reinvigorate the Economy in 2016 (Publication Centre)

The response of U.K. producers and consumers to lower oil prices could not have been more different to those on the other side of the Atlantic. Counter-intuitively, U.K. oil production has grown strongly over the last year, while investment hasn't collapsed to the same extent as in the U.S., yet. Meanwhile, U.K. households have thrown caution to the wind and already have spent the windfall from the previous drop in oil prices, unlike their more prudent--so far--U.S. counterparts. With the costs still to come but most of the benefits already enjoyed, lower oil prices will be neutral for 2016 U.K. GDP growth, at best.

26 Jan. 2016 IFO Points to Slow Start to Q1 for the German Economy (Publication Centre)

Yesterday's IFO report reinforced the message from the PMIs that the Eurozone economy stumbled slightly at the beginning of the first quarter. The headline business climate index fell to an 11-month low of 107.3 in January, from a revised 108.6 in December, hit mainly by a drop in the expectations component. Intensified market volatility and worries over further weakness in the Chinese economy likely were the main drivers. Last week's dovish message from Mr. Draghi, however, came after the survey's cut-off date, leaving us cautiously optimistic for a rebound next month.

28 Apr. 2015 Confidence is high enough to support strong Q2 and Q3 spending (Publication Centre)

The expectations components of both the Michigan and Conference Board measures of consumers' confidence have risen sharply since gasoline prices rolled over.

28 Apr. 2015 Too Far, Too Fast For Eurozone Equity Markets since October? (Publication Centre)

QE and a gradually strengthening economy will remain positive catalysts for equities in the euro area this year. But with the MSCI EU ex -UK up almost 24% in the first quarter, the best quarterly performance since Q4 1999, the question is whether the good news has already been priced in.

29 September 2017 Catalonia Will Not Become Independent this Weekend (Publication Centre)

Sunday's referendum on independence in Catalonia is a wild-card. The central government has taken drastic steps to ensure that a vote doesn't happen.

29 September 2016 Consumers' Spending Growth in Germany is Slowing, Modestly (Publication Centre)

Survey data in the Eurozone were mixed yesterday. In Germany, the advance GfK consumer sentiment index slipped to 10.0 in October, from 10.2 in September, marginally below consensus forecasts. The details, reported for September, also were soft.

29 Sept. 2015 Don't Believe Case-Shiller Home Price Data - Prices are Rising (Publication Centre)

Today's Case-Shiller report on existing home prices will likely show that August prices were little changed, month-to-month, for the fourth straight month. The slowdown in the pace of price gains since the first quarter, when price gains averaged 1.0% per month, has been startling. In all probability, though, the apparent stalling is a reflection of the quality of the data rather than the underlying reality in the housing market.

29 September 2017 China's Pending Targeted RRR cut Implies SMEs are Struggling (Publication Centre)

China is set to ease reserve requirements for banks lending to small businesses. In a statement after the State Council meeting yesterday, Premier Li Keqiang said that commercial banks would receive a cut in their RRR , from 17% currently, based on how much they lend to businesses run by individuals.

29 September 2017 External Accounts no Longer Improving in Brazil and Mexico (Publication Centre)

Brazil's current account deficit is stabilizing following an substantial narrowing since early 2015, thanks to the deep recession.

29 September. 2016 Rocketing Soybean Exports Set to Hold Down August Trade Deficit (Publication Centre)

Today is all about beans. Specifically, soybeans, and more specifically, just how many of them were exported in August. This really matters, because if soybean exports in August and September remained close to their hugely elevated July level, the surge in exports relative to the second quarter will contribute about one percentage point to headline GDP growth.

29 September 2017 Revisions to Show Higher Household Saving, but a Worse External Deficit (Publication Centre)

The picture of the economy's recent performance will be redrawn today, when the national accounts are published.

29 Sept. 2015 Deflation Focus is Overwhelming, But Inflation will Pick Up in Q4 (Publication Centre)

Eurozone September CPI data this week will show that inflation pressures remain weak, appearing to support the ECB's focus on downside risks. We think Eurozone inflation--data released Wednesday-- rose slightly to 0.2% year-over-year in September from 0.1% in August, as core inflation edged higher, offsetting weak energy prices. Looking ahead, structural inflation pressures will keep inflation well below the central bank's 2% target for a considerable period.

29 October 2018 The Glass is Half-Full for French and German Households (Publication Centre)

Friday's consumer sentiment data in the two main Eurozone economies were mixed.

29 Oct. 2015 Will the Chancellor Ease Next Year's Fiscal Squeeze? (Publication Centre)

The defeat in the House of Lords of the Government's plans to cut spending on tax credits by £4.4B next year is not a barrier to their implementation. But it has prompted speculation that the Chancellor will reduce the size of the fiscal consolidation planned for next year. The plans may be tweaked in the Autumn Statement on 25 November, but we think the economy will still endure a major fiscal tightening next year.

29 Oct. 2015 EZ Consumers Remain Upbeat, but Downside Risks in Germany (Publication Centre)

Consumer sentiment data yesterday from the major economies were mixed, signalling that support to Eurozone GDP growth from surging German household consumption is waning. The key "business outlook" index--which correlates best with spending--plunged to a 30-month low in October, while the advance GfK sentiment index dipped to 9.4 in November from 9.6 in October. We see little signs in retail sales data of slowing momentum, and also think consumers' spending rebounded in Q3. But our first chart shows that the fall in the GfK index implies clear downside risks in coming quarters.

29 Oct. 2015 All Fed Eyes Now on the October, November Employment Reports (Publication Centre)

The Fed yesterday toned down its warnings on the potential impact on the U.S. of "global economic and financial developments", and upgraded its view on the domestic economy, pointing out that consumption and fixed investment "have been increasing at solid rates in recent months". In September, they were merely growing "moderately". Policymakers are still "monitoring" global and market developments, but the urgency and fear of September has gone. The statement acknowledged the slower payroll gains of recent months--without offering an explanation--but pointed out, as usual, that "underutilization of labor resources has diminished since early this year" and that it will be appropriate to begin raising rates "some further improvement in the labor market".

29 October 2018 Bolsonaro Likely Won Brazil's Presidency, the Hard Work Begins (Publication Centre)

Recent polls suggest that Jair Bolsonaro has comfortably beaten Fernando Haddad, to become Brazil's president.

29 October 2018 Is the Only Way Up for Public Borrowing from Here? (Publication Centre)

Later today, the Chancellor likely will take the first step towards abandoning plans for further fiscal tightening. In

29 October 2018 The Fed Wants to See Faster Wage Growth, but its Limit is not Far Off (Publication Centre)

We want to revisit remarks from Fed Vice-Chair Clarida last week.

29 October 2018 Japan's National CPI won't Match the Tokyo October Jump (Publication Centre)

Tokyo CPI inflation jumped to 1.5% in October, from 1.2% in September. That

3 April 2017 Expect Strength in Both the ISM and Construction Data Today (Publication Centre)

We'd be very surprised to see a material weakening in today's March ISM manufacturing survey. The regional reports released in recent weeks point to another reading in the high 50s, with a further advance from February's 57.7 a real possibility.

3 April 2017 Eurozone Consumers Likely had a Slow Start to 2017 (Publication Centre)

We fear that private spending in the EZ slowed in Q1, despite rocketing survey data. This fits our view that household consumption will slow in 2017 after sustained above-trend growth in the beginning of this business cycle.

3 August. 2016 The MPC Won't Be Afraid to Disappoint Markets' Stimulus Hopes (Publication Centre)

Many investors are betting that the MPC will announce a bold package of easing measures on Thursday. For a start, overnight index swap markets are pricing-in a 98% probability that the MPC will cut Bank Rate to 0.25%, and a 30% chance that interest rates will fall to, or below, zero by the end of the year.

3 August. 2016 Fundamentals Don't Matter For The EZ's Mighty Corporate Bonds (Publication Centre)

Debt issuance by Eurozone non-financial firms is soaring, consistent with the ECB's hope that adding private debt to QE would boost supply. Our first chart shows that the three-month sum of net debt sold in the euro area jumped to a new record of €60.3B in May. A short-term decline in issuance is a good bet after the initial euphoria in firms' treasury departments.

3 August 2018 The MPC's Hawkish Forecasts Remain Overshadowed by Brexit (Publication Centre)

The MPC made a concerted effort yesterday with its forecasts to signal that it is committed to raising Bank Rate at a faster rate than markets currently expect.

3 Dec. 2014 - ADP Likely to Overstate November Payrolls, Thanks to Early Snows (Publication Centre)

Since its October 2012 revamp, the ADP measure of private employment--the November survey will be released this morning--has tended to be little more than a lagging indicator of the official number.That's because ADP incorporates official data, lagged by one month, into the regression which generates its employment measure.

3 Dec. 2014 Colombia's Central Bank Will Remain Neutral in H1 Nex t Year (Publication Centre)

Colombia's central bank--Banrep--decided last Friday to leave its benchmark interest rate at 4.5% for the third consecutive month, concerned by the slowdown in oil prices, which is affecting economic activity in the fastest growing economy in the region.

3 Dec. 2015 Low Inflation Expectations Won't Become Self-Fulfilling (Publication Centre)

Households' inflation expectations have fallen again over the last few months, but we doubt they will constrain the forthcoming rebound in actual inflation. Past experience shows that inflation expectations are more of a coincident than a leading indicator of inflation. In addition, inflation is weakest right now in sectors where demand is relatively insensitive to price changes, so, when retailers' costs rise, they won't pay much heed to households' expectations.

3 Dec. 2015 Great Expectations of the ECB, But Mr. Draghi Will Not Disappoint (Publication Centre)

Even Charles Dickens could not have written a more dramatic prologue to today's ECB meeting. Elevated expectations ahead of major policy events always leave room for major disappointment, but we think the central bank will deliver. Advance data yesterday indicated inflation was unchanged at 0.1% year-over-year in November, below the consensus 0.2%, and providing all the ammunition the doves need to push ahead. We expect the central bank to cut the deposit rate by 20bp to -0.4%, to increase the pace of bond purchases by €10B to €70B a month, and to extend QE to March 2017.

3 August 2018 Strong Job Growth Likely Continued in June Wage Gains Still Modest (Publication Centre)

We look for a 210K increase in July payrolls. That would be consistent with the message from an array of private sector surveys, as well as the recent trend.

3 August 2017 China's Reform Scorecard Part 3: Building Government Debt Markets (Publication Centre)

China will have to issue a lot of government debt in the next few years. The government will need to continue migrating to its balance sheet, all the debt that should have been registered there in the first place. This will mean a rapid expansion of liabilities, but if handled correctly, the government will also gain valuable assets in the process.

3 April 2018 GDP Growth in the Eurozone is Slowing, but Not Collapsing (Publication Centre)

The economic data in the Eurozone were mixed while we were away.

3 April 2017 Q4 Consumers' Spending Spree Will End Abruptly This Year (Publication Centre)

The national accounts for the fourth quarter showed that the economy relied on households slashing their saving rate to a record low in order to spend more. Now, growth in consumer spending will have to fall back in line with real incomes, which will increasingly be impaired by rising inflation.

3 April 2019 A Decent Industrial Report in Brazil, but the Rebound Remains Subpar (Publication Centre)

Brazil's February industrial production numbers, labour market data, and sentiment indicators are gradually providing clarity on the underlying pace of activity growth, pointing to some red flags.

3 April 2019 A Middle-of-the-Road Perspective on Fiscal Policy in the Eurozone (Publication Centre)

It is fair to say that the economic debate on fiscal policy has shifted dramatically in the last 12-to-18 months.

3 August 2017 Will the MPC Call Time on the Term Funding Scheme? (Publication Centre)

We see only a small risk today of the MPC raising interest rates or sending a strong signal that a hike is imminent, for the reasons we set out in our preview of the meeting. The MPC, however, also must decide today whether to wind up the Term Funding Scheme-- TFS--launched a year ago as part of its post-Brexit stimulus measures.

3 April 2019 Is there a Majority in the Commons for Any Brexit Proposal? (Publication Centre)

Once again, MPs failed to coalesce around any way forward for Brexit in the indicative votes process on Monday.

29 November 2018 We're Holding our Non-Consensus View for no Bank of Korea Hike (Publication Centre)

The Monetary Policy Board of the Bank of Korea will tomorrow hold its final meeting for the year.

29 November 2018 The Jump in EZ Money Growth is Deceptive M1 was Unchanged (Publication Centre)

Money supply growth in the Eurozone quickened last month, by 0.3 percentage points to 3.9% year- over-year, but the details were less upbeat.

29 March 2018 Korean GDP Should Bounce Back in Q1, but Faces Headwinds Thereafter (Publication Centre)

The picture for Korean quarterly real GDP growth in Q4 was unchanged in the final reading, published yesterday, showing a contraction of 0.2%, after the 1.4% jump in Q3.

29 March 2018 Another Big Fall in the Saving Rate Likely Boosted GDP Growth in Q4 (Publication Centre)

The national accounts, released today, likely will restate that quarter-on-quarter GDP growth held steady at 0.4% in Q4.

29 March 2017 Triggering Article 50 Won't End the "Phoney War" Immediately (Publication Centre)

The Prime Minister will invoke Article 50 today, marking the end of the beginning of the U.K.'s departure from the EU. The move likely will not move markets, as it has been all but certain since MPs backed the Government's European Union Bill on February 1.

29 March 2018 Net Trade Will be a Drag on Q1 GDP, but Inventories are Rocketing (Publication Centre)

If we're right with our forecast that real consumers' spending rose by just 0.1% month-to-month in February -- enough only to reverse January's decline -- then it would be reasonable to expect consumption across the first quarter as a whole to climb at a mere 1.2% annualized rate.

29 March 2019 Core PCE Inflation is Stable, but Risk from Higher January Airline Fares (Publication Centre)

Our base case forecast has core PCE inflation at 1.9% from November 2018 through July this year.

29 March 2019 Expect Banxico to Start Easing in Q3, but Risks of Delay Remain (Publication Centre)

Banxico yesterday left its policy rate unchanged at 3%, the highest level in a decade.

29 March 2019 Debt-Assisted Household Spending Will Keep Potential BoK Cuts at Bay (Publication Centre)

Korea's business survey index rose for a second straight month in March, to 75 from 73 in February, on our adjustment.

29 March 2017 Banxico to Hike Tomorrow Despite the MXN's Rebound this Year (Publication Centre)

LatAm currencies have risen against the USD so far this year, easing the upward pressure on imported good prices and allowing most central banks to cut interest rates. The first direct effects of stronger currencies should be felt by firms which import high-turnover intermediate or final goods.

29 March 2017 The Alternative Interpretation of Political Uncertainty in the EZ (Publication Centre)

The presumption in markets is that the French presidential election is the last hurdle to be overcome in the EZ economy. As long as Marine Le Pen is kept out of l'Élysée, animal spirits will be released in the economy and financial markets. We concede that a Le Pen victory would result in chaos, at least in the short run. Bond spreads would widen, equities would crash and the euro would plummet. But we also suspect that such volatility would be short-lived, similar to the convulsions after Brexit.

29 June. 2016 French Households are in a Good Mood, Despite Dip in Sentiment (Publication Centre)

French consumer sentiment dipped slightly in June, but we see no major hit from ongoing labour market disputes. The headline index slipped to 97 in June, from 98 in May; this is a decent reading given the fourpoint jump last month. The headline was constrained by a big fall in consumers' "major purchasing intentions," but this partly was mean-reversion following a surge last month.

29 June. 2015 Mexican Recovery is Stuttering, but Better Days Ahead? (Publication Centre)

Mexico's economy hit a sticky patch in the first quarter, with confidence slipping, employment growth slowing and the downward trend in unemployment stalling. Indeed, the headline unemployment rate rose to 4.5% in May from 4.3% in April. The seasonally adjusted rate, though, was little changed at 4.4%, with a stable participation rate.

29 June. 2016 New BCB Boss Takes a Hawkish Tone, Rates on Hold in Q3 (Publication Centre)

The publication yesterday of the first BCB quarterly inflation report under the new president, Ilan Golfajn, revealed his initial views on inflation, the currency, and monetary policy. Overall, Mr. Golfajn has taken a hawkish approach. We think Brazil's first rate cut will come no earlier than Q4, likely at the final meeting of the year, providing the government continues the fiscal consolidation process and inflation keeps falling.

29 June. 2016 Second Quarter GDP Growth Could Easily Breach 3% (Publication Centre)

The Atlanta Fed's GDP Now estimate for second quarter GDP growth will be revised today, in light of the data released over the past few days. We aren't expecting a big change from the June 24 estimate, 2.6%, because most of the recent data don't capture the most volatile components of growth, including inventories and government spending. The key driver of quarterly swings in the government component is state and local construction, but at this point we have data only for April; those numbers were weak.

29 March 2017 Consumers are Happy, but Spending Will Lag Sentiment (Publication Centre)

Yesterday's data don't significantly change our view that first quarter GDP growth will be reported at only about 1%, but the foreign trade and consumer confidence numbers support our contention that the underlying trend in growth is rather stronger than that.

29 June. 2016 Sterling Likely to be Higher at Year-End, as the Political Fog Lifts (Publication Centre)

Sterling found its feet yesterday, rising to $1.33 from Monday's 31-year low of 1.32, but it would be the height of folly to rule out a further short-term decline. By the end of this year, however, we think that sterling likely will have appreciated to around $1.38.

29 March 2019 German Core Inflation Slumped in March, but it will Rebound in April (Publication Centre)

Data yesterday revealed that headline inflation in Germany was unchanged in March at 1.5%, thanks mainly to higher energy inflation, which offset a dip in food inflation.

29 March 2019 Is There Any Way Through the Brexit Bind? (Publication Centre)

The Prime Minister appears set to have one more go at getting the House of Commons to ratify the Withdrawal Agreement today.

29 November 2017 Stress Tests Give Banks the All-Clear but Profitability Concerns Remain (Publication Centre)

All seven of Britain's major banks passed the Bank of England's stress test this year, in the first clean sweep since the annual test began in 2014.

29 November 2017 Signs Mount that the BoJ is Concerned About the Curve (Publication Centre)

BoJ Governor Kuroda has piqued interest with his recent comments on the "reversal rate", the rate at which easy monetary policy becomes counterproductive, due to the negative impact on financial intermediation.

29 November 2017 Eurozone GDP Growth Will Slow Soon, Will Markets Care? (Publication Centre)

Headline money supply growth in the Eurozone has averaged 5% year-over-year since the beginning of 2015; yesterday's October data did not change that story.

29 November 2017 The Profit Share in GDP is set to Fall Sharply as Wage Growth Picks up (Publication Centre)

It doesn'tt matter if third quarter GDP growth is revised up a couple of tenths in today's third estimate of the data, in line with the consensus forecast.

29 November 2017 Unemployment in Mexico Keeps Falling, but Risks Have Increased (Publication Centre)

Yesterday's October labour market data in Mexico showed that the adjusted unemployment rate rose a bit to 3.4%, from 3.3% in September.

29 November 2018 The Bank's Brexit Deal Scenarios are Consistent with a May Rate Hike (Publication Centre)

Predictably, the Bank of England's estimate that GDP would plunge by 8% in the first year after a disorderly no-deal, no transition Brexit and that interest rates would need to rise to 5.5% to contain inflation grabbed the headlines yesterday.

29 November 2018 Powell Says the Funds Rate is Just Below... Well, What, Exactly (Publication Centre)

The stock market loved Fed Chair Powell's remarks on the economy yesterday, specifically, his comment that rates are now "just below" neutral.

29 May. 2015 Brazil's External Accounts are Improving Amid Weak Economy (Publication Centre)

Brazil's current account deficit rose to USD6.9B in April, from USD5.8B in March. The deficit totaled USD100.2B, or 4.5% of GDP on a 12-month rolling basis, marginally better than 4.6% in March; the underlying trend is flat. The services and income accounts improved slightly compared to April last year.

29 May 2019 Will Consumers Save Less this Year, in Order to Spend More (Publication Centre)

While businesses--and farmers--fret over the damage already wrought by the trade war with China and the further pain to come, consumers are remarkably happy.

29 May 2018 Capex Starts the Second Quarter Strongly, Further Gains Ahead? (Publication Centre)

The newly-revised data on capital goods orders, released on Friday, support our view that sustained strength in business capex remains a good bet for this year.

29 May 2018 A Peek into the Abyss of an Italian Parallel Currency and Euro Exit (Publication Centre)

We have to hand it to Italy's politicians. In an economy with a current account surplus of 3% of GDP, a nearly balanced net foreign asset position and with the majority of government debt held by domestic investors, the leading parties have managed to prompt markets to flatten the yield curve via a jump in shortterm interest rates.

29 May 2018 Does Japanese Core Inflation Respond to Capacity Pressures? (Publication Centre)

Tokyo CPI inflation edged down to 0.4% in May, from 0.5% in April.

29 May 2019 Consumer and Business Confidence Show Diverging Responses to Brexit (Publication Centre)

May's E.C. Economic Sentiment survey was a blow to hopes that the six-month stay of execution on Brexit would facilitate a recovery in confidence.

29 May 2019 Chinese Industrial Profits Tanked in April, after the March Spike (Publication Centre)

Industrial profits in China dropped 3.7% year-over- year in April, after surging 13.9% in March, according to the officially reported data.

29 May 2019 Bra Mex External Accounts are Solid, Despite Rising Global Threats (Publication Centre)

Brazil's external accounts continue to surprise to the upside, with the current account deficit remaining close to historic lows and capital flows performing better than anticipated, mostly due to higher-than- expected FDI.

3 Dec. 2015 Yellen Throws Down the Gauntlet, But Gently, Leaving Get-Outs (Publication Centre)

Short of saying "We're going to hike rates in two weeks' time", Dr. Yellen's view of the immediate economic and policy outlook, set out in her speech yesterday, could hardly have been clearer. Yes, she threw in the usual caveats: "...we take account of both the upside and downside risks around our projections when judging the appropriate stance of monetary policy", and saying the FOMC will have to evaluate the data due ahead of this month's meeting, but her underlying message was straightforward.

3 December 2018 Brazil's Solid Q3 GDP Data Pave the Way for an Upbeat 2019 (Publication Centre)

Data released last week confirm that Brazil's recovery has continued over the second half of the year, supported by steady household consumption and rebounding capex.

3 Mar. 2015 Weak Euro Boosts Orders for Manufacturers (Publication Centre)

Industrial companies in the Eurozone are still struggling with low growth, but the outlook is stabilising following the near-recession late last year. The Eurozone manufacturing PMI was unchanged at 51.0 in February, trivially lower than the initial estimate of 51.1.

3 Mar. 2015 Consumption and Construction Data Point to Sluggish Q1 GDP (Publication Centre)

Barring some sort of miracle, or substantial upward revision to prior data--it happens--first quarter consumption spending growth is unlikely to reach 3%, despite the robust 0.3% gain reported yesterday for January. Part of the problem is a basis effect.

3 June. Brexit Would Hit All Sterling Asset Values, Gilts Included (Publication Centre)

On the face of it, the outperformance of gilts compared to government bonds in other developed countries this year suggests that Brexit would be a boon for the gilt market. In the event of an exit, however, we think that the detrimental impact of higher gilt issuance, rising risk premia and weaker overseas demand would overwhelm the beneficial influence of stronger domestic demand for safe-haven assets, pushing gilt yields higher.

3 March 2017 Banxico is Facing a Tough Dilemma, but the Copom is Sitting Pretty (Publication Centre)

Banxico's Quarterly Inflation Report--QIR--for Q4 2016, published this week, confirmed that the monetary authority is concerned about the slowing pace of economic activity and rising inflation pressures. Banxico noted that signs of a recovery have emerged in external demand, but it also pointed out that the Trump administration might impose policies which would hit FDI flows into Mexico.

3 March 2017 EZ Inflation Hit by Perfect Storm in Q1, Headline Will Ease in Q2 (Publication Centre)

Inflation pressures in the Eurozone are building rapidly, setting up an "interesting" ECB meeting next week. Yesterday's advance CPI report showed that inflation edged up further in February to 2.0%, from 1.8% in January. The headline rate is now in line with the ECB's target, and up sharply from the average of 0.2% last year.

3 March 2017 Yellen and Fischer Won't Push Back Against a March Rate Hike Today (Publication Centre)

Speeches by Chair Yellen and Vice-Chair Fischer give the two most important Fed officials the perfect platform today to signal to markets whether rates will rise this month.

3 March 2017 Will the Chancellor Change the MPC's Inflation Target? (Publication Centre)

The CPIH--the controversial, modified version of the existing CPI that includes a measure of owner occupied housing, or OOH, costs--will become the headline measure of consumer price inflation when February's data are published on March 21.

3 June. 2016 May Payrolls Constrained By Verizon Strike, but Should be OK (Publication Centre)

The downside surprise in April payrolls reflected weakness in just three components--retail, construction, and government--compared to their prior trends. Of these, we think only the construction numbers are likely to remain soft in May. Had it not been for the Verizon strike, then, we would have expected payrolls to rise by just over 200K in May, but the 35K strike hit means our forecast is 170K.

3 June. 2016 Brazil's Recession Eased in Q1, But a Payback is Looming for Q2 (Publication Centre)

Brazil's recession eased considerably in the first quarter, due mainly to a slowing decline in gross fixed capital formation, a strong contribution from net exports, and a sharp, albeit temporary, rebound in government spending. Real GDP fell 0.3% quarter-on-quarter, much less bad than the revised 1.3% contraction in Q4.

3 June 2019 The Trade War Deepens, Mexico's Economy is Under Heavy Fire (Publication Centre)

President Trump's volatile diplomatic style is one of the biggest risks facing the Mexican economy in the near term, as we have discussed in previous Monitors.

3 June 2019 Headline and Core Inflation in the Eurozone Fell Sharply in May (Publication Centre)

Last week's May CPI data in the major EZ economies all but confirmed the story for this week's advance estimate for the euro area as a whole.

3 June 2019 Trade is Now Trump's Weapon for Everything, but it Shoots Backwards (Publication Centre)

The chance of a self-inflicted, unnecessary weakening in the economy this year, and perhaps even a recession, has increased markedly in the wake of the president's announcement on Friday that tariffs will be applied to all imports from Mexico, from June 10.

3 June. 2015 Brazil's Industrial meltdown continues - Better news elsewhere (Publication Centre)

Brazil industrial production continues to edge lower, falling 1.2% month-to-month in April, a 7.6% year-over-year drop. In March, output was down only 3.4% year-over-year, but the data are volatile in the short-term. The trend is about -7%, down from -3.8% in the second half of last year.

3 June. 2016 A Perfect ECB Balancing Act, But it Will Become More Difficult Soon (Publication Centre)

The ECB stood pat yesterday, keeping its key refinancing and deposit rates unchanged at zero and -0.4%, respectively. The marginal lending facility rate was also left at 0.25%, and the monthly pace of QE was maintained at €80B, with a preliminary end-date in the first quarter of 2017. Purchases of corporate bonds will begin June 8, and the first new TLTRO auction will take place June 22.

3 June. 2015 Inflation is rising, but the ECB will confirm its dovish stance today (Publication Centre)

In yesterday's Monitor, we laid out the macroeconomic case for moderately higher inflation in the second half of the year. But subdued market based inflation expectations indicate that the ECB will retain its dovish bias for now. The central bank's preferred measure, 5-year/5-year forward inflation expectations, have only increased modestly in response to QE, and have even declined recently on the back of higher market volatility.

3 May 2017 April's Higher Manufacturing PMI Won't Be Sustained (Publication Centre)

The Markit/CIPS manufacturing PMI shot up to a three-year high of 57.3 in April, from 54.2 in March, bringing an end to the run of downbeat news on the economy. The performance of the U.K. manufacturing sector, however, remains underwhelming, given the magnitude of sterling's depreciation.

3 May 2017 BanRep Acted Boldly on Friday. Will the BCRP follow Suit Next Week? (Publication Centre)

Colombia's sluggish growth and near-term economic outlook resembles that of most other LatAm economies. Domestic demand is weak, credit conditions are tight, and confidence is depressed. The medium term outlook, however, is perking up, slowly.

3 May. 2016 Will GDP Growth in the Eurozone Accelerate This Year? (Publication Centre)

Last week's advance EZ GDP data for the first quarter suggest the economy shrugged off the volatility in financial markets. Eurostat's first estimate indicates that real GDP in the euro area rose 0.6% quarter-on-quarter in Q1, up from 0.3% in Q4, and above the consensus, 0.4%.

3 May. 2016 Auto Sales Set for Clear April Rebound, Boosting Consumption (Publication Centre)

The startling 5.5% drop in auto sales in March left sales at just 16.5M, well below the 17.4M average for the previous three months and the lowest level since February last year. A combination of the early Easter, which causes serious problems for the seasonal adjustments, and the lagged effect of the plunge in stock prices in January and February, likely explains much of the decline.

3 May 2019 The MPC Signals that Rate Hikes are Coming, Though Not Just Yet (Publication Centre)

The MPC restated its commitment to an "ongoing tightening of monetary policy" yesterday, but provided no new guidance to suggest that the next hike is imminent.

3 May. How Far Would Sterling Fall if Britain Chose Brexit? (Publication Centre)

Most of the time, sterling broadly tracks a path implied by the difference between markets' expectations for interest rates in the U.K. and overseas. During the financial crisis, however, sterling fell much further than interest rate differentials implied, as our first chart shows.

3 Nov. 2015 Inflation Will Rise Faster Than the ECB Expects Next Year (Publication Centre)

Mixed comments last week by members of the governing council raised doubts over the ECB's resolve to add further stimulus next month. But the message from senior figures and Mr. Draghi remains that the Central Bank intends to "re-assess" its monetary policy tools in December. Our main reading of last month's meeting is that Mr. Draghi effectively pre-committed to further easing. This raises downside risks in the event of no action, but the President normally doesn't disappoint the market in these instances.

3 Nov. 2015 Truck Sales Soaring, Lifted by Cheap Gas, Robust Confidence (Publication Centre)

Most of the time, markets view auto sales as a bellwether indicator of the state of the consumer. Vehicles are the biggest-ticket item for most households, after housing, and most people buy cars and trucks with credit. Auto purchase decisions, therefore, tend not to be taken lightly, and so are a good guide to peoples' underlying confidence and cashflow. We appreciate that things were different at the peak of the boom, when anyone could get a loan and homeowners could tap the rising values of their properties, but that's not the situation today.

3 Nov. 2015 Manufacturing Unlikely to be Past the Worst (Publication Centre)

The sharp and unexpected improvement in the Markit/CIPS manufacturing survey in October released on Monday raised hopes that the recession in the industrial sector might be over. A cool look at the evidence, however, suggests that this probably is just wishful thinking.

3 May 2019 Is Japan MMT-ing Sort of, but this Prescription was Aimed at the U.S. (Publication Centre)

Modern Money Theory has come up at two consecutive BoJ press conferences.

3 May 2019 Inventories Could Spoil the Party for the EZ Economy in Q2 and Q3 (Publication Centre)

Manufacturers in the Eurozone are still suffering, but yesterday's final PMI data for April offered a few bright spots.

3 May 2018 Can the Prime Minister Fight off the Brexiteers in her Party? (Publication Centre)

The pressure on Theresa May from Brexiteers within her own party intensified yesterday, when 60 Conservative MPs signed a letter arguing that they could not back a proposal for a "customs partnership".

3 May 2018 A Sense of Relief, Despite the Q1 Slowdown in the EZ Economy (Publication Centre)

Yesterday's advance Q1 GDP data in the EZ confirmed that growth slowed at the start of the year.

3 May 2018 China's PMI Export Orders Paint an Overly Gloomy Picture (Publication Centre)

The forward-looking indices of China's Caixin manufacturing PMI for April attracted more attention than the headline, which was a bit of a non-event; it rose trivially 51.1, from 51.0 in March.

3 May 2018 The Fed Expects Above-Target Inflation Soon, but is Relaxed (Publication Centre)

The Fed pretty clearly wanted to tell markets yesterday that inflation is likely to nudge above the target over the next few months, but that this will not prompt any sort of knee-jerk policy response beyond the continued "gradual" tightening.

3 May 2019 Expect Solid April Payrolls, but Downside Risk for Hourly Wages (Publication Centre)

A robust April payroll number today is a good bet, but a gain in line with the 275K ADP reading probably is out of reach.

3 May 2019 Andean Central Bank's Dovish Tone to Continue In Coming Meetings (Publication Centre)

Inflation and growth paths remain diverse across LatAm, but in the Andes, the broad picture is one of modest inflationary pressures and gradual economic recovery.

3 June 2019 Economic Data Still Don't Warrant the Gilt Market's Gloom (Publication Centre)

Gilts continued to rally last week, with 10-year yields dropping to their lowest since October 2016, and the gap between two-year and 10-year yields narrowing to the smallest margin since September 2008.

3 June 2019 China's Faltering "Recovery" will Keep its Trade Negotiators Engaged (Publication Centre)

The sharp fall in China's manufacturing PMI in May makes clear that its recovery is nowhere near secured.

3 January 2018 See no Evil, Hear no Evil in Eurozone Manufacturing? (Publication Centre)

The Eurozone manufacturing sector finished 2017 on a strong note. The headline PMI increased to a cyclical high of 60.6 in December, from 60.1 in November, in line with the initial estimate.

3 January 2018 Caixin PMI Overstates Momentum, but Activity will Strengthen in Q1 (Publication Centre)

The Caixin manufacturing PMI picked up to 51.5 in December from 50.8 in November. But the jump looks erratic and we expect it to correct in January.

3 January 2017 Slowing Real Income Growth Will Define the 2017 U.K. Economy (Publication Centre)

The U.K. economy retained its momentum last year, despite the seismic shock of the vote to leave the EU. Quarter-on-quarter GDP growth averaged 0.5% in the first three quarters of 2016, matching 2015's rate and the average pace of growth across the Atlantic.

3 January 2018 Strong Growth in Manufacturing Output Won't be Sustained in 2018 (Publication Centre)

The manufacturing sector appears to have finished 2017 on a strong note. The Markit/CIPS manufacturing PMI fell to 56.3 in December from 58.2 in November, but it remained above its 12-month average, 55.9.

3 January 2018 Synchronized Recovery in the Andes. Inflation Continues to Fall (Publication Centre)

Data released in recent weeks have confirmed that the Andean economies retained a degree of momentum in Q4, with inflation well under con trol.

3 January 2019 China's PMIs Deteriorate What are the Positives Amid the Gloom (Publication Centre)

China's Caixin manufacturing PMI doused hopes of turning over a January new leaf; it dropped to 49.7 in November, from 50.2 in December.

3 January 2018 The Manufacturing Upswing Continues no Sign of Weakening (Publication Centre)

The Manufacturing Upswing Continues; no Sign of Weakening

3 January 2017 Consumer Confidence Gains Overstate Spending (Publication Centre)

While we were out, the data showed that consumers' confidence has risen very sharply since the election, hitting 15-year highs, but actual spending has been less impressive and housing market activity appears poised for a marked slowdown.

3 January 2017 Brazil stabilizes while Mexico softens (Publication Centre)

The data in LatAm have been all over the map in recent weeks. Brazil's cyclical stabilization continues, while Mexican numbers confirm that the economy has come under pressure in recent months.

3 December 2018 Tariff Deferment Shows Both Sides Want a Deal, but it Will Take Time (Publication Centre)

The agreement between Presidents Trump and Xi at the G20 is a deferment of disaster rather than a fundamental rebuilding of the trading relationship between the U.S. and China.

3 December 2018 March 29 Is Not an Immovable Deadline for Brexit (Publication Centre)

Both the E.U. and the U.K. government have been keen to emphasise, since the Withdrawal Agreement was provisionally signed off, that March 29 is a hard deadline for Brexit.

3 December 2018 The Bank of Korea has Come to the End of its Tightening Cycle (Publication Centre)

The Bank of Korea finally pulled the trigger, raising its base rate to 1.75% at its meeting on Friday. After a year of will-they-or-won't-they, five of the Monetary Policy Board's seven members voted to add another 25 basis points to their previous hike twelve months ago.

3 Feb. 2015 Behind the Noise, U.S. Economic Fundamentals are Solid (Publication Centre)

We are not bothered by either the drop in real December consumption, all of which was due to a weather-induced plunge in utility spending, or the drop in the ISM manufacturing index, which is mostly a story about hopeless seasonal adjustments.

3 February 2017 MPC Signals Newfound Supply Optimism, no Near-Term Rate Hike (Publication Centre)

The absence of hawkish undertones in the minutes of the MPC's meeting or in the Inflation Report forecasts took markets by surprise yesterday. The dominant view on the Committee remains that the economy will slow over the next couple of years, preventing wage growth from reaching a pace which would put inflation on trac k permanently to exceed the 2% target.

3 February 2017 Brazil's Q4 Industrial Output was Poor, Q1 Will be Much Better (Publication Centre)

Brazil's Q4 industrial production report, released Wednesday, confirmed that the recovery remained sluggish at the end of last year. December's print alone was relatively strong, though, and the cyclical correction in inventories--on the back of improving demand--lower interest rates, and the better external outlook, all suggest that the industrial economy will do much better this year.

3 January 2019 Huge External Deficit Points to Big No-Deal Downside for Sterling (Publication Centre)

The U.K.'s balance of payments leaves little room for doubt that sterling would sink like a stone in the event of a no-deal Brexit.

3 January 2019 Is QT Driving the Stock Market Down, or is it Just a Bit-part Player (Publication Centre)

We have focussed on the role of the trade war in depressing U.S. stock prices in recent months, arguing that the concomitant uncertainty, disruptions to supply chains, increases in input costs and, more recently, the drop in Chinese demand for U.S. imports, are the key factor driving investors to the exits.

3 July 2019 Brazil's Industrial Sector is Showing Early Signs of Gradual Stabilization (Publication Centre)

Data released this week in Brazil underscored the effect of weaker external conditions. This adds to the poor domestic demand picture, which has been hit by high, albeit easing, political uncertainty.

3 July 2019 ADP Set for Clear Rebound, but it Likely will Understate Payrolls (Publication Centre)

Today brings an array of economic data, including the jobless claims report, brought forward because July 4 falls on Thursday.

3 July 2018 The EZ Economic Reform Agenda Lives to Fight Another Day (Publication Centre)

Last week's EU summit was an exercise in political pragmatism rather than the bold step forward on reforms that investors had been hoping for.

3 July 2019 Japan's Tankan Highlights Underlying Economic Weakness (Publication Centre)

Japan's Q2 Tankan survey wasn't all bad news, but the positives won't last long. The large manufacturers index dropped to 7 in Q2, after the decline to 12 in Q1.

3 July 2019 Further Signs of a Q2 Slowdown in German Consumption (Publication Centre)

German retail sales always have to be taken with a pinch of salt, given their monthly volatility and often substantial revisions, but the preliminary Q2 data don't look pretty.

3 July. 2015 Will Desperation Force Greece to Print its Own "euros" and IOUs? (Publication Centre)

Rumours of Greece stepping back from the brink and accepting its creditors' demands, have taunted markets this week. But the response from the EU, so far, is that talks will not resume before this weekend's referendum. Our base case is a "yes" to the question of whether Greece should accept the proposal from the EU and IMF.

3 July 2019 Not All Construction Sector Indicators are Flashing Red (Publication Centre)

Don't write off the outlook for the construction sector purely on the basis of June's grim Markit/CIPS survey.

3 July 2018 Tariffs and Truck Shortages are Creating Industrial Bottlenecks (Publication Centre)

The startling jump in supplier delivery times in the June ISM manufacturing survey, to a 14-year high, was due--according to the ISM press release--to disruptions to steel and aluminum supplies, transportation problems and "supplier labor issues".

3 July 2018 It's Too Soon to Relax About the Current Account Deficit (Publication Centre)

Last week's balance of payments showed that the U.K. has made significant progress in reducing its reliance on overseas finance.

3 July 2017 China's Industrial Complex still Strong in Q2, H2 in Draghi's Hands (Publication Centre)

We expect China's quarterly real GDP growth in the second quarter to edge down from Q1, but only because Q1 growth was unsustainable. The official data shows real GDP growth at 1.3% quarter-onquarter in Q1.

3 January 2019 No Respite for Eurozone Manufacturing at the end of 2018 (Publication Centre)

Yesterday's sole economic report in the Eurozone confirmed that the economy slowed further at the end of 2018.

3 July 2017 Is the Jump in Eurozone Core Inflation Really Temporary? (Publication Centre)

Friday's euro area inflation reported capped a difficult week for EZ bondholders, although most of the damage was done beforehand by the advance German data.

3 July 2017 National Accounts Expose Britain's Economic Fragility (Publication Centre)

Last week's national accounts confirmed that the economy lost momentum abruptly in Q1, with net trade and investment failing to offset weaker growth in households' spending.

3 July 2017 Will the Argentinian Economy be Oblivious to Political Risks? (Publication Centre)

Argentina's economic data released last week confirm that the economy is improving. Our core view, for now, is that the economy will continue to defy rising political uncertainty, both domestic and external.

3 July 2017 Three Jobs Reports in Nine Weeks set to Shift Market Rate Expectations (Publication Centre)

The next nine weeks bring three jobs reports, which will determine whether the Fed hikes again in September, as we expect, and will also help shape market expectations for December and beyond.

29 June. 2015 Greek Exit Looms, but Don't Ignore Bullish Leading Indicators (Publication Centre)

Negotiations between Greece and its creditors collapsed over the weekend, greatly increasing the risk of a Grexit. The decision by Syriza to call a referendum on the bailout proposal next weekend, initially advocating rejection, forced the Eurogroup to abandon negotiations and focus on "damage control." Hope of a final retreat from the brink rests with the Greek parliament deciding not to hold the referendum, and accepting the proposal presented on Friday.

29 June. 2015 Greece to Dominate Markets - Dollar, Treasuries to Benefit (Publication Centre)

The Eurozone is on the brink of its first exit this week after the ECB refused to offer incremental emergency liquidity to Greek banks, forcing the start of bank holiday through July 7--two days after next weekend's referendum--and beginning today. We have no doubt that if the banks were to open, they would soon be bust; bank runs have a habit of accelerating beyond the point of no return very quickly.

28 June 2019 Consumers' Confidence Still Points to Steady Growth in Spending (Publication Centre)

The latest E.C. survey shows the gap between firms' and households' confidence levels has remained substantial.

28 June 2019 Banxico Dials Down its Hawkish Rhetoric, it Will Have to Ease Soon (Publication Centre)

Mexican policymakers voted to leave the main rate on hold at 8.25% yesterday, as inflation remains high--though falling--and the economy is stuttering.

28 June 2018 Services Data to Highlight Downside Risk to the MPC's GDP Forecast (Publication Centre)

The MPC will be looking for the Q1 national accounts and April's index of services data, both released on Friday, to support its view that the economy hasn't lost momentum this year.

28 June 2019 Downside Risk for the core PCE Deflator, Again, Expect H2 Rebound (Publication Centre)

The downshift in core PCE inflation this year has unnerved the Fed, along with the intensification of the trade war and slower global growth.

28 June 2019 Who Will get the Top Jobs in the EU, and Should Investors Care? (Publication Centre)

Last week's capsized European Council summit added to our suspicions that uncertainty over the EU's top jobs will linger over the summer.

28 June. 2016 The Case for Stronger U.S. Economic Growth is Still Robust (Publication Centre)

Difficult though it is to tear ourselves away from Britain's political and economic train-wreck, morbid fascination is no substitute for economic analysis. The key point here is that our case for stronger growth in the U.S. over the next year is not much changed by events in Europe.

28 June. 2016 New Government in Spain Will be Given Time to Cut its Deficit (Publication Centre)

okThe weekend's election result in Spain provided relief for investors anxiously looking for another "surprise." Exit polls on Sunday showed a big majority for the anti-establishment party Podemos, but in the end Spanish voters opted for safety. The incumbent Partido Popular, PP, was the election's big winner compared with the elections six months ago, gaining 15 seats.

28 June 2018 Second Quarter Growth is on Track to be a Blockbuster (Publication Centre)

The decline in headline durable goods orders in May, reported yesterday, doesn't matter.

28 June 2018 How will the Chinese Authorities Respond as Pro ts Growth Slows (Publication Centre)

Industrial profits growth is closely watched by the Chinese authorities, even more so now that deleveraging is a prime policy aim.

28 June 2017 A Difficult Balancing Act for Mr. Draghi on Growth and Inflation (Publication Centre)

Mr. Draghi's speech yesterday in Portugal, at the ECB forum on Central Banking, pushed the euro and EZ government bond yields higher. The markets' hawkish interpretation was linked to the president's comment that "The threat of deflation is gone and reflationary forces are at play."

28 July. 2016 Acceleration of Q2 GDP Won't Have Much Bearing on Stimulus Debate (Publication Centre)

Taken at face value, the preliminary estimate of Q2 GDP suggests that the economic recovery weathered Brexit risk well. But growth received support from some unsustainable sources, and also probably was boosted by a calendar quirk. Meanwhile, with few firms or consumers expecting a vote for Brexit prior to the referendum, Q2's brisk growth tells us little about how well the economy will cope in the current climate of heightened uncertainty.

28 June 2017 Chinese Profits Growth to Decelerate, That's a Good Thing (Publication Centre)

Chinese industrial profits growth rose to 16.7% year-on-year in May, from 14.0% in April. But this headline is highly misleading. Profits growth data are about as cyclical as they come so taking one point in the year and looking back 12 months is very arbitrary. Moreover, the data are very volatile over short periods.

28 June 2017 ISM Survey Suggests May Trade Deficit to Drop Sharply (Publication Centre)

The April international trade numbers were startlingly, and surprisingly, horrible. The deficit in trade in goods leaped by $6.2B -- the biggest one-month jump in two years -- to $67.1B, though the headline damage was limited by a sharp narrowing in the oil deficit, thanks to lower prices, and a rebound in the aircraft surplus.

28 June 2017 Inflation Forecast Revisions in August won't Force the MPC's Hand (Publication Centre)

The minutes of the MPC's meeting in June indicated that several members' patience for tolerating for above-target inflation is wearing thin.

28 June 2017 Mexico's Trade Balance Stalled in May, but Trend Remains Positive (Publication Centre)

The upturn in Mexico's trade balance in recent months stalled in May, but the underlying trend is still improving. Data yesterday showed that the seasonally adjusted deficit rose to USD700M in May, after a USD15M gap in April. Imports rose 2.9% month-to-month, offsetting a mere 0.7% increase in exports.

28 March 2017 Full-Scale Tax Reform Likely is Dead (Publication Centre)

The failure of House Republicans to support Speaker Ryan's healthcare bill has laid bare the splits within the Republican party. The fissures weren't hard to see even before last week's debacle but the equity market has appeared determined since November to believe that all the earnings-friendly elements of Mr. Trump's and Mr. Ryan's agendas would be implemented with the minimum of fuss.

28 March 2017 Andes' Countries Hit by Temporary Shocks, Monetary Policy to Help (Publication Centre)

Recent data have confirmed that Colombian economic activity is still fragile, and that downside risks increased in Q1 as oil prices hav e slipped. The ISE economic activity index rose just 1.0% year-over-year in January, down from a 1.6% average gain in Q4.

28 May. 2015 The Oil Hit Matters for Capex, but Not for the Labor Market (Publication Centre)

We argued in the Monitor yesterday that the very low and declining level of jobless claims is a good indicator that businesses were not much bothered by the slowdown in the pace of economic growth in the first quarter. The numbers also help illustrate another key point when thinking about the current state of the economy and, in particular, the rollover in the oil business.

28 May. 2015 Italy Finally Exits Recession, But Will Remain an Underperformer (Publication Centre)

We will be paying special attention today to the EC sentiment survey for Italy, where the headline index has climbed steadily so far this year. It was unchanged at an eight-year high of 106.1 in April, and even if it fell slightly in May--we expect a dip to 105.0--it still points to an upturn in economic growth.

28 May 2019 Japan's CPI Inflation Uptrend Lacks Legs, Holiday Distortions Prevalent (Publication Centre)

CPI inflation last Friday gave Japanese policymakers a break from the run of bad data, jumping to 0.9% in April, from 0.5% in March.

28 November 2017 Chinese Profits Headline Overstates Growth. Private Firms Struggling (Publication Centre)

Chinese industrial profits growth officially edged down to 25.1% year-over-year in October, from 27.7% in September. This is still very rapid but we think the official data are overstating the true rate of growth.

28 November 2017 Consumers' Spending Ought to be Strong this Holiday Season (Publication Centre)

Media reports suggest that the underlying trends in retailing--rising online sales, declining store sales and mall visits--continued unabated over the Thanksgiving weekend.

28 November 2017 The EZ Economy Won't Tell us What Happens Next in Equities (Publication Centre)

This year has been a story of two halves for EZ equities. The MSCI EU ex-UK jumped 11% in the first five months of 2017, but has since struggled to push higher.

28 November 2017 Political Uncertainty to Continue in Mexico Despite a Brief Pause (Publication Centre)

Mexico's political panorama seems to be becoming clearer, at least temporarily. This should dispel some of the uncertainty that has been hanging over the economy in recent months.

28 May 2019 Count on Consumers to Drag the Economy Through the Brexit Mess (Publication Centre)

The Prime Minister's resignation and the stillborn launch of the Withdrawal Agreement Bill last week has forced us to revise our Brexit base case, from a soft E.U. departure on October 31 to continued paralysis.

28 May 2019 Brazil's Inflation Remains Benign, Mexico's GDP Brings Bad News (Publication Centre)

Brazil's economic prospects continue to deteriorate rapidly, due to a combination of rising political uncertainty, the failure of the new government to advance on reforms, and ongoing external threats.

28 March 2017 EZ Money Supply Hit by Non-M1 Components in February (Publication Centre)

Momentum in the euro area's money supply slowed last month. M3 growth dipped to 4.7% year-over-year in February, from a downwardly-revised 4.8% in January. The headline was mainly constrained by the broad money components. The stock of repurchase agreements slumped 24.3% year-over-year and growth in money market fund shares also slowed sharply.

28 March 2017 Could a Rebounding Eurozone Prevent a U.K. Slowdown? (Publication Centre)

Business surveys coming out of the Eurozone have been remarkably strong recently. The composite PMI for the Eurozone jumped to 56.7 in March--its highest level since April 2011--from 56.1 in February. Germany's IFO business climate index leaped to a 67-month high in March.

28 March 2018 Is Wage Growth About to Reach a Turning Point? (Publication Centre)

Wage growth will be crucial in determining how quickly the MPC raises interest rates this year. So far, it hasn't recovered meaningfully.

28 March 2018 Japan's Labour Market to Continue Tightening this Year (Publication Centre)

Data to be released this Friday should show that Japan's labour market remains tight, though the unemployment rate likely ticked back up in February, to 2.6%, after the erratic drop to 2.4% in January.

28 March 2019 China Profits will Bounce Back in March Proper Recovery is Coming (Publication Centre)

China's industrial profits tanked in January/ February, falling 14.0% year-to-date year-over-year, after a 1.9% drop year-over-year in December.

28 March 2018 Recent Data Confirm Argentina's Turnaround but Challenges Remain (Publication Centre)

Data released last week confirm that the Argentinian economy ended 2017 strongly.

28 July 2017 The Downturn in Housing Market Activity has Further to Run (Publication Centre)

Equity prices for companies dependent on the U.K.'s residential property market tumbled yesterday as several companies reported poor results for the first half of 2017. Most companies blamed a decline in housing transactions for falling profits.

28 July 2017 Korean GDP and Chinese Pro ts Con rm China is Slowing (Publication Centre)

Korean real GDP growth slumped in Q2 to 0.6% quarter-on-quarter, from 1.1% in Q1, as both the main drivers--construction and exports--ran out of steam simultaneously. Construction investment grew by 1.0%, sharply slower than the 6.8% in Q1 and contributing just 0.2% to GDP growth in Q2, a turnaround from the 1.1 percentage point contribution in the first quarter.

28 August. 2015 August Payrolls Will Support Fed Inaction - Unemployment Won't (Publication Centre)

We argued yesterday that the August payroll number is unlikely to be a blockbuster, thanks to a combination of problems with the birth/death model and the strong tendency for this month's jobs number to be initially under-reported and then revised substantially higher. But these arguments don't apply to the unemployment rate, which is derived from the separate household survey.

28 August 2018 Mexico Struggled at the End of the First Half Will it Rebound (Publication Centre)

The Mexican economy shrank by 0.2% quarter- on-quarter in Q2, according to the final GDP report, a tenth worse than the preliminary reading.

28 August 2018 Germany's Economy is Resilient in the Face of External Risks (Publication Centre)

Friday's detailed GDP data in Germany confirm that the euro area's largest economy performed strongly in the second quarter.

28 August. 2015 Fed Delay Until December Will Be Positive For LatAm Markets - Just (Publication Centre)

Multiple factors have shaken LatAm financial markets this week. China's market turmoil, commodity price oscillations, currency volatility, and political mayhem in every corner of the region, have all conspired against markets. But market chaos has also driven some central banks to rethink their monetary policy plans. For EM, in particular for LatAm, the stance of the Federal Reserve is key, given the region's close ties to the U.S., and the dollar.

28 February 2017 Colombia's Economy is Struggling, but Further Easing is Coming (Publication Centre)

The Colombian economy was relatively resilient at the end of last year, but economic reports released during the last few weeks indicate that growth is still fragile, and that downside risks have increased. Real GDP rose 1.0% quarter-on-quarter in Q4, pushing the year-over-year rate up to 1.6% from 1.2% in Q3.

28 February 2018 Eurozone Inflation Fell in February, but the Core Rate Likely Rose (Publication Centre)

Yesterday's advance CPI data in Germany and Spain suggest that inflation in the Eurozone as a whole dipped slightly in February.

28 February 2017 The Eurozone Business Cycle Upturn is Resilient and Robust (Publication Centre)

Money supply dynamics in the Eurozone continue to signal a solid outlook for the economy. Headline M3 growth eased marginally to 4.9% year-over-year in January, from 5.0% in December; the dip was due to slowing narrow money growth, falling to 8.4% from 8.8% the month before. The details of the M1 data, however, showed that the headline chiefly was hit by slowing growth in deposits by insurance and pension funds.

28 August 2017 Expect a Correction in the July Trade Data, but Trends are Favorable (Publication Centre)

Net foreign trade made a positive contribution of 0.2 percentage points to GDP growth in the second quarter, matching the Q1 performance.

28 Aug 2019 Peru's Economy is Still Growing, but External Threats are Significant (Publication Centre)

Data last week confirmed that Peru's economic growth slowed sharply in the first half of the year, due to the damaging effects of the global trade war hitting exports.

28 April 2017 Current Account in Brazil Still Improving, But not for Long (Publication Centre)

Brazil's recovery has been steady in recent months, and Q1 likely will mark the end of the recession. The gradual recovery of the industrial and agricultural sectors has been the highlight, thanks to improving external demand, the lagged effect of the more competitive BRL, and the more stable political situation, which has boosted sentiment.

28 Apr. 2016 Eurozone Real Narrow Money Growth Continues to Slow (Publication Centre)

Monetary dynamics in the Eurozone were virtually unchanged last month. M3 growth rose trivially to 5.0% year-over-year in March from a revised 4.9% in February. It was lifted by stronger growth in medium-term deposits and issuance of short-term debt.

28 April 2017 The ECB is Happier about the Economy, But not Inflation (Publication Centre)

Yesterday's ECB meeting painted a picture of a central bank in wait-and-see mode. The main refinancing and deposit rates were kept at 0.00% and -0.4% respectively, and the marginal lending facility rate also was unchanged at 0.25%.

28 April 2017 The Economy Appears to have Stalled in Q1, but Q2 Will be Better (Publication Centre)

Whatever number the BEA publishes this morning for first quarter GDP growth -- we expect zero -- you probably should add about one percentage point to correct for the persistent seasonal adjustment problem which has plagued the data for many years. Reported first quarter growth has been weaker than the average for the preceding three quarters in 21 of the 31 years since 1985 -- and in eight of the past 10 years.

28 Aug 2019 Consumers are Very Happy About the Labor Market: Can it Last? (Publication Centre)

We were happy to see upside surprises from both sides of the domestic economy yesterday, but we doubt that the August readings from both the Conference Board's consumer confidence survey and the Richmond Fed business survey can hold.

28 Aug 2019 China's Talk of Austerity Faces H2 Hurdles but it isn't Merely Rhetoric (Publication Centre)

China's finance minister Liu Kun provided his report on China's current fiscal situation to the legislature last Friday.

28 February 2018 Powell Plays the Continuity Card, Mostly, but he's Bullish on Growth (Publication Centre)

Fed Chair Powell sounded a lot like Janet Yellen yesterday, at least in terms of substance.

28 February 2018 Retail Sales in Mexico Ended 2017 Badly, but Spending Will Rebound (Publication Centre)

Retail sales in Mexico plunged at the end of Q4, but we think households' spending will continue to contribute to GDP growth in the first quarter.

28 Jan. 2016 Italy Gets its "Bad Bank," but Implementation Looks Difficult (Publication Centre)

Reports yesterday indicated that a deal has finally been struck between the European Commission and the Italian government to start dealing with bad loans in the banking system. The initial details suggest the government will be allowed to guarantee senior tranches on non-performing loans, supposedly making them easier to sell to private investors. In order to avoid burdening government finances as part of the sales--not allowed under the new banking union rules--the idea is to price the guarantees based on the credit risk of similar loans.

28 Jan. 2016 FOMC is Focussed on the Labor Market - Global Events Matter Less (Publication Centre)

The FOMC flagged recent market developments as a source of risk to the U.S. economy yesterday, unsurprisingly, but didn't go overboard: "The Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook."

28 Jan. 2015 What Happened to December Durable Goods Orders? (Publication Centre)

We are pretty confident that the reported 3.4% drop in durable goods orders in December, which so spooked the markets yesterday, didn't actually happen.

28 January 2019 Has the Link Between Labour Costs and Inflation Broken? (Publication Centre)

At first glance, the U.K. consumer price data show a perplexing absence of domestically generated inflation.

28 January 2019 Inflation Remains Benign in Mexico, Despite Temporary Shocks (Publication Centre)

Mexican economic data was surprisingly benign last week.

28 January 2019 Policy and Markets Will Slow the Economy, but not Much (Publication Centre)

The end of the government shutdown--for three weeks, at least-- means that the data backlog will start to clear this week.

28 January 2019 PBoC CBSs: Not Quite QE, but Potentially a Useful Step (Publication Centre)

Last week the Chinese authorities issued a series of new measures to help with bank recapitalisation, and, we think, to supplement interbank liquidity.

28 Jan. 2015 QE will boost equities this year, but valuations will be stretched to the extreme (Publication Centre)

The ECB will receive most of the credit for the recent gain in stock markets, but the main leading indicator for the stock market, excess liquidity, was already turning up late last year. With the MSCI EU ex-UK up 21%, in euro terms, since October, a lot is already priced in, but in the medium term the outlook is upbeat, and we look for further gains this year.

28 Jan. 2015 Economic Momentum Means no Easing in Mexico this Year (Publication Centre)

Mexico's central bank, Banxico, will hold its first monetary policy meeting of this year tomorrow. It will break with tradition, holding the meeting on Thursday at 1:00 p.m, local time, instead of the previous 9:00 a.m slot.

28 February 2018 Why Hasn't Britain Enjoyed a Significant Trade Boost? (Publication Centre)

Sterling's depreciation, which began over two years ago, has inflicted pain on consumers but fostered a negligible improvement in net trade.

28 February 2018 The BoK is in Wait-And-See Mode, Consumer Confidence Dented (Publication Centre)

Data and events have gone against the idea of further BoK policy normalisation since the November hike.

28 February 2019 A Dovish Money Supply Report Ahead of the March ECB Meeting (Publication Centre)

Yesterday's January EZ money supply data offered support for investors betting on a further dovish shift by the ECB at next month's meeting.

28 February 2019 China is Relying on Tax Cuts and Local Government for Stimulus (Publication Centre)

China's government overshot its deficit target last year, and probably will overshoot it by at least as much this year

28 February 2019 The Probable Delay to Brexit Makes a Q3 Rate Hike a Closer Call (Publication Centre)

We have no choice but to revise down our forecast for GDP growth in Q2, now that the threat of a no-deal Brexit likely will hang over the economy beyond March, probably for three more months.

28 February 2019 Expect Underwhelming Q4 GDP Growth Data Today Q1 Likely Worse (Publication Centre)

We expect to learn today that the economy expanded at a 2.1% annualized rate in the fourth quarter, slowing from 3.4% in the third.

28 November 2018 Investors Shouldn't Fret about the Risk of a Corbyn Government (Publication Centre)

Some analysts argue that sterling won't recover materially even if MPs wave through Brexit legislation, because the threat of a Labour government worries investors more than a messy departure from the EU.

28 November 2018 Is Mr Macron About to Lose to the Street Like his Predecessors (Publication Centre)

Our hopes that tax cuts and lower energy inflation would lift French household consumption in Q4 were badly dented by yesterday's consumer sentiment report.

29 January 2018 Brazil External Accounts Are Authorities' Least Source of Concern (Publication Centre)

Brazil's external accounts were a bright spot last year, again.

29 Jan. 2016 Will Inventories and Government Hold Q4 GDP Close to Zero? (Publication Centre)

We expect to learn today that the economy barely grew at all in the fourth quarter. At least, that's what we think the first estimate of growth, due today, will show. This number will then be revised twice over the next couple of months, then again when revisions for the past three years are released in July. Thereafter, the numbers are subject to further annual revisions indefinitely.

29 Jan. 2016 Little to Console the Optimists in Fourth Quarter GDP (Publication Centre)

The preliminary estimate of a 0.5% quarter-on-quarter rise in GDP in Q4 slightly exceeded our expectation and the third quarter's growth rate, both 0.4%. Nonetheless, there was little to console the optimists in the figures. The recovery remains unbalanced, with industrial production and construction output falling by 0.2% and 0.1% respectively, while services output rose 0.7% quarter-on-quarter.

29 January 2018 Japanese CPI inflation is Half Energy and Half Food, BoJ in a Bind (Publication Centre)

Japan's CPI inflation jumped to 1.0% in December from 0.6% in November, driven by food prices.

29 January 2018 The Investor's Guide to the Business Cycle in the Eurozone (Publication Centre)

Money supply data in the EZ continue to suggest that headline GDP growth will slow soon.

29 January 2019 External Accounts in Brazil and Mexico are no Threat, For Now (Publication Centre)

Brazil's external accounts were a relatively bright spot last year, once again.

29 January 2018 Strong Q4 GDP Requires us to Tweak, not Overhaul, Our Rate Call (Publication Centre)

The preliminary estimate of Q4 GDP was unambiguously strong and has forced us to modify our view of the likely timing of the next interest rate increase.

29 Jan. 2016 EZ Core Inflation is Rising, but Weak Oil Prices are Still a Wildcard (Publication Centre)

German data yesterday indicate that inflation pressures have, so far, been resilient in the face of the recent collapse in oil prices. Inflation rose to 0.5% year-over-year in January from 0.3% in December, partly due to base effects pushing up the year-over-year rate in energy prices, but core inflation rose too. The detailed state data indicate that almost all key components of the core index contributed positively, lead by leisure and recreation and healthcare.

29 Jan. 2016 Data and Copom Minutes Point to no Change in Brazilian Rates (Publication Centre)

Another month, another bleak Brazilian labor market report. The seasonally adjusted unemployment rate increased marginally to 8.3% in December, up from 8.2% in November, much worse than the 5.1% recorded in December 2014.

29 August 2018 Focus on Slowing Real M1, not the Upbeat Loan Data, in the Eurozone (Publication Centre)

In recent Monitors--see here and here--we have made a case for decent growth in the EZ's largest economies in the second half of the year, though we remain confident that full-year growth will be a good deal slower, about 2.0%, than the 2.5% in 2017.

29 August 2017 The next few Months will Test Temer's Capital in Congress (Publication Centre)

Brazil's economic outlook is gradually improving following a challenging Q2, which was hit by political risk, putting business and consumer confidence under pressure.

29 August 2018 Mexico's Prospects to Improve Following the New NAFTA Pact (Publication Centre)

Mexico's risk profile and financial metrics have improved in recent days, following news of a preliminary bilateral trade deal with the U.S. on Monday.

29 Feb. 2016 Core PCE Inflation Will Breach the Target This Year, Two Years Early (Publication Centre)

When we argue that the Fed will have to respond to accelerating wages and core prices by raising rates faster than markets expect, a frequent retort is that the Fed has signalled a greater tolerance than in the past for inflation overshoots.

29 Feb. 2016 The Eurozone is Back in Deflation, but the Relapse is Temporary (Publication Centre)

Advance inflation data on Friday added to the gloom on the Eurozone economy. Reports from Germany, France, and Spain all surprised to the downside, indicating the euro area as a whole slipped back into deflation in February. Inflation in Germany dipped to 0.0% year-over-year in February, from 0.5% in January, and France slid back into deflation as the CPI index fell 0.2%, down from a 0.2 increase last month.

29 Feb. 2016 Mexican Inflation Edging Higher - Don't Worry, for Now (Publication Centre)

Mexico's inflation has started to edge higher due mainly to an unfavorable base effect and pressures on food prices. The bi-weekly headline CPI for the first half of February edged up to 2.9% year-over-year and up from 2.7% in January and the record low of 2.3% in December.

29 January 2019 Industrial Profits in China Remain Terrible, Underneath the Surface (Publication Centre)

China's industrial profits data for December showed continued weakness in the sector, with no clear signs that a turnaround is in the offing.

29 January 2019 Is it a Good Idea for Markets to Ignore Poor Macro Data in the EZ (Publication Centre)

In the last few weeks markets have been treated to the news that euro area industrial production crashed towards the end of Q4, warning that GDP growth failed to rebound at the end of 2018 from an already weak Q3.

29 June 2018 Core PCE Inflation is Nudging Towards the Target (Publication Centre)

Our base-case forecast for the May core PCE deflator, due today, is a 0.17% increase, lifting the year-over-year rate by a tenth to 1.9%.

29 June 2017 The EZ Economy is in Great Shape, but Probably not Getting Better (Publication Centre)

Money supply dynamics in the Eurozone were broadly stable last month. M3 rose 5.0% year-over-year in May, accelerating slightly from a 4.9% increase in April, in line with the trend since the middle of 2015.

29 June 2017 China's Debt is not too High, but it Grew too Fast - Reckoning will Come (Publication Centre)

China's total debt stock is high for a country at its stage of development, relative to GDP, but it is sustainable for country with excess savings. China was never going to be a typical EM, where external debtors can trigger a crisis by demanding payment.

29 June 2018 EZ Inflation is Back to Normal, but that's not Enough for the ECB (Publication Centre)

Yesterday's inflation data in the major euro area economies force us to mark down slightly our prediction for today's headline EZ number.

29 June 2018 Mexico's Presidential Race Nears the Finish AMLO has a Strong Lead (Publication Centre)

We are going to print two days before the July 1 presidential election in Mexico.

29 June 2018 Trade Tensions Unveil Chinese Financial Fragility (Publication Centre)

In previous Monitors, we have outlined our base case that the direct impact of tariffs on Chinese GDP will be minimal this year.

29 June 2018 Surveys Continue to Weaken the Case for a Rate Hike (Publication Centre)

Surveys released yesterday failed to support the MPC's view that the economy has bounced back in Q2.

29 June 2017 A Single Rate Hike Would Risk a Harmful Rise in Rate Expectations (Publication Centre)

The MPC's hawks are framing the interest rate increase they want as a "withdrawal of part of the stimulus that the Committee had injected in August last year", arguing that monetary policy still would be "very supportive" if rates rose to 0.5%, from 0.25%.

29 July. 2016 Will Household Saving Rise and Tip the Economy into Recession? (Publication Centre)

Households' saving decisions will play a key role in determining whether the economy slips into recession over the next year. Indeed, all of the last three recessions coincided with sharp rises in the household saving rate, as our first chart shows. Will households save more in response to greater economic uncertainty?

29 July 2019 China's GDP Headlines Overstate Growth but Q2 Wasn't all Bad News (Publication Centre)

China's Q2 real GDP growth officially slowed to 6.2% year-over-year, from 6.4% in Q1, which already matched the trough in the financial crisis.

29 January 2019 No Trade Data Today, but You Can Assume the Trend is Deteriorating (Publication Centre)

The advance international trade data for December were due for publication today, but the report probably won't appear.

29 July 2019 Solid External Accounts in Brazil, Mexico Flirting with Recession (Publication Centre)

Brazil's external accounts remain solid, despite the recent modest deterioration, making it easier for the country to withstand external and domestic risks.

29 July 2019 The MPC Won't Provide Meaningful Policy Signals this Side of Brexit (Publication Centre)

The MPC won't seek to make waves on Thursday.

29 July. 2016 Brace for Downside Surprise in Today's Advance Q2 EZ GDP Data (Publication Centre)

Today's Eurozone data schedule is very hectic, but attention likely will focus on advance Q2 GDP data. France, Austria and Spain will report advance data separately ahead of the EZ aggregate estimate, which is released 11.00 CET. This report will include a confidential number from Germany.

29 July. 2015 Is EM Weakness Threatening Investment Recovery in the EZ? (Publication Centre)

Volatility in commodities and emerging markets has intensified since the beginning of July, with the stock market drama in China taking centre stage. The bubble in Chinese equities inflated without much ado elsewhere, and can probably deflate in isolation too. But the accelerating economic slowdown in EM is becoming an issue for policy makers in the Eurozone.

29 August 2017 No Hints on the Future of QE from Mr. Draghi in Jackson Hole (Publication Centre)

Mr. Draghi snubbed investors looking for hints on policy and the euro in his Jackson Hole address--see here--on Friday.

29 August 2017 Hurricane Harvey will Depress September Output and Payrolls (Publication Centre)

The terrible scenes from Texas will play out in the economic data over the next few weeks.

28 October. 2016 Markets Are Complacent About the Chances of Another Rate Cut (Publication Centre)

The preliminary estimate of Q3 GDP, showing quarter-on-quarter growth slowing only to 0.5% from 0.7% in Q2, has kiboshed the chance that the MPC cuts Bank Rate next Thursday.

28 October. 2016 Upside Risk for Third Quarter Growth,Watch Inventories (Publication Centre)

Two entirely separate factors point to significant upside risk to the first estimate of third quarter GDP growth, due today. First, we think it likely that farm inventories will not fall far enough to offset the unprecedented surge in exports of soybeans, which will add some 0.9 percentage points to headline GDP growth.

28 Oct. 2015 Q3 Slowdown Marks the Start of a Sustained Softening (Publication Centre)

Markets responded to yesterday's disappointing GDP figures by pushing back expectations for the first rise in official interest rates even further into 2017. The first rate hike is now expected--by the overnight index swap market--in April 2017, two months later than anticipated before the GDP release. The figures certainly look weak--particularly when you scratch below the surface--and we expect growth to slow further over the coming quarters. But we don't agree they imply an even longer period of inaction on the Monetary Policy Committee.

28 Sept. 2015 Colombia Unexpectedly Raises Rates, Amid Inflation Pressures (Publication Centre)

BanRep surprised everyone late Friday, moving ahead of the curve by starting a tightening cycle that had been expected to begin later in the year or in Q1. But the seven-board member succumbed in the face of persistent inflationary pressures, and voted unanimously to hike the main interest rate by 25bp to 4.75%, the first move since April 2014.

28 Sept. 2015 Don't Believe Case-Shiller Home Price Data - Prices are Rising (Publication Centre)

Former Treasury Secretary and thwarted would-be Fed Chair Larry Summers has been arguing for some time that the Fed should not raise rates "...until it sees the whites of inflation's eyes". As part of his campaign to persuade actual Fed Chair Yellen of the error of her intended ways, he argued at the World Economic Forum in September that the strong dollar has played no role in depressing inflation. Never one to miss an opportunity to diss the competition, he wrote that Stanley Fischer's view that the dollar has indeed restrained inflation is "substantially weakened" by the hard evidence. Dr. Summers' view is that inflation is being held down by other, longer-lasting factors, principally the slack in the lab or market, rather than the "transitory" influences favored by the Fed.

28 September 2016 No Scope For Complacency on Inflation as Import Prices Rise (Publication Centre)

Our forecast that CPI inflation will shoot up to about 3% in the second half of 2017, from 0.6% last month, assumes that pass-through from the exchange rate to consumer goods prices will be as swift and complete as in the past. Our first chart shows that this relationship has held firm recently, with core goods prices falling at the rate implied by sterling's appreciation in 2014 and 2015.

28 Sept. 2015 ECB is on Alert, but No Warning, So Far, From the Economy (Publication Centre)

Mr. Draghi used his introductory statement at the ECON--EU Economic and Monetary Affairs Committee-- hearing last week to assure investors that the central bank is vigilant to downside risks. The president noted the governing council "would not hesitate to act" if it deems growth and inflation to be undershooting expectations. Market volatility has increased the ECB's worries, but economic data continue to tell a story of a firm business cycle upturn.

28 Oct. 2015 Domestic Data Point to Robust Third Quarter Growth in Mexico (Publication Centre)

The Mexican economy is recovering gradually, despite many external headwinds. This week, the IGAE economic activity index--a monthly proxy for GDP--rose a solid 2.6% year-over-year in August, up from 2.0% in July. In the first half the economy grew on average 2.4%. The report showed increases in all three sectors, most notably agriculture, up 8.2% year-over-year, followed by services, 3.3%, and industrial activities, with a 1.0% gain.

28 Oct. 2015 Budget Deal Means Fiscal Policy Will Ease Slightly Next Year (Publication Centre)

The two-year budget deal agreed between the administration and the Republican leadership in Congress will avert a federal debt default and appears to constitute a modest near-term easing of fiscal policy. The debt ceiling will not be raised, but the law imposing the limit will be suspended through March 2017, leaving the Treasury free to borrow as much as necessary to cover the deficit. As a result, the presidential election next year will not be fought against a backdrop of fiscal crisis.

28 November. 2016 The Housing Slowdown Next Year Will be Offset by Fiscal Easing (Publication Centre)

We have been asked how we can justify raising our growth forecasts but at the same time arguing that the housing market is set to weaken quite dramatically, thanks to the clear downshift in mortgage applications in recent months. Applications peaked back in June, so this is not just a story about the post-election rise in mortgage rates.

28 November 2018 No Level of Spin Can Paint China's Industrial Profits in a Better Light (Publication Centre)

The latest profits data out of China were grim, as we had expected.

28 November. 2016 Banxico's Balancing Act is Becoming Harder and More Risky (Publication Centre)

Banxico's decisions throughout the past year have been guided by external forces, dominated by the persistent decline of the MXN against the USD and its potential impact on inflation. The MXN has fallen by almost 17% year-to-date and has dropped by an eye-watering 37% since 2014.

28 November. 2016 GDP Won't Sustain its Recent Momentum Next Year (Publication Centre)

The second estimate of Q3 GDP last week confirmed that the Brexit vote didn't immediately drain momentum from the economic recovery. But it is extremely difficult to see how growth will remain robust next year, when high inflation will cripple consumers and the impact of the decline in investment intentions will be felt.

28 Oct. 2015 A Clear Message from M1: The Cyclical Recovery Persists (Publication Centre)

Monetary conditions in the Eurozone continue to send a bullish message on GDP growth, and indicate an ongoing, but slow, improvement in credit growth. Broad money growth--M3--was unchanged at 4.9% year-over-year in September, after a trivial 0.1% upward revision of last month's data. The increase continues to be driven by surging narrow money rising 11.7% in September from 11.5% in August, boosted by overnight deposit growth offsetting a slight decline in currency in circulation.

28 November. 2016 Household Consumption in France Will Recover Lost Ground in Q4 (Publication Centre)

The outlook for French consumers' spending improved this month, at the margin. The headline consumer sentiment index was unchanged at 98 in November, but most forward-looking indicators rose. Consumers' spending in was flat in Q2 and Q3, following a 1.1% jump in the first quarter.

28 September 2017 A Slowdown in Unsecured Lending will Hurt More than the Bank Thinks (Publication Centre)

The risk posed by consumer borrowing was once again the focus of the Financial Policy Committee's discussion last week.

28 September 2017 Is Business Capex Finally Breaking to the Upside, led by Small Firms? (Publication Centre)

We have been waiting a long time to see signs that business investment spending is becoming less reliant on movements in oil prices.

29 Apr. House Price Trend to Remain Firm, Despite Tax Hikes and Brexit Risk (Publication Centre)

Housing market data yesterday fostered the view that prices are vulnerable to a fall following April's increase in stamp duty--a transactions tax-- and before the E.U. referendum in June. Political uncertainty, however, has rarely had a pervasive or sustained impact on prices in the past.

29 Apr. 2016 Weak Q1 Growth Won't Persist - Better Data Coming, Soon (Publication Centre)

The astonishing 86% annualized plunge in capital spending in mining structures--mostly oil wells--alone subtracted 0.6 percentage points from headline GDP growth in the first quarter. The collapse was bigger than we expected, based on the falling rig count, but the key point is that it will not be repeated in the second quarter.

29 Apr. 2016 Brazil's Central Bank Lays The Groundwork for a Rate Cut in Q3 (Publication Centre)

Brazil's macroeconomic scenario is becoming easier to navigate for the central bank. Both actual inflation and expectations are slowing rapidly, as shown in our first chart. And since the March BCB monetary policy meeting, the BRL has appreciated about 10% against the USD, while commodity prices and EM sentiment have also improved markedly.

29 April 2019 BoJ Wakes up to China's Slowdown, Goes into Lockdown (Publication Centre)

The BoJ until last week had been in wait-and-see mode over China's slowdown, but they finally folded with Thursday's decision.

29 April 2019 Mexico's Economy is Stabilizing, Despite Stifling Monetary Policy (Publication Centre)

Inflation in Mexico remains relatively sticky, limiting Banxico's capacity to adopt a more dovish approach, despite the subpar economic recovery.

29 Aug 2019 Hong Kong It's not Just the Economy, Stupid (Publication Centre)

Concern over individual freedoms was the spark for Hong Kong's recent demonstrations and troubles, and protesters' demands continue to be political in nature.

29 April 2019 Ten Reasons to Expect a Hawkish Nudge from the MPC this Week (Publication Centre)

The MPC likely will vote unanimously to keep Bank Rate at 0.75% on Thursday.

29 Apr. 2015 Upbeat French consumers, but unemployment is a dark spot (Publication Centre)

Household sentiment in France continues to improve, consistent with tailwinds from low energy prices and accommodative monetary policy. INSEE's measure of consumer confidence rose to 94 in April, up from 93 in March, the highest since November 2010.

29 Apr. 2015 Growth in the first quarter, but not much? (Publication Centre)

The first estimate of Q1 growth will show that the economy struggled in the face of the severe winter and, to a lesser extent, the rollover in capital spending in the oil sector. But the weather hit appears to have been much smaller than last year, when the economy shrank at a 2.1% rate in the first quarter; this time, we think the economy expanded at an annualized rate of 1.1%.

28 September 2018 Confidence is Starting to Fray as the Brexit Deadline Nears (Publication Centre)

The persistence of no-deal Brexit risk has taken a toll on confidence across the economy over the last month.

28 September 2017 Why is China's Party Congress Next Month so Important? (Publication Centre)

China's Party Congress is now less than one month away. Most commentators habitually add the words "all-important" before any reference to the event.

28 September 2018 Fed Hikes, PBoC Holds What Interest Rate Differential (Publication Centre)

The PBoC doesn't publicly schedule its meetings, but in recent years has tended to make moves after Fed decisions.

28 September 2018 Trend in EZ Real M1 Indicates that Markets are Too Optimistic on Growth in 2019 (Publication Centre)

As we go to press, it appears that politicians in Italy have agreed on a 2019 budget deficit of 2.4% of GDP.

28 September. 2016 Expect Weak Headline Durable Orders (Publication Centre)

A third outright decline in the past four months seems a decent bet for today's August durable goods orders, thanks to the malign influence of the downward trend in orders for civilian aircraft. The global airline cycle is maturing, and orders for both Boeing and Airbus aircraft have been slowing for some time.

28 September. 2016 The BCB's Report Takes a Big Step Towards Easier Money (Publication Centre)

The publication yesterday of the BCB's second quarterly inflation report under the new president, Ilan Golfajn, revealed that inflation is expected to hit the official target next year, for the first time since 2009. The inflation forecast for 2017 was lowered from 4.7% to 4.4%, just below the central bank's 4.5% target.

25 July 2019 Grim Manufacturing Data Confirm Investors' Priors in the EZ (Publication Centre)

Broadly speaking, yesterday's headline EZ survey data recounted the same story they've told all year; namely that manufacturing is suffering amid resilience in services.

25 July 2019 A Recovery in Mortgage Lending is Taking Root (Publication Centre)

The recent pick-up in mortgage approvals is another sign that households are unperturbed by the risk of a no-deal Brexit.

22 Feb. 2016 Can Extremely Low Gilt Yields Be Sustained? (Publication Centre)

Gilt yields slid to record lows at many maturities in mid-February, and while equity prices have since rebounded, gilt yields have remained anchored at rock-bottom levels. But with political risks rising and deficit reduction still very slow, gilt yields look primed to spring back soon.

22 December 2017 The Public Finances are on Track This Year, but New Challenges Loom (Publication Centre)

The Chancellor can go on his Christmas vacation content that the public finances have weathered the economy's slowdown relatively well this year.

22 December 2017 Strong November Consumption Sets Course for 3½% Q4 Gain? (Publication Centre)

This is the final U.S. Economic Monitor of 2017, a year which has seen the economy strengthen, the labor market tighten substantially, and the Fed raise rates three times, with zero deleterious effect on growth.

22 Feb. 2016 Colombian Policymakers Borrow Banxico's Bazooka Strategy (Publication Centre)

Colombia's central bank, BanRep, increased the monetary policy rate by 25bp to 6.25% on Friday, as expected, and also announced budget cuts and a new FX strategy to try to protect the COP. These measures are similar to those taken by Banxico on Wednesday. The press release, and the tone of the conference after the decision, suggest that more hikes are coming.

22 Feb. 2016 The Fed is Ahead of the Curve but Behind the Economy (Publication Centre)

Here's something we didn't expect to write: The CPI measure of goods prices, excluding food and energy, rose in the three months to January, compared to the previous three months. OK, the increase was marginal, a mere 0.3%, but conventional wisdom has assumed for some time that the strong dollar would push goods prices down indefinitely.

22 February 2017 PMI Data in the Eurozone Signal a Strengthening Economy (Publication Centre)

Our view that EZ survey data would take a step back in February was severely challenged by yesterday's PMI reports. The composite index in the Eurozone rose to 56.0 in February, from 54.4 in January, lifted by a jump in the services index and a small rise in the manufacturing index.

22 February 2017 The MXN Probably is Undervalued, but it Could Move Even Lower in Q2 (Publication Centre)

With the MXN up more than 7% since the low of 21.9 against the dollar in January, investors are pondering just how high the Mexican currency can go. We believe that the MXN will continue to hover around its recent range, 20.1-to-20.5, in the near term, but will come under pressure again as protectionist policies in the U.S. take real shape in the spring or summer.

22 December 2017 Optimism in the French Corporate Sector is High and Broad-Based (Publication Centre)

Sentiment in the French business sector ended this year on a high. The headline manufacturing index fell slightly to 112 in December, from an upwardly-revised 113 in November, but the aggregate sentiment gauge edged higher to a new cycle high of 112.

22 December 2017 BoJ: Concerns over Fluffy Kitty- Cats and an Aggressive Dove (Publication Centre)

The BoJ left policy unchanged yesterday, but we noted some significant additions and modifications in the statement and the press conference.

22 Dec. 2014 Rising Risks in Greece, but Sovereign QE Can Save the Day (Publication Centre)

The political drama in Greece will continue to attract attention this week despite the advent of the holiday season. Prime Minister Samaras will try again tomorrow to secure a majority for his candidate for president, requiring a super majority of 200 votes. If it fails, the last attempt will be on December 29th, where the hurdle for the Prime Minister drops to 180 votes.

22 Dec. 2014 LatAm's Currencies and Economies are Telling Different Stories (Publication Centre)

The sharp drop in commodity prices, especially oil prices, has dampened the growth prospects for most countries in Latin America. But the most damage, so far, is in the currencies, which have dropped sharply.

22 Dec. 2014 - Don't Hold Your Breath Waiting for the Great Housing Rebound (Publication Centre)

Fed Chair Yellen said in her press conference last week that she has "...been surprised that housing hasn't recovered more robustly than it has. In part I think it reflects very tight credit--continuing tight credit conditions for any borrower that doesn't have really pristine credit... my hope is that that situation will ease over time".

22 Dec. 2015 Buy Bunds at Your Peril: Eurozone 10-year yields set to go Higher (Publication Centre)

Long term benchmark yields in the Eurozone almost fell to zero towards the end of the first quarter as investors were carried away in their celebration of QE. The counter-reaction to this move, though, was violent with 10-year yields surging from 0.2% to 0.9% in the space of two months from April to June, and we think a similar tantrum could be waiting in the wings for investors. We are particularly wary that upside surprises in inflation data--mainly in Germany--could push yields up sharply in the next few months.

22 Dec. 2015 Low Household Saving Implies Little Upside to Spending Outlook (Publication Centre)

The national accounts for the third quarter, released on Wednesday, are likely to show that households are saving a very small proportion of their incomes. Low unemployment, subdued inflation and the healthier condition of households' balance sheets suggests that very low saving is more sustainable than in the past. Nonetheless, the low rate underlines that household spending can't grow at a faster rate than incomes for a sustained period again.

22 December 2017 A Tough end to Q4 for Mexico the H1 Outlook Remains (Publication Centre)

Mexican retail sales jumped 1.0% month-to-month in October, the biggest gain since February, following a poor performance in Q3.

22 Dec. 2015 Miserable Economic And Political News Keeps Coming For Brazil (Publication Centre)

Brazil's recent political and economics news has shifted the near-term outlook from bad to worse. President Rousseff on Friday replaced hawkish Finance Minister Joaquim Levy, appointed just over a year ago, with a close partner, Planning Minister Nelson Barbosa. Mr. Levy resigned after continued conflicts with the government, including frustration by the Congress of his attempts to rein in the fiscal mess. Mr. Barbosa is known to be less market friendly, and will likely defend countercyclical measures, delaying any rapid fiscal consolidation. The appointment will deteriorate investors' confidence even further, placing the markets under enormous strain.

22 February 2018 Jobless Claims Still Under Downward Pressure, Labor is Scarce (Publication Centre)

We have learned over the years not to become too excited in the face of swings in the jobless claims numbers, even when the movement appears to persist for a month or two.

22 February 2018 Labour Market Wobble Should Instil Some Caution on the MPC (Publication Centre)

The stand-out news yesterday was the increase in the headline, three-month average, unemployment rate to 4.4% in December, from 4.3% in September.

22 January 2018 The Government Shutdown is Theater, but Could Become a Threat (Publication Centre)

As we reach our Sunday afternoon deadline, no deal has been reached to re-open the federal government.

22 January 2018 Is the EZ's Current Account Surplus Pulling the Euro Up? (Publication Centre)

The data tell an increasingly convincing story that the Eurozone's external surplus rose further in the second half of last year.

22 January 2018 External Factors for LatAm are Positive, but Vary Across Countries (Publication Centre)

Recent global developments lead us to intensify our focus on trade in LatAm.

22 January 2018 China Growth Met Target Before Q4, Environmental Targets hit in Q4 (Publication Centre)

The China Daily ran an article entitled "Beijing, nation get breath of fresh air" on the day Chinese GDP figures were published last week, underlining where the authorities' priorities now lie.

22 January 2019 Chinese GDP Growth was Much Weaker than the Headlines Suggest (Publication Centre)

Chinese GDP numbers always require a great deal of detective work, and yesterday's needed more than the norm; multiple rounds of revisions needed decoding.

22 January 2019 Q1 GDP will Take a Hit, Despite Back Pay for Government Workers (Publication Centre)

The chance of a zero GDP print for the first quarter diminished--but did not die--last week when the president signed a bill granting full back pay to about 300K government workers currently furloughed.

22 January 2019 Commodity Prices are Edging Higher, Improving LatAm's Outlook (Publication Centre)

Recent global developments lead us to intensify our focus on trade in LatAm.

22 January 2018 December's Dive in Retail Sales Points to Poor Q4 GDP Prospects (Publication Centre)

The intensity of the pressure on households' finances was highlighted last week by December's retail sales report, which showed that volumes fell by 1.5% month-to-month, the most since June 2016.

22 Jan. 2016 How Long Will the Inventory Correction Last? (Publication Centre)

We're expecting a substantial inventory hit in the fourth quarter, subtracting about 1¼ percentage points from headline GDP growth. Businesses very likely added to their inventories in Q4, in real terms, but the we reckon the increase was only about $30B, annualized, compared to the $85.5B jump in the third quarter. Remember, the contribution to GDP growth is the change in the pace of inventory-building between quarters.

22 February 2019 This Month's PMI Headline: Weak Manufacturing, Strong Services (Publication Centre)

Yesterday's February PMI data sent a clear message to markets.

22 February 2019 The Good, the Bad, and the Ugly Japan's Economy from Q4 to Q1 (Publication Centre)

Yesterday's Japanese activity data were grim.

22 Jan. 2015 End of the Road for The ECB - Sovereign QE or Chaos (Publication Centre)

Investors will get what they want today from the ECB: additional easing in the form of government bond purchases. The central bank is likely to announce or pre-commit to sovereign QE and corporate bond purchases in a new program that will last at least two years.

22 Jan. 2015 Should We Be Scared by the Flattening Curve? (Publication Centre)

The flattening of the curve in recent months has been substantial, but in our view it is telling us little, if anything, about the outlook for growth. More than anything else, investors in longer Treasuries care about inflation, and the likely path of headline inflation clearly has been lowered by the plunge in oil prices.

22 Jan. 2016 Consensus Looks too Sanguine on December Retail Sales (Publication Centre)

The consensus forecast of a mere 0.3% month-to-month decline in retail sales volumes in December, following the 1.7% surge in November, looks far too timid. We anticipate a much bigger decline, about 1%, bringing volumes back in line with their underlying trend. We can't rule out a bigger fall.

22 Jan. 2016 Brazil's Central Bank on Hold, And Rate Hikes are Now Less Likely (Publication Centre)

Brazil's decision to keep interest rates at 14.25% on Wednesday was a surprise. The consensus forecast immediately before the meeting was for a 25bp increase. As recently as Tuesday, though, most forecasters expected a 50bp increase, following hawkish comments from Board members since the last meeting in November, and rising inflation expectations. But the day before the meeting, the IMF revised its forecast for 2016 GDP to -3.5%, much worse than the 1% drop it predicted in October.

22 August. 2016 Fiscal Problems Will be Exposed as Brazil's Political Mess Clears (Publication Centre)

Brazil's economic performance has improved marginally in recent months, with inflation falling and economic activity and sentiment data stabilizing, or even increasing modestly. The latest regional economic activity report, for instance, showed that although overall output declined again on a sequential basis in March-to-May, three of the five regions expanded.

22 August. 2016 Financial Services are Set to Push Core PCE Inflation Higher (Publication Centre)

The rate of increase of the financial services and insurance component of the PCE deflator has slowed from a recent peak of 5.8% in May 2014 to 3.3% in June this year. This matters, because it accounts for 8.4% of the core deflator, a much bigger weight than in the core CPI.

21 Sept. 2015 Don't Focus on Industry - The U.S. is a Domestic Services Economy (Publication Centre)

The economy is bifurcating. Manufacturing is weak, and likely will remain so for some time, though talk of recession in the sector is overdone. Even more overdone is the idea that the softness of the industrial sector will somehow drag down the rest of the economy, which is more than seven times bigger.

21 October. 2016 The BCB is Cautious, But its Inflation Fears Will Ease Soon (Publication Centre)

Brazil's monetary policy committee, the Copom, cut the Selic rate by 25bp to 14.0% in a unanimous decision, without bias, on Wednesday. This marks the start of the first easing cycle since 2012, and it arrives after 15 months with rates held at 14.25%.

21 October. 2016 Government Spending Higher Next Year? (Publication Centre)

It has become pretty clear over the past couple of weeks that Hillary Clinton will be the next president, so it's now worth thinking about how fiscal policy will evolve over the next couple of years.

21 Sept. 2015 Fed Abstention Increases the Risk of More QE from the ECB this Year (Publication Centre)

ECB growth bears looking for the Fed to move in order to take the sting out of the euro's recent strength were disappointed last week. The FOMC refrained from a hike, referring to the risk that slowing growth in China and emerging markets could "restrain economic activity" and put "downward pressure on inflation in the near term." In doing so, the Fed had an eye on the same global risks as the ECB, highlighting increased fears of deflation risks in China, despite a rosier domestic outlook.

21 September 2016 Still Little Scope for Optimism on Business Investment (Publication Centre)

If the economy is to enter recession, falling business investment probably will have to be the main driver. Growth in consumer spending likely will slow sharply over the next year as firms become more cautious about hiring new workers and inflation begins to exceed wage growth again.

21 September 2017 The FOMC is not Deterred by the Hurricanes, Expect a December Hike (Publication Centre)

The FOMC's view of the economic outlook and the likely required policy response, set out in yesterday's statement and Chair Yellen's press conference, could not be clearer.

21 September 2017 Japanese GDP Supported by U.S. in Q3. Domestic Demand Weakening (Publication Centre)

Exports rebounded sharply in Q3 so far, after the Q2 weakness. This will be a useful boost to GDP growth in Q3, as domestic demand likely will soften.

21 October. 2016 The ECB Treads Water, but Hints at December QE Extension (Publication Centre)

The ECB held fire yesterday. The central bank kept its main refinancing rate unchanged at 0.0%, and also maintained the deposit and marginal lending facility rates at -0.4% and 0.25% respectively.

21 October. 2016 Do September Retail Sales Mark the Start of a Weaker Trend? (Publication Centre)

Retail sales volumes held steady in September, undershooting the consensus, 0.3%, and they were unchanged in August too. At this stage, evidence of a slowdown in retail sales growth is only tentative, but the trend will weaken decisively when retailers raise prices sharply next year.

21 November. 2016 Soft Chilean Data Likely Leading to Rate Cuts Next Year (Publication Centre)

Chile's central bank left rates unchanged at 3.5% last Thursday, as expected, and maintained its neutral tone. Inflation pressures are easing, economic activity remains sluggish and global risks have increased.

21 November. 2016 How Vulnerable are the Public Finances to Rising Gilt Yields? (Publication Centre)

Gilt yields have shot up over the last couple of months, despite ongoing bond purchases authorised by the MPC in August. Ten-year yields closed last week at 1.47%, in line with the average in the first half of 2016.

21 Oct. 2015 Are Payrolls Slowing Because the Pool of Labor Has Evaporated? (Publication Centre)

One of the possible explanations for the slowdown in payroll in growth in recent months is that the pool of labor has shrunk to the point where employers can't find the people they want to hire. That's certainly one interpretation of our first chart, which shows that the NFIB survey's measure of jobs-hard-to-fill has risen to near-record levels even as payroll growth has slowed.

21 Oct. 2015 Colombia Resilient in the Face of External Headwinds (Publication Centre)

Colombia's industrial and retail sectors surprised to the upside in August, suggesting that the domestic economy has been resilient during most of the third quarter, despite the hit from an array of external headwinds. Industrial production increased by a solid 2.6% year-over-year in August, up from an upwardly revised 0.6% expansion in July, and above its recent trend. In the first half of the year, industrial activity fell on average by 1.1%, the worst performance since 2013, due mainly to the oil hit and ex tended works at Reficar, the country's second biggest oil refinery. But Colombia's manufacturers appear to have shrugged off part of the oil pain in recent months.

21 Oct. 2015 Recovery Won't Shrug Off The Fiscal Squeeze (Publication Centre)

The conventional wisdom that the U.K. economy will comfortably weather the coming fiscal squeeze is misplaced. The planned adjustment is large, designed to minimise its political, not economic, impact, and based on overly optimistic assumptions. What's more, the economy is in many respects less well-placed to cope with the tightening than when the previous government applied the fiscal brakes. And when the recovery slows, the Chancellor is less likely to change tack and ease the squeeze this time.

21 Oct. 2015 Eurozone Now Runs a Bigger Current Account Surplus Than Japan and China (Publication Centre)

The Eurozone's external surplus remains solid, despite hitting a wall in August. The seasonally adjusted current account surplus fell to €17.7B in August from €25.6B in July, due to a €7B fall in the goods component. A 5.2% month-to-month collapse in German exports -- the biggest fall since 2009 -- was the key driver, but we expect a rebound next month. The 12-month trend in the Eurozone's external surplus continues to edge higher, rising to 3% of GDP up from 2.1% in August last year.

21 September 2018 Brazilian Policymakers Start to Open the Door for Rate Hikes (Publication Centre)

Brazil's domestic economic outlook has not changed much recently.

21 September 2018 China's Belt and Road Initiative is Likely to Undergo a Major Rethink (Publication Centre)

China's once much-talked-about "Belt and Road Initiative" has gradually disappeared from the headlines over the past twelve months.

22 August 2017 Tourism is Key to Financial Stability in the Spanish Economy (Publication Centre)

Last week's attacks in Barcelona--one of Spain's most popular tourist spots--struck at the heart of one of the economy's main growth engines.

22 August 2017 Is the Worst Over for State and Local Government Spending? (Publication Centre)

Consumption and investment spending by state and local government accounts for just over 10% of the U.S. economy, making it more important than exports or consumers' spending on durable goods, and roughly equal to all business investment in equipment and intellectual property.

22 August 2017 Economic Activity is Turning Up in LatAm, but no Boom Coming (Publication Centre)

LatAm's economies are gradually rebounding, boosted by easier monetary policy in most countries, falling inflation, and a relatively calm external backdrop.

22 August 2018 Sharp Fall in Borrowing Removes Need for Fiscal Tightening in 2019 (Publication Centre)

The latest public finance figures continue to imply that the Chancellor will be able to change course later this year in the Autumn Budget so that fiscal policy doesn't drag on GDP growth next year.

22 August 2018 Venezuela's Economic Crisis Will Deteriorate Despite Recent Plan (Publication Centre)

To imagine an unstoppable macroeconomic policy disaster and desperate improvisation, just think of Venezuela.

22 August. 2016 Acceleration in German GDP Growth Likely Won't be Sustained (Publication Centre)

While we were out, the key economic news in the Eurozone was mostly positive. The main upside surprise came from the advance Q2 German GDP report, which showed that real GDP rose 0.4% quarter-on-quarter, slowing from the 0.7% jump in the first quarter.

22 August 2018 Will the French Economy Re-Assert Itself in the Second Half (Publication Centre)

Economic growth in France has been the key downside surprise in the Eurozone this year.

22 Aug 2019 The Fed's July Differences of Opinion Won't Prevent a September Easing (Publication Centre)

It would be easy to characterize the Fed as quite split at the July meeting.

22 Aug 2019 Brexit from the Perspective of the EU It's Complicated and Risky (Publication Centre)

The stakes in the Brexit saga have been raised significantly over the summer.

21 September 2018 The EZ Consumer is Still in Good Shape (Publication Centre)

Consumer sentiment in the euro area has slipped this year, though the headline indices remain robust overall.

21 September 2018 Recent Momentum in Retail Sales won't be Sustained (Publication Centre)

August's retail sales figures create a misleading impression that consumers can be relied upon to pull the economy through the next six months of heightened Brexit uncertainty unscathed.

22 Apr. 2015 Sustained job gains are key to Eurozone consumers sentiment (Publication Centre)

Advance April consumer survey data will likely confirm that households remain the standout driver of the cyclical recovery in the euro area. We think the headline EC consumer sentiment index rose to -1.0 in April from -3.7 in March.

22 Apr. 2016 Good News for the BCB as Brazil's Inflation Slowdown is Confirmed (Publication Centre)

Brazil's mid-April inflation report delivered more evidence that inflation is decelerating; it fell to 9.3% from 10.0% in March, reaching the slowest pace since July 2015. The unadjusted month-to-month increase surprised marginally to the upside, but the key story is of a declining year-over-year trend. Core inflation, which is a lagging indicator of the business cycle, slowed again, in line with the decline in services and market prices inflation.

22 April 2019 So Much for the Q1 Rollover: GDP Appears to have Breached 2% (Publication Centre)

The U.S. consumer is back on track, almost. We have argued in recent months that the sharp slowdown in the rate of growth of consumption is mostly a story about a transition from last year's surge, when spending was boosted by the tax cuts and, later, by falling gas prices, to a sustainable pace roughly in line with real after-tax income growth.

22 Apr. 2016 The ECB is Worried About Elevated Financial Market Volatility (Publication Centre)

The ECB held fire yesterday and kept its main refinancing and deposit rates unchanged at 0.0% and -0.4%, respectively. The central bank also left the pace of monthly asset purchases unchanged at €80B. The introductory statement overall confirmed the central bank's dovish stance.

22 January 2019 The Prime Minister's Plan B Has Little Chance of Success (Publication Centre)

The Prime Minister has revealed that her Plan B for Brexit is to get Eurosceptics within the Tory party on side in an attempt to show the E.U. that a deal could be done if the backstop for Northern Ireland was amended. Her plan is highly likely to fail, again.

22 July 2019 Chile's Central Bank on Hold, but the Door is Open for Rate Cuts (Publication Centre)

Chile's central bank kept rates unchanged last Thursday at 2.50% with a dovish bias, following an unexpected 50bp rate cut at the June meeting.

22 May 2019 The MPC Won't Be "Indifferent" if Sterling Falls Further (Publication Centre)

On a trade-weighted basis, sterling has dropped by only 1.5% since the start of the month, but it is easy to envisage circumstances in which it would fall significantly further.

22 May 2019 Sino-U.S. Negotiations are a Key Risk to Andean External Accounts (Publication Centre)

Data released on Monday showed that Chile's external accounts remained under pressure at the start of the year, and trade tensions mean that it will be harder to finance the gap.

22 May 2019 How Much Attention is the Fed Paying to the Trimmed Mean PCE (Publication Centre)

Fed policymakers surprised no one with their May 1 statement, which acknowledged the surprisingly "solid " Q1 economic growth--at the time of the March 19-to-20 meeting, the Atlanta Fed's GDPNow model suggested Q1 growth would be just 0.6%--but stuck to its view that low inflation means the FOMC can be "patient".

22 May 2019 Will the EZ Consumer Save the Day for the Economy in Q2 (Publication Centre)

We still don't have the complete picture of what happened to EZ consumers' spending in Q1, but the initial details suggest that growth acceleretated slightly at the start of the year.

22 May. 2015 Brazil, Overshadowed by Mexico During The First Quarter--Again (Publication Centre)

Mexico's economy stuttered at the start of the year. Real GDP rose 0.4% quarter-on-quarter in the first quarter, after a solid 0.7% in the fourth quarter. Q1 activity was supported by the services sector, rising 0.5%, offsetting the 0.2% contraction in industrial activity.

22 May. 2015 Solid EZ PMI, but Weak German Manufacturing is Worrying (Publication Centre)

The composite PMI in the Eurozone continues to edge slightly lower, falling to 53.4 in May from 53.9 in April. A fall in the services index to 53.3, from 54.1 last month offset a modest increase in manufacturing to 52.3 from 52.0 in April.

22 May. 2015 Core Disinflation is Over, but Dollar Strength Limits Upside Risk (Publication Centre)

Core inflation has risen, albeit modestly, in the past two months. The uptick, to 1.8% in March from 1.6% in January, has come as something of a surprise. The narrative in the media and markets remains, as far as we can tell, one of downward pressure on inflation and, still, fear of possible deflation.

22 May 2018 Retail Sales Likely Recovered in April, but the Trend Remains Weak (Publication Centre)

April's retail sales figures, due Thursday, likely will show that spending recovered from snow-induced weakness in March.

22 May 2018 Maduro Wins Bogus Presidential Election, what will Happen Next? (Publication Centre)

President Nicolás Maduro has "won' another six-year term, as expected, even as millions of Venezuelans boycotted the election.

22 March 2019 Existing Home Sales have Bottomed, but Price Gains Still Slowing (Publication Centre)

Existing home sales peaked last February, and the news since then has been almost unremittingly gloomy.

22 March 2019 A Slightly Dovish but Prudent BCB as the New Boss Takes Over (Publication Centre)

At Wednesday's BCB monetary policy meeting, led for the first time by the new president, Roberto Campos Neto, the COPOM voted unanimously to maintain the Selic rate at 6.50%, the lowest on record.

22 March 2019 The Phlegmatic MPC Still Envisages a 2019 Rate Hike (Publication Centre)

Unlike other central banks, the MPC has stuck to its message that "an ongoing tightening of monetary policy over the forecast period" likely will be required to keep inflation close to the 2% target, provided a no-deal Brexit is avoided.

22 May 2017 The Housing Market is Weakening, but Lasting Price Falls aren't Likely (Publication Centre)

Even the most bullish estate agent in Britain would struggle to put a positive spin on the latest housing market news. The latest levels of the official, Nationwide, and Halifax measures of house prices all are below their peaks.

22 May 2018 Chainstore Sales Growth has Surged, Thank Warmer Weather? (Publication Centre)

We have been pleasantly surprised by the recent Redbook chainstore sales numbers.

22 May 2017 What Does the Path to the Recession of 2019 Look Like? (Publication Centre)

In recent years only one event has made a material difference to the growth path of the U.S. economy, namely, the plunge in oil prices which began in the summer of 2014. The ensuing collapse in capital spending in the mining sector and everything connected to it, pulled GDP growth down from 2½% in both 2014 and 2015 to just 1.6% in 2016.

22 November 2017 Core Capital Goods Orders Rising Strongly, Further Gains Ahead? (Publication Centre)

Today brings a wave of data, some brought forward because of Thanksgiving. We are most interested in the durable goods orders report for October, which we expect will show the upward trend in core capital goods orders continues.

22 November 2017 LEIs Point to Stabilising Japanese Domestic Demand Growth in Q4 (Publication Centre)

Japan's all-industry activity index fell 0.5% month-on- month in September after a 0.2% rise in August. Construction activity continued to plummet, with the subindex dropping 2.3%, after a 2.2% fall in August.

22 October 2018 Does the Opioid Crisis Explain the Flat Labor Participation Rate (Publication Centre)

The failure of labor market participation to increase as the economy has gathered pace, pushing unemployment down from its 10.0% peak to just 3.7%in September, is one of the biggest macro mysteries in recent years.

22 October 2018 China's Q3 GDP Growth was Much Weaker than the Headline Rates (Publication Centre)

China's real GDP growth officially slowed to 6.5% year-over-year in Q3, from 6.7% in Q2.

22 October 2018 Budget to Ensure Fiscal Policy Doesn't Slow the Economy in 2019 (Publication Centre)

The Chancellor probably can't believe his luck. Public borrowing has continued to fall this year at a much faster rate than anticipated by the OBR, despite the sluggish economy.

22 October 2018 The EZ External Surplus is Being Boosted by Services Exports (Publication Centre)

The Eurozone's external surplus rebounded over the summer, reversing its sharp decline at the start of Q3.

22 Sept. 2015 Moody's Fires a Shot Across the Bow on French Sovereign Debt (Publication Centre)

Mr. Draghi's pledge in 2012 to do "whatever it takes to preserve the euro," and QE have stymied sovereign debt risk in the euro area. At the same time, the EU's relaxed position over debt sustainability was highlighted earlier this year by the Commission's decision to give France two more years to get its deficit below 3% of GDP. But Moody's downgrade of the French government bond rating last week to Aa2 from Aa1 serves as a gentle reminder to investors of the underlying fundamentals.

22 September 2016 Yield Curve Control Will be Tricky to Implement in the Eurozone (Publication Centre)

We tend to keep a close eye on monetary policy initiatives in Japan, as the BOJ's fight to spur inflation in a rapidly ageing economy resembles the challenge faced by the ECB.

22 September 2016 Poor Borrowing Trend Reduces Scope for Stimulus in November (Publication Centre)

Public borrowing continues to falling at a very slow pace, despite the major fiscal consolidation implemented this year. Public sector net borrowing excluding public sector banks--PSNB ex.--was £10.5B in August, only 8.1% less than the £11.5B borrowed a year ago.

22 Oct. 2015 Will Simply Holding The E.U. Referendum Harm The Economy? (Publication Centre)

Discussion about whether the U.K. would be better off voting to leave the European Union in the forthcoming referendum is rarely out of the press, raising the question of whether simply holding the national vote could damage the economy even if the U.K. votes for the status quo in the end.

22 Oct. 2015 Markets Will Have to Settle for Just Dovish ECB Rhetoric Today (Publication Centre)

Investors looking for more QE and rate cuts will be disappointed by ECB inaction today. We think the Central Bank will keep its main interest rates unchanged, and also maintain the pace of asset purchases at €60B a month. We do, however, look for a slight change in language, hinting that QE is likely to continue beyond September next year.

22 November 2017 What's the Case for Increased Fiscal Stimulus in the Eurozone? (Publication Centre)

The euro area's record-high external surplus has prompted commentators to suggest that the zone has room to loosen fiscal policy to support growth, or at least relax the deficit reduction rules.

22 November 2017 Political Uncertainty is Rising in Mexico. Decisive Weeks Ahead (Publication Centre)

Next July, Mexico will hold presidential elections, an event that will gradually take centre stage as the date approaches. The pre-campaign will start on December 14, but the official campaign opening will take place in late March, when the three main candidates will begin to lay out their platforms.

22 November 2018 Next Year's Fiscal Stimulus Is Secure, Despite the Poorer Borrowing Data (Publication Centre)

October's surprise jump in public borrowing is not a material setback for the Chancellor, who will stick to his new Budget plans for modest fiscal stimulus next year.

22 November 2018 Will the EU Impose Sanctions on Italy over its Budget Deficit Plans (Publication Centre)

The EU Commission and Italy's government remain at loggerheads over the country's fiscal plans next year.

22 Oct. 2015 Claims Signal Payroll Data are Flawed, or Labor Pool Has Run Dry (Publication Centre)

The headline payroll number each month is the difference between the flow of gross hirings and the flow of gross firings. The JOLTS report provides both numbers, with a lag, but we can track the firing side of the equation via the jobless claims numbers. Claims are volatile week-to-week, thanks to the impossibility of ironing out every seasonal fluctuation in such short-term data, but the underlying trend is an accurate measure. The claims data are based on an actual count of all the people making claims, not a sample survey like most other data. That means you'll never be blindsided by outrageous revisions, turning the story upside-down.

22 November. 2016 Will November EZ Survey Data Take a Step Back this Week? (Publication Centre)

November data for most of the major EZ business and consumer surveys arrive this week. We doubt the reports will change our view that EZ GDP growth likely will remain steady at about 1.6% year-over-year in Q4. But appearances matter, and risks are tilted to the downside in some of the main surveys, after jumps in October.

22 March 2019 China's 2018 19 Stimulus is Smaller than in the 2015 16 Round (Publication Centre)

China's growth can be decomposed into the structural story and the mini-cycle, which is policy- driven.

22 March 2018 Wage Growth Still Lacks Momentum, Giving the MPC Time (Publication Centre)

Slack in the labour market no longer is being absorbed and wage growth still is struggling for momentum, placing little pressure on the MPC to rush the next rate rise.

22 June 2017 Asian Exports Remain Sturdy in Q2, but the Outlook is Cloudy (Publication Centre)

Korea's preliminary export numbers rebounded quite spectacularly in June, with growth at 24.4% year-on-year, compared with just 3.4% in May. This reading is important as it comes early in the monthly data cycle. Korea's position close to the beginning of the global supply chain, moreover, means its exports often lead shifts in global trade.

22 July. 2016 The ECB Tells Investors to go on Holiday and Come Back in Q3 (Publication Centre)

As widely expected, the ECB held fire yesterday. The central bank left its main refi rate unchanged at zero, and also kept the pace of QE unchanged at €80B a month. The deposit and marginal lending facility rates were also left unchanged at -0.4% and 0.25% respectively. The formal end-date of QE is still Q1 2017, but the press release repeated the message that QE can continue "beyond [Q1 2017], if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim."

22 July. 2016 July Payrolls Won't Excite Markets, but Hourly Earnings Should (Publication Centre)

This is the final Monitor before we hit the beach for two weeks, so want to highlight some of the key data and event risks while we're out. First, we're expecting little more from the FOMC statement than an acknowledgment that the labor market data improved in June. After the May jobs report, the FOMC remarked that "...the pace of improvement in the labor market has slowed".

22 June 2017 Falling Oil Prices will hit Mining Capex, but no Repeat of 2014 to 16 (Publication Centre)

The renewed slide in oil prices in recent weeks will crimp capital spending, at the margin, but it is not a macroeconomic threat on the scale of the 2014-to-16 hit.

22 June 2018 Copom Likely will Keep Rates on Hold, if the BRL Permits (Publication Centre)

Brazil's central bank looked through the recent dip in the BRL and left interest rates at 6.50% at Wednesday's Copom meeting, in line with the consensus.

22 June 2018 Survey Data Suggest that French Manufacturing will Rebound in Q2 (Publication Centre)

Yesterday's barrage of French business sentiment data suggest that confidence in the industrial sector was a little stronger than expected in Q2.

22 June 2018 Business Capex is Still Set for Rapid Growth, Trade Spats Permitting (Publication Centre)

A round of recent conversations with investors suggests to us that markets remain quite skeptical of the idea that the recent upturn in capital spending will be sustained.

22 July. 2016 Emerging Divisions on the MPC Signal Only Modest August Easing (Publication Centre)

Soon after last week's vote to keep Bank Rate at 0.50%, the MPC's doves were quick to assert that monetary easing is still imminent. A speech by Andy Haldane, published on July 15, called for "... a package of mutually complementary monetary policy easing measures" that should be "delivered promptly and muscularly". Meanwhile, Gertjan Vlieghe, who was alone in voting for a rate cut in July, wrote in The Financial Times last week that he also favours "a package of additional measures" in August.

22 July. 2016 Copom Holds Rates, Looking for Inflation Expectation to Slow More (Publication Centre)

Brazil's central bank kept the SELIC rate on hold on Wednesday at 14.25% for the eight consecutive meeting. The decision, which was widely expected, was unanimous, but the post-meeting statement was more detailed and informative than the central bank's June communiqué. We think the shift was intentional; the central bank's new board, headed by Mr. Ilan Goldfajn, is eager to strengthen the institution's credibility and transparency.

22 July 2019 The Fed's Friday Pushback Against 50bp Makes Sense it's Too Much (Publication Centre)

With Fed officials now in pre-FOMC meeting blackout mode, this week will not bring a repeat of Friday's confusion, when the New York Fed felt obligated to issue a clarification following president William's speech on monetary policy close to the zero bound.

22 July 2019 Still Ample Scope for Fiscal Stimulus, Despite Higher Borrowing in June (Publication Centre)

On the face of it, the latest public finance data suggest that the economy has lost momentum.

22 July 2019 Will Mr. Draghi Set a New CPI Target for Ms. Largarde to Pursue (Publication Centre)

Speculation that the ECB is considering a rethink of its inflation target has intensified in the past few weeks.

22 July. 2015 Brazil's Worst Recession In 25 Years Will Stop The BCB, Soon (Publication Centre)

Recent economic weakness in Brazil, particularly in the labor market, has strengthened our view that the central bank is close to the end of its painful, but necessary, tightening cycle. We expect the BCB to increase its policy rate by 50bp to 14.25% at next week's monetary policy meeting, and then leave the rate on hold for the foreseeable future.

22 July. 2015 The Economic Recovery in Spain is Real, But Can it Last? (Publication Centre)

We have to pinch ourselves when looking at economic data in Spain at the moment. Real GDP rose a dizzying 0.9% quarter-on-quarter in Q1, driven by solid gains of 0.7% and 1.1% in consumer's spending and investment respectively. Retail sales and industrial production data indicate GDP growth remained strong in Q2, even if survey data lost some momentum towards the end of the quarter. We will be looking for signs of further moderation in Q3, but surging private deposit growth indicate the cyclical recovery will continue.

22 July. 2015 Chain Store Sales Growth Will Slow Further - Don't be Misled (Publication Centre)

The downshift in the rate of growth of retail sales, which has caused a degree of consternation among investors, likely has further to run. The Redbook chain store sales survey clearly warned at the turn of the year that a slowdown was coming, but forecasters didn't want hear the warning: Five of the seven non-auto retail sales numbers released this year have undershot consensus.

22 June 2018 The MPC Glosses Over Weak Data, but Must Confront Reality in August (Publication Centre)

The MPC was more hawkish than we and most investors expected yesterday. The vote to keep Bank Rate at 0.50% was split 6-3, f ollowing Andy Haldane's decision to join the existing hawks, Ian McCafferty and Michael Saunders.

22 June. 2015 No Grand Deal with Greece, but an Extension Until Year-End is Likely (Publication Centre)

Discussions between Greece and its creditors drifted further into limbo last week, but we are cautiously optimistic that the Euro Summit meeting later today will yield a deal. The acrimony between Syriza and the main EU and IMF negotiators means, though, that a grand bargain is virtually impossible. We think an extension of the current bail-out until year-end is the most likely outcome.

22 March 2017 Improving Fiscal Picture in the South, but Politics Are Key (Publication Centre)

Growth in South America disappointed last year, but prospects are gradually improving on the back of rising commodity prices and the global manufacturing rebound. These factors will help to ease the region's external and fiscal vulnerabilities, particularly over the second half of the year. On the domestic front, though, the first quarter has proved challenging for some countries, hit by temporary supply factors such as a mine strikes, floods, and wildfires.

22 March 2017 Why Are Pending Sales Lagging Existing Sales? (Publication Centre)

The remarkably strong existing home sales numbers in recent months, relative to the pending home sales index, are hard to explain. In January, total sales reached 5.69M, some 6% higher than the 5.35M implied by December's pending sales index. The gap between the series has widened in recent months, as our first chart shows, and we think the odds now favor a correction in today's February report.

22 March 2017 Greece, the EU and the IMF are Sleepwalking into Crisis... Again (Publication Centre)

Another deadline has come and gone in the negotiations between Greece and its creditors. This week's meeting between EU finance ministers revealed that the creditors have not seen enough commitments unlock the €7B Greece needs to repay in July. Mr. Tsipras has agreed to energy sector privatizations, and to increase the threshold for income tax exemption.

22 March 2017 Inflation Will Continue to Exceed the MPC's Forecast (Publication Centre)

February's consumer price figures provided hard evidence that the import price shock, caused by sterling's depreciation last year, is filtering through faster than the MPC expected. We expect CPI inflation to continue to exceed the forecast set out in February's Inflation Report.

22 March 2018 China's State Capital to Nourish Tech but Neglect Households (Publication Centre)

So much has changed in China over the last six months that we are taking the opportunity in this Monitor to step back and gain an overview of where the economy is going in the long term.

22 March 2018 The IFO and EZ manufacturing sentiment likely fell further in March (Publication Centre)

Today's economic calendar in the Eurozone is filled to the rafters.

22 March 2018 Strong Growth, Gradual Hikes, and Only a bit of Inflation, Here's Hoping (Publication Centre)

The most striking feature of the Fed's new forecasts is the projected overshoot in core PCE inflation at end-2019 and end-2020, which fits our definition of "persistent".

22 Mar. Housing Market Revival Reflects More than Stamp Duty Increase (Publication Centre)

The recent revival in housing market activity reflects more than just a temporary boost provided by imminent tax changes. The current momentum in market activity and lending likely will fade later this year, but we think this will have more to do with looming interest rate rises than a lull in activity caused by a shift in the timing of home purchases.

22 Mar. 2016 Will Economic Survey Data Step Back From the Brink this Week? (Publication Centre)

Financial markets and economic survey data have been sending a downbeat message on the Eurozone economy so far this year. The composite PMI has declined to a 12-month low, consumer sentiment has weakened, and national business surveys have also been poor.

22 June. 2015 Why is the Fed so Cautious About the Trajectory of Unemployment? (Publication Centre)

The closer we look at the Fed's new forecasts, the stranger they seem. The FOMC cut its GDP estimate for this year and now expects the economy to grow by 1.9%--the mid-point of its forecast range--in the year to the fourth quarter. Growth is then expected to pick up to 2.6% next year, before slowing a bit to 2.3% in 2017. Unemployment, however, is expected to fall much less quickly than in the recent past.

22 June. 2015 Twin Disaster for Brazil As Inflation Rises and the Recession Deepens (Publication Centre)

In recent weeks Brazilian central bank officials have reinforced their message that they will continue fighting inflation with "determination and perseverance". CPI inflation is failing to subside, at least at the headline level, where the latest readings are very disappointing, and expectations have remained stubbornly high. And the BRL has fallen 13% year-to-date, posing further inflation threats ahead. All these factors mean that the BCB will increase its main interest rate yet again in July.

22 June. 2016 No Real Change from Yellen, but Acknowledgement of Other Views (Publication Centre)

Dr. Yellen's Testimony yesterday was largely a cut-and-paste job from the FOMC statement last week and her remarks at the press conference. The Fed's core views have not changed since last week, unsurprisingly, and policymakers still expect to raise rates gradually as inflation returns to the target, but will be guided by the incoming data.

22 June. 2016 Promising Inflation Picture in Brazil, Better News is Coming (Publication Centre)

Brazil's mid-June inflation reading surprised to the downside, falling to 9.0% from 9.6% in May. The reading essentially confirmed that May's rebound was a pause in the downward trend rather than a resurgence of inflationary pressures. A 1.3% increase in housing prices, including services, was the main driver of mid-June's modest unadjusted 0.4% month-to-month rise in the IPCA-15.

22 Mar. 2016 The Upturn in Core Inflation is Real - Don't Focus on the Noise (Publication Centre)

We pointed out in yesterday's Monitor that Fed Chair Yellen appears to be putting a good deal of faith in the idea that the recent upturn in core inflation is temporary. She argued that "some" of the increase reflects "unusually high readings in categories that tend to be quite volatile without very much significance for inflation over time".

22 June. Fiscal and Monetary Policy Won't Come to the Rescue After a Brexit (Publication Centre)

The Chancellor warned last week that he would hold an Emergency Budget shortly after a vote to leave the E.U. to address a £30B black hole in the public finances. The £30B--some 1.6% of GDP-- is the mid-point of the Institute for Fiscal Studies' estimates of the impact of Brexit on public borrowing in 2019/20, which were based on the GDP forecasts of a range of reports.

21 November 2018 October Retail Sales Cast Doubt on Consumers' Resilience (Publication Centre)

October's retail sales figures, published last Thursday, extended the month-long run of near consistent downside data surprises.

21 November 2018 Korean PPI Points to Cascading Drops in Inflation Elsewhere in Asia (Publication Centre)

PPI inflation in Korea slowed sharply in October, to a five-month low of 2.2%, from 2.7% in September.

21 August 2017 Chile's Economy is Improving, but Expect Only Modest Growth in H2 (Publication Centre)

Chile's Q2 GDP report, released on Friday, confirmed that the economy gathered momentum in recent months, following an alarmingly weak start to the year.

21 Aug 2019 Construction in the EZ is Slowing, Driven by Weakness in Germany (Publication Centre)

We still don't have the complete picture of what happened to the EZ construction sector in Q2, but we have enough evidence to suggest that it rolled over.

21 Aug 2019 China's Authorities Signal Further Easing, but Space is Limited (Publication Centre)

The PBoC's reformed one-year Loan Prime Rate was published yesterday at 4.25%, compared with 4.31% on the previous LPR, and below the benchmark lending rate, 4.35%.

21 August 2017 Construction is Propelling the Eurozone Economy in 2017 (Publication Centre)

The construction sector remains a stand-out performer in the Eurozone economy, despite stumbling at the end of Q2.

21 August 2017 Growth Momentum and Slow Hikes Means no Recession Until 2019 (Publication Centre)

We have had something of a rethink about the likely timing of the coming cyclical downturn. Previously, we thought the economy would start to slow markedly in the middle of next year, with a mild recession--two quarters of modest declines in GDP-- beginning in the fourth quarter.

21 August 2018 Chile's Fundamentals are Improving This Likely Will Offset External Risks (Publication Centre)

Chile's Q2 GDP report, released yesterday, confirmed that the economy gathered strength in the first half of the year, consolidating a strong recovery that started in Q3 2017.

21 August 2017 The Peak in CPI Inflation Still Hasn't Been Reached Yet (Publication Centre)

After soaring in the Spring, inflation has slipped back in the Summer. July's consumer prices report, released while we were away last week, showed that CPI inflation held steady at 2.6% in July, one -tenth below the consensus and three tenths below May's year-to-date peak.

21 Aug 2019 Resilient Domestic Demand in the Andes, Despite Global Tensions (Publication Centre)

The Andean economies haven't been immune to the turmoil roiling the global economy in the past few weeks.

21 April 2017 Faites vos Jeux! Anything is Possible in France this Weekend (Publication Centre)

This weekend's first round of the French presidential election is too close to call. Our first chart indicates that a runoff between Marine Le Pen and Emmanuel Macron remains the best bet. But the statistical uncertainty inherent in the predictions, and the proximity of the two remaining candidates--the centre-right Mr. Fillon and far-left Mr. Melenchon-- mean that this is now effectively a four-horse race.

21 Apr. 2015 Greek IMF default is looming, but it won't necessarily mean Grexit (Publication Centre)

Media reports that Greece and the EU are putting together "contingency plans" for a Greek default--and perhaps even an exit from the Eurozone--highlight how far the parties remain from each other.

20 September. 2016 LatAm's Disinflation is Gathering Speed - Rate Cuts Soon? (Publication Centre)

August inflation surprised to the downside across most of LatAm, as food price surges proved transitory, and the lagged effect of the FX depreciations last year faded. Brazil appeared to be the exception last month, but the underlying trend in inflation is downwards.

20 September. 2016 Homebuilders Need to Catch up to Rising Sales - Expect a Q4 Surge (Publication Centre)

The information available to date--which is still very incomplete--suggests that new housing construction will decline in the third quarter. This would be the second straight decline, following the 6.1% drop in Q2. We aren't expecting such a large fall in the third quarter, but it is nonetheless curious that housing investment--construction, in other words--is falling at a time when new home sales have risen sharply.

21 Apr. 2015 Survey evidence signalling faster wage gains is mounting (Publication Centre)

We have argued for some time that the plunge in gasoline prices will constrain core inflation over the course of this year, by reducing production and distribution costs for a broad array of goods.

21 Apr. 2016 All Eyes on the Details of QE and TLTROs in Today's ECB Meeting (Publication Centre)

The ECB will keep its refinancing and deposit rates unchanged today, at 0.0% and -0.4% respectively. We also think the pace of QE will be held at €80B per month. Attention will turn instead to the details and implementation of the measures unveiled last month. Corporate bonds will be added to QE at the end of the second quarter, and monthly purchases of about €5-to-€10B per month are a realistic assumption.

21 Apr. Retail Sales Likely to Disappoint in March Due to Weak Easter Trading (Publication Centre)

Signs that Easter trading was unusually poor lead us to anticipate a downside surprise from today's retail sales data for March. The BRC's Retail Sales Monitor, which surveys companies that account for 60% of total retail sales, was remarkably weak in March.

21 Apr. 2016 Further Evidence that the Manufacturing Rollover is History? (Publication Centre)

The recent sharp, if not startling, upturn in the regional manufacturing surveys should continue today with the release of the Philadelphia Fed report. The survey is constructed in the same way as the more volatile Empire State, which has rocketed in the past few months, and the headline indexes follow similar trends, as our first chart shows.

21 August 2018 Could Stockpiling for a No-Deal Brexit Boost the Economy? (Publication Centre)

We have been asked several times in recent days whether a pick-up in stockbuilding, as part of businesses' contingency planning for a no-deal Brexit, could cause the economy to gather some pace in the run-up to Britain's scheduled departure from the EU in March 2019.

21 August 2018 The End of the Beginning for the Greek Public Debt Tragedy (Publication Centre)

Greece's exit from eight years of near constant bail-out programs raises as many questions as it answers.

21 December 2017 Fourth Quarter GDP Heading for 3%. Trade, Inventories will be Drags (Publication Centre)

We see no compelling reason to expect a significant revision to the third quarter GDP numbers today, so our base case is that the second estimate, 3.3%, will still stand.

21 December 2017 China's Government Bond Issuance to Rise. Japan's is Slated to Fall (Publication Centre)

The details of next year's Japanese budget are not yet official and the Chinese budget remains unknown. But the main figures of the Japanese budget are available, while China's Economic Work Conference, which concluded yesterday, has set out the colour of the paint for the budget, if not the actual brush strokes.

21 December 2016 Is FDI Now the Main Driver of Eurozone Capital Outflows? (Publication Centre)

The Eurozone's external surplus is on track for a record-breaking year in 2016. Data yesterday showed that the current account surplus rose to €28.4B in October, from €27.7B in September. The trade surplus in goods fell, but this drag was offset by a higher services and income surplus, and a lower current transfers deficit.

21 December 2017 Polls Point to a Hung Parliament In Catalonia in Today's Vote (Publication Centre)

Catalonia goes to the polls today, and it will be a close call. Surveys point to a hung parliament in which neither the pro-separatists nor the unionist coalition will secure an absolute majority.

21 December 2017 Q3 Accounts to Reveal Temporary Supports to Households' Spending (Publication Centre)

The national accounts, released on Friday, likely will restate that quarter-on-quarter GDP growth picked up to 0.4% in Q3, from 0.3% in Q2.

21 December 2018 The MPC Will Act Quickly When Brexit Uncertainty Fades (Publication Centre)

The minutes of this week's MPC meeting indicate that it won't waste any time to raise interest rates after MPs finally have signed off a Brexit deal.

21 December 2018 Consumption Will Firm in Mexico in Q4, Despite October's Poor Data (Publication Centre)

Yesterday's report on October private spending in Mexico was downbeat, suggesting that consumption started the fourth quarter on a weak footing.

21 December 2016 Home Sales Likely Fell in November, Before the Hit from Higher Rates (Publication Centre)

After two big monthly gains in existing home sales, culminating in October's nine-year high of 5.60M, we expect a dip in sales in today's November report. This wouldn't be such a big deal -- data correct after big movements all the time -- were it not for the downward trend in mortgage applications.

21 December 2016 Consumption Likely Remained Firm in Mexico in Q4, But it Will Slow (Publication Centre)

Yesterday's report on October private spending in Mexico was positive, suggesting that consumption remained relatively strong at the start of Q4. Retail sales jumped 1.6% month-to-month, following a modest 0.2% drop in September. October's rebound was the biggest gain since March this year, but note that wild swings are not unusual in these data. The headline year-over-year rate rose to 9.3%, from 8.1% in September, but survey data signal to a gradual slowdown in coming months to around 5%.

21 Dec. 2015 Corporations Still Over-leveraged, but Little Near-Term Danger? (Publication Centre)

The markets' favorite story of the moment, aside from the Fed, seems to be the idea that overstretched corporate finances are an accident waiting to happen. When the crunch comes, the unavoidable hit to the stock market and the corporate bond market will have dire consequences, limiting the Fed's scope to raise rates, regardless of what might be happening in the labor market. We don't buy this. At least, we don't buy the second part of the narrative; we have no problem with the idea the finances of the corporate sector are shaky.

21 August. 2015 Mexico's Domestic Recovery Remains - But Oil Woes Continue (Publication Centre)

The Mexican economy had a decent start to the year thanks to resilient domestic demand, but hampered by the rollover in capital spending in the oil sector and the slowdown in manufacturing activity. Economic activity expanded 2.2% year-over-year in the second quarter, down from 2.6% in the first quarter, but the underlying trend remains reasonably solid.

21 Dec. 2015 Fed Tightening Triggers Immediate Policy Changes in LatAm (Publication Centre)

Central banks in Mexico, Colombia and Chile raised interest rates last week in tandem with the Fed, underscoring the almost mystical importance of the FOMC's actions in Latin America. In Colombia and Chile, their decisions were also helped by rising inflation pressures, due mainly to pass-through effects from currency depreciation.

21 Dec. 2015 How Vulnerable is the U.K. to a Current Account Crisis? (Publication Centre)

The latest balance of payments figures, released Wednesday, look set to show that the current account deficit widened in Q3, underlying the U.K.'s vulnerability to a sudden change in overseas investor sentiment. The risk of a full-blown sterling crisis, however, is lower than the enormous current account deficit would appear to suggest.

21 December 2016 Big Current Account Deficit Likely to Cloud Resilient GDP Picture (Publication Centre)

The third quarter national accounts, due to be published on Friday, likely will not alter the picture of economic resilience immediately after the referendum. The latest estimate of GDP growth often is revised in this release, but revisions have not exceeded 0.1 percentage points in either direction in the last four years, as our first chart shows.

21 Dec. 2015 Paris Attacks Unlikely to Dent Q4 French GDP Growth Severely (Publication Centre)

Manufacturing confidence in France remained resilient in the fourth quarter. The INSEE sentiment index rose to 103 in December from 102 in November, lifted by a jump in firms' own production expectations, and a small increase in the new orders-to-inventory ratio. We think production will increase in Q4, lifted by energy output, but the recent jump in the year-over-year rate is unlikely to be sustained, even if we factor in the marginal increase in new orders this month.

20 September 2018 Consensus is Wrong in Thinking the BoJ will Sit on its Hands Next Year (Publication Centre)

The BoJ kept all policy measures unchanged at its meeting yesterday.

20 September 2018 Business Surveys Wobbling in the Face of Higher Rates (Publication Centre)

In the wake of the unexpectedly weak September Empire State survey, released Monday, we are now very keen to see what today's Philadelphia Fed survey has to say.

20 Oct. 2015 Could the Terminal Funds Rate be Much Higher Than Markets Think? (Publication Centre)

In the September forecasts, the median forecast of FOMC members for the long-term fed funds rate was 3.5%. Their long-term inflation forecast is 2%-- it has to be 2%, otherwise they would be forecasting permanent failure to meet their policy objectives -- implying a real rate of 1.5%. This is well below the long-run average; from 1960 through 2005, the real funds rate--the nominal rate less the rate of increase of the PCE deflator--averaged 2.4%.

20 November 2018 The PM is Likely to Hang on, Even if a Confidence Vote is Triggered (Publication Centre)

As we write, 25 Conservative MPs have confirmed publicly that they have submitted no-confidence letters to the Chairman of the 1922 Committee. That's 23 short of the 48 required to trigger a leadership contest, though some MPs might have submitted letters without making it public.

20 November 2018 The Housing Downturn won't Kill the Rest of the Economy, this is not 2008 (Publication Centre)

The media and markets are waking up to the idea that the housing market has peaked in the face of higher mortgage rates and slightly--so far--tighter lending standards.

20 Oct. 2015 Inflation Rebound to Force MPC's Hand, Even if Recovery Slows (Publication Centre)

The consensus view on the Monetary Policy Committee, that it will take two years for CPI inflation to return to the 2% target, looks complacent. Leading indicators suggest that price pressures will return faster than both policymakers and markets expect. Interest rates are therefore likely to rise in the first half of 2016, even if the recovery loses momentum.

20 Oct. 2015 Slowdown in U.K. GDP Growth to Dent EZ Exports Next Year? (Publication Centre)

Our new Chief U.K. economist, Samuel Tombs, initiated his coverage yesterday with a sombre, non-consensus, message on the economy. Headwinds from fiscal tightening and net trade will weigh on GDP growth next year, but the BoE will likely have to look through such cyclical weakness, and hike as inflation creeps higher. An intensified drag from net trade in the U.K. will, other things equal, benefit the Eurozone. But a slowdown in U.K. GDP growth still poses a notable risk to euro area headline export growth, especially in the latter part of next year.

20 October 2017 Domestic Fundamentals Remain Positive for Brazilian Markets (Publication Centre)

Recent economic indicators in Brazil have undershot consensus in recent weeks, but the economy nonetheless continues to recover.

20 October 2017 Chinese Q3 Real GDP Growth was Stable but Below the Official Print (Publication Centre)

On the official gauge, China's real GDP growth fell minimally to 6.8% year-on-year in Q3, from 6.9% in Q2. Growth edged down to 1.7% quarter-on-quarter from an upwardly revised 1.8% in Q2.

20 November 2018 The Eurozone Economy's Global Liquidity Pump is Sputtering (Publication Centre)

The EZ's current account surplus was stung at the end of Q3, falling to a three-year low of €16.9B in September, from a revised €23.9B in August.

20 November 2018 Japan's Trade will Come Back into Balance, but not Until the New Year (Publication Centre)

Looking through recent supply disruptions, Japan's adjusted trade balance seems likely to remain in the red until the new year.

20 November 2017 PBoC Lets up After Tightening Ahead of Fed Hikes (Publication Centre)

The PBoC has let up on its open-market operations after allowing bond yields to move higher again in October.

20 November 2017 Low Core Inflation Continues to Provide Cover for Mr. Draghi (Publication Centre)

Mr. Draghi's speech to the European Banking Congress on Friday--see here--was a timely reminder to markets that the ECB is in no hurry to make any changes to its policy setting.

20 November 2017 Terrible Timing for Tax Cuts -- if they Pass, the Fed Will Hike More Quickly (Publication Centre)

The passage of the House tax cut bill does not guarantee that the Senate will follow suit with its own bill, still less that both chambers will then be able to agree on a single bill which can then b e signed into law. As

20 November 2017 The Chancellor Will Stick to Plans for an Intensifying Fiscal Squeeze (Publication Centre)

Chancellor Hammond likely will broadly stick to the current plans for the fiscal consolidation to intensify next year when he delivers his second Budget on Thursday.

20 November 2018 Chile's Economy Shifted into Lower Gear in Q3, is the Outlook Brighter (Publication Centre)

Chile's Q3 GDP report, released yesterday, confirmed that the economy lost momentum in the last quarter.

20 November 2017 Will Argentina Succeed in Tackling High Inflation and Fiscal Deficits? (Publication Centre)

Argentina's economy is firing on all cylinders, thanks to improving fundamentals and a positive external backdrop.

20 October 2017 September Existing Home Sales Likely Fell, but the Outlook is Bright (Publication Centre)

Usually, we forecast existing home sales from the pending sales index, which captures sales at the point contracts are signed.

20 October 2017 September's Retail Sales Slump Highlights Consumers' Caution (Publication Centre)

Retail sales fell sharply in September, highlighting that consumers still are spending only cautiously amid high economic uncertainty and falling real wages.

20 September 2017 Construction in the Eurozone Will Continue to Lift GDP Growth in Q3 (Publication Centre)

Construction in the Eurozone had a decent start in the third quarter. Output rose 0.5% month-to- month in July, pushing the year-over-year rate down to 1.9% from 2.8% in June.

20 September 2016 Will Weaker Sterling Ride to the Economy's Rescue? (Publication Centre)

Hopes that the economy will not slow over the next year are largely pinned on the idea that net trade will be boosted by the drop in sterling. The pound has tracked sideways over the last two months and is about 15% below its trade-weighted peak in November 2015.

20 September 2016 The Recycling of the EZ's Current Account Surplus Continues (Publication Centre)

The external surplus in the EZ economy slipped in July. The seasonally-adjusted current account surplus dropped to €21.0B, from a revised €29.5B in June, hit by an increase in the current transfers deficit, and a falling trade surplus. The recent increase in the transfers deficit partly is due to the migrant deal with Turkey, and we expect it to remain elevated.

20 September 2017 Expect a December Hike (Publication Centre)

The FOMC won't raise rates today, but we expect that the announcement of the start of balance sheet reduction will not be interrupted by Harvey and Irma.

20 September 2017 Is China set to Open Further its Financial Sector to Foreigners? (Publication Centre)

Bloomberg reported on Monday that the PBoC is drafting a package of reforms to give foreign investors greater access to the China's financial services sector. This could involve allowing foreign institutions to control their local joint ventures and raising the 25% ceiling on foreign ownership of Chinese banks.

20 September 2018 August's Jump in CPI Inflation is More Noise than Signal (Publication Centre)

August's consumer price figures caught everyone by surprise. CPI inflation increased to 2.7%, from 2.4% in July, greatly exceeding the consensus and the MPC's forecast, 2.4%.

20 September 2017 August Retail Sales to Confirm Consumption Still Weak in Q3 (Publication Centre)

August's retail sales figures, released today, look set to show that growth in consumers' spending has remained subpar in Q3, casting doubt over whether the MPC will conclude that the economy can cope with a rate hike this year.

20 Sept 2019 The COPOM Cuts Rates and Points to Further Easing in October (Publication Centre)

The Brazilian Central Bank's policy board-- COPOM--voted unanimously on Wednesday to cut the Selic rate by 50bp to 5.50%.

20 Sept 2019 The Case for Expecting Higher Inflation Next Year is Strong (Publication Centre)

Our forecast of significantly higher core inflation over the next year has been met, it would be fair to say, with a degree of skepticism.

20 October. 2016 Are Jobless Claims Really at a 43-Year Low?  (Publication Centre)

The recent jobless claims numbers have been spectacularly good, with the absolute level dropping unexpectedly in the past two weeks to a 43-year low. The four-week moving average has dropped by a hefty 14K since late August.

20 October 2017 The Spanish Economy is Resilient to the Chaos in Catalonia, for Now (Publication Centre)

The Spanish economy has been punching above its weight in the current business cycle. Real GDP growth has trended at about 0.8% quarter-on-quarter since 2015, far outpacing the other major EZ economies.

20 October. 2016 Rising Prices Will Arrest the Strong Trend in Retail Sales Next Year (Publication Centre)

It's hard to have much conviction in any forecast for September retail sales, as the relationship between the official data and the surveys has weakened considerably.

20 October.2016 The ECB Will Prepare Markets for QE Extension in December (Publication Centre)

We don't expect any major policy announcements at today's ECB meeting. We think the central bank will keep its main refinancing rate unchanged at 0.0%, and we expect the deposit and marginal lending facility rates to remain at -0.4% and 0.25%, respectively.

20 Sept 2019 Next BoJ Meeting is Live it's About Cost-Minimisation, not Expansion (Publication Centre)

The big question left by the BoJ at yesterday's meeting is how, if at all, they will follow up in October.

20 Sept 2019 A Pre-Brexit Rate Cut Now is on the Table, But Remains Unlikely (Publication Centre)

It was widely assumed that the MPC simply would regurgitate its key messages from August in the minutes of September's meeting, released yesterday alongside its unanimous no-change policy decision.

21 December 2018 What Happened in the French Economy in the Fourth Quarter (Publication Centre)

This is the final report before we dial down for our Christmas break, and we are happy to report that the economic calendar will be almost empty in our absence.

21 February 2017 Are EZ Survey Data Overestimating Momentum in the Economy? (Publication Centre)

We think this week's main economic surveys in the Eurozone will take a step back following a steady rise since the end of Q3. Today's composite PMI in the Eurozone likely slipped to 54.0 in February, from 54.4 in January, mainly due to a dip in the manufacturing component. Even if we're right about slightly weaker survey data in February, though, it is unlikely to change the story of a stable and solid cyclical expansion in the EZ.

21 March 2017 Will Investors Shorting Sterling Remain Frustrated? (Publication Centre)

Speculators who have sold sterling over the last six months have been frustrated. Investors have been overwhelmingly net short sterling, but the pound has hovered between $1.20 and $1.25, as our first chart shows. Undeterred, investors increased their net short positions last week to 107K contracts-- the most since records began in 1992--from 81K a week earlier.

21 March 2017 The Debt Ceiling is Back, but no Crisis Likely Until the Fall (Publication Centre)

The federal debt ceiling was re-imposed last week, with no fanfare, and no reaction in the markets. All eyes were focussed instead on the Fed's rate hike and Chair Yellen's press conference.

21 March 2017 Real Wage Growth in the Eurozone is Being Hit by Higher Inflation (Publication Centre)

One of the key characteristics of this euro area business cycle has been near-zero inflation due to structurally weak domestic demand and depressed prices for globally traded goods and commodities. This has supported real incomes, despite sluggish nominal wage growth.

21 March 2018 China's Fiscal Reforms: Economies of Scale won't Reduce the Deficit yet (Publication Centre)

Premier Li Keqiang rounded out the National People's Congress with his press conference yesterday.

21 March 2018 Fiscal stimulus in the EZ won't cure global imbalances (Publication Centre)

Global current account imbalances are back on the agenda. In the U.S., economic policies threaten to blow out the twin deficit, while external surpluses in the euro area and Asia are rising.

21 March 2018 Powell to Play the Continuity Card Again (Publication Centre)

We previewed the FOMC meeting in detail yesterday -- see here -- but to recap briefly, we expect a 25bp rate hike, with no significant changes in the statement, and a repeat of the median forecasts of three rate hikes this year.

21 March 2018 Lower CPI Inflation in February Should Give the MPC Doubts (Publication Centre)

February's consumer price figures give the MPC reason to doubt the case for raising interest rates again as soon as May.

21 March 2017 LatAm's Gradual Recovery will Ease Concerns on the Fiscal Front (Publication Centre)

Latin American markets have been relatively resilient this year, despite Fed tightening and high global political risks. The LACI index has risen more than 5% year-to-date, and the MSCI index has been trending higher since late last year.

21 Mar. 2016 The Periphery is Slowly Regaining Competitiveness in the Eurozone (Publication Centre)

Labour costs growth accelerated modestly last year in the Eurozone. Data on Friday showed that Q4 nominal labour costs in the Eurozone rose 1.3% year-over-year, slightly higher than the 1.1% increase in Q3. The modest acceleration was mainly due to a rise in "non-business" labour costs, which rose 1.6% year-over-year, up from a 0.9% increase in Q3.

21 June 2019 Will Brazilian Policymakers Open the Door for Rate Cuts Soon (Publication Centre)

The Brazilian Central Bank's policy board, COPOM, left the Selic rate at 6.50% on Wednesday, as widely expected.

21 June 2019 Financial Markets in the Eurozone are now in Bizarro-World (Publication Centre)

Swoons in EZ investor sentiment are not always reliable leading indicators for the economic surveys, but it is fair to say that risks for today's advance PMIs are tilted to the downside, following the dreadful Sentix and ZEW headlines earlier this month.

21 June. 2016 All Aboard for a Recovery in German Inflation Pressures (Publication Centre)

Producer prices in Germany rose 0.4% month-to-month in May, stronger than the consensus expectation of a 0.3% gain, and we think further upside surprises are likely in coming months. The headline was boosted by a 0.7% jump in energy prices, but food and manufacturing goods prices also rose.

21 June. 2016 Monetary Policy Testimony Won't Signal a Change in Fed Thinking (Publication Centre)

Back in the dim and increasingly distant past the semi-annual Monetary Policy Testimony--previously known as the Humphrey-Hawkins--used to be something of an event. Today's Testimony, however, is most unlikely to change anyone's opinion of the likely pace and timing of Fed action.

21 Mar. 2016 The Fed Either Hopes for a Miracle or Wants Inflation to Overshoot (Publication Centre)

Fed Chair Yellen made it clear in last week's press conference that she is not convinced the increase in core inflation will persist: "I want to warn that there may be some transitory factors that are influencing [the rise in core inflation]... I see some of that is having to do with unusually high inflation readings in categories that tend to be quite volatile without very much significance for inflation over time.

21 Mar. 2016 Monetary Policy Divergence in LatAm Despite Calm in Markets (Publication Centre)

No surprises from Chile's central bank last week, after leaving rates unchanged for the third consecutive month, in the light of recent data confirming the sluggish pace of the economic recovery. In the communiqué accompanying the decision, the BCCh kept their tightening bias, signaling that rates will rise in the near term.

21 March 2018 The BRL is Flat Year-to-Date, but Politics is Driving Some Pressures (Publication Centre)

The Brazilian BRL has remained relatively stable year-to-date, following a strong rebound in January. But downward pressures have re-emerged over the last two months, as shown in our first chart.

21 March 2019 Above-Target Inflation over the Spring Will Test the MPC's Patience (Publication Centre)

February's consumer price figures, released yesterday, put more pressure on the MPC to stick to its plans for an "ongoing" tightening of monetary policy, despite the uncertainty created by the Brexit chaos.

21 November 2017 Chile's Economy Rebounded in Q3, but Politics Will Dominate the News (Publication Centre)

Incoming data confirm our view that the Chilean economy to rebound steadily in the second half of the year, with real GDP increasing 1.5% quarter-on-quarter in Q3, after a relatively modest 0.9% increase in Q2 and a meagre 0.1% in Q1.

21 May. 2015 Greece Needs EU Bailout Funds to Pay the IMF Next Month (Publication Centre)

The day of reckoning in Greece has been continuously postponed in the past three months, but government officials told national TV yesterday that the country cannot meet its IMF payment of €300M June 5th, without a deal with the EU. The urgency was echoed by the joint statement earlier this week by German Chancellor Merkel and French President Hollande that Greece has until the end of this month to reach a deal.

21 May 2019 The MPC Will Shun its Strategy of Waiting for Brexit Uncertainty to Fade (Publication Centre)

The chances of the first phase of the Brexit saga concluding soon declined sharply last week.

21 November 2017 Cutting Stamp Duty for FTBs Will Boost Prices, not Home Ownership (Publication Centre)

Reforms to Stamp Duty Land Tax paid by first-time buyers likely will take centre stage in the Budget. At the Conservatives' party conference, Theresa May pledged another £10B to expand the Help to Buy Scheme, which helps first-time buyers obtain a mortgage which just a 5% deposit.

21 November 2017 Is Germany Headed for New Elections Next Year? (Publication Centre)

Political uncertainty in the Eurozone is the story that won't die. Coalition talks in Germany collapsed yesterday when the centre-right FDP walked out of the negotiations.

21 November 2018 Commodity Prices Struggle in the Trade War Will LatAm be Resilient (Publication Centre)

The sharp downtrend in commodity prices in recent months is alarming from a LatAm perspective.

21 November 2018 The Curious Case of the Crash in the French Housing Market (Publication Centre)

The French economy has suffered from weakness in manufacturing this year, alongside the other major EZ economies.

21 May 2019 Chile's Economy Struggled in Q1, and the Near-Term Outlook is Poor (Publication Centre)

Chile's Q1 GDP report, released yesterday, confirmed that the economy weakened sharply at the beginning of the year, due mainly to temporary shocks, including adverse weather conditions.

21 May 2018 How do you Price the Risk of a Political Wildcard in Italy? (Publication Centre)

In our Monitor May 15 we described the initial government program in Italy, drafted by the leadership of the Five-Star Movement and the League parties, as a "macroeconomic fairytale."

21 March 2019 The Fed is Safe Until the Second Half then all Bets are Off (Publication Centre)

Now that the Fed has abandoned the idea of raising rates this year, despite 3.8% unemployment and accelerating wages, it is very exposed to the risk that the bad things it fears don't happen.

21 March 2019 EZ Equity Investors Have Bought the Global Central Bank Put (Publication Centre)

The perfect world for equities is one in which earnings and valuations are rising at the same time, but in the Eurozone it seems as if investors have to make do with one or the other.

21 March 2019 Upside Risks to our China 2019 GDP Growth Forecast (Publication Centre)

For countries with developed non-banking funding channels, narrow money isn't necessarily a good predictor of GDP growth.

21 May 2018 Banxico on Hold as Inflation Falls, but the MXN is a Risk (Publication Centre)

Mexico's central bank last week left its policy rate at 7.0%, the highest level since early 2009.

21 May 2018 Higher Oil Prices won't Kill the Economy, A Boost is a Better Bet (Publication Centre)

Oil prices have risen by about $20 per barrel since last fall.

21 May 2018 China's $200B Offer is Long-run Unviable, Short-run Problematic (Publication Centre)

China reportedly has offered President Trump a $200B reduction in its annual trade surplus with the U.S., engineered by increasing imports of American products, among other steps.

21 June 2019 Dealing with the "Delay Suits Both" Theories of China Trade (Publication Centre)

We've had pushback from readers over our take on the likelihood of a trade deal with China in the near future.

21 June 2019 As Markets Attack, the BoJ is Caught like a Deer in the Headlights (Publication Centre)

On the face of it, BoJ policy seems to be to change none of the settings and let things unfold, hoping that the trade war doesn't escalate, that China's recovery gets underway soon, and that semiconductor sales pick up in the second half.

21 Jan. 2016 Could the Chancellor Still Reduce Borrowing This Year as Planned? (Publication Centre)

By any yardstick, progress in reducing public sector borrowing so far this fiscal year has been poor. While the borrowing trend should improve in the final four months of this year--including December's figures, published Friday--the Chancellor has only a slim chance of meeting the forecasts set out in the Autumn Statement.

21 Jan. 2015 Welcome Gain in ZEW, but Still Not Confirmed by IFO or PMIs (Publication Centre)

Investor sentiment in the Eurozone showed further signs of recovery yesterday. The ZEW expectations index rose strongly to 48.4 in January from 34.9 in December, and the leap since the trough in October ranks among the strongest rebounds ever recorded in the index.

21 Jan. 2015 Colombia Will Lose Momentum in 2015, But Don't Panic Just Yet (Publication Centre)

Colombia is one of the few larger economies in Latin America to have enjoyed solid, positive economic growth over the past two years. But lower commodity prices and last year's central bank tightening, to curb high inflation generated by strong growth, have started to become visible in the main economic data.

21 Jan. 2016 The ECB is Under Pressure to Act, but Likely Will Hold Fire Today (Publication Centre)

Financial markets have put maximum pressure on the ECB going into today's meeting, but we doubt it will be enough to spur the governing council into action so soon after announcing additional stimulus in December. We think the central bank will keep its refi and deposit rate unchanged at 0.05% and -0.3% respectively, and maintain the pace of asset purchases at €60B a month.

21 Jan. 2016 Why Aren't Core Goods Prices Falling Much Faster? (Publication Centre)

Another day, another sharp drop in the stock market, and another wavelet of commentary suggesting recession and deflation are just around the corner. We have no argument with the idea that the manufacturing sector could contract over, say, the next six months. But the other 88% of the economy--apart from the 1½% of GDP generated by oil extraction-- is benefiting from the strong dollar and cheap fuel.

21 January 2019 The EZ's Current Account Surplus is now Well Below 3% of GDP (Publication Centre)

The Eurozone's current account surplus almost surely fell further in Q4.

21 January 2019 Colombia's Private Spending Did Well in Q4, 2019 Will Be Solid (Publication Centre)

Data released on Friday confirmed that Colombian activity remained strong in Q4.

21 Jan. 2015 - Spending Not Yet Surging in the Wake of Cheaper Gas, But it Will (Publication Centre)

So far, the surge in retail spending promised by the plunge in gasoline prices has not materialized. The latest Redbook chain store sales numbers dipped below the gently rising trend last week, perhaps because of severe weather, but the point is that the holiday season burst of spending has not been maintained.

21 February 2019 Will the Real Story in French Services Please Stand Up (Publication Centre)

Today's data dump will deliver the advance PMIs and the French INSEE business sentiment indices for February, all of which will be examined closely for signs of stabilisation in the wake of recent evidence that EZ growth is slowing quicker than markets and the ECB have been expecting.

21 February 2017 Fiscal Policy Won't Be Eased, Even If January's Surplus is Huge (Publication Centre)

January's public finance data, released today, take on particular importance because they are the last to be published before the Chancellor delivers his first Budget on March 8. The public finances nearly always swing into surplus in January, primarily because the deadline for individuals to submit self-assessment--SA--tax returns for the previous fiscal year is at the end of the month. Firms also pay their third of four payments of corporation tax for their profits in the current fiscal year.

21 February 2017 Brazil's Current Account Remains Healthy, FDI In ows are Robust (Publication Centre)

Brazil's current account data last week provided further evidence of stabilisation in the economy, despite the modest headline deterioration. The unadjusted current account deficit increased marginally to USD5.1B in January, from USD4.8B in January 2016, but the underlying trend remains stable, at about 1.3% of GDP. Our first two charts show that the overall deficit began to stabilize in mid-2016, as the rate of improvement in the trade balance slowed, reflecting the easing of the domestic recession.

21 February 2017 Wages Don't Necessarily Lead Inflation, but Unit Labor Costs do (Publication Centre)

Fed Chair Yellen said something which sounded odd, at first, in her Q&A at the Senate Banking Committee last Tuesday. It is "not clear" she argued, that the rate of growth of wages has a "direct impact on inflation".

21 February 2018 Downside Risk for January Home Sales, but Expect a Decent Spring (Publication Centre)

Today's housing market data likely will look soft, but will probably not be representative of the underlying story, which remains quite positive.

21 February 2018 The ECB is in the Headlines, But Not Because of its Monetary Policy (Publication Centre)

Politics are once again encroaching on the economic story in the Eurozone. At the ECB, this week has so far been a tumultuous one.

21 February 2018 Labour Data Won't be Hot Enough to Compel the MPC to Hike in May (Publication Centre)

December's labour market report, released today, won't be a game-changer for the near-term outlook for interest rates; January data will be released before the MPC meets in March, and February data will be available at its key meeting in May.

21 January 2019 Governor Kuroda is at the Last Chance Saloon, Q2 is it (Publication Centre)

Forecasting BoJ policy for this year is trickier than it has been in a long time.

21 January 2019 How Far Will Sterling Jump if a Soft Brexit Becomes Government Policy? (Publication Centre)

Signs that the government is softening its Brexit plans, in response to its substantial defeat in the Commons last week, has enabled sterling to recover most of the ground lost against the dollar and euro in the fourth quarter of last year.

21 June 2017 Japan will Grow this Year, Despite its Structural Hurdles (Publication Centre)

Abenomics has had its successes in changing the structure of Japan. Notably, large numbers of women have gone back to work and corporations have started paying dividends. These are by no means small victories. But overall, the macroeconomy is essentially the same as when Shinzo Abe became prime minister.

21 June 2017 Home Sales set for new Cycle Highs, but not in May (Publication Centre)

Over the past couple of weeks, the number of applications for new mortgages to finance house purchase have reached their highest level since late 2010, when activity was boosted by the impending expiration of a time-limited tax credit for homebuyers.

21 June 2017 German PPI Likely has Peaked in 2017, Will Equity Markets Care? (Publication Centre)

German producer price inflation fell last month, following uninterrupted gains since the beginning of this year. Headline PPI inflation fell to 2.8% year-over- year in May, from 3.4% in April, constrained by lower energy inflation, which slipped to 3.0%, from 4.6% in April. Meanwhile, non-energy inflation declined marginally to 2.7%, from 2.8%.

21 June 2017 Q3 LatAm FX Will be Driven by Fundamentals and Commodities (Publication Centre)

LatAm investors' concerns about U.S. monetary policy expectations and the broad direction of the USD should on the back burner until the Fed hikes again, likely in September. This will leave room for country-specific drivers to take centre stage. That should support Mexico's MXN, which already has risen 14% year-to-date against the USD, erasing its losses after the US election last November.

21 June 2018 As Trade Tensions Mount, will the PBoC Stabilise the RMB Basket (Publication Centre)

As promised, Mr. Trump retaliated earlier this week against China's weekend retaliation, after his refusal to back down on the initial tariffs on $50B-worth of imports of Chinese goods, on top of the steel and aluminium tariffs first announced back in March.

21 June 2018 What Does Enhanced Forward Guidance Mean for Bond Yields (Publication Centre)

Last week's ECB meeting--see here--made it clear that the central bank does not intend to jump the gun on rate hikes next year, even as QE is scheduled to end in Q4 2018.

21 June 2018 Core Inflation Below 2% Next Year Won't Rule Out Rate Hikes (Publication Centre)

It is looking increasingly likely that core inflation, which already has fallen to 2.1% in May, from a peak of 2.7% last year, will slip below 2% next year.

21 July. 2016 Upside Risk for July Existing Home Sales - Price Gains Should Rebound (Publication Centre)

A very light week for U.S. data concludes today with four economic reports, which likely will be mixed, relative to the consensus forecasts. The recent run of clear upside surprises and robust-looking headline numbers is likely over, for the most part.

21 July. 2016 The ECB Will Stand Pat Today, But Extend QE in September (Publication Centre)

Political uncertainty has surged since the ECB last met, but the central bank likely will refrain from action today. We think the ECB will keep its refi and deposit rates unchanged at 0.05% and -0.4%, respectively, and leave the monthly pace of QE unchanged at €80B.

21 July 2017 Don't Bet the Farm on a Major QE Decision in September (Publication Centre)

The ECB pressed the repeat button yesterday. The central bank maintained its refinancing rate at 0.00%, and also kept the deposit and marginal lending facility rate at -0.4% and 0.25 respectively. The pace of QE was held at €60B per month, scheduled to run until the end of December, "or beyond, if necessary."

21 July 2017 BoJ to Allow Foreign Tightening to Ease Japanese Policy, for now (Publication Centre)

Governor Kuroda commented yesterday that he doesn't think Japan needs more easing at this stage. If he means that the BoJ does not have to change policy to provide more easing then we think he is right, on two and a half counts. First, Japan is likely to receive a boost under its current framework as external rate rises exceed expectations, driving down the yen.

21 July 2017 Q2 Consumption will be Weak, Despite the Pickup in Retail Sales (Publication Centre)

On the face of it, June's retail sales figures suggest that households have splurged in Q2, re-energising GDP growth after its slowdown in Q1. Sales volumes rose by 0.6% month-to-month in June, completing a 1.5% quarter-on-quarter jump in Q2.

21 July 2017 Venezuela's Economic and Political Crisis Deteriorates, Risks is Soaring (Publication Centre)

The risk of political change in Venezuela is coming to a boil, following President Maduro's plans for a new constituent assembly that has the power to rewrite the constitution and scrap the existing National Assembly.

21 July. 2015 The Eurozone is Adding to Global Current Account Imbalances (Publication Centre)

The Eurozone's current account surplus plunged to €18.0B in May from €24.0B, the biggest monthly fall since July 2013, but an upward revision to the April data makes the headline look worse than it is. These numbers are volatile, even after seasonal adjustments, and revisions have been larger than normal this year, so we need to smooth the data to get the true story.

21 July. 2015 Easier Lending Standards Set to Lift Second Half Housing Activity (Publication Centre)

If the only things that mattered for the housing markets were the obvious factors--the strength of the labor market, and low mortgage rates--the sector would be booming. Activity is picking up, with new and existing home sales up by 23% and 9% year-over-year respectively in the three months to May, but the level of transactions volumes remains hugely depressed. At the peak, new home sales were sustained at an annualized rate of about 1½M, but May sales stood at only 546K. Adjusting for population growth, the long-run data suggests sales ought to be running at close to 1M.

22 September 2017 Angela Merkel will stay as Chancellor, but building a coalition will be tricky (Publication Centre)

Germans head to the polls on Sunday to elect representatives for the national parliament. The media has tried to keep investors on alert for a surprise, but polls indicate clearly that Angela Merkel will continue as Chancellor.

22 September 2017 Don't Expect a Giveaway Budget, Despite low Borrowing this year (Publication Centre)

Public borrowing was below consensus expectations in August, fuelling speculation that the Chancellor might pare back the remaining fiscal tightening in the Autumn Budget on November 22.

24 Mar. 2015 Core Inflation Set to Slow in the Short-term, But Watch Services (Publication Centre)

It's probably too soon to start looking for second round effects from the drop in gasoline prices in the core CPI. History suggests quite strongly that sharp declines in energy prices feed into the core by depressing the costs of production, distribution and service delivery, but the lags are quite long, a year or more.

24 June. Initial Thoughts on the U.K.'s Shock Brexit Vote (Publication Centre)

Britain's shock vote to leave the E.U. has unleashed a wave of economic and political uncertainty that likely will drive the U.K. into recession.

24 June. 2016 Markets Wild After Brexit Vote, LatAm Currencies Under Pressure (Publication Centre)

The U.K.'s unexpected vote for Brexit means a stronger USD for the foreseeable future, pressure on EM currencies and increasing risk premiums. LatAm fundamentals will a sideshow for some time. The focus will be on the currencies, which will be the main shock absorbers.

24 Mar. 2015 Risks are Rising Rapidly in Greece, but Grexit Will Likely be Avoided (Publication Centre)

In a letter earlier this month, Greek prime minister Alexis Tsipras warned German chancellor Angela Merkel that failure to disburse additional bailout funds would lead to an imminent cash crunch. Last week's meeting with EU leaders and the ECB yielded no progress, intensifying the risk that Greece will literally run out of money within weeks.

24 Mar. 2016 EZ Consumers' Spending Is Slowing, but Won't Collapse (Publication Centre)

All the evidence indicates that growth in Eurozone consumers' spending is slowing. We think data today will show that the advance GfK consumer sentiment index in Germany was unchanged at 9.5 in April, but the headline index does not correlate well with spending. The "business expectations" index is better, and while it likely will increase slightly, our first chart shows that it continues to signal a slowdown in consumers' spending growth.

24 Mar. 2016 Mexico's Domestic Sector Still Resilient - a Good Start to the Year (Publication Centre)

Mexico's CPI rose just 0.1% in the first half of March, due to higher core prices. The increase was broadbased within this component, with goods prices increasing by 0.2% and core services 0.4%. Core services prices were driven by temporary factors, including vacation packages and higher airfare tickets. Non-core prices, meanwhile, fell 0.5%, due mainly to falling fresh food prices.

24 Mar. 2016 In the March Employment Report, Wages are Wild (Publication Centre)

This is the final Monitor before we head out for our spring break, so we have added a page in order to make room to preview the employment report due next Friday, April 4. We expect a solid but unspectacular 175K increase in payrolls, slowing from February's unsustainable 242K, but still robust.

24 June. 2016 Brexit Implications for the U.S: No Immediate Fed Easing (Publication Centre)

The U.K.'s unexpected vote for Brexit means a stronger dollar for the foreseeable future, a sharp though likely containable drop in U.S. stock prices, and a further delay before the Fed next raises rates. The vote does not necessarily mean the U.K. actually will leave the EU, because the policy choices now facing leaders of Union have changed dramatically. An offer of substantial concessions on the migration issue--the single biggest driver of the Leave vote-- might be enough to trigger a second referendum, but this is a consideration for another day.

24 June. 2015 Q1 GDP to be Revised up, But the Big Shift Will Come Next Month (Publication Centre)

The third estimate of first quarter GDP growth, due today, will not be the final word. The BEA will revise the data again on July 30, when it will also release its first estimate for the second quarter and the results of its annual revision exercise. Quarterly estimates back to 2012 will be revised. The revisions are of greater interest than usual this year because the new data will incorporate the first results of the BEA's review of the seasonal problems.

24 June 2019 Japan's CPI Inflation has Peaked but the BoJ isn't Bothered (Publication Centre)

Japan's national CPI inflation has peaked, falling to 0.7% in May from 0.9% in April.

24 June 2019 Capex and Stock Market Fears Explain the Fed's Itchy Trigger-Finger (Publication Centre)

The apparent softness of business capex is worrying the Fed.

24 July. 2015 Retail Sales on Track for New High, Despite Dip in Sentiment (Publication Centre)

Advance Eurozone consumer sentiment fell disappointingly to -7.1 in July, from -5.6 in June, but it is consistent with a solid trend in retail sales growth. Household consumption in the zone has surged in the last four quarters, and a modest loss of momentum in Q3 and Q4 is a reasonable bet. But we see little risk of a sharp slowdown in the shor t run, and the trend in spending growth should stabilize at an annualised 1.5% this year.

24 June 2019 External Threats are Easing, Can Banxico Adopt a Dovish Tone? (Publication Centre)

Data released in recent days confirm the story of a struggling economy and falling inflation pressures in Mexico, strengthening our forecast of interest rate cuts over the second half of the year.

24 June 2019 Further Evidence of Stabilisation in EZ Growth from the PMIs (Publication Centre)

Friday's advance PMI data for the Eurozone added further evidence of stabilisation in the economy after the sharp slowdown in GDP growth since the beginning of last year.

24 June. 2015 Mexico's Soft April Consumption Will Change Course Ahead (Publication Centre)

Mexico's private spending stumbled at the start of the second quarter. Retail sales fell 0.3% month-to-month in April after three consecutive increases, hit by an unexpected 1.6% drop in both supermarket and apparel sales, and a surprising 1.2% fall in food sales. In year-over-year terms, total sales rose 4.6% in April, down from 5.6% in March.

24 June. 2015 Another Upbeat PMI Report Adds to the Cyclical Optimism in the EZ (Publication Centre)

The PMI survey yesterday painted a more upbeat picture on the Eurozone economy than we expected. The composite index rose to 54.1 in June from 53.6 in May, taking the quarterly average to its highest level since Q2 2011.

24 March 2017 Boeing Likely Boosted February Orders,Oil Lifting the Core Trend (Publication Centre)

The nominal value of orders for non-defense capital equipment, excluding aircraft, fell by 3.4% last year. This was less terrible than 2015, when orders plunged by 8.4%, but both years were grim when compared to the average 7.5% increase over the previous five years.

24 March 2017 Q1 Consumption will be Weak, Despite February's Retail Recovery (Publication Centre)

The 1.4% month-to-month rise in retail sales volumes in February is not a game-changer for the economy's growth prospects in Q1. The increase reversed just under half of the 2.9% decline between October and January. The 1.5% fall in retail sales in the three months to February, compared to the previous three months, is the worst result in seven years.

24 Nov. 2015 A New Political Era For Argentina - Will the Economy Recover? (Publication Centre)

Mauricio Macri, the centre-right candidate of the Cambiemos--Let's Change--coalition won Argentina's weekend presidential election. Mr. Macri, the mayor of Buenos Aires, defeated Daniel Scioli, of the ruling Front for Victory--FpV--coalition on Sunday. His victory marks the end of the 12-year Kirchnerist era, characterized by wild inflation, huge public deficits and unsustainable subsidies. If Mr. Macri lives up to his promises, Argentina, the second-largest economy in South America, will become an orthodox economy on a sustainable path. The recovery will come, we think, but it will be a long and challenging process.

24 May 2019 Switching Our Brexit Base Case From Soft Departure to Paralysis (Publication Centre)

The chances of our Brexit base case--a soft departure just before the current October 31 deadline--playing out have declined sharply over the last two weeks.

24 May 2019 Modi 2.0 Defies Expectations, but Economic Reality will Hit Hard (Publication Centre)

India's National Democratic Alliance, led by Prime Minister Narendra Modi's Bharatiya Janata Party,

24 Nov. 2015 Bullish PMI Survey Won't Prevent Further ECB Stimulus (Publication Centre)

Yesterday's PMI reports repeated the message of a firm cyclical Eurozone recovery, despite investors' angst over deflation and the underwhelming Q3 GDP data earlier this month. The composite index in the zone rose to a 54-month high of 54.4 in November from 53.9 in October, lifted by strong output and solid new business growth. Our first chart shows the rise in the PMI points to slight upside risks in Q4 to the four quarter trend in real GDP growth of 0.4% per quarter.

24 Nov. 2015 Will Gilts Decouple as US Treasury Yields Rise? (Publication Centre)

A less rapid tightening of monetary policy in the U.K. than in the U.S. should ensure that gilt yields don't move in lockstep with U.S. Treasury yields over the coming years. But the outlook for monetary policy isn't the only influence on gilt yields. We expect low levels of market liquidity in the secondary market, high levels of gilt issuance and overseas concerns about the possibility of the U.K.'s exit from the E.U. to add to the upward pressure on gilt yields.

24 November 2017 Slowdown in German Domestic Demand Will Reverse in Q4 (Publication Centre)

Yesterday's detailed GDP report in Germany showed net exports propelled GDP growth to a cyclical high last quarter.

24 November 2017 Risks to Mexico's Inflation Outlook are Increasing, but Q1 will be Better (Publication Centre)

The minutes of Banxico's November 9 policy meeting were released yesterday, in which the Bank left the reference rate unanimously unchanged at 7.0%.

24 May 2019 Mexican Retail Sector is Stabilizing Despite Tight Financial Conditions (Publication Centre)

Mexico's retail sector is finally improving, following a grim second half last year.

24 May 2018 If the BoK Lacks the Stamina to Hike this Week, 2018 Could be Barren (Publication Centre)

Korea's 20-day export growth came in weaker than we anticipated earlier this week. Granted, year-over- year growth rebounded to 14.8% in May, from 8.3% in April.

24 March 2017 TLTROs Finish with a Bang, but it Probably does not Mean Much (Publication Centre)

Robust demand in the ECB's final TLTRO auction was the main story in EZ financial markets yesterday. Euro area banks--474 in total-- took up €233.5B in the March TLTRO, well above the consensus forecast €110B. To us, this strong demand is a sign that EZ banks are taking advantage of the TLTROs' incredibly generous conditions.

24 March 2017 Rapid Disinflation will Allow the BCB to Ease More Quickly (Publication Centre)

Brazil has made a convincing escape from high inflation in the past few months, laying the groundwork for a gradual economic recovery and faster cuts in interest rates. Mid-March CPI data, released this week, confirmed that inflation pressures eased substantially this month.

24 May 2017 Soft Inflation Data Puts Pressure on BCB, Despite Brazil's Political Mess (Publication Centre)

Inflation pressures in Brazil are still easing rapidly. The mid-May unadjusted IPCA- 15 index rose just 0.2% month-to-month, much less than the 0.6% historical average for the month. Base effects pushed the year-over-year rate down to 3.8% from 4.1% in April. Food prices, healthcare and personal costs were the main drivers of the modest month-to-month increase.

24 May 2017 FOMC Minutes will Reinforce Skepticism over the Q1 Slowdown (Publication Centre)

The minutes of the May 2/3 FOMC meeting today should add some color to policymakers' blunt assertion that "The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term."

24 May 2018 April's Inflation Data aren't a Blow to August Rate Hike Chances (Publication Centre)

CPI inflation dropped to 2.4% in April, from 2.5% in March, undershooting the no-change consensus and prompting many commentators to argue that the chances of an August rate hike have declined further.

24 May 2018 April Existing Home Sales Likely to Signal that Activity has Peaked (Publication Centre)

The recovery in existing home sales appears to have stalled, at best.

24 July. 2015 More Bad News From Brazil, But Mexico Strength Remains Good (Publication Centre)

Brazil's inflation data continue to disappoint, but they are showing some signs of improvement, at the margin. The mid-month CPI, the IPCA-15 index, jumped to 9.3% year-over-year in July, up from 8.8% in June, soaring well above the upper bound of the inflation target and reaching the highest level since December 2003, as shown in our first chart.

24 July 2019 Why are Cash Buyers Abandoning the Existing Homes Market (Publication Centre)

The sluggishness of existing home sales in recent months, as exemplified by yesterday's report of a small dip in June, is due entirely to a sharp drop in the number of cash buyers.

24 January 2017 Chainstore Sales Growth is Trending Upwards, but not for Long (Publication Centre)

Now that the holidays are just a distant memory, the distortions they cause in an array of economic data are fading. The problems are particularly acute in the weekly data­ -- mortgage applications, chainstore sales and jobless claims -- because Christmas Day falls on a different day of the week each year.

24 February 2017 The BCB Remains on Track to Deliver More Easing this Year (Publication Centre)

Brazil's central bank conformed to expectations on Wednesday, cutting the Selic rate by 75 basis points to 12.25%, without bias. Overall, the BCB recognises that the economic signals have been mixed in recent weeks, but the Copom echoed our view that the data are pointing to a gradual stabilisation and, ultimately, a recovery in GDP growth later this year.

24 February 2017 Is Sterling's Depreciation a Blessing or a Curse for Profits? (Publication Centre)

This week's GDP figures showed that firms invested only sparingly in 2016, but their financial fortunes have been bolstered by a recovery in profits. The gross operating surplus of all firms rose by 4.5% quarter-on-quarter in Q4, the biggest increase for 11 quarters. This pushed the share of GDP absorbed by profits up to 21.3%, just above its 60-year average of 21.2%.

24 January 2017 EZ Economic Data Will Struggle to Live Up to Expectations in Q1 (Publication Centre)

Consensus forecasts expect further gains in this week's key EZ business surveys, but the data will struggle to live up to expectations. The headline EZ PMIs, the IFO in Germany, and French manufacturing sentiment have increased almost uninterruptedly since August, and we think the consensus is getting ahead of itself expecting further gains. Our first chart shows that macroeconomic surprise indices in the euro area have jumped to levels which usually have been followed by mean-reversion.

24 January 2017 LatAm Currencies Enjoying a Moment of Calm, but Risks Remain (Publication Centre)

Most LatAm currencies traded higher against the USD yesterday, adding to the gains achieved after Donald Trump's inauguration last Friday. The MXN, which was the best performer during yesterday's session, was up about 0.8%; it was followed by the CLP, and the BRL. The positive performance of most LatAm currencies, especially the MXN, is related to positioning and technical factors.

24 January 2018 Brazil's Inflation is Still Falling, Assisting BCB Policymakers (Publication Centre)

Brazilian inflation rate remained well under control at the start of this year, and we think the news will continue to be favorable for most of this year.

24 January 2017 The Boost to Disposable Incomes from Mortgage Refinancing is Fading (Publication Centre)

The steady decline in mortgage rates since the financial crisis has helped to underpin strong growth in household spending. Existing borrowers have been able to refinance loans at ever-lower interest rates, while the proportion of first-time buyers' incomes absorbed by interest and capital payments has declined to a record low. As a result, the proportion of annual household incomes taken up by interest payments has fallen to 4.6%, from a peak of 10% in 2008.

24 February 2017 German Economy did Well in Q4, but What Happened to Net Trade? (Publication Centre)

Yesterday's detailed German GDP report raised more questions than it answered. The headline confirmed that growth accelerated to 0.4% quarteron- quarter in Q4, from 0.1% in Q3, leaving the year-over- year rate unchanged at 1.7%.

24 Feb. 2016 Mortgage Applications are Rising, Despite the Usual February Drop (Publication Centre)

If, like us, you have been cheered by the upturn in mortgage applications since November, you don't need to worry about the apparent drop in activity in the past couple of weeks. The numbers don't look great: The MBA's index capturing the number of applications for new mortgages to finance house purchase has dropped from a peak of 237.7 in the third week of January--ignoring September's spike, which was triggered by a regulatory change--to 213.3 last week.

24 August. 2016 Chainstore Sales Still Pitifully Weak, Despite the Dip in the Dollar (Publication Centre)

We are a bit troubled by the persistent weakness of the Redbook chain store sales numbers. We aren't ready to sound an alarm, but we are puzzled at the recent declines in the rate of growth of same-store sales to new post-crash lows. On the face of it, the recent performance of the Redbook, shown in our first chart, is terrible. Sales rose only 0.5% in the year to July, during which time we estimate nominal personal incomes rose nearly 3%.

24 August. 2016 "Breaking News": EZ PMIs Signal Unchanged GDP Growth in Q3 (Publication Centre)

Yesterday's advance EZ PMI data were virtually unchanged from previous months, yet again. The composite PMI rose trivially to 53.3 in August from 53.2 in July; this means that the index has been almost stable since February. The headline was lifted by a small increase in services, which offset a slight decline in manufacturing.

24 August. 2016 Mexican Consumers' Spending Still Robust, but Set to Slow in H2 (Publication Centre)

Mexican consumers' spending improved toward the end of Q2. Retail sales jumped by 1.0% month-to-month in June, pushing the year-over-year rate up to 9.4%, from an already solid 8.6% in May. Still, private spending lost some momentum in the second quarter as a whole, rising by 2.5% quarter-on-quarter, after a 3.8% jump in Q1. A modest slowdown in consumers' spending had to come eventually, following surging growth rates in the initial phases of the recovery.

24 Feb. 2015 Labor Data Set to Change Yellen's Tone at Today's Testimony? (Publication Centre)

Fed Chair Yellen is a committed believer in the orthodox idea that inflation is largely a cost-push phenomenon, and that the most important cost, by far, is labor. So in order to predict what Dr. Yellen might say about the outlook for Fed policy in her Testimony today--beyond the language of the January FOMC statement--we have to take a view on her assessment of the state of the labor market.

24 Feb. 2016 Mexico's GDP Slowed in Q4, but Services are Still Resilient (Publication Centre)

Mexico's economy slowed marginally in Q4, due mainly to the challenging external environment, but the domestic economy remains relatively healthy. Real GDP rose 0.5% quarter-on-quarter in Q4, following a 0.8% solid expansion in Q3. Year-over-year growth dipped to 2.5% from 2.8%.

24 Feb. 2016 Distress Signal from IFO Confirm Downside Risks are Increasing (Publication Centre)

Yesterday's IFO survey sent a clear signal that the German economy's engine is stuttering. The business climate index fell to a 14-month low of 105.7 in February from 107.3 in January, and the expectations index slumped to 98.8 from 102.3. The weakness was driven by weaker sentiment in manufacturing, which plunged at its fastest rate since November 2008.

24 January 2018 Existing Home Sales Likely Dropped in December, but the Trend is Rising (Publication Centre)

In November, existing home sales substantially overshot the pace implied by the pending home sales index.

24 January 2018 Government Bonds Can Cope With an End to QE. Can C orporates? (Publication Centre)

Bond markets didn't panic when the ECB announced its intention further to reduce the pace of QE this year, to €30B per month from €60B in 2017.

24 July 2018 Mexico's Services Sector Still Driving the Economic Cycle (Publication Centre)

Economic activity in Mexico during the past few months has been resilient, as external and domestic threats, particularly domestic political risks, appear to have diminished.

24 July 2018 GDP Growth in Korea Likely Slipped in Q2, on Cooler Domestic Demand (Publication Centre)

GDP data for Q2 are due July 26; we expect the report to show a marginal dip in growth, to a seasonally adjusted 0.8% quarter-on-quarter, from 1.0% in Q1.

24 July 2018 EZ Consumption Accelerated in H1, But Will Slow in H2 (Publication Centre)

Eurozone consumer confidence remained at its low for the year at the start of Q3.

24 July 2018 Sterling has Plenty of Scope to Rise in a Soft Brexit Scenario (Publication Centre)

Sterling depreciated further last week as the Prime Minister's Brexit plans were tweaked by Brexiteers and given a lukewarm reception by the European Commission.

24 July 2019 If a Downturn Materialises, Households Will Feel its Full Force (Publication Centre)

Our base case remains that the slowdown in quarter-on-quarter GDP growth to about zero in Q2 is just a blip, and that the economy will regain momentum in Q3 and sustain it well into 2020.

24 July 2019 The ECB's Q2 Lending Survey Provides Support for ECB Doves (Publication Centre)

The headline in yesterday's ECB Q2 bank lending survey seemed almost tailor-made for the central bank to deliver a dovish message to markets this week.

24 July 2019 Copom to Cut Rates, Thanks to Low Inflation and Progress on Reforms (Publication Centre)

Data released yesterday in Brazil helped to lay the ground for interest rate cuts over the coming months.

24 July 2017 Not Much Upside for Eurozone Equities in the Rest of 2017 (Publication Centre)

The tailwinds that have propelled Eurozone equities higher since the middle of last year remain place, in principle. In the economy, political uncertainty in the euro area has turned into an opportunity for further integration and reforms, and cyclical momentum in has picked up. And closer to the ground, fundamentals also have improved.

24 July 2017 High Inflation Won't Last as Long as Markets Expect (Publication Centre)

After pricing-in the consequences of sterling's depreciation for inflation last year only slowly, markets are at risk of costly inertia again.

24 January 2019 Future Fiscal Stimulus Is Still Secure, Despite Worse Borrowing Data (Publication Centre)

On the face of it, the trend in public borrowing deteriorated sharply late last year. In the three months to December, borrowing on the main "PSNB ex ." measure, which excludes banks owned by the public sector, was a trivial £0.3B, or 1.6%, lower than in the same months of 2017.

24 January 2018 Low Public Borrowing Reflects One-Offs, not a Reviving Economy (Publication Centre)

The main measure of public borrowing--PSNB excluding public sector banks--came in at £2.6B in December, well below the £5.1B in December 2016 and lower than in any other December since 2000.

24 January 2019 Mr. Draghi Won't Help Already Dovishly-Inclined Markets Today (Publication Centre)

The ECB will deliver a carbon copy of its December meeting today, at least in terms of the main headlines.

24 January 2019 Slower Growth won't Necessarily Loosen the Labor Market Much (Publication Centre)

One of the arguments we hear in favor of an endless Fed pause--in other words, the cyclical tightening is over--is that GDP growth is set to slow markedly this year, to only 2% or so.

24 July 2017 Asian Trade Dragged Down by Chinese Slump (Publication Centre)

Korean exports are often a useful gauge of Asian and global trade; the country sits near the beginning of the global supply chain. It also happens to publish early in the data cycle and provides a measure of exports in the first 20 days of the month.

24 January 2019 What's Brewing Under the Surface of the BoJ's Nonchalance (Publication Centre)

We suspect that under the calm surface of the BoJ, a major decision is being debated.

24 November 2017 Why Investors Should Heed China's Pivot to Environmentalism (Publication Centre)

We believe China is going through a paradigm shift in its economic policy, away from GDPism-- the obsession with GDP growth targeting--to environmentalism, setting widespread environmental targets on everything, from air to water to waste.

24 November. 2016 The Fiscal Fetters Remain in Place, Despite the Looming Slowdown (Publication Centre)

The Chancellor's Autumn Statement dashed hopes that the fiscal consolidation will be paused while the economy struggles to adjust to the implications of Brexit. Admittedly, Mr. Hammond has another opportunity in the Spring Budget to reduce next year's fiscal tightening.

25 February 2019 The IFO is still Bleak, but the German GDP Data are Nuanced (Publication Centre)

Friday's economic data in Germany left markets with a confused picture of the Eurozone's largest economy.

25 February 2019 Manufacturing Continues to Weaken, no Floor Yet in Sight (Publication Centre)

Last week's data added yet more weight to our view that manufacturing is in deep trouble, and that the bottom has not yet been reached.

25 February 2019 Is Banxico Ready to Consider Rate Cuts in the Near Term? (Publication Centre)

The minutes of the Banxico's monetary policy meeting on February 7, when the board unanimously voted to keep the reference rate on hold at 8.25%, were consistent with the post-meeting statement.

25 Jan. 2016 Last Week's Data Reinforce Brazil's Doves - Rates are Now on Hold (Publication Centre)

The bad news on economic activity keeps coming for Brazil. The formal payroll employment report-- CAGED--for December was very weak, with 120K net jobs eliminated, compared to a 40K net destruction in December 2014, according to our seasonal adjustment. The severe downturn has translated into huge job losses. The economy eliminated 1.5 million jobs last year, compared to 152K gains in 2014. Last year's job destruction was the worst since the data series started in 1992. The payroll losses have been broad-based, but manufacturing has been hit very hard, with 606K jobs eliminated, followed by civil construction and services. Since the end of 2014, the crisis has hit one sector after another.

25 Jan. 2016 Oil Capex Crash Nearly Over - What Happens Next to Consumers? (Publication Centre)

If we had known back in June 2014 that oil prices would drop to about $30, the collapse in capital spending in the oil sector would not have been a surprise. Spending on well-drilling, which accounts for about three quarters of oil capex, has dropped in line with the fall in prices, after a short lag, as our first chart shows. We think spending on equipment has tracked the fall in oil prices, too.

25 January 2017 Brazil's Current Account Gap is Shrinking, but not for Much Longer (Publication Centre)

Brazil's external accounts were the bright spot last year, once again, but the ne ws will soon take a turn for the worse. The current account deficit fell to just USD24B last year, or 1.3% of GDP, from USD59B in 2015. The improvement was driven by the trade surplus, which rose to USD48B, the highest since 1992, when the comparable data series begins. A 20% plunge in imports, coupled with a mere 3% dip in exports, explain the rising trade surplus.

25 Jan. 2016 Will Housing Debt Concerns Resurface at the Bank? (Publication Centre)

Data this week look set to emphasise that heat is returning to the housing market, again. The Financial Policy Committee--FPC--still has additional tools it could deploy to cool housing demand. But the root cause of surging house prices remains very cheap debt. Alongside the inflation risk posed by the labour market, the case for the MPC to begin to raise interest rates to prevent a widespread debt problem is becoming compelling.

25 February 2019 China's Deflating Property Boomlet will Spur the Authorities to Action (Publication Centre)

China's 2018 property market boomlet let out more air last month.

25 Feb. 2016 Huge Upside Risk for Durable Orders as Aircraft Sales Rebound (Publication Centre)

Today's headline durable goods orders number for January is likely to blast through the consensus forecast, +2.7%. We expect a 6.5% jump, comfortably reversing December's 5.0% drop.

25 August. 2016 Weak Mortgage Approvals Point to Falling House Prices Ahead (Publication Centre)

July's mortgage approvals data from the BBA brought clear evidence that households have held off making major financial commitments as a result of the Brexit vote. Following a 5% month-to-month fall in June, approvals fell a further 5.3% in July, leaving them at their lowest level since January 2015 and down 19% year-over-year.

25 August. 2016 The Collapse in Core Capex Orders is Over, Where's the Rebound? (Publication Centre)

The alarming-looking decline in core capital goods orders since late 2014 has been substantially due, in our view, to the rollover in investment in the mining sector. But the 29% jump in the number of oil rigs in operation, since the mid-May low, makes it clear that the collapse is over.

25 Feb. 2015 Capex Needs to Pick up in Germany to Sustain GDP Growth (Publication Centre)

Real GDP in Germany grew 0.7% quarter-on-quarter in Q4, thanks mainly to a 0.4% contribution from private consumption, and a 0.2% boost from net trade. Household consumption grew 2.2% annualised in 2014, the best year for German consumers since 2006.

25 Feb. 2015 Sharp Increase in Brazil's Inflation Rate - BCB Will Have to Hike Again (Publication Centre)

The bad economic news in Brazil is unstoppable. The mid-month CPI index rose 1.3% month-to-month in February, as education, housing, and transport prices increased. School tuition fees jumped 6% month-to-month in February, reflecting their annual adjustment, and transport costs rose by 2% due to an increase in regulated gasoline prices.

25 Feb. 2016 Fundamentals for French Consumers Remain Resilient (Publication Centre)

A downbeat French INSEE consumer sentiment report yesterday continued the run of poor survey data this week. The headline index fell to 95 in February from 97 in January, indicating downside risk f or Q1 consumers' spending. But we remain optimistic that private consumption will rebound solidly, following a 0.4% quarter-on-quarter fall in Q4.

25 Feb. 2015 Yellen Bullish on Growth and Jobs - "Patient" Set to Go in March? (Publication Centre)

Chair Yellen's Testimony sought clearly to tell markets that the Fed has upgraded its view on growth, and the state of the labor market. After reading the first few paragraphs, which focussed clearly on the good news, though peppered with the usual caveats, the door was open for the section on policy to signal unambiguously that the Fed is close to its first tightening.

25 January 2017 The EZ Economy is Performing Strongly, But Inflation is Picking Up (Publication Centre)

The Eurozone economy is in fine shape, according to the latest PMI data. The composite EZ PMI fell trivially to 54.3 in January, but remains strong. A marginal dip in the services index offset a small increase in the manufacturing PMI to a cyclical high of 55.1. These data tell a story of a strong private sector that continues to support GDP growth.

25 January 2017 The Fiscal Plans Won't Be Softened, Despite December's Better Figures (Publication Centre)

December's public finance figures suggest that borrowing is on track to come in a bit below the forecasts set out in the Autumn Statement in November. But we caution against expecting the Chancellor to unveil a material reduction in the scale of the fiscal consolidation set to hit the economy in his Budget on 8th March.

25 July 2017 The July PMIs Provide a Dose of Reality on the Eurozone Economy (Publication Centre)

Yesterday's PMIs kicked off a busy week for Eurozone data on a downbeat note. The composite EZ PMI fell to a five-month low of 55.8 in July, from 56.3 in June; it was constrained by a 0.6 point dip in the manufacturing index to 56.8.

25 July 2017 Korean Q2 GDP Growth to Provide Evidence of Chinese Slowdown (Publication Centre)

After strong real GDP growth in Q1, China commentators called the peak, claiming that growth would slow for the rest of 2017.

25 January 2019 The ECB Admits it Might not be Able to Raise Rates in Q4 (Publication Centre)

The ECB made no major policy changes yesterday.

25 July 2017 Will the Participation Rate Continue to Defy Gravity? (Publication Centre)

The participation rate--the proportion of people either in or looking for work--has held steady over the last decade, despite the ageing of the population and the rise in student numbers.

25 July 2018 China's Scope for Fiscal Expansion is Surprisingly Limited (Publication Centre)

The PBoC and Ministry of Finance have been locked in a relatively public debate recently over which body should shoulder the burden of stimulating the economy as growth slows and trade tensions take their toll.

25 July 2018 Threats Posed by Brexit and Trump Stymie Manufacturing Investment (Publication Centre)

The CBI's Industrial Trends Survey, for July and Q3, supplied encouraging evidence yesterday that the manufacturing upswing still has momentum.

25 July 2018 The PMIs are Probably Telling the True Story on the EZ Economy (Publication Centre)

Yesterday's first batch of Q3 survey data in the Eurozone suggest that economic growth eased further, albeit it slightly, at the start of the quarter.

25 January 2019 Reality will Hit the Bank of Korea Hard Expect a Year-Long Pause (Publication Centre)

The Monetary Policy Board of the Bank of Korea yesterday left its benchmark base rate unchanged, at 1.75%, at its first meeting of the year.

25 January 2019 How Would an Extension of Article 50 Affect the MPC's Rate Hike Plans? (Publication Centre)

MPs look set to take a decisive step next Tuesday towards removing the risk of a calamitous no-deal Brexit at the end of March.

25 January 2018 Rising Oil Prices Will Reduce Q4 Real Inventories, but by How Much? (Publication Centre)

Today's advance inventory and international trade data for December could change our Q4 GDP forecast significantly.

25 January 2018 Mr. Draghi Has a Lot of Explaining to do at Today's ECB Meeting (Publication Centre)

The ECB won't make any changes to its policy settings today.

25 January 2018 Japan's Trade Surplus Should Diminish but December was a Blip (Publication Centre)

Chinese New Year effects were very visible in Japan's December trade data. Export growth slowed sharply to 9.3% year-over-year in December, from 16.2% in November.

25 January 2018 The MPC Needn't Rush the Next Rate Hike to Keep Wages in Check (Publication Centre)

Yesterday's labour market data brought further signs that wage growth is recovering from its early 2017 dip.

25 January 2019 Analysts are too Bearish on Housing, but too Bullish on Manufacturing (Publication Centre)

Neither of the major economic reports due today will be published on schedule.

25 January 2019 A Positive Outlook for the Brazilian Economy will Support the BRL (Publication Centre)

Data released this week in Brazil, coupled with the message from President Bolsonaro at the World Economic Forum, vowing to meet the country's fiscal targets and reduce distortions, support our benign inflation view and monetary policy forecasts for this year.

25 August. 2016 Surging Net Exports Prevented a Q2 GDP Contraction in Germany (Publication Centre)

Yesterday's final Q2 GDP report in Germany confirmed the initial data showing that the economy slowed less than we expected last quarter. Real GDP rose 0.4% quarter-on-quarter in Q2, after a 0.7% jump in Q1. The working-day adjusted year-over-year rate fell marginally to 1.8%, from 1.9% in Q1.

25 August. 2015 The Stock Drop is Unwelcome, but the Market is not the Economy (Publication Centre)

If you want to know what's going to happen to the real economy over, say, the next year, don't look to the stock market for reliable clues. The relationship between swings in stock prices over single quarters and GDP growth over the following year is nonexistent, as our next chart shows.

24 Sept. 2015 Capital goods orders recovering, but they won't rise every month (Publication Centre)

The plunge in capital spending in the oil business appears to be over, at least for now. Orders for non-defense capital goods, excluding aircraft, fell by 8.9% from their September peak to their February low, but they have since rebounded, as our first chart shows. We can't be certain that the sudden drop in core capex orders late last year was triggered by a rollover in oil companies' spending, but it is the most likely explanation, by far.

24 October. 2016 Why are Households Running Such Large Bank Balances? (Publication Centre)

The U.S. household sector carries substantial gross debts, even after the sustained deleveraging since the crash of 2008. The gross debt-to-income ratio stood at 105.3% in the second quarter of this year, down from the 135% peak in late 2007 but still well above the 88% average recorded in the 1990s, which was not a decade of restraint on the part of consumers.

24 October. 2016 The Eurozone needs better PR (Publication Centre)

The EZ doom-and-gloom crew has come crawling out of the woodwork again this year. Earlier this month, Nobel laureate Joseph Stiglitz told a German newspaper that Italy and other euro area countries likely will leave the currency union soon.

24 September 2018 BoJ Still Likely to Shift the Focus to Capacity-Responsive Prices (Publication Centre)

Japan's CPI inflation jumped to 1.3% in August, from 0.9% in July.

24 September 2018 Good News on Brazil Inflation, but all Eyes are on the Presidential Race (Publication Centre)

Broad-based inflation pressures in Brazil remain tame despite the sharp BRL depreciation this year, totalling about 7% in the last three months alone.

25 Apr. 2016 Brazil is Still Struggling, But Recent Data Are Encouraging (Publication Centre)

Financial market performance and economic survey data on the Brazilian economy have been better than many investors and commentators feared this year. The composite PMI has improved gradually since November last year, consumer sentiment has stabilized, and national business surveys have been less bleak.

24 September 2018 How can the Fed Slow the Economy when the Private Sector is so Strong? (Publication Centre)

The big difference between economic cycles in developed and emerging markets is that recessions in the former tend to be driven by the unwinding of imbalances only in the private sector, usually in the wake of a tightening of monetary policy.

24 October. 2016 Tax Receipt Shortfall Casts Doubt on Economy's Resilience (Publication Centre)

Progress in reducing the budget deficit has ground to a virtual halt, despite the ongoing fiscal consolidation. Public sector net borrowing excluding public sector banks--PSNB ex.--was £10.6B in September, exceeding the £9.3B borrowed in the same month last year.

24 October 2018 The Double-Digit Fall in Equity Prices Bolsters Case for MPC Inertia (Publication Centre)

The FTSE 100 has dropped by 7% since the end of September--leaving it on course for its worst month since May 2012--and now is 12% below its May peak.

24 October 2017 EZ Consumers' Spending Slowed in Q3, but Should Rebound in Q4 (Publication Centre)

Eurozone consumers' spending jumped in Q2, but we are pretty certain that a slowdown in retail sales constrained growth in Q3.

24 October 2017 China's Property Slowdown Intensifies, More to Come (Publication Centre)

In his opening speech at the Party Congress, President Xi received warm applause for his comment that houses are "for living in, not for speculation".

24 October 2017 The Real Income Squeeze has been More Intense than Wage Data Imply (Publication Centre)

It is often argued that the average weekly earnings--AWE--figures exaggerate the severity of the squeeze on households' incomes.

24 October 2017 Which to Believe, the Markit PMI or the ISM Survey? (Publication Centre)

A startlingly wide gap has emerged over the past nine months between the ISM manufacturing index and Markit's manufacturing PMI.

24 October 2018 September New Home Sales Likely Hit by Hurricane Michael (Publication Centre)

The path of new home sales over the past couple of years has followed the mortgage applications numbers quite closely.

24 October 2018 EZ Households Face Uncertainty, Despite Solid Fundamentals (Publication Centre)

Consumer confidence in the Eurozone rose marginally at the start of Q4, though it is still down since the start of the year.

25 Apr. 2016 Growth Will Rebound in Q2, But Brexit Fears Will Constrain the Fed (Publication Centre)

We are revising our forecast for Fed action this year, taking out two of the four hikes we had previously expected. We now look for the Fed to hike by 25bp in September and December, so the funds rate ends the year at 0.875%. The Fed's current forecast is also 0.875%, but the fed funds future shows 0.6%.

25 Apr. 2016 Stable, but Weak, Cyclical Upturn to Continue in the EZ Economy (Publication Centre)

Last week's advance PMI data suggest that economic activity in the Eurozone was stable at the beginning of Q2. The composite EZ PMI fell trivially to 53.0 in April, from 53.1 in March, because a dip in manufacturing offset a small rise in the services index.

25 August 2017 Mexico's Mid-August Inflation Surprise is Nothing to Worry About (Publication Centre)

Mexico's inflation has been LatAm's odd one out over the last few years. In the decade through 2014, Mexico's inflation rate was broadly in sync with those of its regional fellows, as shown in our first chart.

25 April 2019 Still Scope for Neutral Fiscal Policy in 2020, Despite March Hiccup (Publication Centre)

The run of better-than-expected public borrowing figures ended abruptly with the publication of March data yesterday.

25 April 2019 Aircraft will Flatter March Durable Goods Orders Expect a Weak Core (Publication Centre)

If you wanted to be charitable, you could argue that the downturn in the rate of growth of core durable goods orders in recent months has not been as bad as implied by the ISM manufacturing survey.

25 August 2017 Sizzling Business Sentiment in France Signals Firm Q3 GDP (Publication Centre)

Yesterday's barrage of French business surveys contains hundreds of indicators, but its central story is comfortably simple.

25 August 2017 Trade and Investment are Failing to Offset the Consumption Slowdown (Publication Centre)

The second estimate of GDP left the estimate of quarter-on-quarter growth unrevised at 0.3%, a trivial improvement on Q1's 0.2% gain.

25 August. 2015 Market Panic Puts Pressure on ECB, but Fed's Response is Key (Publication Centre)

Weakness in risk assets turned into panic yesterday with the Eurostoxx falling over 6%, taking the accumulated decline to 19% since the beginning of August, and volatility hitting a three-year high. Market crashes of this kind are usually followed by a period of violent ups and downs, and we expect volatile trading in coming weeks. Following an extended bull market in risk assets, the key question investors will be asking is whether the economic cycle is turning.

25 August 2017 Yellen to Talk on Financial Stability, But Might Refer to Policy too (Publication Centre)

Fed Chair Yellen speaks at Jackson Hole today, at 10:00 Eastern. Her topic is billed as "financial stability", but that does not necessarily preclude remarks on the outlook for the economy and policy.

25 April 2018 Low Public Borrowing is Not a Sign the Economy is Reviving (Publication Centre)

Public borrowing has continued to fall more rapidly than anticipated in the latest official plans.

25 April 2018 Korean Q1 GDP Growth will Bounce Back, A er Q4 Distortions (Publication Centre)

Korean real GDP growth--to be published on Thursday--should bounce back in Q1 to 1.0% quarter-on-quarter, after the 0.2% drop in Q4.

25 April 2017 Are Further Tax Rises After the Election Inevitable? (Publication Centre)

The Prime Minister's refusal last week to reaffirm her party's 2015 election pledge not to raise income tax, National Insurance or VAT has fuelled speculation that taxes will rise if the Conservatives are re-elected on June 8. Admittedly, Mrs. May asserted that her party "believes in lower taxes", and the tax pledge s till might appear in the Conservatives' manifesto, which won't be published for a few weeks.

25 Apr. Preliminary GDP Data to Confirm Q1 Slowdown (Publication Centre)

The preliminary estimate of first quarter GDP likely will confirm that the economic recovery lost considerable pace in early 2016. Bedlam in financial markets in January and business fears over the E.U. referendum are partly responsible for the slowdown. The deceleration, however, also reflects tighter fiscal policy, uncompetitive exports, and the economy running into supply-side constraints.

25 April 2017 Mexico's IGAE Confirms a Surprisingly Firm Economy in Q1 (Publication Centre)

Economic activity in Mexico during the past few months has been stronger than most observers expected. Growth has certainly moderated from the relatively strong pace recorded during the second half of last year, but data for January and February show that it is still quite strong.

25 April 2017A Government Shutdown Would Say More About Politics Than Economics (Publication Centre)

A shutdown of the federal government, which could happen as early as this weekend, is a political event rather than a macroeconomic shock. But if it happens--if Congress cannot agree on even a shortterm stop-gap spending measure in order to keep the lights on after the 28th--it would demonstrate yet again that the splits in the House mean that the prospects of a substantial near-term loosening of fiscal policy are now very slim.

25 April 2018 Mortgage Demand Faltering in the Face of Higher Rates (Publication Centre)

Today brings new housing market data, in the form of the weekly applications numbers from the MBA. The weekly data are seasonally adjusted but are still very volatile, especially in the spring.

25 April 2018 Brazil's Labour Market Recovery Has Lost Momentum, but it will Improve (Publication Centre)

In Brazil, last week's formal payroll employment report for March was decent, with employment increasing by 56K, well above the consensus expectation for a 48K gain.

24 August. 2015 U.S and U.K. Demand, Not China, Drives the Eurozone Trade Surplus (Publication Centre)

The sell-off in risky assets intensified while we were away, driven by China's decision to loosen its grip on the currency, and looming rate hikes in the U.S. The Chinese move partly shows, we think, the PBoC is uncomfortable pegging to a strengthening dollar amid the unwinding investment boom and weakness in manufacturing.

24 August. 2015 The U.S. Will be A Net Gainer from EM Turmoil, Thanks to Cheap Oil (Publication Centre)

If the plunge in the stock market last week, and especially Friday, was a entirely a reaction to the slowdown in China and its perceived impact on other emerging economies, then it was an over-reaction. Exports to China account for just 0.7% of U.S. GDP; exports to all emerging markets account for 2.1%. So, even a 25% plunge in exports to these economies-- comparable to the meltdown seen as global trade collapsed after the financial crisis--would subtract only 0.5% from U.S. growth over a full year, gross.

23 January 2019 Mortgage Applications Point to Rebounding Home Sales in Q1 (Publication Centre)

The weekly mortgage applications numbers have been wild recently, but our first chart shows that the trend underneath the noise is solid.

23 January 2019 Ignore Korea's Consensus-Beating Q4 GDP Print it's not Sustainable (Publication Centre)

Korea's preliminary Q4 GDP report was stronger than nearly all forecasters, including ourselves, expected.

23 January 2018 Unemployment in Mexico Close to Cyclical Lows, Despite Rising Risks (Publication Centre)

High inflation and interest rates, coupled with increasing uncertainty, both economic and political, put Mexican consumption under strain last year.

23 January 2019 The MPC Won't Risk Letting the Labour Market Overheat (Publication Centre)

November's labour market data were the last before the MPC's February meeting, when it will conduct its annual assessment of the supply side of the economy.

23 January 2019 Unemployment in Mexico Ended Q4 Badly Uncertainty is Biting (Publication Centre)

We expect the Mexican economy to continue growing close to 2% year-over-year in 2019, driven mainly by consumption, but constrained by weak investment, due to prolonged uncertainty related to trade.

23 July 2018 Brace for Very Strong Q2 GDP Growth, but a Q3 Payback is Coming (Publication Centre)

Back on May 14, we argued--see here--that the stars were aligned to generate very strong second quarter GDP growth, perhaps even reaching 5%.

23 July 2018 A Welcome Pause to the Fiscal Squeeze is In Sight (Publication Centre)

The public finances continue to heal rapidly, suggesting that the Chancellor should have scope to soften his fiscal plans substantially in the Autumn Budget.

23 January 2018 Plunging Oil Output Points to Below-Consensus Q4 GDP (Publication Centre)

We see considerable downside risk to the consensus forecast that GDP increased by 0.4% quarter-on-quarter in Q4, the same as in Q3.

23 January 2018 China's Demand for Foreign Goods Slows as Output Curbs Loosened? (Publication Centre)

Korean 20-day exports are volatile and often miss the mark with respect to the full-month print. But these data offer the month's first look at Asian trade, and we often find value in these early signs.

23 Jan. 2015 Can Treasuries Focus on the U.S. Economy as Euro Risk Recedes? (Publication Centre)

The ECB's decision to go all-in and buy sovereign debt has three key consequences for U.S. markets. First, Treasuries will no longer benefit from safe-haven flows, because shorting Eurozone government debt has just become a fantastically risky proposition.

23 Jan. 2015 Brazil Continues to Combat Expectations for Surging Inflation (Publication Centre)

Brazil's central bank is finally decisively facing its demon, persistently high inflation. The eight-member policy board, known as Copom, decided unanimously on Wednesday to increase the Selic rate by 50bp to 12.25%, the highest level in more than three years, in line with the consensus.

23 Jan. 2015 The ECB gets ahead of the curve with significant QE program (Publication Centre)

The ECB sent a strong signal yesterday that it is ready to fight deflation with a full range of unconventional monetary policy tools. Asset purchases, including sovereigns, to the tune of €60B per month will begin in March, and will run until end-September 2016, but Mr. Draghi noted that purchases could continue if the ECB is not satisfied with the trajectory of inflation.

23 January 2017 Chile's Central Bank Cuts Rates, Leaving the Door Open for More (Publication Centre)

Chile's central bank cut the country's main interest rate by 25bp to 3.25% last Thursday. The easing was expected, as the board adopted a dovish bias last month, after keeping a neutral stance for most of 2016. Last week's move, coupled with the tone of the communiqué, suggests that further easing is coming, as growth continues to disappoint and inflation pressures are easing.

23 January 2017 Threats to Make Britain a Corporate Tax Haven Lack Credibility (Publication Centre)

Both the Prime Minister and Chancellor last week threatened to cut business taxes aggressively to persuade multinationals to remain in Britain in the event of hard Brexit. But these threats lack credibility, given the likely lingering weakness of the public finances by the time of the U.K.'s departure from the EU and the scale of demographic pressures set to weigh on public spending over the next decade.

23 January 2017 ECB: Can the Eurozone Consumer Keep Up the Good Work in 2017? (Publication Centre)

The Eurozone has come under the spotlight for its growing external surplus, but domestic households have been doing the heavy lifting for GDP growth in this business cycle. During the last four quarters, consumers' spending has boosted year-over-year GDP growth by an average of 1.0 percentage points, in contrast to a 0.4pp drag from net exports.

23 July 2018 Inflation in Brazil Started Q3 Badly, but Temporary Shocks are Easing (Publication Centre)

Friday's inflation data in Brazil confirmed that the ripples from the truckers' strike in May were still being felt at the start of the third quarter.

23 July 2018 Japan's CPI Inflation is Set to Slow Again, Forcing a BoJ Change of Tack (Publication Centre)

Japan's CPI inflation was unchanged in June, at 0.7%, despite strong upward pressure from energy inflation.

23 June. 2015 Oil Firms' Equipment Capex Can't Fall Forever - is it Close to Bottom? (Publication Centre)

We are intrigued by the idea that the rollover in oil firms' capital spending on equipment might already be over, even as spending on new well-drilling--captured by the still-falling weekly operating rigs data--continues to decline. The evidence to suggest equipment spending has fallen far enough is straightforward.

23 June. 2015 More Waiting For Investors, But a Deal With Greece is Coming (Publication Centre)

We sympathize greatly with investors' frustration over endless postponements and new "deadlines" in the negotiations between Greece and its creditors. Syriza delivered a proposal for reforms to the EU and the IMF on Monday morning, welcome d as a "positive step in the right direction" by Eurogroup president Dijsselbloem and Economic and Financial Affairs commissioner Moscovici.

23 June 2017 Will French Domestic Demand in Rebound in Q2? (Publication Centre)

The June batch of the French statistical office's business surveys continues to signal a firming cyclical recovery. The aggregate business index rose to cyclical high of 106 in June from a revised 105 in May, continuing an uptrend that began in the middle of 2016.

23 June. 2016 Brexit Would Trigger a Dollar Surge, But it's an Unlikely Outcome (Publication Centre)

With most poll-of-poll measures showing a very narrow margin in the U.K. Brexit referendum, while betting markets show a huge majority for "Remain", today brings a live experiment in the idea that the wisdom of crowds is a better guide to elections than peoples' preferences.

23 June. 2016 Venezuela is Still in Dire Straits - Straining to Avoid Collapse (Publication Centre)

2016 has been another terrible year for Venezuela, and we have no hope that the country's economic and political situation will improve in the near-term. Economic mismanagement, authoritarianism, corruption, violent looting and social unrest are the norm.

23 Mar. 2016 Mortgage Lending Conditions Improving - Where are the Sales? (Publication Centre)

Further evidence emerged yesterday in support of our view that mortgage lending conditions are easing. The monthly mortgage origination report from Ellie Mae, Inc., a private mortgage processing firm, shows average credit scores for both successful and unsuccessful loan applications continue to trend downwards--though the latter rose marginally in February--while loans are closing much more quickly than in the recent past.

23 Mar. 2015 Manufacturing remains the key driver of the EZ business cycle (Publication Centre)

The Eurozone economy is becoming increasingly service-oriented. The private services sector has contributed just over 50% of gross value added-- GVA -- in the past three years, up from 44% in the seven years before the crash of 2008.

23 June 2017 PBoC is to the Chinese Yield Curve as Dr Frankenstein is to the Monster (Publication Centre)

China has undoubtedly been through a credit tightening, commonly explained as the PBoC attempting to engineer a squeeze, to spur on corporate deleveraging.

23 June 2017 Fed Officials Cite "Full Employment" but Worry About Recent CPI Data (Publication Centre)

A couple of Fed speakers this week have described the economy as being at "full employment". Looking at the headline unemployment rate, it's easy to see why they would reach that conclusion.

23 July 2019 A Stable MXN will Allow Banxico to Cut Interest Rates, Despite Politics (Publication Centre)

The MXN remains the best performer in LatAm year-to-date, despite some ugly periods of high volatility driven by external and domestic threats.

23 July 2018 The Eurozone's Current Account Surplus likely Plunged in Q2 (Publication Centre)

The Eurozone's current account surplus extended its decline in May, falling to a nine-month low of €22.4B, from €29.6B in April.

23 July 2019 How Long Until the Next General Election? (Publication Centre)

The spectre of a general election relentlessly will haunt the new Prime Minister--due to be announced as Tory party leader today before moving into Downing Street tomorrow--but our base case remains that a poll won't happen this year.

23 July 2019 Shock News Politicians Choose not to Cut Spending in Election Year (Publication Centre)

As we reach our deadline--4pm eastern time--media reports indicate that a debt ceiling agreement is close.

23 July. 2015 Slow, but Steady, Recovery in French Manufacturing This Year (Publication Centre)

The manufacturing industry in France is recovering slowly, but surely. The headline INSEE index rose to 102 in July from 101 in June, close to a post-crisis high, pointing to steady improvement for manufacturers. Our first chart shows the main leading components of the survey, indicating a modest, but positive, trend in output. The increase in sentiment in July was driven by firming new orders--especially in the export sector--pushing the new orders-to-inventory ratio to an 18-month high.

23 July 2019 The ECB Will Prepare Markets for a Deposit Rate Cut This Week (Publication Centre)

We're breaking protocol this week by delivering our preview for Thursday's ECB meeting in today's Monitor.

23 February 2018 Venezuela's Crytocurrency is not a Quick Fix for Rising Misfortunes (Publication Centre)

Venezuela's beleaguered government announced on Tuesday that it had begun the pre-sale of 82.4M coins of a virtual currency, called the "petro", backed by the nation's vast petroleum reserves.

23 February 2018 PBoC Fights Back Against RMB Strength but BoJ Le to Jawbone (Publication Centre)

The PBoC managed to keep interest rates well- anchored around the Chinese New Year holiday, when volatility is often elevated.

23 April 2019 MPC Rethink to Catch Out Markets Next Week (Publication Centre)

On balance, our conviction that the MPC will surprise markets on May 2 by retreating from its dovish stance has risen, following last week's labour and retail sales data.

23 April 2019 Brazil's Economy will Improve, but Rising Political Risk Remains a Drag (Publication Centre)

The economic data in Brazil were poor while we were away.

23 April 2018 Inflation Started Q2 Below the BCB's Target, but the Trend will Rise in Q3 (Publication Centre)

Inflation in Brazil remained subdued at the start of the second quarter, strengthening the odds for an additional interest rate cut next month, and opening the door for further stimulus in June.

23 Aug 2019 Chair Powell will Struggle to Meet Market Expectations Today (Publication Centre)

It's going to be very hard for Fed Chair Powell's Jackson Hole speech today to satisfy markets, which now expect three further rate cuts by March next year.

23 Aug 2019 Further Evidence of Resilience in the Eurozone PMI Data (Publication Centre)

Yesterday's August PMI data in the euro area ran counter to the otherwise gloomy signals from the ZEW and Sentix investor sentiment indices.

23 August 2017 All Systems Go for Italy's Economy, but Don't ask About the Long Run (Publication Centre)

The performance of Italy's economy in the first half of 2017 proves that the strengthening euro area recovery is a tide lifting all the r egion's boats.

23 Aug 2019 Inflation Stuns to the Downside in Brazil and Mexico Rate Cuts Loom (Publication Centre)

Inflation pressures in Brazil and Mexico are well under control, with the August mid-month readings falling more than expected, strengthening the case for the BCB and Banxico to cut interest rates in the near term.

23 April 2018 Japan's Inflation Faces Near-Term Headwinds, but Core Will Trend up (Publication Centre)

Japan's headline CPI inflation is set to edge down in coming months, thanks to non-core prices.

23 April 2018 German Producer Price Inflation is Turning Up, Slowly (Publication Centre)

Friday's economic data suggest that the downtrend in German PPI inflation is reversing.

22 September 2017 Policy Divergence is Back on as the BoJ Stands Pat (Publication Centre)

The BoJ kept policy unchanged yesterday, with the policy balance rate remaining at -0.1% and the 10-year yield target remaining around zero.

22 September 2017 How far will the Hurricanes Depress September Payrolls? (Publication Centre)

The trend rate of increase in private payrolls in the months before Hurricane Katrina in 2005 was about 240K per month.

22 September 2017 The Earthquake's Economic Hit Appears to be Modest (Publication Centre)

Before this week's earthquake, the resilience of Mexico's economy in the face of a volatile and challenging global backdrop owed much to the strength of domestic demand, especially private consumption.

22 September. 2016 December Fed Hike Still Most Likely (Publication Centre)

The hawks clearly tried hard to persuade their more nervous colleagues to raise rates yesterday. In the end, though, they had to make do with shifting the language of the FOMC statement, which did not read like it had come after a run of weaker data.

23 April 2018 Behind the Base-Case Forecast, Risks Abound, in Both Directions (Publication Centre)

For now, we're happy with our base-case forecast that growth will be nearer 3% than 2% this year, and that most of the rise in core inflation this year will come as a result of unfavorable base effects, rather than a serious increase in the month-to-month trend.

23 Apr. 2015 Cyclical recovery in the Eurozone will likely moderate in Q2, slightly (Publication Centre)

The preliminary April PMIs due today will provide the first economic sentiment data for Q2, and likely will point to a continuation of the cyclical recovery. We think the composite PMI was unchanged at 54.0 in April, driven by a small gain in manufacturing offset by a slight decline in services.

23 August 2017 Fiscal Restraint, not a Surging Economy, Drove July's Surplus (Publication Centre)

Yesterday's public finance figures showed that the public sector, excluding public sector banks, ran a surplus of £0.2B in July, a modest improvement on borrowing of £0.4B a year ago.

23 August 2017 Mexican Economy was Firm in H1, H2 Will be Soft, but 2018 Better (Publication Centre)

Yesterday's detailed Mexican GDP report confirmed that growth was relatively resilient in Q2, despite the lagged effect of external and domestic headwinds.

23 Feb. 2016 Would the MPC Just Let Sterling Drop Like a Stone? (Publication Centre)

Sterling will be under the spotlight again today when four members of the Monetary Policy Committee, including Governor Mark Carney, answer questions from the Treasury Select Committee about the recent Inflation Report.

23 Feb. 2016 Falling Stock Prices Won't Kill Consumers Enjoying Cheap Gas (Publication Centre)

Dire warnings that the plunge in s tock prices would depress consumers' confidence and spending have not come to pass. It's too soon to draw a definitive conclusion--the S&P hit its low as recently as the 11th--but peoples' end-February brokerage statements are on track to look less horrific than the end-January numbers, provided the market doesn't swoon again over the next few days.

23 Feb. 2015 Mexico's GDP Rising at the Fastest Pace in Two Years - More to Come? (Publication Centre)

Punished by the global economic slowdown depressing commodity prices, the Mexican economy is now making a gradual comeback, thanks to the continuing strength of its main trading partner, increasing public expenditure on key infrastructure projects, and accommodative monetary policy.

23 February 2017 Fiscal Easing Could Boost Growth Substantially, but not for Long (Publication Centre)

The White House budget proposals, which Roll Call says will be released in limited form on March 14, will include forecasts of sustained real GDP growth in a 3-to-3.5% range, according to an array of recent press reports.

23 February 2017 Q4 GDP Flatters to Deceive, a Consumer-led Slowdown is Coming (Publication Centre)

Taken at face value, the GDP data continue to suggest that the Brexit vote has had no adverse consequences for the economy. The official estimate of quarter-on-quarter GDP growth in Q4 was revised up yesterday to 0.7%, from 0.6%. The revision had been flagged earlier this month by stronger industrial production and construction output figures.

23 February 2018 IFO and INSEE Business Surveys Compound February Misery (Publication Centre)

Yesterday's national surveys in the EZ confirmed the downbeat message from the PMIs and consumer sentiment data earlier this week.

23 February 2018 Earnings Set to Beat Consensus this Year (Publication Centre)

The knee-jerk reaction of the stock market to the unexpectedly high hourly earnings growth number for January was predicated on two connected ideas.

23 Feb. 2015 Deal between EU and Greece will avert disaster in the short run (Publication Centre)

The Eurogroup finally agreed on a four-month financing extension for Greece late Friday evening, conditional on Syriza presenting a satisfactory list of reforms later today. At the press conference, Eurogroup President Dijsselboem emphasized that commitments always come before money.

23 August. 2016 The Inventory Cycle is About to Turn, Worsening the Downturn (Publication Centre)

Whether the economy enters recession will hinge more on corporate behaviour than on consumers. Household spending accounts for about two thirds of GDP, but it is a relatively stable component of demand. By contrast, business investment and inventories--which are often overlooked--are prone to wild swings.

23 August 2018 No Help for Eurozone Equities from Macro-Liquidity Indicators (Publication Centre)

The story in EZ capital markets this year has been downbeat.

23 August 2017 New Home Sales set for Cycle Highs, but Only Temporarily (Publication Centre)

The level of new home sales is likely to hit new cycle highs over the next few months, with a decent chance that today's July report will show sales at their highest level since late 2007.

23 August 2018 Political Risks is Rising Sharply in Brazil When Will Pressures Abate (Publication Centre)

The beginning of the electoral campaign last week in Brazil bodes uncertain results and a very close competition for the presidential elections on October 7.

23 August 2018 Why Have U.K. Equities not Kept up with the Record-Breaking U.S. Rally? (Publication Centre)

The S&P 500 index chalked up a new record on Wednesday by going 3,453 days without a 20% drawdown, making it the longest equity bull-run in U.S. history.

23 August. 2016 Rental Inflation Set to Rise Further as Vacancies Hit a New Cycle Low (Publication Centre)

This week brings home sales data for July, which we expect will be mixed. New home sales likely rose a bit, but we are pretty confident that existing home sales will be reported down, following four straight gains. We're still expecting a clear positive contribution to GDP growth from housing construction in the third quarter, but from the Fed's perspective the more immediate threat comes from the rate of increase of housing rents, rather than the pace of home sales.

23 August. 2016 Mexico Struggled at the end of the First Half - Will it Rebound? (Publication Centre)

The Mexican economy shrank by 0.2% quarter-on-quarter in Q2, according to the final GDP report, a tenth better than the preliminary reading. The year-over-year rate rose marginally to 2.5% from 2.4% in Q1. But the year-over-year data are not seasonally adjusted, understating the slowdown in the first half of the year, as shown in our first chart.

23 Mar. 2016 Rousseff's Government is on the Ropes - Fiscal Progress Will Slow (Publication Centre)

Political turmoil in Brazil continues to undermine President Dilma Rousseff's leverage over the economy. On Friday, the Lower House of Congress voted to start impeachment proceeding against Ms. Rousseff. She has until early April to present her defense against charges that she doctored government accounts and used graft proceeds to fund the 2014 electoral campaign.

23 Mar. 2016 Welcome March Rebound in Eurozone Economic Survey Data (Publication Centre)

Economic sentiment data, which rebounded in March, continue to suggest slight downside risk to EZ GDP growth in Q1. The composite Eurozone PMI in March rose modestly to 53.7 from 53.0 in February, only partially erasing the weakness in recent months. The PMI dipped slightly over the quarter as a whole, although not enough to change the EZ GDP forecast in a statistically meaningful way.

23 September 2016 French Manufacturing Confidence Rebounds Solidly in September (Publication Centre)

French manufacturers recovered their optimism towards the end of Q3. The headline INSEE manufacturing sentiment index rose to 103 in September, from 101 in August, and the composite business confidence gauge also increased. A rebound in transport equipment firms' own production expectations was the key driver of the recovery.

23 Sept. 2015 Slow Growth in China is a Risk, but Not the Whole Story in the EZ (Publication Centre)

Expectations that the ECB will respond to weakening growth in China with Additional stimulus mean that survey data will be under particular scrutiny this week. The consensus thinks the Chinese manufacturing PMI--released overnight--will remain weak, but advance PMIs in the Eurozone should confirm that the cyclical recovery remained firm in Q3. We think the composite PMI edged slightly lower to 54.0 in September from 54.3 in August, consistent with real GDP growth of about 0.4% quarter-on-quarter in Q3.

23 Sept. 2015 Mexico On Hold, Keeping Calm And Still Waiting for the Fed (Publication Centre)

Banxico left Mexico's benchmark interest rate at a record low of 3% on Monday, maintaining its neutral tone and indicating that the balance of risks is unchanged for both inflation and growth. Policymakers remain confident that inflation will remain under control over the coming months, below 3% over the fourth quarter, but they repeated their message that they are vigilant to any inflation pass though from MXN depreciation into prices.

23 September 2016 Is Quantitative Easing Already a Spent Force? (Publication Centre)

The MPC must be very disappointed by the impact of its £60B government bond purchase programme. Gilt yields initially fell, but they now have returned to the levels seen shortly before the MPC's August meeting, when the purchases were announced.

23 September. 2016 How to Read the Split FOMC's Confusing Thought Processes (Publication Centre)

Over the past few days we have written about the difference between the Fed's tactics--signalling rate hikes and then choosing not to act in the face of weaker data--and its strategy, which is to normalize rates in the expectation that inflation will head to 2% in the medium-term.

24 Apr. 2015 Core capital goods orders heading down through summer (Publication Centre)

Orders for core capital goods began to fall outright in September last year; we can't blame the severe winter for the 11.1% annualized decline in the fourth quarter of last year. Indeed, the drop in orders in the first quarter will be rather smaller than in the fourth, unless today's March report reveals a catastrophic collapse.

23 September. 2016 The MXN Will Remain a Victim of Collateral Risk This Year (Publication Centre)

The risk of higher US rates put LatAm currencies under pressure during the first half of the week, before the US FOMC meeting on Wednesday. But they recovered some ground yesterday, following the Fed's decision to leave rates on hold.

23 Sept 2019 Recessions Usually Require Private Sector Imbalances, they're Absent (Publication Centre)

We think of recessions usually as processes; namely, the unwinding of private sector financial imbalances.

23 Sept 2019 PBoC Refrains from a Rate Cut a Third Time, it's Still Coming (Publication Centre)

The PBoC left its interest rate corridor, including the Medium-term Lending Facility rate, unchanged last Friday, but published the reformed Loan Prime Rate modestly lower, at 4.20% in September, down from 4.25% in August.

23 October 2018 Business Surveys have Flattened Richmond Fed due to Correct (Publication Centre)

All the regional PMIs and Fed business surveys are volatile in the short-term, so observations for single months need to be viewed with due skepticism.

23 October 2017 Wage Inflation Still Subdued, but a Decisive Turning Point is Coming (Publication Centre)

In the absence of any significant data releases today, we want to take a closer look at the outlook for wage growth, and the implications of an acceleration in hourly earnings for inflation.

23 October 2018 China's Retail Sales Show that Tax Reductions were Badly Needed (Publication Centre)

China's September activity data, released at the end of last week, back up our claim that GDP growth weakened in Q3, on a quarter-on-quarter basis.

23 October 2018 The Eurozone Auto Sector is on Sale Should Investors Bite (Publication Centre)

The automotive sector accounts for 6.1% of total employment, and 4% of GDP, in the Eurozone.

23 Sept 2019 Could a Tweaked Brexit Deal get Through the Commons? (Publication Centre)

Sterling rallied to $1.25 last week--its highest level against the dollar since Boris Johnson became PM in mid-July--amid growing speculation that a Brexit deal still was possible in the next couple of weeks, enabling the U.K. to leave the E.U. on October 31.

23 October 2018 Will Yields on Gilts Close the Gap with Treasuries? (Publication Centre)

The gap between U.K. and U.S. government bond yields has continued to grow this year and is approaching a record.

24 Apr. 2015 Cyclical recovery remains on track in the Eurozone Economy (Publication Centre)

The preliminary April PMIs point to a continuation of the cyclical bounce, despite falling slightly from last month. The composite PMI in the Eurozone fell to 53.5 in April, down from 54.0 in March.

24 April 2017 Brazil's Disinflation Continues, Expect Further Rapid Easing Ahead (Publication Centre)

While we were out, Brazil's data were relatively positive, showing that inflation is still falling quickly and economic activity is stabilizing. The country has made a rapid and convincing escape from high inflation over the past year.

24 April 2019 Industrial Sentiment is Stabilizing, Despite the Richmond Fed Drop (Publication Centre)

Yesterday's data were mixed, though disappointment over the weakening in the Richmond Fed survey should be tempered by a quick look at the history, shown in our first chart.

24 April 2019 Colombia's Economy is Gathering Speed following a Soft End to 2018 (Publication Centre)

Colombia's recently-released data signal that the economy started the year quite strongly, following a relatively poor end to Q4.

24 April 2019 Above-target CPI Inflation Will Return in Q2 (Publication Centre)

CPI inflation was steadfast at 1.9% in March, undershooting the consensus and our forecast for it to rise to 2.0%.

24 August 2017 Markets Will Look in Vain for QE Clues from Mr. Draghi this Week (Publication Centre)

Eurozone investors are fixed on Mr. Draghi's speaking schedule this week, looking for hints of the ECB's future policy path.

24 August 2017 Second Estimate of Q2 GDP to Show U.K. Missing out on G7 Boom (Publication Centre)

We expect today's second estimate of Q2 GDP to confirm that the U.K. has been the slowest growing G7 economy this year.

24 August. 2015 Better Economic News Fails to Lift LatAm Sentiment - Fx Still Trashed (Publication Centre)

Mexico's economy continues to withstand several headwinds, especially the sharp currency depreciation--shown in our first chart--falling commodity prices, and the tough external environment. The country is still one of the economic bright spots in the region, thanks to its resilient domestic demand. June retail sales rose 5.4% year-over-year, well above expectations, and up from 4.1% in May. The underlying trend is positive, averaging 4.8% in the second quarter, well above its 2014 pace.

24 August 2018 What Probability are Markets Attaching to a No-Deal Brexit? (Publication Centre)

Speculation that the U.K. will end up leaving the E.U. in March without a deal has dominated the headlines over the last month. Politicians on both sides of the Channel have warned that the probability of a no-deal Brexit is at least as high as 50%, even though more than 80% of the withdrawal deal already has been agreed.

24 April 2018 The Strong Services Sector Boosted Mexico's Economy in Q1 (Publication Centre)

Growth appears to have accelerated in the first quarter in Mexico, as NAFTA-related uncertainty abated, inflation started to fall, and the MXN rebounded.

24 April 2018 Surveys are Stronger than Hard Data, but with no Common Cause (Publication Centre)

The levelling-off in the industrial surveys in recent months is reflected in the consumer sentiment numbers. Anything can happen in any given month, but we'd now be surprised to see sustained further gains in any of the regular monthly surveys.

24 April 2017 Take None of Last Week's Data at Face Value -- Distortions Abound (Publication Centre)

The gap between the hard and soft data from the industrial economy appeared to widen still further last week. But we are disinclined to take the data--the official industrial production report for March, and the first survey evidence for April--at face value.

24 April 2017 Past Errors Mean Investors Should Treat the Latest Polls Cautiously (Publication Centre)

Sterling jumped last week to its highest level against the dollar since last October in response to news that a general election will be held on June 8. Markets are betting that the Conservative Government will sharply increase its majority, enabling Theresa May to ignore Eurosceptic backbenchers when she strikes a deal with the EU.

24 April 2017 It Looks Like Mr. Macron Against Mrs. Le Pen in the Second Round (Publication Centre)

The initial "official estimate" of the French presidential election--released 20.00 CET--suggest that the runoff will be between the centre-right Emmanuel Macron and Front National's Marine Le Pen. This is consistent with opinion polls. The average of five early estimates also suggests that Mr. Macron won the vote with 23.1% of the vote against Mrs. Le Pen's 22.5%.

24 April 2018 Japan's PMI Lends Strength to the Nascent Re ation Story (Publication Centre)

Japan's manufacturing PMI rose to 53.3 in April, from 53.1 in March. The index weakened earlier this year, but remained at levels unjustified by the hard data.

24 April 2018 Q1 GDP to Reinforce the Case for the MPC to Delay in May (Publication Centre)

One way or another, the preliminary estimate of Q1 GDP--due Friday--will have a big market impact, following Mark Carney's warning last week that a May rate hike is not a done deal.

24 April 2018 Welcome Signs of Stabilisation in the Eurozone PMI Data (Publication Centre)

Eurozone investors will be drawing a sigh of relief after yesterday's PMI data. The alarming plunge in February and March made way for stabilisation, with the composite PMI in the euro area unchanged at 55.2 in April.

23 October 2017 The Fiscal Squeeze won't be Eased, Despite this Year's Low Borrowing (Publication Centre)

At the halfway mark of the fiscal year, public borrowing has been significantly lower than the OBR forecast in the March Budget.

23 October 2017 Remember Minsky Moments? And Please Give us Capital, says China (Publication Centre)

Two major themes emerged from the Chinese Party Congress last week, namely, further opening of the financial sector to foreigners, and the threat of a Minsky moment.

23 May 2018 Chinese Capex Growth will Flounder this Year as PPI Inflation Slows (Publication Centre)

China's capex growth faces renewed challenges this year, as PPI inflation slows.

23 May 2017 The Mexican Economy Shrugged Off Trump in Q1, But Risks Remain (Publication Centre)

Yesterday's detailed Mexican GDP report confirmed that growth was resilient in Q1, despite external and domestic headwinds. GDP rose 0.7% quarter-on-quarter in Q1, in line with our expectation, but marginally above the first estimate, 0.6%.

23 May 2017 How to Lift French GDP Growth to Above 1.5% Year-over-year (Publication Centre)

The recovery in the French economy since the sovereign debt crisis has been lukewarm. Growth in domestic demand, excluding inventories, has averaged 0.4% quarter-on-quarter since 2012. This comp ares with 0.8%-to-1.1% in the two major business cycle upturns in the 1990s and from 2000s before the crisis.

23 May 2018 The Fiscal Squeeze can be Paused Soon, Unshackling the Economy (Publication Centre)

Yesterday's public finance figures brought more good news for the Chancellor.

23 May 2018 The Mexican Economy is Getting Better, Despite Rising Political Risks (Publication Centre)

Yesterday's March retail sales report for Mexico is in line with other recently released hard and survey data, painting an upbeat picture of the economy.

23 May 2019 Patience to Persist FOMC Members Content to Wait for Developments (Publication Centre)

It's hard to read the minutes of the April 30/May 1 FOMC meeting as anything other than a statement of the Fed's intent to do nothing for some time yet.

23 May 2019 No Need to Reduce Inflation Forecasts After April's Low Print (Publication Centre)

CPI inflation rose only to 2.1% in April, from 1.9% in March, undershooting the 2.2% consensus and MPC forecasts, as well as our own 2.3% estimate.

23 March 2018 The MPC Keeps its Options Open, Instead of Committing to May (Publication Centre)

The Monetary Policy Committee chose to keep its options open in the minutes of this week's meeting, rather than signal as clearly as it did last year that interest rates will rise very soon.

23 March 2018 Stock up on Chinese-Made T-Shirts, While They're Still Nearly Free (Publication Centre)

Yesterday's announcement that the administration plans to imposes tariffs worth about $60B per year -- thatìs 0.3% of GDP -- on an array of imports of consumer goods from China is a serious escalation.

23 March 2017 The Eurozone's Primary Income Surplus is Climbing Steadily (Publication Centre)

The Eurozone's total external surplus hit the skids at the start of the year. Yesterday's report showed that the seasonally adjusted current account surplus plunged to a two-year low of €24.1B in January, from a revised €30.8B in December.

23 March 2017 February Retail Sales Likely to Confirm Consumer Slowdown (Publication Centre)

Under normal circumstances, we would expect today's retail sales figures to reveal that volumes rebounded in February, following the 2.7% fall over the previous three months. But the continued weakness of spending surveys suggests that we should brace for another soft report.

23 March 2017 Warm Weather Points to Upside Risk for February New Home Sales (Publication Centre)

New home sales are much more susceptible to weather effects -- in both directions -- than existing home sales. We have lifted our forecast for today's February numbers above the 575K pace implied by the mortgage applications data in recognition of the likely boost from the much warmer-than-usual temperatures.

23 March 2018 Brazil and Colombia to Ease Further, but Chile's Rate Cuts are Over (Publication Centre)

The COPOM meeting was the centre of attention in Brazil this week. The committee cut the main rate by 25 basis points to a new historical low of 6.50%, in line with market expectations.

23 March 2018 PBoC Bides its Time on Rates, but Macroprudential Tightening is on (Publication Centre)

The PBoC hiked its 7-day reverse repo rate by 5bp yesterday, stating that the move was a response to the latest Fed hike.

23 March 2018 Don't Over-Interpret the Latest Soft Survey Data in the Eurozone (Publication Centre)

Yesterday's barrage of economic data in the Eurozone added to the evidence that economic momentum is slowing.

23 May. 2016 Does the Fed Funds Laffer Curve Explain Sluggish Growth? (Publication Centre)

Like just about everyone else, we have struggled in recent years to find a convincing explanation for the persistent sluggishness of growth even as the Fed has cut rates to zero and expanded its balance sheet to a peak of $4.2T. Sure, we can explain the slowdown in growth in 2010, when the post-crash stimulus ended, and the subsequent softening in 2013, when government spending was cut by the sequester.

23 May. 2016 LatAm Markets Hit by a Hawkish Fed - Choppy Summer Ahead? (Publication Centre)

Weakness across EM asset markets returned after the April FOMC minutes, released last week, suggested that a June rate hike is a real possibility. The risks posed by Brexit, however, is still a very real barrier to Fed action, with the vote coming just eight days after the FOMC meeting.

23 November. 2016 Brazil's Current Account De cit is Stabilizing, Improvement Ahead (Publication Centre)

Brazil's external deficit fell marginally in October, but most of the improvement is now likely behind us. The unadjusted current account deficit dipped to USD3.3B, from USD4.3B in October 2015. The trend is stabilizing, with the 12-month total rolling deficit easing to USD22B--that's 1.2% of GDP--from USD23B in September.

23 November 2018 Risk Diverges in the Biggest LatAm Economies, Will it Stabilize Soon? (Publication Centre)

Idiosyncratic developments have driven market volatility in LatAm in recent weeks.

23 November 2018 Lower Oil Prices are Another Tailwind for 2019 (Publication Centre)

The recent plunge in oil prices is another positive development, alongside looser fiscal policy and the striking of a Brexit deal with the E.U., pointing to scope for GDP growth to pick up next year.

23 Oct. 2015 BCB Stuck Between Inflation Risks and Deep, Long Recession (Publication Centre)

Brazil economic and political outlook is still opaque, but grim, after a vast array of negative news. Impeachment of President Rousseff remains a possibility; the process of fiscal consolidation is messy and politically bloody; rumors that Finance Minister Levy might leave his post next year have intensified; and the latest data showed that the recession worsened in Q3. As a consequence, the BRL and interest rates have been under pressure and we see no clear signs that the turmoil will ease soon.

23 Oct. 2015 Dovish Mr. Draghi All But Promises More QE in December (Publication Centre)

Mr. Draghi gave one of his most dovish performances to date yesterday. The central bank kept its main interest rates and the pace of QE unchanged, but reiterated that risks to growth and inflation are tilted to the downside. The president noted further that the existing policies will be "reexamined" in December in light of updated staff projections. It is difficult to see how the downbeat assessment on the economy will change materially from now until December, indicating that further stimulus is likely.

23 Oct. 2015 U.K. Consumer Recovery is Not as Robust as Retail Sales Suggest (Publication Centre)

On the face of it, the surge in retail sales volumes in September suggests that the U.K. consumer is in fine fettle and can prevent the economic recovery from losing momentum as exporters struggle and government spending retrenches. But the underlying picture is less encouraging and consumers won't be able to sustain the recent robust growth in real spending when inflation revives next year.

23 Oct. 2015 Manufacturing Slowdown is Set to Intensify as Exports Drop Further (Publication Centre)

The woes of the manufacturing sector are likely to intensify over the next few months, even if--as we expect--overall economic growth picks up. The core problem is the strong dollar, which is hammering exporters, as our first chart shows. The slowdown in growth in China and other emerging markets is hurting too, but this is part of the reason why the dollar is strong in the first place.

23 November 2018 Economic Growth in France Should Maintain Momentum in Q4 (Publication Centre)

Yesterday's barrage of survey data in France, tentatively suggest that business sentiment is stabilising following a string of declines since the start of the year.

23 November 2017 The Chancellor Softens the Fiscal Squeeze and Hopes for the Best (Publication Centre)

The Chancellor was bolder than widely expected yesterday and scaled back the fiscal consolidation planned for the next two years significantly, even though his borrowing forecast was boosted by the OBR's gloomier prognosis for the economy.

23 Nov. 2015 How to Scare Yourself Over the U.S. Inflation Outlook (Publication Centre)

Should you be feeling in the mood to panic over inflation risks--or more positively, benefit from the markets' underpricing of inflation risks--consider the following scenario. First, assume that the uptick in wages reported in October really does mark the start of the long-awaited sustained acceleration promised by a 5% unemployment rate and employers' difficulty in finding people to hire. Second, assume that the rental property market remains extremely tight. Third, assume that the abrupt upturn in medical costs in the October CPI is a harbinger o f things to come. And finally, assume that the Fed hawks are right in their view that the initial increase in interest rates will--to quote the September FOMC minutes--"...spur, rather than restrain economic activity". Under these conditions, what happens to inflation?

23 Nov. 2015 Domestic Demand Offsets External Woes in Mexico and Colombia (Publication Centre)

Mexico's economy gathered momentum in Q3, thanks mainly to solid gains in industrial and services activity. Real GDP rose 0.8% quarter-on-quarter in Q3, the fastest pace since Q3 2013 and the ninth consecutive increase. Year-over-year growth rose to 2.6% year-over-year, from 2.3% in Q2. In short, a positive report, surprising to the upside, and above the INEGI's advance estimate, released in late October.

23 Nov. 2015 If the Chancellor Wants A Budget Surplus, Taxes Will Have to Rise (Publication Centre)

The Chancellor claims he can eliminate public borrowing without raising taxes. But the latest borrowing overshoot and the continual optimistic bias of the OBR's forecasts cast doubt on whether his approach will be sufficient to meet his self-imposed surplus target.

23 Nov. 2015 The Challenge of Surging Migration Won't Go Away Soon (Publication Centre)

The flow of Middle-Eastern refugees taking the treacherous journey towards Europe continues unabated. UNHCR estimates of arrivals through the Western Balkan route--mainly originating from Greece and Serbia--suggest the average daily number of refugees has been stable so far between October and November at about 11,000. These data are very unreliable, but they indicate that the onset of winter on the European continent--and the added risk to migrants with no shelter--will not deter people from attempting the trip to Europe.

23 November 2017 Olympics Preparations Should Lift Japan's GDP Growth Next Year (Publication Centre)

Japan will host the Olympics in 2020 and the preparatory surge in construction investment makes 2017-to-2018 the peak spending period.

23 November 2017 Is EZ Consumption on Track for Grand Finish to 2017? (Publication Centre)

Yesterday's advance consumer sentiment index in the Eurozone confirmed the upside risks for consumers' spending in Q4. The headline index rose to a 17- year high of +0.1 in November, from -1.0 in October.

3 November 2017 Asian Policy Divergence Can't Continue. PBoC to Fold First (Publication Centre)

The two major central banks in Asia currently have hugely different aims, causing a policy divergence that won't survive the 2018 rise in external yields.

3 November 2017 Brazilian Manufacturing Continued to Support the Recovery in Q3 (Publication Centre)

Brazil's industrial sector continued to support the economy in Q3. The underlying tr end in output is rising and leading indicators point to further growth in the near term.

8 November. 2016 Weather--not Brexit--is Culpable for Production and Retail Sales Swings (Publication Centre)

It would be a mistake to conclude much about the economic impact of the Brexit vote from today's official industrial production figures for September, and the British Retail Consortium's figures for retail sales in October.

8 November. 2016 Rate Cuts are Coming in the Andes, Uncertainty Will Ease Soon (Publication Centre)

Inflation pressures are easing rapidly in Colombia, according to October's CPI report, released on Saturday. Inflation fell to 6.5% year-over-year in October, down from 7.3% in September; the consensus expectation was 6.7%.

8 November. 2016 Focus on the Improving Trend in German Manufacturing (Publication Centre)

Demand for German manufacturing goods slipped at the end of Q3. Yesterday's report showed that factory orders fell 0.6% month-to-month in September, constrained by weakness in domestic demand and falling export orders to other EZ economies.

8 Oct. 2015 Flat Mortgage Demand Signals a Pause in the Housing Recovery (Publication Centre)

We planned to write today about the rebound in housing market activity over the past few months, arguing that it is about to run out of steam in the face of the recent flat trend in mortgage applications. The Mortgage Bankers Associations' purchase applications index rocketed in the spring, but then moved in a narrow range from mid-April through late September. Then, out of the blue, the MBA reported a 27% leap in applications in the week ended October 2, taking the index to its highest level in more than five years.

8 Oct. 2015 Weak, but Stable, Trend in German Manufacturing Investment in Q3 (Publication Centre)

Yesterdays' industrial production report capped a poor week for German manufacturing. Output fell 1.2% month-to-month in August, well below the consensus, +0.2%, though note that a 0.5% upward revision to the July data made the August headline look worse. Similar to the factory orders report earlier this week--see our October 6th Monitor--base effects also mean that production accelerated to 2.5% year-over-year, from a revised 0.8% gain in July.

8 October 2018 German Manufacturing Export Orders Probably Bottomed in Q3 (Publication Centre)

Friday's factory orders report in Germany provided a bit of relief amid the gloom in manufacturing.

8 October 2018 Banxico will Keep Rates on Hold, but the Hawkish Tone will Remain (Publication Centre)

In Mexico, Banxico left its policy rate unchanged at 7.75% last Thursday, as was widely expected.

8 November. 2016 If Clinton Loses, Most U.S. Forecasting Models Will be Wrong (Publication Centre)

We are not political analysts or psephologists, but we note that each of the nine separate election forecasting models tracked by the New York Times suggests that Hillary Clinton will be president, with odds ranging from 67% to greater than 99%.

8 November 2018 September GDP Set To Undershoot the Consensus (Publication Centre)

Friday's GDP report likely will fuel concerns the economy has little underlying momentum. Granted, quarter-on-quarter growth probably sped up to 0.6% in Q3--exceeding the economy's potential rate--from 0.4% in Q2.

8 May 2019 Where Current MMT Prescriptions Fall Short for Japan... and China (Publication Centre)

In our Friday Monitor, we came to the conclusion that prescriptions arising from Modern Money Theory have been designed primarily with the U.S. in mind.

8 May 2019 Manufacturing in Germany is Not Out of the Woods Yet (Publication Centre)

Demand in German manufacturing rebounded slightly at the end of Q1, though the overall picture for the sector remains grim.

8 May 2019 Financial Services have Depressed the Core PCE Expect a Rebound (Publication Centre)

A steep drop in prices for financial services in January was a key factor behind the sharp slowdown in the rate of increase of the core PCE deflator in the first quarter, relative to the core CPI.

8 November 2017 New Fed Governors Likely to be Dovishly-Inclined, up to a Point (Publication Centre)

The impending retirement of New York Fed president Dudley creates yet another vacancy on the FOMC.

8 November 2017 Mexico's Leading Indicators Remain Strong Despite Mixed Hard Data (Publication Centre)

Recent economic indicators in Mexico have been mixed, distorted by temporary factors, including the effect of the natural disasters in late Q3. Private consumption has lost some momentum, hit by the lagged effect of high interest rates and inflation, as well as the earthquakes.

8 November 2018 Is it Time to Worry About Consumers' Spending in Japan (Publication Centre)

The recent slowdown in labour cash earnings growth in Japan halted in September.

8 November 2017 The Period of Leverage-Driven Growth in House Prices is Over (Publication Centre)

Mortgage lender Halifax reported yesterday that the rate of increase in house prices has picked up since the summer.

8 October 2018 Mortgage Refinancing won't be a Tailwind for the Economy Next Year (Publication Centre)

The process of refinancing existing mortgages at ever-lower interest rates has been a boon for the economy in recent years.

8 Sept. 2015 The German Manufacturing Sector is Still Stuck in Neutral (Publication Centre)

Industrial production in Germany had a decent start to the third quarter. Output rose 0.7% month-to-month in July, less than we and the consensus expected, but the 0.5% upward revision to the June data brings the net headline almost in line with forecasts. Rebounds of 2.8% and 3.2% month-to-month in the capital goods and construction sectors respectively were the key drivers of the gain, following similar falls in June. A 3.2% fall in consumer goods production, however, was a notable drag.

9 April 2018 Hard Data Suggest that the German Economy Stalled in Q1 (Publication Centre)

Friday's industrial production report in Germany capped a miserable week for economic data in the Eurozone's largest economy.

9 April 2018 Brazil set for Stronger Growth in Q2, but the Election Brings Uncertainty (Publication Centre)

Brazil's recent data show that inflation is still falling, allowing the central bank to ease further next month, while economic activity is improving, though the rate of growth has slowed.

9 Apr. 2015 German Manufacturing sector remains relatively subdued (Publication Centre)

The combination of upbeat survey data and solid consumer spending numbers indicate that the German economy is in good shape. But manufacturing data continue to disappoint; factory orders fell 0.9% month-to-month in February, equivalent to a 1.3% decline year-over-year.

9 April 2018 March Payrolls Don't Signal a Shift in the Trend, Expect 200K-plus in April (Publication Centre)

March payrolls were constrained by both the impact of colder and snowier weather than usual in the survey week, and a correction in the construction and retail components, which were unsustainably strong in February.

9 April 2018 Will China use the RMB Nuclear Option as Tariff Pain Rises? (Publication Centre)

China has a nuclear option in the face of pressure from U.S. tariffs, namely, to devalue the currency.

9 April 2019 PBoC Resists RMB Weakness, Despite Exports Threat (Publication Centre)

We aren't convinced that China's recovery is in train just yet.

9 April 2019 Inflation in the Andes Remains Tame Despite Overshooting in March (Publication Centre)

Colombia and Chile faced similar broad trends through most of 2018.

8 September. 2016 The ECB Will Extend QE Today (Publication Centre)

Markets are looking for the ECB to extend QE today, and we think they will get their way. We expect the central bank to prolong the program by six months, to September 2017, and to maintain the pace of monthly purchases at €80B per month.

8 September. 2016 Evidence of the Inefficacy of Monetary Stimulus Mounts (Publication Centre)

Evidence that households are not benefiting much from the Monetary Policy Committee's easing measures mounted yesterday, after the release of August data on advertised borrowing rates. Our first chart shows the drop in swap rates and average quoted mortgage rates since the end of last year.

8 September 2017 The ECB is worried about a strong euro (Publication Centre)

The ECB made no changes to its policy stance yesterday. The central bank left its refinancing and deposit rates at 0.00% and -0.4%, respectively, and maintained the pace of QE at €60B per month. The program will run until December "or beyond, if necessary."

8 September 2017 Jobless Claims will be Elevated for Some Time, Payroll hit Uncertain (Publication Centre)

The 62K jump in jobless claims for the week ended September 2 is a hint of what's to come. Claims usually don't surge until the second week after major hurricanes, because people have better things to do in the immediate aftermath, so we are braced for a further big increase next week.

8 September 2017 Brazil's Central Bank Eases Boldly, but Hints at Slower Cuts Ahead (Publication Centre)

Brazil's improving economic and political situation allowed the BCB to cut the Selic rate by 100bp to 8.25% at its Wednesday meeting, matching expectations.

8 September 2017 China Probably is Content with its Modest "Safe-haven" Role, for now (Publication Centre)

Geopolitical tensions have risen sharply for Asia in the last few months, yet the RMB has appreciated sharply. China's currency appears to be playing some kind of safe haven role.

8 September. 2016 Claims, JOLTS, and Sales Don't Support the Grim ISM Message (Publication Centre)

We argued yesterday that the steep declines in the ISM surveys in August, both manufacturing and services, likely were one-time events, triggered by a combination of weather events, seasonal adjustment issues and sampling error. These declines don't chime with most other data.

8 September 2017 Production Likely Jumped in July, but it Won't Drive a Q3 Revival (Publication Centre)

The consensus that industrial production increased by just 0.2% month-to-month in July looks too cautious.

8 May 2019 Don't Extrapolate from April's Double-Digit Decline in Car Sales (Publication Centre)

The 10.3% year-over-year decline in private new car registrations in April likely is not a sign that the trend in either vehic le sales or consumers' overall spending is taking a turn f or the worse.

8 May 2019 Chile's Economy Slowed in Q1, but Expect a Modest Q2 Rebound (Publication Centre)

Economic growth in Chile slowed in Q1, despite a relatively strong end to the quarter, and the chances of an accelerating recovery remains disappointingly low, due to both global and domestic headwinds.

8 June. April Production to Underline Poor Prospects for Q2 GDP Growth (Publication Centre)

April's production data, released today, look set to indicate that the industrial sector's recession--its third in the last eight years--deepened in the second quarter. We think the consensus expectation that industrial production held steady in April is too upbeat. We look for a 0.3% month-to-month drop.

8 June. 2016 EZ Domestic Demand Rose Solidly in Q1, but Will Slow in Q2 (Publication Centre)

The third estimate of euro area growth in the first quarter provides clear evidence that measuring GDP is not an exact science. Real GDP rose 0.6% quarter-on-quarter in Q1, accelerating from 0.4% in Q4. This latest estimate is higher than the previous estimate, 0.5%, but in line with the first calculation. Eurostat and all the large Eurozone economies now provide early estimates of GDP, before data for the full quarter is available.

8 June. 2016 Colombia's Inflation Picture Still Ugly, but it Will Improve (Publication Centre)

Brazil's interim government has been trying to put the kibosh on the vicious circle of recession, capital outflows, and political pandering that has dogged the country for so long. In his first few weeks at the helm, despite the political turmoil, Mr. Temer has started to tackle Brazil's fiscal mess, the country's biggest headache.

8 March 2017 Brazil's Economy Struggled Late Last Year, Will it Grow in Q1? (Publication Centre)

Markets have been positively surprised by Brazil's rapid disinflation, the efforts at fiscal reform, and the prospect of growth in the economy this year. The Ibovespa index is now above its pre-crisis high and the real has approached the key level of three per USD in recent months. But the latest GDP report, released yesterday, showed that the economy struggled in Q4. Real GDP fell 0.9% quarter-on-quarter, worse than the revised 0.7% drop in Q3.

8 March 2017 Could a Bad Payroll Report for February Really Stop the Fed? (Publication Centre)

With the FOMC decision now just seven days away, the forcefulness of recent Fed speakers has led many analysts to argue that only a spectacularly bad payroll report, or an external shock, can prevent a rate hike next week. External shocks are unpredictable, by definition, and we think the chance of a startlingly terrible employment report is low, though substantial sampling error does occasionally throw the numbers off-track.

8 March 2017 Rising Interest Payments may Slash the Chancellor's Rainy Day Fund (Publication Centre)

The Chancellor's Budget today looks set to prioritise retaining scope to loosen policy if the economy struggles in future, rather than reducing the near-term fiscal tightening. In November, the OBR predicted that cyclically-adjusted borrowing would fall to 0.8% of GDP in 2019/20, comfortably below the 2% limit stipulated by the Chancellor's new fiscal rules.

8 March 2017 Focus on the Trend in German Factory Orders, to Retain Sanity (Publication Centre)

A setback in German manufacturing orders was coming after the jump at the end of 2016, but yesterday's headline was worse than we expected. Factory orders crashed 7.4% month-to-month in January, more than reversing the 5.4% jump in December. The year-over-year rate fell to -0.8% from a revised +8.0%. The decline was the biggest since 2009, but the huge volatility in domestic capital goods orders means that the headline has to be taken with a large pinch of salt.

8 June. 2015 Slowly Does it for German Manufacturing Upturn in Q2 (Publication Centre)

New orders data indicate that German manufacturing enjoyed a strong start to the second quarter. Factory orders rose 1.4% month-to-month in April, equivalent to a modest 0.4% gain yearover- year, down from a revised 2.0% in March. The numbers put new orders on track for a solid 1.8% quarter-on-quarter gain in Q2--assuming no change in May and June--but these data are volatile, making this estimate highly uncertain.

8 June. 2015 Inflation improving in key LatAm countries, but risks remain (Publication Centre)

Tomorrow, Mexico's INEGI will release its inflation report for the second half of May, which is of key importance for Banxico's monetary policy. The Bank, in particular governor Agustin Carstens, has said on many occasions that it will watch external conditions and their impact on consumer prices closely. We expect inflation to edge down to 2.9% year-over-year in May, thanks to a 0.1% increase in the second half.

8 June 2018 China is Ill-equipped to Keep up with Fed Hikes in the Next 18 Months (Publication Centre)

China's FX reserves data pointed to an about-turn in net capital flows in May, with capital leaving the country again after two months of net inflows, and a current account deficit in Q1.

8 June 2017 Subdued Core Inflation Gives ECB Doves the Upper Hand Today (Publication Centre)

The ECB will keep all its policy parameters unchanged today. The refi and deposit rates will be maintained at 0.00% and -0.4%, respectively, and the pace of QE will stay at €60B per month, running until the end of the year.

8 June 2018 Did German Manufacturers Take a Long Break in Q1 and Q2? (Publication Centre)

New orders data increasingly suggest that German manufacturers all but shut their production lines at the start of the year.

8 June 2018 House Prices will Continue to Flatline in the Second Half of 2018 (Publication Centre)

House prices continue to struggle for momentum, instilling caution among households. Admittedly, Halifax reported yesterday that its index jumped by 1.5% month-to-month in May.

8 June. 2015 Expect more jobs reports like May's, piling pressure on the Fed (Publication Centre)

The winter hit to payrolls is now ancient history. Private employment rose by an average of 273K per month in the second half of last year, so May's 262K has restored normal service, more or less. History strongly suggests the number will be revised up, so we are happy to argue that the data convincingly support our view that the weakness in late winter and early spring was temporary, substantially due to the severe weather.

8 June 2018 The FX Sell-off has Put Central Banks Under Stress, will they Act? (Publication Centre)

EM risk sentiment remains grim as the Trump administration dispenses protectionist trade measures. LatAm's biggest economies, Brazil and Mexico, have been hit the hardest, with their currencies falling 3.3% and 2.2% respectively in the last week, the most in the EM world.

8 March 2018 Labor Demand Remains Strong, Can Supply Keep Up? (Publication Centre)

ADP's report of a 235K increase in private payrolls in February is not definitive evidence of anything, but it is consistent with the idea that labor demand remains very strong.

8 March 2018 Look for Slight Change in the ECB's Guidance on QE Today (Publication Centre)

The build-up to today's ECB meeting has drowned in the focus on Italy's new political situation and the rising risk of a global trade war.

8 May 2017 Rocky Commodity Markets Put LatAm FX under Temporary Stress (Publication Centre)

LatAm assets have done well in recent weeks on the back of upbeat investor risk sentiment, low volatility in developed markets and a relatively benign USD. A less confrontational approach from the U.S. administration to trade policy has helped too.

8 May 2017 Inflation Report Likely to Reaffirm Slim Chances of a 2017 Rate Hike (Publication Centre)

This week's MPC meeting and Inflation Report likely will support the dominant view in markets that the chances of a 2017 rate hike are remote, even though inflation will rise further above the 2% target over the coming months. Overnight index swap markets currently are pricing-in only a 20% chance of an increase in Bank Rate this year.

8 May 2017 Fed Hawks Will Focus More on Unemployment than Wage Gains (Publication Centre)

At their March meeting FOMC members' range of forecasts for the unemployment rate in the fourth quarter of this year ranged from 4.4% to 4.7%, with a median of 4.5%. But Friday's report showed that the unemployment rate hit the bottom of the forecast range in April.

8 May 2018 China's Diminished Current Account Surplus is Hugely Significant (Publication Centre)

China's current account dropped sharply in Q1, to a deficit of $28.2B, from a surplus of $62.3B in Q4.

8 May 2018 Brazil's Q1 Looks Poor - we Expect a Rebound Soon, but Risks Remain (Publication Centre)

Brazil's March industrial production report, released on Thursday last week, was weaker than we and the markets were expecting, while the recent deterioration in sentiment surveys highlights the downside risks to the rather fragile economic recovery.

8 May 2018 Into the Weeds with the ECB: How will the Central Bank Proceed? (Publication Centre)

Calling the ECB has suddenly become a lot more complicated.

8 May 2018 Don't Expect the MPC to Signal an Imminent Rate Hike Clearly this Week (Publication Centre)

With little reason to doubt that interest rates will remain at 0.50% on Thursday, focus has turned to what signal the MPC will give about future policy, via its economic forecasts and commentary.

8 May 2017 Mr. Macron Easily Defeats Ms. Le Pen: Now the Hard Work Begins (Publication Centre)

Early results suggest that Mr. Macron has comfortably beat Marine Le Pen to become French president, defying a leak of emails and other documents from his En Marche campaign over the weekend. The final results won't be published until Monday morning, but the initial estimate indicates that Mr. Macron will edge Ms. Le Pen by 65.1% to 34.9%.

8 March 2019 Payrolls Constrained by Reversals of Weather and Shutdown Boosts (Publication Centre)

Our below-consensus 125K forecast for today's February payroll number is predicated on two ideas.

8 March 2018 Will President Xi's Power Grab Scare Capital out of China? (Publication Centre)

China's FX reserves fell to $3,134B in February, from $3,161B in January, after a year of gains.

8 March 2018 The Spring Statement Really Will Be a Non-Event (Publication Centre)

The Treasury has tried to dampen expectations for Tuesday's Spring Statement, which has replaced the Autumn Statement since the Budget was moved last year to November.

8 March 2019 Business and Consumer Sentiment in Stark Contrast Who's Right (Publication Centre)

Consumer sentiment in Mexico continues to improve, consistent with tailwinds from the relatively strong labour market and the president's rising approval ratings.

8 March 2019 Doves on Parade at the ECB No Hikes in 2019, and New TLTROs (Publication Centre)

Mr. Draghi and his colleagues erred on the side of maximum dovishness yesterday.

8 March 2019 January's GDP Report to Reassure that Recession Risks Remain Low (Publication Centre)

The sharp 0.4% month-to-month fall in GDP in December and the slump in the Markit/CIPS PMIs towards 50 have created the impression the economy is on the cusp of recession.

8 March 2019 How will Markets and the Economy, Fare as India's Elections Approach (Publication Centre)

India's prime minister, Narendra Modi, yesterday held his last cabinet meeting before the general election.

9 April 2019 Small Business Sentiment Ought to be Rebounding Capex Plans too (Publication Centre)

The recovery in small business sentiment since the fourth quarter rollover has been extremely modest, so far.

9 Aug 2019 China's Trade Balance has Just About Peaked, For Now (Publication Centre)

China's trade numbers for July surprised to the upside, with both exports and imports faring better than consensus forecasts in year-over-year terms.

9 July 2019 Andean Inflation Prospects Remain Benign No Rush to Move Rates (Publication Centre)

Andean inflation remains under control, due to subpar growth, modest pressures on prices for nontradeables, and broadly stable currencies.

9 July 2018 The MXN Rebound Likely will Allow Banxico to Keep Rates on Hold (Publication Centre)

The Banxico minutes from the June 20 meeting, released last Thursday, offered more detail about the outlook for policy in the near term.

9 July 2018 Evidence is Mounting that German Manufacturing did Well in Q2 (Publication Centre)

Friday's industrial production data in Germany added to the manufacturing optimism following the sharp rise in new orders--see here--reported earlier in the week.

9 July 2019 Did the Rising China Tariffs and the Mexico Threat Scare Small Firms? (Publication Centre)

Small business sentiment and activity, as reported by the NFIB survey, has recovered exactly half the drop triggered by the rollover in stock prices in the fourth quarter. This matters, because most people work at small firms, which are responsible for the vast bulk of net job growth.

9 July 2019 It Won't Be Just "One and Done" for the MPC, in the Event of No-Deal (Publication Centre)

The sharp fall in markets' expectations for Bank Rate over the last month has partly reflected the perceived increase in the chance of a no-deal Brexit. Betting markets are pricing-in around a 30% chance of a no-deal departure before the end of this year, up from 10% shortly after the first Brexit deadline was missed.

9 July 2019 The German Economy Hit a Brick Wall in the Second Quarter (Publication Centre)

Yesterday's headline economic data in Germany were decent enough. Industrial output edged higher by 0.3% month-to-month in May, lifted primarily by rising production of capital and consumer goods.

9 July 2019 Japan's Machine Orders Douse Resilient Domestic Demand Hopes (Publication Centre)

The 7.8% month-on-month plunge in Japan's core machine orders in May re-emphasises the underlying weakness that we have been worrying about, after the 5.2% jump in April.

9 July 2018 China's PMI Points to Q2 Strength, but Watch Slump in Export Orders (Publication Centre)

China's official manufacturing PMI slipped in June, but the overall picture for Q2 is sound despite the uncertainty posed by rising trade tensions with the U.S.

9 January 2019 Small Firms are Cutting their Capex Plans but Raising Prices (Publication Centre)

The only way to read the December NFIB survey and not be alarmed is to look at the headline, which fell by less than expected, and ignore the details.

9 January 2018 Small Business Owners are Happy, so Why are Capex Plans Soft? (Publication Centre)

We already know that the month-to-month movements in the key labor market components of the December NFIB small business survey were mixed; the data were released last week, ahead the official employment report, as usual.

9 January 2018 Now is Not the Time to Turn Upbeat on Productivity Growth (Publication Centre)

Last week's news that output per hour jumped by 0.9% quarter-on-quarter in Q3--the biggest rise since Q2 2011--has fanned hopes that the underlying trend finally is improving.

9 January 2019 What Went Wrong with the Hotly Anticipated Net Trade Boost? (Publication Centre)

When trade-weighted sterling fell by 20% in 2016, it was widely expected that net trade would cushion GDP growth from the hit to households' real incomes.

9 January 2019 Brazil's Industrial Sector Ended Q4 on a Weak Footing Can it Improve (Publication Centre)

Brazil's industrial sector is still struggling, despite recent signs of better economic and financial conditions.

9 January 2019 Positive Signs so far, After China and the U.S. Resume Trade Talks (Publication Centre)

The first round of trade talks between the U.S.and China kicked off in Beijing on Monday, marking the first face-to-face meeting between the two sides since Presidents Donald Trump and Xi Jinping struck a "truce" in December.

9 January 2019 Germany Likely was in Recession in H2 2018 Will Markets Care (Publication Centre)

Yesterday's manufacturing data in Germany provided alarming evidence of a much more severe slowdown in the second half of last year than economists had initially expected.

9 July. 2015 Oil Firms' Capex Rollover is Almost Over, Provided Prices Stabilize (Publication Centre)

After 29 straight weekly declines, the number of oil rigs in operation in the U.S. rose to 640 in the week ended July 2, from 628 the previous week, according to oil services firm Baker Hughes, Inc. If today's report for the week ended July 9 shows the rig count steady or up again, it will b e much easier to argue that the plunge in activity since the peak--1,601 rigs, in mid-September--is now over.

9 July. 2015 Steep Wall of Worry in EZ Equities, But Macro Indicators Say "Buy" (Publication Centre)

Bond market volatility and political turmoil in Greece have been the key drivers of an abysmal second quarter for Eurozone equities. Recent panic in Chinese markets has further increased the pressure, adding to the wall of worry for investors. A correction in stocks is not alarming, though, following the surge in Q1 from the lows in October. The total return-- year-to-date in euros--for the benchmark MSCI EU ex-UK index remains a respectable 11.4%.

9 March 2017 ADP Report Raises the Chance of a Blockbuster February Jobs Number (Publication Centre)

We expected a consensus-beating ADP employment number for February, but the 298K leap was much better than our forecast, 210K. The error now becomes an input into our payroll model, shifting our estimate for tomorrow's official number to 250K; our initial forecast was 210K.

9 Mar. 2015 Surging Job Gains, and Sub-Nairu Unemployment to Force June Hike (Publication Centre)

In the wake of the February employment report, the implied probability of a June rate hike, measured by the fed funds future, jumped to 89% from 71%. The market now shows the chance of a funds rate at 75bp by the end of the year at just over 60%. That still looks low to us, but it is a big change and we very much doubt it represents the end of the shift in expectations.

9 Mar. 2015 Currency Depreciation is Affecting Inflation Expectations in LatAm (Publication Centre)

Brazil's central bank is in a very delicate situation. The economy is on the verge of another recession, but at the same time the BRL is falling, inflation expectations are rising and the inflation rate is overshooting. Fiscal policy is also tightening to restore macro stability magnifying the squeeze on growth.

9 March 2017 The Chancellor Sticks to Plans for an Intense Fiscal Tightening (Publication Centre)

The Chancellor lived up to his reputation for fiscal conservatism yesterday and is pressing ahead with a tough fiscal tightening. He hopes that this will create scope to loosen policy if the economy struggles after the U.K. leaves the EU in 2019, but we remain concerned his "fiscal headroom" will be much smaller than he currently anticipates.

9 March 2017 The Devil is in the De tail for the ECB's Communication Today (Publication Centre)

We predict no major policy changes at the ECB today. We think the central bank will leave its main refinancing and deposit rates unchanged at 0.00% and -0.4%, respectively. We also expect the ECB will leave the pace of QE unchanged at €60 per month until December 2017, at least.

9 March 2018 MXN Breathes Sigh of Relief as U.S. Exempts Mexico, but Risks Remain (Publication Centre)

It is still premature to make fundamental changes to our core views for the global or LatAm economy, following President Trump's plan to slap hefty tariffs on steel and aluminium imports, potentially escalating into a global trade war.

9 March 2018 January's Production Rebound will Conceal a Manufacturing Slowdown (Publication Centre)

The industrial sector went from strength to strength in 2017. Year-over-year growth in production picked up to 2.1%--its highest rate since 2010--from 1.3% in 2016.

9 Mar. 2015 A Strong Consumer is Helping to Lift GDP Growth in the Eurozone (Publication Centre)

The second estimate of Eurozone GDP confirmed that the economy grew 0.3% quarter-on-quarter in the final three months of last year, up slightly from 0.2% in the third quarter. Gross fixed capital formation and household consumption both rose 0.4%, but the improving trend in euro area GDP growth is almost exclusively driven by consumer spending.

9 June. The Surge in April Industrial Production is Just Noise (Publication Centre)

April's 2.0% month-to-month leap in industrial production was the biggest upside surprise on record to the consensus forecast, which predicted no change. The surge, however, just reflects statistical and weather-related distortions. These boosts will unwind in May, ensuring that industry provides little support to Q2 GDP growth. Make no mistake, the recovery has not suddenly gained momentum.

9 June 2017 Inflation in Mexico will Stabilize Soon, Despite May's Ugly Headline (Publication Centre)

The Mexican inflation rate soared at the start of 2017, but this is yesterday's story; the headline will stabilize soon and will decline slowly towards the year-end. May data yesterday showed that inflation rose to 6.2%, from 5.8% in April. Prices fell 0.1% month-to-month unadjusted in May, driven mainly by lower non-core prices, which dropped by 1.3%, as a result of lower seasonal electricity tariffs.

9 June 2017 Bank C&I Lending has Levelled-off, Expect a Second-Half Rebound (Publication Centre)

The rollover in bank lending to commercial and industrial companies probably is over. On the face of it, the slowdown has been alarming, with year-over-year growth in the stock of lending slowing to just 2.6% in April, from a sustained peak of more than 10% in the early part of last year.

9 June 2017 Markets Continue to Distrust Opinion Polls Indicating a Tight Race (Publication Centre)

The final flurry of opinion polls indicates that voting intentions have changed little over the last few days. The Conservatives have an average lead over Labour of 7.5% in the final p olls conducted by 10 different agencies, only slightly more than their 6.5% lead at the 2015 election.

9 June 2017 The ECB's World: Accelerating GDP Growth and Lower Inflation (Publication Centre)

The headline changes in yesterday's ECB policy announcement were largely as expected. The central bank left its main refinancing and deposit rates unchanged at 0.00% and -0.4% respectively, and maintained the pace of QE at €60B per month. The central bank also delivered the two expected changes to its introductory statement. The reference to "lower levels" was removed from the forward guidance on rates, signalling that the ECB does not expect that rates will be lowered anytime soon.

9 June. 2016 Eurozone Credit Markets Cheer as ECB Private QE Begins (Publication Centre)

The ECB's corporate bond purchase program began yesterday with purchases concentrated in utilities and telecoms, according to media sources. This is consistent with the structure of the market, and the fact that bond issues by firms in these sectors are the largest and most liquid. But debt issued by consumer staples firms likely also featured prominently.

9 June. 2015 A flying start to Q2 for German Industrial sector and exports (Publication Centre)

Economic reports released yesterday indicate that the German economy was off to a solid start early in the second quarter. Industrial production rose 0.9% month-to-month in April, equivalent to a 1.4% increase year-over-year, up from a revised tiny 0.2% gain in March. This is the biggest annual jump in production since July last year, but the underlying trend is turning up only slowly, in line with the moderate improvement in survey data this year.

9 January 2018 Ignore November Dip in German Factory Orders Trend is Still Rising (Publication Centre)

The upturn in German manufacturing orders waned slightly towards the end of 2017; factory orders fell 0.4% month-to-month in November.

9 January 2018 Colombian Inflation Ended 2017 Above Target 2018 Will be Better (Publication Centre)

Colombian inflation ended 2017 slightly above the central bank's 2-to-4% target range, after a year in which policymakers cut interest rates to boost economic growth.

9 Dec. 2014 Stable, But not Yet Signs of Strong Growth in the German Economy (Publication Centre)

The German manufacturing sector is showing signs of stabilisation with industrial production rising 0.2% month-on-month in October, equivalent to 0.8% year-over- year. This is consistent with a decent retracement in production this quarter, but growth is still only barely above zero.

9 Dec. 2014 - NFIB Says Wage Pressure is Rising: ECI Data Seem to Agree (Publication Centre)

We argued in the Monitor yesterday that the NFIB survey's hiring intentions number is the best guide to the trend in payroll growth a few months ahead. But today's November NFIB report will bring no new information on job growth because the key labor market elements of the survey have already been released.

9 August. 2016 NFIB Survey Signals Better Non-Oil Business Capex as Soon as Q3 (Publication Centre)

The headline NFIB index of small business activity and sentiment in July likely will be little changed from June--we expect a half-point dip, while the consensus forecast is for a repeat of June's 94.5--but what we really care about is the capex intentions componen

9 Dec. 2015 Chile's Imacec Consistent With Weak But Stable GDP Growth (Publication Centre)

Economic activity data in Chile have been soft and uneven this year, due mainly to the hit from low commodity prices and uncertainty surrounding the reform agenda, which has badly damaged consumer and investor sentiment. The latest Imacec index, a proxy for GDP, increased just 1.7% year-over-year in October, down from the 2.7% gain in September, and below the 2.2% average seen during Q3 as a whole.

9 Dec. 2015 Could Falling Oil Prices Delay the MPC Again? (Publication Centre)

The price of Brent oil has fallen sharply to $40 per barrel from about $50 just a month ago, and speculation is mounting that it could plunge to $20 soon. But CPI inflation should still pick up over coming months, provided oil prices remain above $30. And the absence of "second-round" effects of lower oil prices this year should reassure the Monetary Policy Committee that lower oil prices won't bear down on inflation over the medium-term.

9 Dec. 2015 Sub-$40 WTI Boosts Consumers' Cashflow - Oil Capex to Fall Further (Publication Centre)

OPEC's decision at the weekend to turn the oil market into a free-for-all means that the rebound in headline inflation over the next few months will be less dramatic than we had been expecting. Falling retail gas prices look set to subtract 0.2% from the headline index in both November and December, and by a further 0.1% in January. These declines are much smaller than in the same three months a year ago, so the headline rate will still rise sharply, to about 1.3% by January from 0.2% in October, but it won't approach 2% until the end of next year or early 2017,

9 Dec. 2015 Services will Push up Core Inflation in the EZ Next Year (Publication Centre)

Core inflation--a long lagging indicator in the euro area-- will rise next year, in response to surging consumers' spending. Our first chart shows that services inflation likely will be a key theme in this story. Even allowing for a structural drag on inflation due to high unemployment outside Germany, cyclical risks to services inflation are tilted firmly to the upside.

9 August. 2016 London Will Continue to Bear the Brunt of the Downturn (Publication Centre)

London has been the U.K.'s growth star for the last two decades. Between 1997 and 2014, yearover-year growth in nominal Gross Value Added averaged 5.4% in London, greatly exceeding the 4% rate across the rest of the country. Surveys since the referendum, however, indicate that the capital is at the sharp end of the post-referendum downturn.

9 August. 2016 Further Evidence of Divergence in the Andean Economies (Publication Centre)

Colombia's economy has continued to slow, due mainly to lagged effect of the oil price shock since mid-2014, and stubbornly high inflation, which has triggered painful monetary tightening. Modest fiscal expansion and capital inflows have helped to avoid a hard landing, but the economy is still feeling the pain of weakening domestic demand. And the twin deficits--though improving--remain a threat.

9 August 2017 Chinese Trade Growth to Continue Trending Down in the Second Half (Publication Centre)

The headline Chinese trade numbers are beginning to come into line with the story we have been telling about the more recent trends.

9 Aug 2019 Still No Recession Signalled by Financial Market Indicators (Publication Centre)

Financial markets have gone into another tailspin over the last fortnight, triggered by rising concern about the possibility of a no-deal Brexit and President Trump's threat of further tariffs on Chinese goods.

9 August 2017 Inflation in the Andes Remains in Check, But H2 Will Be Less Benign (Publication Centre)

Inflation pressures in Colombia cooled considerably last month. Saturday's CPI report showed that inflation fell to 3.4% year-over-year in July, its lowest level since 2014, from 4.0% in June.

9 August 2017 Productivity Growth Might be Turning up, Labor Costs Subdued (Publication Centre)

We are a bit more optimistic than the consensus on the question of second quarter productivity growth, but the data are so unreliable and erratic that the difference between our 1.2% forecast and the 0.7% consensus estimate doesn't mean much.

9 August 2018 War and Peace in China's Trade Data... and Some Capital Flows (Publication Centre)

China's export data shows little impact from trade tensions so far.

9 August 2018 Core PPI Inflation is Still Rising, but Most of the Pressure is Due to Oil (Publication Centre)

Core PPI inflation has risen steadily this year, with month-to-month increases of 0.3% or more in five of the past six months.

9 December 2016 Mexico's Consumers Will Face a Tough 2017 (Publication Centre)

Mexico's economic outlook has dimmed recently, a point driven home by sentiment data released last week. Still, we think GDP growth will slow only marginally in Q4, to about 11⁄2% year-over-year. Consumers' spending likely will remain strong in the near term, thanks mainly to rising remittances from the U.S., driven by fear of policy changes under the Trump administration.

9 December. 2016 The ECB Sent a Dovish Signal Yesterday, QE is Here to Stay (Publication Centre)

Yesterday's ECB meeting left investors with a lot of thinking to do. The central bank kept its key interest rate unchanged, but extended and tweaked its asset purchase program. QE was extended until December 2017, but the monthly pace of purchases will be reduced by €20B per month to €60B starting April next year.

9 Jan. 2015 Inflation Under Control, But Currency Depreciation Still a Risk (Publication Centre)

Colombia's annual inflation rate closed last year at 3.7% year-over-year, unchanged from November, and within Banrep's target, 2%-to-4%. Core inflation, ex-food and fuel, advanced to 2.8% in December from 2.6% in November.

9 February 2018 The MPC's Guidance is Too Fuzzy to Make a May Hike the Base Case (Publication Centre)

The MPC signalled yesterday that it is actively considering a May rate hike, stating that rates likely will "...need to be tightened somewhat earlier and by a somewhat greater degree over the forecast period than anticipated at the time of the November Report".

9 February 2018 Congress Set to Spray Yet More Fuel on the Fire, Over to You, Mr. Powell (Publication Centre)

The budget sequestration process, which cut discretionary government spending by a total of $114B in fiscal 2013 and fiscal 2014, was one of the dumbest things Congress has done in recent years.

9 Jan. 2015 Weak Manufacturing amid Signs of Strength in Consumption (Publication Centre)

New orders data released yesterday for Germany confirmed that weakness in the manufacturing sector remains a key challenge for the economy. Factory orders fell 2.4% month-on-month in November, equivalent to a 0.4% fall year-over-year.

9 January 2017 Wage Growth is Emerging as a Clear and Present Inflation Threat (Publication Centre)

December's payroll numbers were unexciting, exactly matching the 175K consensus when the 19K upward revision to November is taken into account. Some of the details were a bit odd, though, notably the 63K jump in healthcare jobs, well above the 40K trend, and the 19K drop in temporary workers, compared to the typical 15K monthly gain.

9 January 2017 The Eurozone Economy Likely Finished 2016 With a Bang (Publication Centre)

The slew of EZ economic data on Friday supports our view that the economy ended 2016. The Commission's economic sentiment index jumped to 107.8 in December from a revised 106.6 in November. The headline strength was due to a big increase in "business climate indicator" and higher consumer sentiment. In individual countries, solid numbers for German construction and French services sentiment were the stand-out details.

9 January 2017 Mexico Trembles Before Trump Tweets, Expect More Volatility Soon (Publication Centre)

For the MXN, last year was especially harsh. The currency endured extreme volatility, plunging 17% against the USD. So far, this year is off to a rocky start too. The MXN fell close to 2.5% during the first week of 2017.

9 February 2018 China's Trade Surplus Knocked by Calendar Effects, RMB Takes a Cue (Publication Centre)

China's trade surplus tumbled to $20.3B in January, from $54.7B in December, surprising the consensus for little change.

9 February 2018 A Benign Inflation Report Challenges COPOM's View that Easing is Over (Publication Centre)

The Brazilian central bank cut the benchmark Selic interest rate by 25bp, to 6.75%, on Wednesday night, as expected.

9 Feb. 2015 Labor Data Forcing the Fed Into a Corner - (Publication Centre)

It's always easy to find reasons to doubt single monthly observations of any economic time series, but our first chart makes it very clear that the labor market has strengthened markedly over the past few months. The underlying trend rate of growth in private payrolls is now above 300K for the first time in exactly 20 years, and we seen no reason to expect much change over the next few months.

9 December. 2016 The Oil Hit Spread Widely Across the Economy - Now, it's Over (Publication Centre)

A core element of our relatively upbeat macro view before the implementation of fiscal stimulus under the new administration is that the ending of the drag from falling capex in the oil sector will have quite wide, positive implications for growth. The recovery in direct oil sector spending is clear enough; it will just track the rising rig count, as usual.

9 Feb. 2015 Only Brazil Will Have to Hike, Other LatAm Central Banks On Hold (Publication Centre)

Last week's data supported our view that monetary policy across LatAm will continue to diverge in the short term. Brazil will have to prolong its monetary tightening cycle, while economies such as Colombia and Chile will remain on hold despite the recent slowdowns in their economic cycle.

9 Feb. 2015 The German economy is improving: Q4 GDP will beat consensus (Publication Centre)

German industrial production data were presented by Bloomberg News as signs that the recovery is "gathering momentum", but it is slightly premature to make that call. Narrow money growth is currently sending a strong signal of higher GDP growth this year in the euro area, but the message from the manufacturing sector is still one of stabilisation rather than acceleration.

9 February 2017 Weak December Production to Raise Spectre of GDP Revision (Publication Centre)

Figures due on Friday likely will show that the increase in industrial production in December was much smaller than the 0.6% month-to-month assumed by the ONS in its preliminar y Q4 GDP estimate. We expect a 0.2% rise, which would leave production down 0.1% quarter-on-quarter, rather than up 0.1% as the ONS initially estimated.

9 February 2017 Markets finally wake up to political risks in France (Publication Centre)

The twists and turns of the French presidential election campaign continue. François Fillon was tipped as favourite after he won the Republican primaries. But Mr. Fillon now is struggling to keep his campaign on track after allegations that he gave high paying "pro-forma" jobs to his wife as an assistant last year. The socialist candidate, Benoit Hamon, has been hampered by the unpopularity of his party's incumbent, François Hollande, and has lost ground to the far-left Jean-Luc Mélenchon.

8 July. 2016 Muted Headline Inflation in Mexico, but Core has Hit Banxico's Target (Publication Centre)

Favourable inflation conditions in Mexico remain in place with June consumer prices increasing just 0.1% month-to-month, unadjusted, better than expected. A modest gain in core prices was largely offset by falling non-core prices, so year-over-year inflation edged down to 2.5% from 2.6% in May.

8 July. 2016 German Economy Likely Stalled in Q2, but Don't Forget the Q1 Surge (Publication Centre)

German GDP growth jumped in the first quarter, but monthly economic data suggest the economy all but stalled in Q2. Yesterday's industrial production data are a case in point. Output slid 1.3% month-tomonth in May, pushing the year-over-year rate down to -0.4% from a revised 0.8% gain in April. Adding insult to injury, the month-to-month number for April was revised down by 0.3 percentage points

7 March 2017 The Chancellor Isn't Bluffing, This Will Be a Thrifty Budget (Publication Centre)

If the Chancellor is true to his word, Wednesday's Budget will be a pedestrian affair with few major policy changes designed to prevent the economy from slowing this year. In an article in The Sunday Times, Philip Hammond asserted that "we cannot take our foot off the pedal" in the mission to eliminate the budget deficit by the end of the next parliament.

7 March 2017 Mexicans' Confidence Rebounds, Partly, but the Trend is Still Poor (Publication Centre)

Mexican asset prices and sentiment have been helped in recent weeks by less-harsh rhetoric from the Trump administration. The headline consumer confidence for February, reported yesterday, rose to 75.7 from 68.5 in January; all the sub-components improved. The data are not seasonally adjusted, so most local analysts look at the data in year-over-year terms.

7 March 2017 Can Italy's Economy Overcome Weak Real Wage Growth in 2017? (Publication Centre)

The Italian economy slowed at the end 2017, and it continues to underperform other major EZ economies. Real GDP rose 0.2% quarter-on-quarter in Q4, a bit slower than the 0.3% gain in Q3, pushing full-year growth up to a modest 1.0%. This compares poorly, though, with growth of 1.6% in the euro area as a whole.

7 March 2017 Why has Spending not Faltered After Tax Refunds were Delayed? (Publication Centre)

The delay in the processing of personal income tax refunds this year appears not to have had any adverse impact on retail sales, so far. Indeed, the Redbook chainstore sales survey suggests that sales have accelerated over the past few weeks.

7 March 2018 ADP Set to Report Strong Payrolls in February, 200K Seems a Good Bet (Publication Centre)

All the signs are that ADP will today report a solid increase in February private payrolls; our forecast is 200K, but if you twist our arms we'd probably say the mild weather last month across most of the country points to a bit of upside risk.

7 March 2018 Reading Between the Lines of Governor Kuroda's Confirmation (Publication Centre)

In his second confirmation hearing, Governor Kuroda continued his dance with markets, dialling down the exit talk.

7 March 2018 Brazil's Industrial Sector Remains Solid, Despite Slipping in January (Publication Centre)

Brazil's industrial sector was off to a soft-looking start in Q1, but the fall in January output was chiefly payback for an especially strong end to 2017.

7 June. Are Falling Car Sales Signalling a Wider Consumer Malaise? (Publication Centre)

Consumer spending has been the main locomotive of the economic recovery over the last couple of quarters, as investment and net trade have dragged on growth. Signs are emerging, however, that consumption is slowing too.

7 June. 2016 Atlanta Fed Wage Tracker Hits Seven-Year High - Does it Matter? (Publication Centre)

The headline hourly earnings data for May were dull, showing the year-over-year rate unchanged at 2.5%. That's up from 2.1% in the year to May 2015, but it's not an alarming rate of increase. But the Atlanta Fed's median hourly earnings data, which track the wages of individuals from year-to-year, show wages up 3.4% year-over-year, the fastest rate of increase since February 2009.

7 June 2019 GDP Likely Fell Again in April, But the Pain Will Be All in Manufacturing (Publication Centre)

April's GDP report, released on Monday, likely will add fuel to the fire of the re cent sharp decline in interest rate expectations.

7 June 2019 Did Mr. Draghi Inadvertently Snub Expectations for a Q4 Rate Cut (Publication Centre)

It says a lot about investor expectations that markets' reaction to yesterday's policy announcement by the ECB was marked by slight "disappointment," with EURUSD rallying and EZ bond yields rising.

7 June 2018 Slower Growth in Consumer Credit is a Correction, not a Warning (Publication Centre)

We've been hearing a good deal about the slowdown in the rate of growth of consumer credit in recent months, and with the April data due for release today, it makes sense now to reiterate our view that the recent numbers are no cause for alarm.

7 June 2019 Job Gains Likely Slowed Sharply in May, but will Recover (Publication Centre)

In the wake of Wednesday's ADP report, showing a mere 27K increase in private payrolls, we cut our payroll forecast to 100K.

7 June 2019 The RBI's Third Rate Cut is Overkill a U-Turn is Likely, Soon (Publication Centre)

The Monetary Policy Committee of the Reserve Bank of India voted yesterday to cut the benchmark repo rate by a further 25 basis points, to 5.75%, a nine-year low.

7 June. 2016 Are Eurozone Equity Markets Complacent About Brexit? (Publication Centre)

Recent polls in the U.K. have reminded markets that the vote is too close to call at this point, but investors in the Eurozone appear unfazed, so far. The headline Sentix index rose to 9.9 in June, from 6.2 in May, lifted by the expectations index, which increased to a six-month high of 10.0 from 5.5 in May.

7 June 2019 The Rising Threat of Protectionism Is Hurting More than Just the MXN (Publication Centre)

Monday will see 5% tariffs going into effect on Mexican exports to the U.S.--which totalled about USD360B last year--unless President Trump steps back from the brink.

7 March 2018 The Eurozone has a lot to lose from a trade war (Publication Centre)

We are surprised by the EU's reaction to Mr. Trump's announcement that the U.S. will impose tariffs on steel and aluminium.

7 March 2018 Will Snow Disruption Freeze the MPC in its Tracks? (Publication Centre)

Last week's heavy snowfall, which blighted the entire country, will depress GDP growth in Q1, making it harder for the MPC to read the economy.

7 November. 2016 Wage Gains Will Focus Fed Minds (Publication Centre)

If the Fed needed further encouragement to raise rates next month, it arrived Friday in the form of solid jobs numbers, a new cycle low for the broad unemployment rate, and a new cycle high for wage growth.

7 November 2018 Should a 2019 General Election be the Base Case? (Publication Centre)

Speculation that another general election is imminent is rarely out of the news. At present, betting markets see about a 35% chance of another election in 2019, broadly the same chance as one in 2022, when it is currently scheduled to be held.

7 November 2018 Sentiment Surveys are Deteriorating in Mexico Texcoco Airport Effect (Publication Centre)

Recently released data in Mexico are sending weak signals for the business outlook, and the Texcoco airport saga won't help.

7 November. 2016 Is Sterling Now Back on a Sustained Recovery Path? (Publication Centre)

Upbeat PMIs, the MPC's abandonment of its easing bias and the High Court ruling that only a parliamentary vote--and not the Prime Minister--can trigger Article 50, all helped sterling to make up some lost ground last week.

7 November. 2016 U.S. Election is the Big Threat for LatAm Markets (Publication Centre)

The U.S. Presidential election will set the tone for LatAm's markets this week. Hillary Clinton's dwindling lead over Donald Trump in recent polls has unleashed pressure on EM assets.

7 Oct. 2015 Banxico Confirms No Rush to Hike Interest Rates, With the Fed on Hold (Publication Centre)

The September Banxico minutes restated that the U.S. Fed's first interest rate hike is the key event awaited by Mexican policymakers. Banxico's board of governors voted unanimously on September 21st to keep the main interest rate at a record-low 3%.

7 Oct. 2015 Are Payrolls Slowing Because There's No-one Left to Hire? (Publication Centre)

In the absence of market-moving data today, we want to take a closer look at the labor market, and, specifically, the idea that payroll growth is slowing because firms cannot find staff they consider suitably qualified for the jobs available. Every indicator of labor demand, with the sole exception of manufacturing-specific surveys, is consistent with very rapid payroll growth, well in excess of 200K per month.

7 November 2018 China's Q3 BoP Data Confirm Trade War-Related Capital Flight (Publication Centre)

China's unadjusted current account surplus widened to $16.0B in the preliminary report for Q3, from $5.3B in Q2.

7 November 2017 JOLTS Report will Confirm that Labor Demand is Rising Strongly (Publication Centre)

No single measure of labor demand is always a reliable leading indicator of the official payroll numbers, which is why we track an array of private and official measures.

7 March 2019 Only a Fool Would Believe the Official Public Borrowing Forecasts (Publication Centre)

The Chancellor will struggle to make his Spring Statement heard on March 13 over the noise of next week's key Brexit votes in parliament, likely spanning from March 12 to 14.

7 March 2019 Monthly Data Shed Light on Korea's Strong Q4, but Q1 is Looking Poor (Publication Centre)

Korea's final GDP report for Q4 was little changed, in the end.

7 March 2019 Productivity Growth Rose Last Year, but it Probably has Peaked (Publication Centre)

We're expecting to learn this morning that productivity rose by a respectable 1.7% in the year to the fourth quarter, the best performance in nearly four years.

7 March 2019 The ECB Will Take a Knife to its GDP and CPI Forecasts Today (Publication Centre)

In some sense, today's ECB meeting will be a sobering one for policymakers.

7 November 2017 Central Bank in Argentina and Peru to Leave Rates on Hold this Week (Publication Centre)

Argentina's central bank likely will leave its main interest rate at 27.75% tomorrow at its biweekly monetary policy meeting.

7 November 2017 Car Sales are Falling Rapidly, with no End in Sight (Publication Centre)

The downturn in car sales is showing no sign of abating. Data released yesterday by the Society of Motor Manufacturers and Traders showed that private registrations fell 10.1% year-over-year in October, much worse than the 6.6% average drop in the previous 12 months.

7 June 2018 Should the ECB Teach Shorts in Italian Two-year BTPs a Lesson? (Publication Centre)

This week's uproar over the ECB's purchases of Italian debt in May--or lack thereof--shows that monetary policy in the euro is never far removed from the political sphere.

7 June 2018 Car Sales Aren't Recovering Yet, Recent Data are Misleading (Publication Centre)

At first glance, car sales appear to be staging a strong recovery, mirroring the better news on high street spending in Q2.

7 February 2018 The Economic Fallout from the Plunge in Equities will be Modest (Publication Centre)

As things stand, we see little reason to revise down our forecasts for the U.K. economy in response to the tailspin in equity markets

7 February 2018 The EZ Economy Should be Resilient to Rising Market Volatility (Publication Centre)

As we go to press, equities in the Eurozone are having a bad day following the collapse in U.S. and Asian equities earlier.

7 February 2018 Fed Officials Likely to Signal that the Plan is to Stick to the Plan (Publication Centre)

No fewer than four FOMC members will speak today, ranging from the very dovish to the pretty hawkish.

7 February 2019 Industrial and Retail Sectors to Drive December GDP Dip (Publication Centre)

December's GDP report, released next Monday, likely will maintain the flow of negative news on the U.K. economy.

7 February 2019 Korea's December was Good, not Great Expect Revisions to Q4 GDP (Publication Centre)

Following the publication of Korea's preliminary Q4 GDP report last month--see here--we said the consensus-beating print would be susceptible to downgrades, unless the economy had a miraculous end to 2018

7 Jan. 2015 Low Inflation to Offer Significant Boost to Real GDP in the Eurozone (Publication Centre)

Inflation data later today will likely show that the Eurozone fell into deflation driven primarily by the big plunge in oil prices since 2008. The consensus expects a 0.1% decline year-over-year, but we look for the CPI to fall slightly more, by 0.2%.

7 February 2019 Weakness in Exports Still Weighs on German Manufacturing (Publication Centre)

Demand for German manufacturing goods remained subdued at the end of Q4.

7 February 2017 January's Rise in Car Sales is Misleading, it won't be Sustained (Publication Centre)

The 5% year-over-year increase in private new car registrations in January ended a nine-month period of falling sales. January's increase, however, is unlikely to be a bellwether for car sales over the whole year, or for the strength of consumer spending more generally.

7 February 2017 Don't Be Fooled by Jump in German Factory Orders (Publication Centre)

German manufacturing is in good shape, but probably is not as strong as implied by yesterday's surge in new orders. Factory orders jumped 5.2% month-to-month in December, rebounding strongly after a downwardly revised 3.6% fall in November. December's jump was the biggest monthly increase in two years, but it was flattered by a leap in bulk investment goods orders, mainly in the domestic market and other EZ economies.

7 December 2018 Will the BoJ be Put Off Policy Adjustments by Market Turmoil? (Publication Centre)

Recent market turmoil and concerns on the outlook for global growth have re-awakened talk of stimulus. For the BoJ, this inevitably raises the question of what could possibly be done, given that policy already appears to be on the excessively loose side of loose.

7 December 2018 German Manufacturing is Recovering, but Watch Out for Base Effects in Q4 (Publication Centre)

The tepid recovery in German manufacturing continued in at the start of Q4. Factory orders edged higher by 0.3% month-to-month in October, boosted by a 2.9% month-to-month increase in export orders, primarily for capital and intermediate goods in other EZ economies.

7 December 2018 GDP to Stagnate Again in October, but Markets are Braced for the Worst (Publication Centre)

October's GDP report, released on Monday, might just manage to break through the wall of noise coming from parliament ahead of the key Brexit vote on Tuesday.

7 December. 2016 Durable Goods Orders Plunged Last Month, but the Core is Stabilizing (Publication Centre)

Unless Boeing received a huge aircraft order on November 30, we can now be pretty sure that most of October's 4.6% leap in headline durable goods orders reversed last month. Through November 29, Boeing booked orders for 34 aircraft, compared to 85 in October. Moreover, the bulk of the orders were for relatively low value 737s, whereas the October numbers were boosted by a surge in orders for 787s, whose list price is about three times higher.

7 February 2017 Disinflation in Colombia Continues, but Momentum is Easing, for now (Publication Centre)

January CPI data in Colombia, released on Saturday, confirmed that inflation pressures eased last month, but the details weren't as good as the headline. Inflation fell to 5.5% year-over-year, from 5.8% in December, as a result of falling food inflation-- helped mainly by a favourable base effect--and lower clothing prices.

7 December. 2016 Steady as She Goes for the EZ Economy, Despite Political Turmoil (Publication Centre)

Yesterday's detailed EZ GDP report showed that real output rose 0.3% quarter-on-quarter in Q3, the same pace as in Q2. The year-over-over rate rose marginally to 1.7% from 1.6%, trivially higher than the first estimate, 1.6%. The details showed that consumers' spending and public consumption were the key drivers of growth in Q3, offsetting a slowdown in net trade.

7 Jan. 2015 The Sharp Slowdown In Chile's Economy Is Almost Over (Publication Centre)

Chile's economic outlook remains challenging. Overall, 2015 will likely mark the second consecutive year of disappointing growth, but it will be better than 2014, a year to forget.

7 January 2019 Chile's Economic Upturn Stuttered in Q4, Risks to Growth are Rising (Publication Centre)

Chile's economic outlook is still positive, but clouds have been gradually gathering since mid-year, due mostly to the slowdown in China, low copper prices and falling consumer and business confidence.

7 July. 2016 June ADP Set to be Constrained by Weak May Payroll Data (Publication Centre)

We have argued frequently that the ADP employment report is not a reliable advance payroll indicator--see our Monitor of May 4, for example-- so for now we'll just note that it is generated by a regression model which includes a host of nonpayroll data and the official jobs numbers from the previous month. It is not based solely on reports from employers who use ADP for payroll processing, despite ADP's best efforts to insinuate that it is.

7 July. 2016 German Manufacturing Likely Slipped in the Second Quarter (Publication Centre)

German factory orders struggled in the second quarter. New orders were unchanged month-to-month in May, a poor headline following the revised 1.9% plunge in April. The year-over-year rate rose to -0.2%, from a revised -0.4% in April. The month-to-month rate was depressed by a big fall in domestic orders, which offset a rise in export orders.

7 July. 2015 Cyclical Recovery is Resilient - Not Immune - To Greek Turmoil (Publication Centre)

The sell-off in bonds and equities continued yesterday, but the reaction bears no resemblance, so far, to the sovereign debt crises in 2012 and 2010. The first evidence from sentiment data in July also points to surprising stability. The headline Sentix index rose to 18.5, up slightly from 17.1 in June, but the expectations index fell marginally, to 22.3 from 22.5.

7 June 2017 A Tory Victory Wouldn't Necessarily Boost Sterling this Time (Publication Centre)

Predicting which way markets would move in response to potential general election outcomes has been relatively straightforward in the past. But the usual rules of thumb will not apply when the election results filter through after polling stations close on Thursday evening.

7 June 2017 How to Prepare for a Eurozone Bond Market Without the ECB (Publication Centre)

Predicting which way markets would move in response to potential general election outcomes has been relatively straightforward in the past. But the usual rules of thumb will not apply when the election results filter through after polling stations close on Thursday evening.

7 June 2017 The Slowing in Consumer Credit Demand is Good News (Publication Centre)

Today's consumer credit report for April likely will show that the stock of debt rose by about $15B, a bit below the recent trend. The monthly numbers are volatile, but the underlying trend rate of increase has eased over the past year-and-a-half, as our first chart shows. The slowdown has been concentrated in the non-revolving component, though the rate of growth of the stock of revolving credit--mostly credit cards--has dipped recently, perhaps because of weather effects and the late Easter.

7 June 2017 Sentiment Indicators Signal Better Times for the Mexican Economy (Publication Centre)

Mexico's survey data have improved significantly over the last few months, reaching levels last since before Donald Trump won the U.S. election in November. This suggest that the economy is in much better shape than feared earlier this year. Consumer confidence, for instance, has continued its recovery.

7 July 2017 Upside Risk for Payroll. Despite Soft ADP. Robust AHE a Decent Bet too (Publication Centre)

ADP's reported 158K increase in private payrolls was very close to our model-based estimate, so it doesn't change our 220K forecast for todays official payroll number, well above the 177K consensus.

7 July 2017 The Soft and Hard Data Divide Persists in German Manufacturing (Publication Centre)

The hard numbers in Eurozone manufacturing continue to lag the sharp rise in the main surveys. Data yesterday showed that German factory orders rose 1.0% month-to-month in May, only partially rebounding from a downwardly revised 2.2% plunge in April.

7 January 2019 Eurozone Headline Inflation will Fall Further in Coming Months (Publication Centre)

Inflation in the Eurozone fell significantly last month, and probably will ease further in Q1.

7 January 2019 Don't Discount the Upswing in China's Services Caixin (Publication Centre)

China's Caixin services PMI for December surprised well to the upside, providing a glimmer of hope that the economy isn't losing steam on all fronts.

7 January 2019 Job Growth will Slow in Q1, but it Won't Collapse, AHE is Accelerating (Publication Centre)

If our composite index of businesses' hiring plans could speak, it would say: "Told you payrolls were going to go nuts at the end of the year."

7 July 2017 Andean Economies Improving as First-Half Shocks Fade (Publication Centre)

The Imacec data released on Wednesday provided further evidence that the Chilean economy grew at a decent pace in the second quarter, following a very sluggish first quarter.

7 July 2017 Production Likely Jumped in May, but Q2 GDP Still Will b e Soft (Publication Centre)

Markets likely will be particularly sensitive to May's industrial production and construction output figures, released today, as they will provide a guide to the strength of the preliminary estimate of Q2 GDP, released shortly before the MPC's key meeting on August 3.

7 July 2017 China's Authorities Losing the Regulatory Arbitrage Game (Publication Centre)

All regulators face the challenge that when you regulate one part of the economy, problems appear somewhere else. For China, the game is particularly intense because liquidity created by previous debt binges continues to slosh around the financial system, with no outlet to the real economy.

7 Oct. 2015 Trend in German New Orders is Stable, Despite Monthly Plunge (Publication Centre)

Yesterday's factory orders report in German was grim reading. New orders fell 1.8% month-to-month in August, following a downwardly revised 2.2% plunge in July. Weakness in export demand and mean reversion in domestic orders were the key culprits. Domestic orders fell 2.6% month-to-month; nothing to worry about after a near-4% jump in July.

7 Sept. 2015 Mexico's Recovery In Place But Constrained By External Headwinds (Publication Centre)

Growth momentum in Mexico has improved marginally over the last few months after the soft patch during the first quarter, with business and households gaining confidence in the economic recovery. But the upswing has been rather modest, due to the volatility in global financial markets and the challenging external environment. The outlook for the global economy has deteriorated over recent months due to China's problems, and commodity prices remain under pressure. All these factors are now weighing on investors' confidence and hurting EM across asset classes.

8 February 2018 Housing Market Wobble Highlights that the MPC Can't Hike Quickly (Publication Centre)

Markets expect the MPC to shelve November's guidance--that interest rates need to rise only twice in the next three years--at today's meeting.

8 February 2018 Japanese Wage Cost Pressures are Building, but the Yen is Competitive (Publication Centre)

Japanese firms hand out a significant portion of labour compensation through bonuses, with the largest lump awarded in December.

8 February 2018 Is the Acceleration in German Manufacturing Output Over? (Publication Centre)

Industrial production in Germany stumbled at the end of Q4. Data yesterday showed that output fell 0.6 month-to-month in December, though this drop has to be seen in light of the downwardly-revised 3.1% jump in November.

8 February 2019 Brazil's Policymakers are in no Rush to Change Rates Reform is the Key (Publication Centre)

The Brazilian Central Bank's policy board--the Copom--voted unanimously on Wednesday to keep the Selic rate on hold at 6.50%.

8 February 2019 Shaktikanta Das Starts with a Bang, Changing the Course of RBI Policy (Publication Centre)

The Monetary Policy Committee of the Reserve Bank of India shocked most forecasters yesterday, including us, with a 4-to-2 majority voting in favour of a 25-basis point rate cut.

8 February 2019 Fiscal Deadlines Promise Drama, but Probably not Crises (Publication Centre)

Two fiscal deadlines are on the near-horizon.

8 February 2017 Seasonal Problems set to Depress Mortgage Applications Data (Publication Centre)

Mortgage applications have risen, net, over the past couple of months, despite the 70bp surge in 30-year mortgage rates since the election. Indeed, we'd argue that the increase in applications is a result of the spike in rates, because it likely scared would-be homebuyers, triggering a wave of demand from people seeking to lock-in rates, fearing further increases.

8 February 2017 Housing Market Flagging Again as Income Squeeze Intensifies (Publication Centre)

The MPC's interest rate cut in August, and the continued willingness of banks to lend, bolstered the housing market immediately after the referendum. But the latest indicators suggest that the market is slowing again, as the financial pressures on households' incomes intensify.

8 December 2017 Robust Jobs Data Will Emphasize the Labor Market's Tightness (Publication Centre)

We expect to see a 180K increase in November payrolls

8 December 2017 Production Likely Was Neither Strong Nor Stable in October (Publication Centre)

The 0.7% month-to-month rise in industrial production in September marked the sixth consecutive increase, a feat last achieved 23 years ago.

8 December. 2016 The ECB Will Extend QE Today, but Also Signal its Eventual End (Publication Centre)

The scars from previous economic crises have not healed fully in the Eurozone, and we think the ECB will extend QE today, by six months to Q3 2017. We expect Mr. Draghi to retain his dovish bias in the opening statement, and to repeat the emphasis on downside risks, due to the weak external environment and political fears.

8 December. 2016 Will the Fed Move up the Dotplot in Anticipation of Fiscal Easing? (Publication Centre)

We're hearing a good deal of speculation about the dotplot after next week's FOMC meeting, with investors wondering whether the median dot will rise in anticipation of the increased inflation threat posed by substantial fiscal loosening under the new administration. We suspect not, though for the record we think that higher rate forecasts could easily be justified simply by the tightening of the labor market even before any stimulus is implemented.

8 February 2017 German Manufacturing Data Threw a Tantrum in December (Publication Centre)

German manufacturing data are all over the place at the moment. Earlier this week, data showed that new orders jumped toward the end of 2016, but yesterday's industrial production report was a shocker. Output plunged 3.0% month-to-month in December, pushing the year-over-year rate down to -0.7% from a revised +2.3% in November.

8 February 2017 Banxico to Hike Rates Tomorrow, but its Tone Likely Will be Softened (Publication Centre)

Banxico's likely will deliver the widely-anticipated rate hike this Thursday. Policymakers' recent actions suggests that investors should expect a 50bp increase, in line with TIIE pric ing and the market consensus. The balance of risks to inflation has deteriorated markedly on the back of the "gasolinazo", a sharp increase in regulated gasoline prices imposed to raise money and attract foreign investment.

8 February 2019 The MPC has Gone only Half-Way to Endorsing Markets' Lower Rate Path (Publication Centre)

In the midst of heightened and potentially longerlasting Brexit uncertainty, the MPC revised down its forecast for GDP growth sharply yesterday and came close to endorsing investors' view that the chances of a 25bp rate hike before the end of this year have slipped to 50:50.

8 Jan. 2015 - Payroll Still Set for Big December Gain - ADP is Unreliable (Publication Centre)

We aren't revising our payroll forecast in the wake of the ADP report, which showed private payrolls rising by 241K in December. We expected a bigger increase because ADP tends to lag the official data for the previous month, and the BLS reported a 314K jump in private employment in November, but the "shortfall" is too small to matter.

8 July 2019 Slump in German Manufacturing isn't Over Yet...Far From It (Publication Centre)

The German manufacturing data remain terrible. Friday's factory orders report showed that new orders plunged 2.2% month-to-month in May, convincingly cancelling out the 1.1% cumulative increase in March and April.

8 July 2019 No Quick Relief from Food Inflation in Sight for India and China (Publication Centre)

One of the main reasons we expect the Reserve Bank of India to roll back at least one of this year's rate cuts before the end of the year is the likely further rise in food inflation.

8 July 2019 Incomplete Rebound in GDP in May to Confirm Stagnation Likely in Q2 (Publication Centre)

Odds-on, the consensus forecast for May's GDP report, released on Wednesday, will miss the mark.

8 July 2019 Will the Weakness of Mexican Capex and Consumption Continue? (Publication Centre)

Data released last week confirmed that Mexico's economy stumbled in the first half of the year, hurt by a temporary shocks in both the industrial and services sectors, and heightened political uncertainty, due to policy mistakes at the outset of AMLO's presidency.

8 July. 2015 Evidence, so far, Points to Strong Q2 GDP Print in Germany (Publication Centre)

German GDP growth likely accelerated in the second quarter, following a disappointing 0.3% quarter-on-quarter expansion in Q1. Growth in the manufacturing sector remains modest, and the trend in consumers' spending remains solid. Industrial production was unchanged in May, pushing year-over-year growth to 2.1% from a revised 1.1% in April.

8 July. 2015 Oil to the Rescue as Core Trade Numbers Disappoint, Again (Publication Centre)

In the wake of the May international trade numbers, our hopes that net foreign trade would contribute more than a full percentage point to second quarter GDP growth have taken something of a knock. We're now looking for a 0.7pp contribution.

8 July. 2015 Mexican Consumers Upbeat, as Economic Fundamentals Improve (Publication Centre)

Household sentiment in Mexico continues to improve, consistent with tailwinds from low inflation, accommodative monetary policy, and the improving labor market. The consumers confidence index rose to 94.7 in June from 92.0 in May, with four of the five components improving, especially big-ticket purchasing expectations and expectations for the economy.

8 January 2019 Expect to See a Real but Lukewarm Q4 GDP Recovery in Japan (Publication Centre)

Yesterday's Nikkei services PMI report completed Japan's set of surveys for the fourth quarter of 2018.

8 January 2019 Colombia's Economic Resilience Will be Challenged in the First Half (Publication Centre)

Colombia was one of the fastest growing economies in LatAm in 2018, and prospects for this year have improved significantly following June's presidential election, with the market-friendly candidate, Iván Duque, winning.

8 January 2018 Brazil's Industrial Sector and Foreign Trade to Remain Resilient in Q1 (Publication Centre)

Survey data have been signalling a relatively resilient Brazilian economy in the last few months, despite intensified political risk, and hard data are beginning to confirm this story.

8 Jan. 2015 The ECB Will Be Forced to Act as The Eurozone Slips Into Deflation (Publication Centre)

Deflation officially arrived in the Eurozone yesterday as a 6.3% plunge in energy prices pushed the overall rate of inflation to -0.2% year-over-year in December, down sharply from 0.3% in November.

8 January 2018 Japan's Services Sector will Pick Up in Q1, Wage Pressure Mounts (Publication Centre)

Japan's services sector PMI last week was disappointing.

8 January 2018 The Labor Market is Still Tightening, Don't Fret over December Payrolls (Publication Centre)

We aren't perturbed by the undershoot in December payrolls, relative both to the October and November numbers and all the leading indicators.

8 January 2019 Bifurcation Intensifying Services Outperforming as Industry Suffers (Publication Centre)

If you need more evidence that the U.S. economy is bifurcating, look at the spread between the ISM non- manufacturing and manufacturing indexes, which has risen to 3.5 points, the widest gap since September 2016.

8 January 2019 A Story for Everyone in Confusing Q4 German Manufacturing Data (Publication Centre)

The German economy's engine room continues to stutter.

8 December 2017 Investment is Now the Key Driver of GDP Growth. Will it Continue? (Publication Centre)

Yesterday's detailed Q3 GDP data in the Eurozone confirmed that the economy has gone from strength to strength this year.

8 December 2017 Chinese Outflows Picking up? FX Reserves to Fall Again in 2018 (Publication Centre)

China's FX reserves rose to $3119B in November from $3109B in October. But the increase is explained by simultaneous yen, euro and sterling strength, which raises the dollar value of assets denominated in these currencies.

8 Apr. 2015 Slowly does it for upturn in the German manufacturing sector (Publication Centre)

German factory orders probably bounced a modest 0.3% month-to-month in February, equivalent to a 0.5% decline year-over-year. We expect private investment growth to have picked up in the first quarter, but leading indicators for the industrial sector in Germany are sending conflicting signals.

7 September. 2016 Q2 GDP Data Add to the Evidence of a Peak in the EZ Business Cycle (Publication Centre)

A plunge in imports saved the EZ economy from a contraction in second quarter GDP. Yesterday's final data showed that real GDP growth rose 0.3% quarter- on-quarter, slowing from a 0.5% jump in Q1. A 0.4 percentage points boost from net exports was the key driving force.

7 September. 2016 Copom Minutes Suggest that October Easing is Very Much Alive (Publication Centre)

The recent less-bad growth and inflation data in Brazil are encouraging news and are setting the stage for easing in October. The minutes of the Copom's August 31 monetary policy meeting, released yesterday, were less hawkish than in previous months, indicating that policymakers are gauging the possibility of cutting rates.

8 Apr. 2016 Net Exports Likely Weighed on French GDP Growth Again in Q1 (Publication Centre)

External demand in France probably weakened in the first quarter. The trade deficit widened sharply to €5.2B in February, from a revised €3.9B in January, pushing the current account deficit to an 18-month high. It is tempting to blame the stronger euro, but that wasn't the whole story.

8 Apr. 2016 Tame Inflation Pressures Leave Banxico Room to Breathe (Publication Centre)

Good news keeps on coming from Mexico, and the outlook is still favourable. Overall inflation pressures remain subdued and the domestic economy remains reasonably solid, despite a modest slowdown in recent months. Job creation remains robust, and real wages have been growing at a solid, non-inflationary pace.

8 April 2019 Andean Economies Hoping for a U.S.-China Trade Deal Soon (Publication Centre)

Fears of a Chinese hard landing have roiled financial and commodity markets this past year and have constrained the economic recovery of major raw material exporters in LatAm.

8 Apr. The Trade Deficit Will Remain Bloated, Despite the Weaker Pound (Publication Centre)

Net trade has been a major drag on the economy's growth rate in recent quarters, and February's trade figures, released today, are likely to signal another dismal performance in the first quarter.

7 September. 2016 Capex Rebounding in Q3, Except in the Housing Component (Publication Centre)

If you had asked us in the spring where the action would be in capital spending over the summer, we would have said that the housing component was the best bet. Right now, though, the opposite seems more likely, with housing likely to be the weakest component of capex.

7 September 2018 Brace for Soft Looking August Payroll and Hourly Earnings Data (Publication Centre)

In the wake of yesterday's ADP report, which showed private payrolls rising by only 163K, we have pulled down our forecast for today's official number to 170K.

7 September 2017 Jobless Claims will Rocket After Harvey, but Timing is Tricky (Publication Centre)

The jobless claims numbers today likely will mark the end of the calm before the storm effect, even though the data cover the week ended September 1, and Harvey hit on August 26.

7 Sept. 2015 Poor New Orders in Germany, But Expect Rebound Next Month (Publication Centre)

The disappointing German factory orders ended the run of strong economic data last week. New orders fell 1.4% month-to-month in July, pushing the year-over-year rate down to a 0.6% fall from a 7.0% increase in June. This is a poor headline, but it partly reflects mean-reversion from last month's revised 1.8% jump. We expect a rebound next month, and the details also offer a useful reminder that these data are extremely volatile on a month-to-month basis.

7 September 2017 Scrappage Schemes Will Only Postpone the Slump in Car Sales (Publication Centre)

Car manufacturers have been at the sharp end o f the slowdown in consumers' spending this year. In response, several brands have launched generous scrappage schemes, giving buyers a big discount when they trade in their old vehicle.

7 September 2017 The ECB will Set up Markets Today for a QE Decision in Q4 (Publication Centre)

Today's ECB meeting will follow the same script as in July. No-one expects the central bank to make any formal changes to its policy settings. The ECB will keep its main refinancing and deposit rates at zero and -0.4%, respectively.

7 September 2018 Are Chinese Efforts to Stabilise Growth Starving Private Firms (Publication Centre)

China's authorities recognised, around the middle of this year, that activity was slowing and that monetary conditions had become overly tight.

7 September 2018 Low Inflation Means Policymakers to Stay Steady in Brazil and Colombia (Publication Centre)

Brazil's benchmark inflation index, the IPCA, fell 0.1% month-to-month unadjusted in August, below market expectations.

8 April 2019 Payroll Gains set to be Close to 200K in Q2 Labor Market Still Tightening (Publication Centre)

The return to normal in the March payroll numbers, with a 196K headline increase, is another nail in the coffin of the "imminent recession" theory.

8 April 2019 Recovering from the Shock of Japan's Wage Data... it's Not All Bad (Publication Centre)

Officially, Japanese wages have been falling year- over-year since January, marking a break from the gradual acceleration over the past 18 or so months.

8 Dec. 2014 The Hunt for Yield is Still On, But it Comes With Higher Risk Next Year (Publication Centre)

Divergence between central banks and the reach for yield will remain dominant themes for Eurozone fixed income markets next year, but a lot has already been priced in.

8 August. 2016 Wage Gains Set to Slide in August, Delaying the Fed Until December (Publication Centre)

We were happy to see the 255K gain in July payrolls, but we remain nervous about the sustainability of such strong numbers. The jump in employment was very large relative to some of the key survey-based indicators of the pace of hiring, even after allowing for the 29K favorable swing in the birth/ death model, compared to a year ago, and the 27K jump in state and local government education jobs, likely due to seasonal adjustment problems

8 August. 2016 The Term Funding Scheme is Not a Game-Changer (Publication Centre)

Economists failed to foresee the U.K.'s growth spurt in 2013 partly because they underestimated the positive impact of the Funding for Lending Scheme, launched in mid-2012. In fact, the FLS was so successful at stimulating mortgage lending that it had to be "refocussed" to apply solely to business lending in January 2014.

8 Dec. 2015 Energy Production Will Depress German Industrial Output in Q4 (Publication Centre)

German industrial output was off to a sluggish start in the fourth quarter. Production eked out a marginal 0.2% month-to-month gain in October, pushing the year-over-year rate down to 0.0% from a revised 0.4% in September. Manufacturing output rose 0.6%, led by a 2.7% jump in production of capital goods, but the underlying trend in the sector overall is flat. On a more positive note, construction output rose 0.7% month-to-month in October, and leading indicators suggest this could be the beginning of a string of gains, lifting investment spending in coming quarters.

8 Dec. 2015 Productivity Growth Still too Weak to Prevent Inflation Rebound (Publication Centre)

By any yardstick, U.K. productivity growth has been terrible in recent years. Output per hour exceeded its pre-recession peak only in the second quarter of 2015, and it has grown at an average annual rate of just 0.6% this decade. U.S. productivity growth has been equally dismal since 2010. But the U.K.'s performance is more worrying, because the productivity slump during the recession suggested scope for a period of catch-up. In the U.S., by contrast, productivity surged during the recession as firms cut headcount sharply.

8 December 2017 Brazil's Central Bank Leaves the Door Open for More Easing in Q1 (Publication Centre)

The Brazilian central bank cut its benchmark Selic interest rate by 50bp, to 7.0%, on Thursday night and confirmed our view that the end of the easing cycle is not far off.

8 Dec. 2015 Small Firms Are Struggling to Recruit, and Price are Nudging Up (Publication Centre)

The release of the NFIB survey at 6.00AM eastern time this morning--really, they need a new PR advisor--doubtless will bring a flurry of headlines about rising wage pressures, with the expected compensation index rising by a startling three points to a new post-crash high. But this is not news, nor is the high, stable level of hiring intentions; these key labor market numbers were released last week in the NFIB Jobs Report, which appears the day before the official employment report. The data are simply extracted from the main NFIB survey.

8 August. 2016 Brazil's Economy is Stabilizing. Mexico's is Slowing, Temporarily (Publication Centre)

While we were out, Brazil's economic and political position continued to improve. The recession eased in the second quarter and into July. Industrial production, for example, increased in June for the fourth consecutive month, rising by 1.1% month-to-month.

8 August 2018 Chainstore Sales Growth is Strong, but the Tax Cuts aren't Responsible (Publication Centre)

The release yesterday of the weekly Redbook chainstore sales report for the week ended Saturday August 4 means that we now have a complete picture of July sales.

8 Aug 2019 June GDP to Reassure that the Economy is Avoiding Recession (Publication Centre)

Friday's GDP report should show that the economy narrowly avoided contracting in Q2.

8 April 2019 The Plot Thickens in Germany's Manufacturing Data (Publication Centre)

Last week's manufacturing data in Germany left investors with more questions than answers.

8 Aug 2019 The RBI's Unconventional Rate Cut is Likely to be its Last (Publication Centre)

The Monetary Policy Committee of the RBI ventured into the unknown yesterday, cutting its benchmark repo rate further, by an unconventional 35 basis points, to 5.40%.

8 August 2017 Chinese Capital Outflows Well -Managed while Conditions Benign (Publication Centre)

The external environment was relatively benign for China in July. The euro and yen appreciated as markets began to question how long policy can remain on their current emergency settings.

8 August 2017 Will Mexico's Economy Resilience Continue in the Second Half? (Publication Centre)

The Mexican economy maintained its relatively strong momentum in Q2. The first estimate of Q2 GDP, released last week, confirmed that growth was resilient during the first half of this year, despite the confidence hit caused by domestic and external headwinds.

8 August 2017 Watch the NFIB Survey for Clues to Job Growth, Capex and Inflation (Publication Centre)

The NFIB survey of small businesses today will show that July hiring intentions jumped by four points to +19, the highest level since November 2006. The NFIB survey has been running since 1973, and the hiring intentions index has never been sustained above 20.

9 March 2018 Payrolls Likely Strong Again, All Eyes on Unemployment and Wages (Publication Centre)

We'd be quite surprised if the headline payroll number today turned out to be far from the consensus, 205K, or our forecast, 225K.

9 March 2018 The ECB is Edging Towards the QE Exit, but Rates set to Remain Low (Publication Centre)

The ECB made no major policy changes yesterday, but tweaked its communication. The key refinancing and deposit rates were kept at 0.00% and -0.4%, respectively, and the pace of QE was maintained at €30B per month.

PM Datanote: Trade Balance, France, March (Publication Centre)

In one line: Q1 net trade hit confirmed; a rebound in Q2?

PM Datanote: Inflation, Chile, April (Publication Centre)

In one line: Inflation still little source of concern.

LatAm Datanote: Retail Sales, Mexico, March (Publication Centre)

In one line: A soft Q1, and the outlook remain challenging.

U.K. Datanote U.K. Car Registrations, June (Publication Centre)

In one line: Pronounced weakness in Q2 likely a consequence of the original Brexit deadline.

U.K. Datanote U.K. Markit CIPS Construction Survey, June (Publication Centre)

In one line: A worrying step change in the impact of Brexit uncertainty.

U.K. Datanote: Car Registrations, April (Publication Centre)

In one line: An inevitable pull-back after Q1's pick-up.

U.K. Datanote: BRC Retail Sales Monitor, April (Publication Centre)

In one line: Sub-par, once the Easter effect is excluded.

LatAm Datanote: Retail Sales, Mexico, July (Publication Centre)

In one line: Decent momentum in private consumption, but threats are rising.

LatAm Datanote: Retail Sales, Mexico, April (Publication Centre)

In one line: A good start to the second quarter but downside risks remain.

LatAm Datanote: Inflation IPCA-15, Brazil, May (Publication Centre)

In one line: Underlying pressures are modest, and food prices are starting to stabilise.

LatAm Datanote: Inflation IPCA-15, Brazil, June (Publication Centre)

In one line: Inflation falls sharply helped, by a favourable base effect and a sluggish economic recovery.

LatAm Datanote: Inflation IPCA-15, Brazil, July (Publication Centre)

In one line: Inflation is well under control; the BCB will cut rates next week.

LatAm Datanote: Inflation, Chile, June (Publication Centre)

In one line: Pressures are well under control; the BCCh to remain on the sidelines, for now.

LatAm Datanote: Monetary policy meeting, Brazil (Publication Centre)

In one line: The cautious approach continues as the economy struggles and uncertainty remains high

LatAm Datanote: Monetary policy meeting, Brazil, September (Publication Centre)

In one line: Another bold cut and more stimulus is likely.

LatAm Datanote: Monetary policy meeting, Brazil (Publication Centre)

In one line: A bold cut to help the economic recovery, more to come.

U.K. Datanote: Nationwide House Prices, April (Publication Centre)

In one line: Flat in Q1, but scope for modest gains ahead.

U.K. Datanote: U.K. Balance of Payments, Q1 (Publication Centre)

In one line: The first real evidence that foreign companies are abandoning Britain.

U.K. Datanote: U.K. Consumer Prices, July (Publication Centre)

In one line: The wage-price link is firmly intact; the MPC's hands are tied.

U.K. Datanote: U.K. Consumer Prices, April (Publication Centre)

In one line: Downside surprise due to unsustainably low core goods inflation.

U.K. Datanote: U.K. CBI Industrial Trends Survey, June (Publication Centre)

In one line: Another weak survey, but production will rebound in Q3.

U.K. Datanote: U.K. Consumer Prices, June (Publication Centre)

In one line: No case for cutting Bank Rate based on the outlook for inflation.

U.K. Datanote: U.K. Consumer Prices, May (Publication Centre)

In one line: Rising "underlying" services inflation points to the MPC retaining its tightening bias.

U.K. Datanote: U.K. Economic Sentiment, June (Publication Centre)

In one line: Still a big gap between business and consumer confidence.

U.K. Datanote: U.K. Economic Sentiment, July (Publication Centre)

In one line: Consumers are defiantly optimistic, despite the Brexit saga.

U.K. Datanote: U.K. CBI Industrial Trends Survey, July and Q3 (Publication Centre)

In one line: Mixed messages warn against coming to strong conclusions.

U.K. Datanote: U.K. CBI Distributive Trades Survey, June (Publication Centre)

In one line: Too noisy to warrant concern.

U.K. Datanote: U.K. BRC Retail Sales Monitor, July (Publication Centre)

In one line: Probably just one isolated soft month; consumers have the means to spend more.

U.K. Datanote: U.K. BRC Retail Sales Monitor, August (Publication Centre)

In one line: A mediocre month, but a lasting slowdown isn't likely.

U.K. Datanote: U.K. BRC Retail Sales Monitor, June (Publication Centre)

In one line: Lower energy prices push inflation down at the end of Q2.

U.K. Datanote: U.K. Car Registrations, July (Publication Centre)

In one line: Probably still artificially low due to the original Brexit deadline.

U.K. Datanote: U.K. CBI Distributive Trades Survey, July (Publication Centre)

In one line: Crying wolf, again.

U.K. Datanote: U.K. Car Registrations, May (Publication Centre)

In one line: Payback for the Brexit-related surge in Q1.

LatAm Datanote: Inflation IPCA, Brazil, May (Publication Centre)

In one line: Disinflation resumes as the economy falters.

LatAm Datanote: Inflation IPCA, Brazil, June (Publication Centre)

In one line: A sharp fall helped by a favourable base effect; underlying pressures are tame.

LatAm Datanote: Economic Activity Index, Brazil, July (Publication Centre)

In one line: Better domestic conditions offset by rising external risks.

LatAm Datanote: Economic Activity Index, Brazil, April (Publication Centre)

In one line: An ugly start to the second quarter, despite a modest improvement in sectoral data.

LatAm Datanote: Economic activity index and Bi-weekly CPI, Mexico, April, June (Publication Centre)

In one line: Modest inflation pressures amid subpar economic activity.

LatAm Datanote: Economic Activity Index, Brazil, March (Publication Centre)

In one line: The economy did very badly in Q1, and risks are still tilted to the downside.

LatAm Datanote: Economic Activity Index, Brazil, May (Publication Centre)

In one line: A decent improvement, and we expect further good news ahead.

LatAm Datanote: Final GDP, Mexico, Q2 (Publication Centre)

In one line: Disappointing, and the outlook remains challenging due to high external risks.

LatAm Datanote: Economic activity index, Chile, April (Publication Centre)

In one line: A marginal improvement, but poor mining activity remains a drag.

LatAm Datanote: CPI, Mexico, May (Publication Centre)

In one line: Inflation pressures are finally easing, but the MXN--that is, President Trump's actions--is the key variable now for policymakers.

LatAm Datanote: CPI, Mexico, June (Publication Centre)

In one line: Lower energy prices push inflation down at the end of Q2.

LatAm Datanote: BCRP Rate Decision, Peru (Publication Centre)

In one line: Adopting a dovish stance as the economy fails to gather speed.

LatAm Datanote: BCRP Rate Decision, Peru (Publication Centre)

In one line: Rates on hold; trade tensions are a key risk to start policy normalization.

LatAm Datanote: BCRP Rate Decision, Peru (Publication Centre)

In one line: On hold, but the BCRP will cut rates soon.

LatAm Datanote: Bi-weekly CPI, Mexico, August (Publication Centre)

In one line: Inflation falling rapidly as the economy comes under severe strain.

LatAm Datanote: CPI, Mexico, August (Publication Centre)

In one line: Inflation falls close to target, allowing Banxico to cut rates.

LatAm Datanote: CPI, Mexico, April (Publication Centre)

In one line: A bad-looking start to Q2, but the y/y rate was hurt by an unfavourable base effect.

LatAm Datanote: GDP, Chile, Q1 (Publication Centre)

In one line: A soft Q1, and the outlook remain challenging.

LatAm Datanote: GDP, Colombia, Q1 (Publication Centre)

In one line: A soft start to the year, but we expect better numbers ahead.

LatAm Datanote: Industrial Production, Mexico, June (Publication Centre)

In one line: Undershooting expectations, but we expect a modest rebound in Q3.

LatAm Datanote: Industrial Production, Mexico, July (Publication Centre)

In one line: Resilient manufacturing output offsets weakness elsewhere.

LatAm Datanote: Industrial Production, Mexico, April (Publication Centre)

In one line: Ignore the un-adjusted headline; production did well at the start of Q2.

LatAm Datanote: Industrial Production, Mexico, March (Publication Centre)

In one line: Manufacturing gain fails to offset weakness elsewhere.

LatAm Datanote: Inflation IPCA, Brazil, April (Publication Centre)

In one line: A sharp increase on the month, but underlying pressures remain tame.

LatAm Datanote: Inflation IPCA, Brazil, August (Publication Centre)

In one line: A modest increase, but underlying inflation is stable.

LatAm Datanote: Inflation IPCA, Brazil, August (Publication Centre)

In one line: Inflation edged lower in August, leaving the door open for further interest rate cuts.

LatAm Datanote: Industrial Production, Brazil, July (Publication Centre)

In one line: A soft start to the quarter, but leading indicators point to a decent Q3 as a whole.

LatAm Datanote: Industrial Production and unemployment, Chile, May (Publication Centre)

In one line: A marginal improvement in manufacturing, offset by poor mining activity.

LatAm Datanote: Gross fixed investment, Mexico, April (Publication Centre)

In one line: A weak-looking report but hit by calendar effects; capex will stabilise as uncertainty fades.

LatAm Datanote: GDP, Second Quarter, Brazil (Publication Centre)

In one line: A resilient economy despite many shocks.

LatAm Datanote: Gross fixed investment, Mexico, June (Publication Centre)

In one line: Capex is struggling; the outlook remains challenging.

LatAm Datanote: Gross fixed investment, Mexico, March (Publication Centre)

In one line: Another ugly report, and Mexico's prospects have deteriorated significantly.

LatAm Datanote: Industrial Production and unemployment, Chile, July (Publication Centre)

In one line: Good industrial production numbers; the labour market is still struggling.

LatAm Datanote: Industrial Production and unemployment, Chile, April (Publication Centre)

In one line: Soft industrial data, and external conditions for EM economies are becoming increasingly challenging

U.K. Datanote: U.K. Economic Sentiment, May (Publication Centre)

In one line: Business and consumer confidence is diverging.

U.K. Datanote: U.K. GDP, March & Q1 (Publication Centre)

In one line: Brexit preparations provide a temporary fillip to manufacturing.

U.S. Datanote: U.S. Consumer Prices, July (Publication Centre)

In one line: Not yet an accelerating trend, but labor cost and tariff pressures are visible.

U.S. Datanote: U.S. Consumer Prices, April (Publication Centre)

In one line: Details indicate that downside pressure is much less than headlines suggest.

U.S. Datanote: U.S. Consumer Confidence & Richmond Fed, August (Publication Centre)

In one line: Both better than expected, but downside risk is not over.

U.S. Datanote: U.S. Consumer Prices, June (Publication Centre)

In one line: Tariffs, labor costs, and tight rental home supply pushing up core inflation, plus some noise.

U.S. Datanote: U.S. Consumer Prices, May (Publication Centre)

In one line: Used car prices a drag yet again, but they'll stop falling soon.

U.S. Datanote: U.S. Industrial Production, April (Publication Centre)

In one line: Calendar quirks explain the drop in manufacturing output; expect a rebound in May.

U.S. Datanote: U.S. Durable Goods Orders and Advance Goods Trade, May (Publication Centre)

In one line: Capex orders and trade are net neutral for Q2 GDP estimates.

U.S. Datanote: Richmond Fed Survey, July (Publication Centre)

In one line: Philly Fed soars; Empire State steady; Richmond Fed tanks; which to believe?

U.S. Datanote: Michigan Consumer Sentiment, May (Publication Centre)

In one line: The consumer is just fine; recent softness in spending is temporary.

U.S. Datanote: ISM Manufacturing, April (Publication Centre)

In one line: Disappointing but a rebound is coming.

U.S. Datanote: ISM Manufacturing Survey, May (Publication Centre)

In one line: Disconnected from the rebound in China's surveys by the trade war.

U.S. Datanote: ISM Nonmanufacturing Survey, April (Publication Centre)

In one line: Further declines unlikely, but signals slower payroll gains

U.S. Datanote: Jobless Claims (Publication Centre)

In one line: The trend is back to the cycle low.

U.S. Datanote: Michigan Consumer Sentiment, August preliminary (Publication Centre)

In one line: Trade wars have consequences.

U.S. Datanote: Jobless Claims, August (Publication Centre)

In one line: Policy uncertainty is not lifting layoffs.

U.S. Datanote: U.S. Jobless Claims, June (Publication Centre)

In one line: Claims noise likely insignificant; hefty upward revisions to Q1 capex.

U.S. Datanote: U.S. Personal Income and Spending, April (Publication Centre)

In one line: Core PCE deflator back on track; Q2 consumption headed for 3%.

US 15 September 2017 Core CPI Mean-Reverts, Hefty Storm-Induced Increases Ahead? (Publication Centre)

The run of soft core CPI numbers is over. The average 0.18% increase over the past two months probably is a good indication of the underlying trend -- the prints would have been close to this pace in both months had it not been for wild swings in the lodging component -- and the other one-time oddities of recent months' have faded.

UK Datanote: Markit CIPS Construction Survey, April (Publication Centre)

In one line: Overall stagnation masks sub-sector divergence.

UK Datanote MPC Decision, Minutes & Inflation Report, May (Publication Centre)

In one line: Still committed to rate hikes, but not willing to pull the trigger just yet.

US 19 January 2018 Where is the Rebound in CPI Physicians' Services? (Publication Centre)

Today brings only the preliminary Michigan consumer sentiment data for January so we want to take some time to look at how recent changes to Medicare Part B premiums, which cover doctors' fees, are likely to affect inflation over the next few months.

US Datanote FOMC Statement (Publication Centre)

No surprises in the statement; the IOER cut is technical, not a policy change.

CNBC - Bull markets die because the Fed kills them, says economist (Media Centre)

Ian Shepherdson, Pantheon Macroeconomics chief economist, discusses his outlook on the U.S. economy and the long-lasting bull market.

US Datanote Productivity and Labor Costs Jobless Claims (Publication Centre)

In one line: Spectacular but unsustainable.

U.S. Webinar - Oct 2017 (Publication Centre)

Yellen's Patience is Running Out..Rates to Rise Sharply Next Year

U.S. Datanote: Univ. of Michigan Consumer Sentiment, June (p) (Publication Centre)

In one line: Sentiment still very elevated; inflation expectations dip.

U.S. Datanote: U.S. Personal Income and Spending, May (Publication Centre)

In one line: Consumption rocketing; core PCE deflator returning to target on a quarterly annualized basis.

U.S. Datanote: U.S. Personal Income and Spending, July (Publication Centre)

In one line: Consumption on track for 3-to-3.5% in Q2; core inflation mean-reverting.

U.S. Datanote: U.S. Producer Prices, April (Publication Centre)

In one line: Recent declines in y/y rates for core goods and services won't continue.

U.S. Datanote: U.S. Producer Prices, August (Publication Centre)

In one line: Core services prices jump, but it's noise not signal.

U.S. Datanote: Univ. of Michigan Consumer Sentiment, July (Publication Centre)

In one line: Confidence high and stable; inflation expectations steady.

U.S. Datanote: U.S. Producer Prices, May (Publication Centre)

In one line: Goods inflation falling; some signs of upward pressure in services.

U.S. Datanote: International Trade, March Weekly Jobless Claims (Publication Centre)

In one line: Trade deficit has stabilized, provided the China talks don't fall apart.

U.S. Datanote: Industrial Production, June (Publication Centre)

In one line: Manufacturing is enduring a mild recession, but it probably won't deepen much further.

U.K. Datanote: U.K. Money and Credit, April (Publication Centre)

In one line: More evidence of momentum in the household sector.

U.K. Datanote: U.K. Markit CIPS Services Survey, August (Publication Centre)

In one line: Don't take the PMI's recession signal literally.

U.K. Datanote: U.K. Markit and CIPS Services Survey, May (Publication Centre)

In one line: Tentatively moving in the right direction.

U.K. Datanote: U.K. Money and Credit, June (Publication Centre)

In one line: Consistent with the economy retaining momentum ahead of the Brexit deadline.

U.K. Datanote: U.K. MPC Decision & Minutes, June (Publication Centre)

In one line: Acknowledging the growing downside risks, but not changing course.

U.K. Datanote: U.K. MPC Decision, Minutes and Inflation Report, August (Publication Centre)

In one line: Maintaining its composure; tightening still likely, if no-deal is averted.

U.K. Datanote: U.K. MPC Decision and Minutes, September (Publication Centre)

In one line: The MPC has lost its confidence in the outlook, but isn't close to pre-emptive easing.

U.K. Datanote: U.K. Markit and CIPS Services Survey, July (Publication Centre)

In one line: Modest revival weakens the case for fresh monetary stimulus.

U.K. Datanote: U.K. Markit and CIPS Manufacturing Survey, May (Publication Centre)

In one line: On course to reverse the Q1 boost.

U.K. Datanote: U.K. Halifax House Price Index, July (Publication Centre)

In one line: Starting to converge with other weaker measures.

U.K. Datanote: U.K. Halifax House Price Index, August (Publication Centre)

In one line: Slower growth reported following methodological improvements.

U.K. Datanote: U.K. Halifax House Price Index, June (Publication Centre)

In one line: Irreconcilable with all other evidence.

U.K. Datanote: U.K. Markit & CIPS Construction Survey, May (Publication Centre)

In one line: Brexit uncertainty is still hurting, but a boost from lower borrowing costs is coming.

U.K. Datanote: U.K. Markit and CIPS Manufacturing Survey, June (Publication Centre)

In one line: No longer outperforming now the stockpiling boost has fully worn off.

U.K. Datanote: U.K. Markit and CIPS Construction Survey, July (Publication Centre)

In one line: Work is continuing to dry up as no-deal Brexit risk mounts.

U.K. Datanote: U.K. National Accounts, Q1 (Publication Centre)

In one line: Consumers are showing little anxiety in the run-up to Brexit.

U.K. Datanote: U.K. Official House Price Index, July (Publication Centre)

In one line: Close to the nadir.

U.S. Datanote: Fed Chair Powell Monetary Policy Testimony (Publication Centre)

In one line: No pushback on the July ease, but it's still a bad idea.

U.S. Datanote: Consumer Confidence, June (Publication Centre)

In one line: Mexico tariff fears hit sentiment and raised inflation expectations; expect a reversal.

U.S. Datanote: Chicago PMI, August (Publication Centre)

In one line: Much better, but still soft, and downside risks ahead.

U.S. Datanote: Federal Reserve Announcement (Publication Centre)

In one line: Uncertainty reigns.

U.S. Datanote: FOMC Announcement, July (Publication Centre)

In one line: A grudging ease makes one-and-done a decent bet, data permitting.

U.S. Datanote: FOMC Statement, June (Publication Centre)

In one line: Split decision guarantees nothing; trade is the key.

U.S. Datanote: FOMC Minutes, April 30 May 1 (Publication Centre)

In one line: Patience persists.

U.S. Datanote: Chair Powell Speech (Publication Centre)

In one line: The Fed will use its room for maneuver to ease again next month, but the data don't justify aggressive rate cuts.

U.S. Datanote: Advance goods trade, March (Publication Centre)

In one line: The advance goods deficit rose to $71.4B in April from $70.9B in March, better than the consensus, $73.0B.

U.K. Datanote: U.K. Public Finances, April (Publication Centre)

In one line: Too soon to take fright from the slowdown in tax receipts.

U.K. Datanote: U.K. Official House Price Index, March (Publication Centre)

In one line: Near-flat trend in prices unlikely to improve soon.

U.K. Datanote: U.K. Public Finances, June (Publication Centre)

In one line: Not pretty, though volatility in interest payments has distorted the picture.

U.K. Datanote: U.K. Public Finances, May (Publication Centre)

In one line: No cause for alarm.

U.K. Datanote: U.K. RICS Residential Market Survey, July (Publication Centre)

In one line: Still pointing to a recovery in demand.

U.K. Datanote: U.K. RICS Residential Market Survey, August (Publication Centre)

In one line: Depressed, but not knocked out, by Brexit uncertainty.

LatAm Datanote: BCCh Rate Decision, Chile, June (Publication Centre)

In one line: A surprise hefty rate cut; policymakers respond to the subpar recovery and trade war fears.

LatAm Datanote: BCCh Rate Decision, Chile, July (Publication Centre)

In one line: Another hefty cut as the economy struggles, and the door is open to further stimulus.

9 Sept. 2015 Inflation still the key concern for Andes' central banks (Publication Centre)

Colombia's August inflation rate exceeded BanRep's 2-to-4% target range yet again, rising to a six-year high of 4.7%, from 4.5% in July. The signs of stabilization over the previous couple of months proved to be temporary. Core inflation has jumped above the upper bound of the inflation target too, climbing to 4.2%--the highest rate since 2009--in August from 4.0% in July, suggesting that the pass-through from the depreciating currency into consumer prices is starting to hurt. Inflation in tradables jumped in August to 5.2% from 4.7%, underscoring the hit from the COP's drop.

9 Sept. 2015 Ignore Swings in Random Labor Force Data: Focus on Job Gains (Publication Centre)

We read after the employment report that the drop in the unemployment rate was somehow not significant, because it was due in p art to a reported 41K drop in the size of the labor force, completing a 404K cumulative contraction over the three months to August. In our view, though, analysts need to take a broader approach to the picture painted by the household survey, which is much more volatile and less reliable than the payroll survey over short periods.

9 Sept. 2015 Cyclical Recovery in the Eurozone Goes from Strength to Strength (Publication Centre)

Final Q2 GDP data yesterday indicate the euro area economy was stronger than initially estimated in the first half of the year. Real GDP rose 0.4% quarter-on-quarter in Q2, slightly higher than the initial estimate of 0.3, following an upwardly revised 0.5% increase in Q1. Upward revisions to GDP in Italy were the key driver of the more upbeat growth picture. The revisions mean that annualised Eurozone growth is now estimated at 1.8% in the first six months of the year, up from the previous 1.4%, consistent with the bullish message from real M1 growth and the composite PMI.

9 September. 2016 Inventories are Key to Q3 Growth, but Anything Could Happen (Publication Centre)

Inventories subtracted 1.3 percentage points from headline GDP growth in the second quarter and were by far the biggest constraint on the economy. This was the fifth straight drag from inventories, but it was more than twice the average hit over the previous year.

9 September. 2016 iPhone Price Hike Underlines Incoming In ation Shock (Publication Centre)

The consequences of sterling's sharp depreciation for inflation were brought home yesterday by the news that the iPhone 7 will cost more than its predecessor. The entry-level version is priced at £60 more than its iPhone 6S equivalent. Of course, the new version is more advanced, but the fact that the dollar price held steady, at $649, demonstrates the U.K. price hike entirely is due to the adverse impact of the weaker pound.

9 September. 2016 The ECB Underwhelms, But QE Extension is Likely in December (Publication Centre)

Yesterday's ECB policy decision was a carbon copy of the announcement in July. The central bank maintained its key refinancing rate at 0.00%, and also kept its deposit and marginal lending facility rates unchanged at -0.4% and 0.25% respectively. The ECB also kept the pace of QE unchanged at €80B per month. Finally, the central bank refrained from formally extending QE.

9 September. 2016 Political Turbulence in Mexico Won't Derail Fiscal Consolidation (Publication Centre)

Political developments are clouding the horizon in Mexico, at least temporarily. Mexico's Finance Minister Luis Videgaray, the mastermind behind President Enrique Peña Nieto's most important economic reforms, resigned on Wednesday. José Antonio Meade, a former finance chief, has been tapped to replace him.

9 Sept 2019 The EZ Economy is Carrying the Burden of Weak Manufacturing (Publication Centre)

Friday's detailed Q2 growth data in the EZ broadly confirmed the advance numbers.

9 Sept 2019 Relief to Some Central Banks as Benign Inflation Picture Continues (Publication Centre)

Inflation in most economies in LatAm is well under control, allowing central banks to keep a dovish bias, and giving them room for further rate cuts.

9 October 2018 PBoC RRR cut: The Lady Doth Protest too Much, Methinks (Publication Centre)

Over the weekend, the PBoC cut the RRR for the vast majority of banks. FX reserves data released shortly after suggested that the Bank already is propping up the currency.

9 October 2018 German Manufacturing Slowed Sharply in Q3, Denting Growth (Publication Centre)

Yesterday's industrial production data in Germany were better than we feared. Output slipped 0.3% month-to-month in August, depressing the year- over-rate to -0.4% from 1.6% in July, a minor fall given evidence of a big hit from weakness in the auto sector ahead of the EU emissions tests.

9 October 2018 Risks to the Consensus for August GDP Lie to the Upside (Publication Centre)

We expect August's GDP figures, released on Wednesday, to show that month-to-month growth slowed to 0.1%, from 0.3% in July.

9 October 2018 September Payrolls Hit by Florence (Publication Centre)

The dip in payroll growth in September was due to Hurricane Florence. We expect a clear rebound in payrolls in October; our tentative forecast is 250K.

9 Sept 2019 China's RRR cut Helps Credit Supply but Demand Still Wanting (Publication Centre)

The PBoC cut the Reserve Requirement Ratio late on Friday--as signalled at last Wednesday's State Council meeting--by 0.5 percentage points, to be implemented from September 16.

9 Sept 2019 Brexiteers Lost the Brexit Day Battle, But Will They Win the Election War (Publication Centre)

After last week's drama, the pace of political developments should slow down this week.

Asia Datanote PBoC RRR cut (Publication Centre)

In one line: PBoC tops up previous easing measures, and provides clarity on RRR policy intentions for the remainder of the year.

Asia Datanote: BoJ press conference, September (Publication Centre)

In one line: We anticipate a curve-steepening move in October, combined with some sugar coating.

Asia Webinar - Oct 2017 (Publication Centre)

2018 Will Test Chinese Leaders' Will To Reform...China Is Exposed To The Coming Rise In Global Yields

Asia Datanote: PBoC RRR cut (Publication Centre)

In one line: Not so much retaliation as housekeeping that the PBoC put off until now.

Asia Datanote: Money and credit, May, China (Publication Centre)

In one line: Confidence to borrow is lacking, but M1 growth pick-up is a welcome sign.

Asia Webinar - October, 2018 (Publication Centre)

The Big Picture on Sino - U.S. Trade Wars...The Immediate Threat and the Medium-Term Risks

Eurozone Webinar - Oct 2017 (Publication Centre)

We can't find much wrong with the EZ Economy...and that is probably worrying

EZ Datanote: Advance GDP, Germany, Q1 (Publication Centre)

In one line: Domestic demand to the rescue, but inventories will be a drag in Q2.

EZ Datanote: Business and Consumer Sentiment, France, August (Publication Centre)

In one line: Marginally better in manufacturing; upturn in consumer sentiment halted, for now.

Asia Datanote: Money and credit, July, China (Publication Centre)

Easing isn't going exactly to plan... a trade deal would really help

Asia Datanote: Money and Credit, China, August (Publication Centre)

In one line: A rate cut is needed.

Asia Datanote: FX Reserves, China, April (Publication Centre)

In one line: Just a valuations drag; net capital outflows up modestly

Asia Datanote: China Current Account, Q2 (Publication Centre)

Capital outflow pressure is slowly rebuilding.

Asia Datanote: FX reserves, China, July (Publication Centre)

In one line: Earth to Trump, the PBoC isn't devaluing the yuan

Asia Datanote: Industrial Production, Retail Sales, FAI, May, China (Publication Centre)

In one line: Some improvement in retails sales, which now face renewed headwinds; infrastructure growth driver sputters.

Asia Datanote: Machine tool orders, Japan, July (Publication Centre)

In one line: Machine tool orders feeling for the floor

Asia Datanote: Machine Tool Orders, Japan, August (Publication Centre)

In one line: Still no recovery.

9 October 2018 Anti-Establishment Sentiment Lands a Big Win in Brazil on Sunday (Publication Centre)

Since April, the presidential elections in Brazil have dominated local discourse, prompting several market moves.

9 October 2017 Did German Manufacturing Pick up the Pace in Q3? (Publication Centre)

Friday's German new orders data were sizzling. Factory orders jumped 3.6% month-to-month in August, pushing the year-over-year rate up to a nine-month high of 7.8%, from an upwardly-revised 5.4% in July.

9 May 2019 Core PPI Inflation has Fallen Recently, but the Bottom is Near (Publication Centre)

Core producer price inflation is falling, and it probably has not yet hit bottom.

9 May 2019 China's Imports are U-Turning, but Exports Still Face Major Headwinds (Publication Centre)

China's trade surplus collapsed unexpectedly in April, to $13.8B, from a trivially-revised $32.4B in March.

9 May 2019 A Solid Q1 in the Bag for Germany Now a Q2 Correction Looms (Publication Centre)

Industrial production data in Germany continued to defy the signal of doom and gloom from leading indicators.

9 May 2019 March GDP Likely to Continue the Run of Above-Consensus Prints (Publication Centre)

We're among a small minority of economists forecasting that GDP rose by 0.1% month-to-month in March.

9 May. 2016 Banxico Will Wait for the Fed to Hike - No Reasons to Move Soon (Publication Centre)

Banxico left Mexico's benchmark interest rate at 3.75% on Thursday, maintaining its neutral tone and indicating that the balance of risks is unchanged for both inflation and growth. Policymakers remain confident that inflation will remain under control over the coming months, below 3%, but noted that they expect a brief increase above the target during Q4.

9 Nov. 2015 Fed Set to Hike in December, and then Faster than Markets Expect (Publication Centre)

At a stroke, the October payroll report returned the short-term trend in payroll growth to the range in place since 2011, pushed the unemployment rate into the lower part of the Fed's Nairu range, and lifted the year-over-year rate of growth of hourly earnings to a six-year high. The FOMC has never quantitatively defined what it means by "some further improvement in the labor market", its condition for increasing rates, but if the October report does not qualify, it's hard to know what might fit the bill. We expect a 25bp increase in December.

9 May. Inflation Report Forecasts Likely to Be Overshadowed by Brexit Risks (Publication Centre)

This week's Inflation Report--now released alongside the MPC's decision and minutes of its meeting in a deluge of releases now known as "Super Thursday"--is likely to be a damp squib.

9 May 2018 The German Economy Finished Q1 on a Strong Note (Publication Centre)

Yesterday's economic reports showed that the German economy firmed at the end of Q1, but this doesn't change the story for a poor quarter overall.

9 May 2018 Improving Economies in the Andes, Inflation is Well Under Control (Publication Centre)

March economic activity in Chile expanded by a solid 4.6% year-over-year, pointing to Q1 real GDP growth of 4.0%, the fastest pace since Q3 2013, up from 3.3% in Q4.

9 May 2017 Colombian Inflation is Heading Lower, Despite the Pause in April (Publication Centre)

Colombia's disinflation since mid-2016 has been driven by easing pressures on food prices, weak demand, and the better performance of the COP. But higher regulated prices at the start of the second quarter have triggered a pause in the downward trend.

9 May 2017 Chainstore Sales Rebound Points to Robust Q2 Consumption (Publication Centre)

If the Redbook chain store sales survey moved consistently in line with the official core retail sales numbers, it would attract a good deal more attention in the markets. We appreciate that brick-and-mortar retailers are losing market share to online sellers, but the rate at which sales are moving to the web is quite steady and easy to accommodate when comparing the Redbook with the official data.

9 May 2017 Does the Economy Thrive Under "Strong and Stable" Government? (Publication Centre)

The Prime Minister has argued repeatedly during the general election campaign that Britain will prosper under a "strong and stable" Conservative government with a large majority. "Division in Westminster," she argued when calling the election last month, "...will risk our ability to make a success of Brexit and it will cause damaging uncertainty and instability to the country."

9 May 2017 Two Answers and Many Questions, as President Macron Settles in (Publication Centre)

Mr. Macron's victory in France answers two questions for markets, at least in the short run. Firstly, France will stay in the Eurozone, and Mr. Macron will not call a referendum on EU membership. Mr. Macron has come to power with a mandate to strengthen economic integration and co-operation between Eurozone economies.

9 May 2018 Faster Productivity Growth and Higher Inflation will Lift Wage Gains (Publication Centre)

We just can't get away from the deeply vexed question of wages; specifically, why the rate of growth of nominal hourly earnings has risen only to just over 2.5%, even though the historical relationship between wage gains and the tightness of the labor market points to increases of 4%-plus.

9 May 2018 Chinese Import Growth is Flattered by Price Effects (Publication Centre)

China's trade data looked more normal in April. The trade balance rebounded to a surplus of $28.8B in April, from a deficit of $5.0B in March. Exports also bounced back, rising 12.9% year-over-year in April, after a 2.7% decline in March.

9 Nov. 2015 Inflation Still a Headache for South American Central Banks (Publication Centre)

Three of the big LatAm economies-- Brazil, Colombia and Chile--released October inflation last week; the data are still showing the pass-through effects of currency depreciation during the first half of the year into prices, though, at different degrees. LatAm currencies have been hit by the weakness in commodity prices and negative sentiment towards EM generally.

9 Nov. 2015 Investors Should Brace for a Poor German Q3 GDP Report (Publication Centre)

Friday's industrial production data capped another dreadful week for German manufacturing. Output fell 1.1% month-to-month in September, pushing the year-over-year rate lower to 0.2%, from a revised 2.9% in August. The 0.6% upward revision of the previous month's data makes the data slightly less awful than the headline, but the details showed weakness across all core sectors. The underlying trend in production is stable at about 1.2% year-over-year, but downbeat new orders suggest it will weaken in the fourth quarter.

9 Oct. 2015 FOMC Members Sticking to Previous Positions, Mostly (Publication Centre)

The FOMC minutes showed both sides of the hike debate are digging in their heels. As the doves are a majority--rates haven't been hiked--the tone of the minutes is, well, a bit do vish. But don't let that detract from the key point that, "Most participants continued to anticipate that, based on their assessment of current economic conditions and their outlook for economic activity, the labor market, and inflation, the conditions for policy firming had been met or would likely be met by the end of the year." Confidence in this view has diminished among "some" participants, however, worried about the impact of the strong dollar, falling stock prices and weaker growth in China on U.S. net exports and inflation.

9 Oct. 2015 Drag from Net Trade will be Key Story in German Q3 GDP Data (Publication Centre)

Trade data yesterday added to the downbeat impression of the German economy, following poor manufacturing data earlier in the week. Exports plunged 5.2% month-to-month in August--the second biggest monthly fall ever--pushing the year-over-year rate down to 4.4%, from a revised 6.3% in July. Surging growth in the past six months, and base effects pointed to a big fall in August, but we didn't expect a collapse.

9 November. 2016 With Trump the Likely winner, what next for policy and Markets? (Publication Centre)

The verdict is not yet definitive, but prudence dictates we must now assume victory for Donald Trump. The immediate implication of President Trump is global risk-off, with stocks everywhere falling hard, government bonds rallying, alongside gold and the Swiss franc. The dollar is the outlier; usually the beneficiary when fear is the story in global markets, it has fallen overnight because the risk is a U.S. story.

9 Oct. 2015 Three-Speed LatAm Inflation - Brazil And Mexico the Outliers (Publication Centre)

The big four LatAm economies, Brazil, Mexico, Colombia and Chile, released September inflation this week and the data showed three clear--and contrasting--trends. Inflation is accelerating in the Andes, whereas the headline rate hit another historic low in Mexico. Inflation in Brazil is still the depressing outlier, with annual CPI inflation hovering around 9.5% year-over-year in recent months, well above the rates of its regional peers. But it is close to peaking, at last.

9 October 2017 Britain's Productivity Problem can no Longer Hide Below the Surface (Publication Centre)

Britain's productivity problem has been building under the surface for years, but it is set to be more pertinent now that the economy is close to full employment.

9 October 2017 Japan's Wages Continue to Grow, the Party of Hope Reveals Policy (Publication Centre)

Japanese average regular wages increased at an annualised rate of 0.6% in the three months to August compared with the previous three months, matching the rate in July.

9 October 2017 Inflation Surprises in September, but Will Central Banks Care? (Publication Centre)

Recent inflation numbers across LatAm have surprised, in both directions. On the upside, Brazil's IPCA index rose 0.2% month-to-month in September, above the market consensus forecast of 0.1%.

9 November. 2016 Trump Stuns LatAm... Banxico Likely Will Have to Act (Publication Centre)

As it became clear that Donald Trump would beat Hillary Clinton to win the U.S. presidency, EM currencies came under severe pressure, fearing his economic and immigration policies. Some of the initial pressure is easing as markets digest the news and following Mr. Trump's conciliatory tone in his victory speech. But the proposals have been made and the MXN and other key LatAm assets likely will remain very stressed in the near term.

9 November 2018 The Fed is Still on Course to Hike in December no Mention of Stocks (Publication Centre)

Convention dictates that we lead with yesterday's Fed meeting, but it's hard to argue that it really deserves top billing.

9 November 2017 Claims Data Look Great, but Payrolls are Driven More by Shifts in Hiring (Publication Centre)

We were pretty sure that the underlying trend in jobless claims had bottomed, in the high 230s, before the hurricanes began to distort the data in early September.

9 Nov. 2015 The Unemployment Rate Is the Key Measure of Labour Market Slack (Publication Centre)

The Monetary Policy Committee continues to assert that it can leave interest rates at rock-bottom levels, even though the unemployment rate has returned to its pre-recession level, because it understates the extent of slack in the labour market. If that hypothesis were correct, however, the relationship between the unemployment rate and wage growth would have weakened. But this clearly has not happened, as our first chart shows.

9 November 2017 Higher Oil Prices: Another Headwind for the Economy (Publication Centre)

The recent surge in the oil price has added to the headwinds set to batter the economy over the next year. The price of Brent crude has jumped by $10 since September to $64, its highest level since June 2015.

9 November 2018 Brazil's Economic Outlook Keeps Improving Politics are Helping Too (Publication Centre)

News on Mr. Bolsonaro's economic plans and announcements on key names for his government this week are helping the currency and easing risks perception in Brazil.

9 November 2018 Stockbuilding Won't Temper the Near-Term Slowdown (Publication Centre)

A flawed theory still is circulating that the economy might outperform over the next two quarters because firms will stockpile goods due to the risk of a no-deal Brexit.

9 November 2018 Ignore the Headlines the Tariffs are Starting to Hit China's Trade Flows (Publication Centre)

China's official, unadjusted trade data for October grabbed the headlines, as they look great at first glance.

EZ Datanote: Advance GDP, Germany, Q2 (Publication Centre)

In one line: Germany edges closer to recession.

EZ Datanote: Advance Inflation and Unemployment, Eurozone (Publication Centre)

In one line: Soft CPI data, but temporary distortions are depressing the core.

EZ Datanote: GfK Consumer Sentiment, Germany, June (Publication Centre)

In one line: Soft, but still consistent with solid growth in consumption.

EZ Datanote: GfK Consumer Sentiment, Germany, July (Publication Centre)

In one line: The downtrend resumes, but take the headline with a pinch of salt.

EZ Datanote: Final Manufacturing PMIs, Eurozone, May (Publication Centre)

In one line: Not pretty; downside risks remain for industrial production in Q2.

EZ Datanote: GfK Consumer Sentiment, Germany, September (Publication Centre)

In one line: Lukewarm ... but still consistent with decent growth in spending.

EZ Datanote: Industrial Production and Labour Costs, Germany (Publication Centre)

In one line: Germany's recession all but confirmed.

EZ Datanote: Industrial Production, Eurozone, July (Publication Centre)

In one line: Another poor performance is underway in Q3.

EZ Datanote: Industrial Production and Trade, France, April (Publication Centre)

In one line: Robust, but base effects are challenging for manufacturing in Q2.

EZ Datanote: Final Manufacturing PMIs, Eurozone, August (Publication Centre)

In one line: Small rebound confirmed, but still overall weak.

EZ Datanote: Final June Manufacturing PMIs, Money Supply, Eurozone (Publication Centre)

In one line: Grim manufacturing, mixed money supply data.

EZ Datanote: Final Inflation, France, April (Publication Centre)

In one line: Core inflation remains subdued, but it will rise soon.

EZ Datanote: Final Inflation and Construction, Eurozone, August and July (Publication Centre)

In one line: Don't extrapolate low EZ inflation; both the headline and core will rise into year-end.

EZ Datanote: Final Inflation, France, August (Publication Centre)

In one line: Deflation in manufactured goods is still a big drag.

EZ Datanote: Final inflation, France, July (Publication Centre)

In one line: Rising food inflation offset plunge in energy inflation; core stable.

EZ Datanote: Final Inflation, France, May (Publication Centre)

In one line: Very soft, but services inflation should rebound soon.

EZ Datanote: Final Inflation, France, June (Publication Centre)

In one line: Boosted by sharp rebound in services inflation.

EZ Datanote: Industrial Production, France, July (Publication Centre)

In one line: Decent, but Q3 as a whole doesn't look good.

EZ Datanote: Industrial Production, Germany, April (Publication Centre)

In one line: Back to reality?

H2 2017 LatAM Outlook - Monetary Policy Easing Continues, Offsetting Political Risk (Publication Centre)

Pantheon Macroeconomics is pleased to make available to you our Outlooks for the second half of 2017 for the US, Eurozone, UK, Asia, and Latin America. These reports present our key views, giving you a concise summary of our economic and policy expectations. If you are interested in seeing publications which you don't already receive, please request a complimentary trial

EZ Datanote: Trade Balance, France, May (Publication Centre)

In one line: Très bien; boosted by exports of transport goods and pharmaceuticals.

EZ Datanote: Trade Balance and Labour Costs, Germany (Publication Centre)

In one line: Grim trade data, but decent labour costs headline.

LatAm Datanote: Advance GDP, Mexico, Q2 (Publication Centre)

In one line: Avoiding a technical recession by small margin.

LatAm Datanote: Banxico Announcement, Mexico (Publication Centre)

In one line: On hold and on the sidelines in the near term due to high uncertainty.

LatAm Datanote: BCCh Rate Decision, Chile (Publication Centre)

In one line: Rates on hold as the economy falters.

LatAm Datanote: Banxico Announcement, Mexico, June (Publication Centre)

In one line: Rate cuts are looming as the economy loses momentum.

EZ Datanote: Saxony CPI, Germany, May (Publication Centre)

In one line: Back to trend?

EZ Datanote: Retail Sales, Germany, March (Publication Centre)

In one line: Just a dip; Q1 was excellent overall.

EZ Datanote: Inflation and Consumers' Spending, France (Publication Centre)

In one line: Consumers on track for a solid Q2; services inflation on the rebound?

EZ Datanote: Inflation and Construction, Eurozone (Publication Centre)

In one line: Core inflation will fall back this month; construction jumped in Q1, but a setback looms in Q2.

EZ Datanote: Inflation, Construction, and Car Registrations - EZ (Publication Centre)

In one line: More poor Q2 data; EZ core inflation rebounds, but it is not going anywhere fast.

EZ Datanote: Labour Costs and Trade Balance, Eurozone (Publication Centre)

In one line: Wage growth is firming in the Eurozone, but the ECB is focused elsewhere.

EZ Datanote: Mr. Draghi's Introductory Speech, Sintra (Publication Centre)

In one line: Mr. Draghi just talked himself into cutting rates before he steps down.

EZ Datanote: Labour Costs, Eurozone, Q1 (Publication Centre)

In one line: EZ labour costs are accelerating.

EZ Datanote: Factory Orders, Germany, March (Publication Centre)

In one line: Not much to cheer about; the trend is still falling.

EZ Datanote: Factory Orders, Germany, July (Publication Centre)

In one line: Normal, and poor, services resumed.

EZ Datanote: Advance PMIs, Germany, July (Publication Centre)

In one line: Ugly; manufacturing is sinking without a trace.

EZ Datanote: Advance PMIs, Germany, August (Publication Centre)

In one line: Weak, but not recessionary.

EZ Datanote: Advance PMIs, Germany (Publication Centre)

In one line: Still grim in manufacturing, but services look ok.

EZ Datanote: Advance PMIs, Germany, June (Publication Centre)

In one line: Manufacturing still looks terrible, but the remaining headlines are decent.

EZ Datanote: Advance PMIs, Germany, September (Publication Centre)

In one line: Recession all but confirmed; over to you Berlin.

EZ Datanote: Business Confidence and Advance PMIs, France, July (Publication Centre)

In one line: Soft, but still consistent with decent GDP growth.

EZ Datanote: Advance Trade, July: GDP Q2 revised: Jobless Claims (Publication Centre)

In one line: Decent July means net foreign trade unlikely to be a big drag on Q3 GDP growth.

EZ Datanote: Advance PMIs, France, September (Publication Centre)

In one line: A setback, but the composite PMI rose over Q3 as a whole.

EZ Datanote: Advance PMIs, France, June (Publication Centre)

In one line: Robust, but not a reliable indicator for GDP growth.

EZ Datanote: Advance Inflation, Eurozone, June (Publication Centre)

In one line: Big rebound in services inflation; non-energy goods inflation is flat-lining.

EZ Datanote: Advance Inflation, Eurozone, April (Publication Centre)

In one line: Easter distortions drove services inflation higher; the core goods CPI is still subdued

EZ Datanote: Advance Inflation, France, August (Publication Centre)

In one line: Stable, but the core rate probably fell a bit.

EZ Datanote: Advance Inflation, Germany, August (Publication Centre)

In one line: Soft; we still don't know what is going on with the core rate.

EZ Datanote: Advance PMIs, France, August (Publication Centre)

In one line: The French economy is bucking the trend, to the upside.

EZ Datanote: Advance PMIs, Eurozone, June (Publication Centre)

In one line: Stabilisation complete; now an upturn?

EZ Datanote: Business Sentiment, France, June (Publication Centre)

In one line: Slightly confusing manufacturing data; but overall picture is robust.

EZ Datanote: Consumer Sentiment, Eurozone, August (Publication Centre)

No change; overall robust.

EZ Datanote: ECB Rate Decision, July (Publication Centre)

In one line: The ECB is loading its bazooka, but with what?

EZ Datanote: ECB Press Conference, June (Publication Centre)

In one line: Dovish, but slight doubts now linger over the reaction function.

EZ Datanote: ECB Press Conference, July (Publication Centre)

In one line: A rate cut and QE are on the way.

EZ Datanote: ECB Rate Decision, June (Publication Centre)

In one line: The market speaks, and the ECB listens.

EZ Datanote: ECB Rate Decision, September (Publication Centre)

In one line: The ECB is all in; buckle up!

EZ Datanote: EZ Industrial Production and ZEW (Publication Centre)

In one line: Solid production data in Q1, but setback looms in Q2.

EZ Datanote: Economic Sentiment, Eurozone, August (Publication Centre)

In one line: Surprisingly strong, but too soon to cheer.

EZ Datanote: ECB Press Conference (Publication Centre)

In one line: The ECB is all in; buckle up!

EZ Datanote: EC Sentiment, Eurozone, May (Publication Centre)

In one line: Hold the press; we have an increase in the EC sentiment index.

EZ Datanote: Consumers' Spending in France & Saxony Inflation (Publication Centre)

In one line: A good start to Q3 for French consumers; German inflation likely fell in August.

EZ Datanote: Consumers' Spending and Inflation, France (Publication Centre)

In one line: A solid start to Q2 for French consumers.

EZ Datanote: Current Account, Eurozone, July (Publication Centre)

In one line: A modest rebound; net portfolio outflows are still subdued, but that should change soon.

EZ Datanote: Current Account, Eurozone, June (Publication Centre)

In one line: Stung by weakness across the board, but expect a rebound next month.

EZ Datanote: Current Account, Eurozone, May (Publication Centre)

In one line: Are capital flows pointing to a stronger euro?

EZ Datanote: Current Account, Eurozone, March (Publication Centre)

In one line: Core inflation will fall back this month; construction jumped in Q1, but a setback looms in Q2.

7 December 2018 Expect Solid November Jobs (Publication Centre)

We're sticking to our 220K forecast for today's official payroll number, despite the slightly smaller-than- expected 179K increase in the ADP measure of private employment.

7 December 2018 Chile's Central Bank will Stay in Cautiously Hawkish Mode in Q1 (Publication Centre)

Chile's central bank, the BCCh, held its reference rate unchanged at 2.75% on Tuesday, in line with the majority of analysts' forecasts.

4 April 2017 Mexican Markets Had a Good Q1, the Next Test is on the Political Front (Publication Centre)

LatAm, particularly Mexico, has dealt with Donald Trump's presidency better than expected thus far. Indeed, the MXN rose 10.7% against the USD in Q1, the stock market has recovered after its initial post-Trump plunge, and risk metrics have eased significantly.

4 Apr. Britain is Living Beyond its Means, Once Again (Publication Centre)

The clear message from the fourth quarter's national accounts, released last week, is that the economic recovery rests on unsustainable foundations. The U.K. has returned to bad habits and is financing expenditure today by borrowing. As this undermines future spending, it is only a matter of time before the U.K.'s recovery loses steam.

4 Apr. 2016 ECB QE is Failing to Lift Equities, but Bond Yields are Being Crushed (Publication Centre)

Today's Sentix survey of Eurozone investor sentiment likely will remain downbeat. We think the headline index rose only trivially, to 6.0 in April from 5.5 in March, and that the expectations index was unchanged at 2.8. Weakness in equities due to global growth fears and negative earnings revisions likely is the key driver of below-par investor sentiment.

4 April 2017 Sterling's Depreciation is a Mixed Blessing for Manufacturers (Publication Centre)

The latest Markit/CIPS manufacturing survey has dashed hopes that sterling's depreciation and the pickup in global trade will facilitate strong growth in U.K. production this year. The PMI dropped to 54.2 in March, from 54.6 in February.

4 April 2018 More soft economic data in the Eurozone (Publication Centre)

Economic data in the Eurozone continue to come in soft. Yesterday's final manufacturing PMIs confirmed that the euro area index slipped to an eight-month low of 56.6 in March, from 58.6 in February.

4 April 2019 Japan's Services Survey Data Overstate Q1 Strength (Publication Centre)

Japan's services PMI edged down to 52.0 in March, from 52.3 in February, taking the Q1 average to 52.0, minimally up from Q4's 51.9.

4 April 2019 It's Hard to Find the Signal Behind the ADP Noise in March (Publication Centre)

We can think of at least three reasons for the apparent softness of ADP's March private sector employment reading.

4 Apr. 2016 Did the Brazilian Industrial Slump Ease Significantly in Q1? (Publication Centre)

The Brazilian manufacturing sector remains very depressed by weak end-demand, but the misery is easing, at the margin. Industrial production fell 2.5% month-to-month in February, equivalent to an eye-watering 9.8% contraction year-over-year, but this was rather less bad than the 13.6% slump in January.

31 October. 2016 MPC Likely to Reaffirm Easing Bias, to Markets Surprise (Publication Centre)

The MPC would have to change tack sharply on Thursday in order to live up to the markets' expectation that there is a near-zero chance of another rate cut within the next year.

31 October 2018 Mexico's Airport Cancellation will Damage the Economic Outlook (Publication Centre)

Mexico's financial markets and risk metrics plunged early this week, following the AMLO government's decision to cancel the construction of the new airport in Mexico City, after a public consultation held in the previous four days.

31 October 2018 Japan's Unemployment Rate is Likely to Tick up Again in Q4 (Publication Centre)

The Japanese unemployment rate fell again in September, to 2.3% from 2.4%. In the same vein, the job-to-applicant ratio rose to 1.64, from 1.63.

31 October 2018 Eurozone GDP Growth hit a Speed Bump in the Third Quarter (Publication Centre)

Yesterday's barrage of economic data in the Eurozone offered a good snapshot of the grand narrative.

31 October 2018 Plans for a Modest Near-Term Fiscal Expansion are Future-Proof (Publication Centre)

The Chancellor's decision immediately to spend all the proceeds from the OBR's upgrade to its projections for tax receipts appears to leave his plans exposed to future adverse revisions to the economic outlook.

31 October 2018 The October ADP will be Constrained by the Soft September Payroll Data (Publication Centre)

Today's October ADP measure of private payrolls likely will overshoot Friday's official number.

31 October. 2016 Mexico and Brazil Are Stabilizing at Different Speeds, For Now (Publication Centre)

While we were out, the economic news in LatAm was mostly positive. The main upside surprise came from Mexico, with the IGAE activity index--a monthly proxy for GDP--rising 2.9% year-over-year in August, up from 1.2% in July, and an average of 2.4% in Q2. A modest rebound was anticipated, but the headline was much better than we and the markets expected.

31 October. 2016 Q3 Growth Likely Wasn't 2.9%, Headwinds in Q4 (Publication Centre)

We are struggling to make sense of the third quarter GDP numbers. The reality is that the massive surge in soybean exports--which we estimate contributed 0.9 percentage points, gross, to GDP growth--mostly came from falling inventory, because the soybean harvest mostly takes place in Q4.

4 April 2019 More Evidence of a Relatively Resilient Domestic EZ Economy (Publication Centre)

Yesterday's economic reports added to the evidence the euro area economy as a whole is showing signs of resilience in the face of still-terrible conditions in manufacturing.

4 April 2019 The Economy is Struggling, but not to the Extent Implied by the PMIs (Publication Centre)

All the main surveys of business activity in Q1 now have been released and they present a uniformly downbeat picture.

4 December 2017 GDP Growth Will Rise in Brazil Next Year, but Political Risk is Looming (Publication Centre)

Data released last week confirm that Brazil's recovery has continued over the second half of the year, supported by steady household consumption and rebounding capex.

4 Dec. 2015 November Labor Data Will Support Yellen's Case for Hiking (Publication Centre)

We're expecting to see November payrolls up by about 200K this morning, but our forecast takes into account the likelihood that the initial reading will be revised up. In the five years through 2014, the first estimate of November payrolls was revised up by an average of 73K by the time o f the third estimate. Our forecast for today, therefore, is consistent with our view that the underlying trend in payrolls is 250K-plus. That's the message of the very low level of jobless claims, and the strength of all surveys of hiring, with the exception of the depressed ISM manufacturing employment index. Manufacturing accounts for only 9% of payrolls, though, so this just doesn't matter.

4 Dec. 2015 How Reliable is the Composite PMI as an Indicator of GDP Growth? (Publication Centre)

A further rise in the business activity index of the November Markit/CIPS report on services offset declines in the manufacturing and construction surveys' key balances. The composite PMI--a weighted average of three survey's activity indices -- therefore rose, to a level consistent with quarter-on-quarter GDP growth strengthening to 0.6% in the fourth quarter, from 0.5% in Q3. Nonetheless, we do not think this is a convincing signal that the economic recovery is regaining strength.

4 December 2017 No End in Sight to Upturn in EZ Manufacturing PMI? (Publication Centre)

The upside to manufacturing survey data in the Eurozone appears endless.

4 December 2017 Britain Will be Forever Stuck in the Brexit Departure Lounge (Publication Centre)

Sterling strengthened last week to its highest tradeweighted level since mid-May, amid hopes that the U.K. government will concede more ground to ensure that the European Council deems, at its December 14 meeting, that "sufficient progress" has been made in Brexit talks for trade discussions to begin

4 December 2018 China and U.S. Agree a Truce Exports Still Face Headwinds (Publication Centre)

Following the much-anticipated meeting between Presidents Xi and Trump over the weekend, the U.S. will now leave existing tariffs on $200B of Chinese goods at 10%, rather than increasing the rate to 25% in January, as previously slated.

4 December 2017 Hefty Tax Cuts at Full Employment Make no Sense, but they're Coming (Publication Centre)

It's not our job to pontificate on the merits, or otherwise, of the tax cut bill from a political perspective.

4 Dec. 2015 Brazil's Economic Mess Worsens Amid Deepening Political Crises (Publication Centre)

Industrial production data yesterday confirmed downside risks to Q4's GDP data in Brazil. Output fell 0.7% month-to-month in October, the fifth consecutive decline, pushing the year-over-year rate down to -11.2%, from -10.9% in September. This was the biggest drop since April 2009, when output collapsed by 14.2% during the global financial crisis. The October details were even worse than the headline, as all three broad-measures fell sharply.

4 Dec. 2015 A Bad Day for ECB Doves - New Policies Fall Short of Expectations (Publication Centre)

On all accounts, the ECB announced a significant addition to its stimulus program yesterday. The central bank cut the deposit rate by 0.1%, to -0.3%, and extended the duration of QE until March 2017. The ECB also increased the scope of eligible assets to include regional and local government debt; decided to re-invest principal bond payments; and affirmed its commitment to long-term refinancing operations in the financial sector for as long as necessary. The measures were not agreed upon unanimously, but the majority was, according to Mr. Draghi, "very large".

4 August 2017 Little from the MPC to Support Markets' Steep Near-Term Rate Path (Publication Centre)

Markets still see a near-40% chance of the MPC raising Bank Rate by the end of this year--the same as at the start of this week--despite the notable absence of comments from the Committee yesterday aimed at preparing the ground for a near term hike.

4 August 2017 China's Reform Scorecard Part 4: Effective Bad Debt Screening (Publication Centre)

In yesterday's Monitor we set out how government will have to prepare for an increase in debt issuance both to bring debts on-balance sheet and also to issue new debt as government is obliged to run deficits while the corporate sector deleverages.

4 August. 2016 The PMIs Highlight the MPC's Policy Dilemma (Publication Centre)

The final July PMIs indicate that the post-referendum slump in activity has been even worse than the flash estimates originally implied. The manufacturing PMI was revised down to 48.2, from the 49.1 flash reading, while the services PMI was unrevised at 47.4, its lowest level since March 2009.

4 August. 2016 Will the ECB Take The Markets' Hint on Negative Interest Rates? (Publication Centre)

Markets initially applauded the ECB for its bold actions, but the tune has changed recently. Negative interest rates, in particular, have been vilified for their margin destroying effect in the banking sector. Our first chart shows that the relative performance of financials in the EZ equity market has dwindled steadily in line with the plunge in yields.

4 Dec. 2014 The ECB Doves are In Control - Can They Make Their Influence Count? (Publication Centre)

The dovish message from the ECB going into today's final meeting of the year has intensified. Mr. Draghi's comments last month, at the European Banking Congress in Frankfurt, point to an increased worry on low core inflation.

4 Dec. 2014 - November Data Might Hide Underlying Labor Market Strength (Publication Centre)

The ADP report yesterday has not changed our view that tomorrow's payroll number will be about 180K, well below our estimate of the underlying trend, which is about 250K. ADP's numbers are heavily influenced by the BLS data for the prior month, and tell us little or nothing about the next official report.

31 October 2017 The Slowdown in Bank Lending will Gather Momentum Soon (Publication Centre)

Growth in the broad money supply slowed further in September, providing more evidence that the economy is losing momentum.

31 October 2017 The Mexican Economy Remained Resilient in Q3, Despite Headwinds (Publication Centre)

Today's advance Q3 GDP report for Mexico will show that the economy performed relatively well at the start of the second half, despite external and domestic shocks.

31 March 2017 February Consumption Will Look Grim (Publication Centre)

On the face of it, the February consumer spending data, due today, will contradict the upbeat signal from confidence surveys. The dramatic upturn in sentiment since the election is consistent with a rapid surge in real consumption, but we're expecting to see unchanged real spending in February, following a startling 0.3% decline in January.

31 Mar. 2015 Soft first quarter consumption will change course in the second (Publication Centre)

We now have consumption data for two-thirds of the first quarter, making it is easy to see that a near-herculean spending effort is required to lift the quarter as a whole into anything like respectable territory. After February's 0.1% dip, real spending has to rise by at least 0.4% in March just to generate a 2.0% annualized gain for the quarter, and a 2.5% increase requires a 0.7% jump.

31 July. 2015 Energy Will Depress July Inflation Print, But Core Inflation is Rising (Publication Centre)

Renewed weakness in food and energy prices weighed on Eurozone inflation in July, but core inflation probably rose slightly. German inflation fell to 0.2% year-over-year in July, down from 0.3% in June. The hit came entirely from falling energy and food inflation, though, with the jump in services inflation suggesting rising core inflation.

31 March 2017 The Economic Outlook is Improving in Brazil, and even in Mexico (Publication Centre)

Downside risks to our growth forecast for Brazil and Mexico for this year have diminished this week. In Brazil, concerns over the potential impact of the meat scandal on the economy have diminished. Some key global customers, including Hong Kong, have in recent days eased restrictions on imports from Brazil, and other counties have ended their bans.

31 March 2017 Eurozone Inflation Data will Undershoot the Consensus Today (Publication Centre)

Yesterday's advance data from Germany and Spain suggest that today's Eurozone inflation report will undershoot the consensus. In Germany, headline inflation slipped to 1.6% in March from 2.2% in February, and in Spain the headline rate plunged to 2.3% from 3.0%.

31 May 2017 A Consumer Rebound is Underway, but Watch out for Healthcare Costs (Publication Centre)

In the wake of April's 0.2% increase in real consumers' spending, and the upward revisions to the first quarter numbers, we now think that second quarter spending is on course to rise at an annualized rate of about 3.5%.

31 March 2017 Q4 National Accounts will Show Stronger, but Fragile, Growth (Publication Centre)

The national accounts look set to show that GDP growth in the fourth quarter was even stronger than previously estimated. Earlier this month, quarter-on-quarter growth in construction output in Q4 was revised up to 1.2%, from 0.2%. As a result, construction's contribution to GDP growth will rise by 0.07 percentage points.

31 July 2019 Rising Confidence Points to Solid Household Spending Ahead of Brexit (Publication Centre)

The further depreciation of sterling yesterday, to its lowest level against the dollar and euro since March 2017 and September 2017, respectively, signified deepening pessimism among investors about the chances of a no-deal Brexit.

31 July 2019 Low Inflation and Economy Under Strain will Force Banxico to Cut (Publication Centre)

We're maintaining our estimate of Mexico's Q2 GDP growth, due today, namely a 0.2% year- over-year contraction, in line with a recent array of extremely poor data.

31 January 2019 Powell Says No Fed Put, but Stocks Jump and the Curve Steepens (Publication Centre)

The FOMC has gone all-in, more or less, on the idea that the headwinds facing the economy mean that the hiking cycle is over.

31 January 2019 Japanese Retail Sales Demand a Q4 Private Consumption Upgrade (Publication Centre)

The value of Japanese retail sales bounced back strongly in December, rising 0.9% month-on-month, after a 1.1% drop in November.

31 July 2017 How Tight Can Japan's Labour Market go? (Publication Centre)

The jobless rate fell back to 2.8% in June after the surprise rise to 3.1% in May. This drop takes us back to where we were in April before voluntary unemployment jumped in May.

31 July 2018 Money and Credit Data Cast Doubt Over the Viability of Q2's Upturn (Publication Centre)

June's money and credit figures showed that the economy still doesn't have much zing, even though lending has picked up since Q1.

31 July 2018 Employment Costs are Accelerating, but Slowly... For Now (Publication Centre)

The most important number, potentially, in today's wave of economic reports is the Employment Costs Index for second quarter.

31 July 2018 Brazil's Solid External Accounts Offsetting Fiscal Risk, For Now (Publication Centre)

Brazil's external accounts remain solid, despite the recent modest deterioration.

31 May 2017 Argentina's Economic Recovery Continues, but Brazil's is at Risk (Publication Centre)

The outlook for Argentina is improving. We expect economic growth to remain quite strong over the next year, despite a relatively soft start to 2017 and increasing external threats in recent weeks. The INDEC index of economic activity--a monthly proxy for GDP--is volatile, rising 1.9% month-to-month in March after a 2.6% drop in February, but the underlying trend is improving.

31 May 2017 Eurozone Core Inflation Likely will Undershoot the Consensus Today (Publication Centre)

Today's advance EZ CPI report likely will show that inflation pressures eased in May. We think inflation slipped to 1.5% year-over-year, from 1.9% in April, as the boost to the core rate from the late Easter faded.

31 May. 2016 Rebound in German Inflation is the Beginning of a Sustained Pick-Up (Publication Centre)

Advance CPI data yesterday continue to indicate that inflation pressures remain depressed in the Eurozone's largest economy, for now. Inflation in Germany rose slightly in May, but only to 0.1% year-over-year, from -0.1% in April. The downward pressure on the headline from the crash in oil prices remains significant. Energy prices fell 7.9% year-over-year, slowing slightly from the 8.5% drop in the year to April.

31 May. 2016 Can we Still be Confident that the Saving Rate Will Fall? (Publication Centre)

Europeans, who usually save more of their income than Americans, have spent all the windfall from falling gas prices. Americans have not. It is tempting, therefore, to argue that perhaps Americans have come to see the error of their low-saving ways, and are now seeking to emulate the behavior of high-saving Europeans. Undeniably, the plunge in gas prices has given Americans the opportunity to save more without making hard choices.

31 May. 2016 Banxico is Managing the Peso, Not the Business Cycle, For Now (Publication Centre)

Banxico's quarterly inflation report, released last week, underscored concerns over growth as well as the weakness of the MXN and the risks p osed by the Fed's imminent tightening. Policymakers downgraded Mexico's GDP forecast for 2017 to 2.3-to-3.3% year-over-year, from 2.5-to-3.5%. Weaker-than-expected U.S. manufacturing activity is behind the downshift.

31 May. Are House Prices Near a Ceiling, or Just Temporarily Slowing? (Publication Centre)

Housing market activity has weakened sharply over the last two months. Indeed, figures this week likely will reveal that mortgage approvals plunged in April and that house price growth slowed in May. The increase in stamp duty for buy-to-let purchases at the start of April and Brexit risk, however, entirely explain the slowdown.

31 October 2017 China's Developers Increase Risky Debt Issuance as Property Cools (Publication Centre)

In yesterday's Monitor we suggested that China's profits surge has been party dependent on developers' risky debt issuance practices.

31 October 2017 EZ GDP Growth Slowed in Q3, but Trend is Steady at About 2% (Publication Centre)

Yesterday's data kicked off the release of Eurozone Q3 growth numbers with a robust Spanish headline. Real GDP in Spain rose 0.8% quarter-on-quarter, slowing slightly from 0.9% in Q2, and le aving the year-over-year rate unchanged at 3.1%.

31 October 2017 Consumption Set for a Sluggish Q4, Capex Will Take up the Slack (Publication Centre)

The September consumption data were a bit better than median expectations, with real spending rebounding by 0.6%, led by an 15.1% leap in the new vehicle component.

31 May 2019 The Rebound in the Core PCE Deflator Likely Started in April (Publication Centre)

The biggest surprise in the revisions to first quarter GDP growth, released yesterday, was in the core PCE deflator.

31 May 2019 The Ins and Outs of Last Week's Parliamentary Elections in the EU (Publication Centre)

On a headline level, last week's European Parliament elections were an excellent occasion for the EU.

31 May 2018 Italy isn't Headed for Euro Exit, but Markets Need Clarity to Calm Fears (Publication Centre)

Our Chief Eurozone Economist, Claus Vistesen, is covering the Italian situation in detail in his daily Monitor but it's worth summarizing the key points for U.S. investors here.

31 May 2017 Manifestos Point to Very Different Public Borrowing Paths (Publication Centre)

The recent narrowing of the Conservatives' opinion poll lead suggests that investors, particularly in the gilt market, now must consider other parties' fiscal proposals.

31 May 2018 Will Chinese Authorities Allow Developer Defaults? Probably (Publication Centre)

Defaults by Chinese companies have been on the rise lately. Most recently, China Energy, an oil and gas producer with $1.8B of offshore notes outstanding, missed a bond payment earlier this week. We've highlighted the likelihood of a rise in defaults this year, for three main reasons.

31 May 2018 Recovering Consumer Confidence Won't Lift Spending, Much (Publication Centre)

The widespread view, which we share, that GDP will rebound in Q2 following the disruption caused by bad weather in Q1, was supported yesterday by the E.C.'s Economic Sentiment survey.

31 May 2019 The First GDP Contraction in Brazil Since 2016 Will it Improve (Publication Centre)

Brazil's economic recovery faltered in the first quarter and the near-term outlook remains challenging.

31 May 2019 The Economy Won't Be Knocked Off Course by Rising Household Saving (Publication Centre)

Households' willingness to save a smaller fraction of their incomes goes a long way to explaining why the U.K. economy hasn't lost too much momentum since the Brexit vote.

4 December 2018 Eurozone Markets Want to Believe in the U.S.-China Trade Truce (Publication Centre)

The 90-day truce in the trade wars between the U.S. and China, brokered on Saturday at the G20 meeting in Argentina, is a big deal for financial markets in the euro area, at least in the near term.

4 December 2018 Manufacturing Still Treading Water, Despite the Slightly Stronger PMI (Publication Centre)

The recovery in the Markit/CIPS manufacturing PMI to 53.1 in November, from 51.1 in October, propelled it well above the consensus, and the equivalent reading for the Eurozone, 51.8, for only the second time in the last 19 months.

4 May 2018 Is China Leaking Financial Fragility, a Financial Crisis in the Making? (Publication Centre)

We've argued for some time that China faces a massive legacy of bad debt that will either have to be dealt with, or will result in the Japanning of its economy.

4 May 2018 Don't Let an Outlier Dictate Your View on the ECB's Policy Path (Publication Centre)

We recommend that investors take yesterday's inflation data in the Eurozone with a pinch of salt. The headline rate slipped to 1.2% in April, from 1.4% in March, hit by a slide in core inflation to 0.7%, from 1.0%.

4 May 2018 A Solid Start to the Year for Chile's Economy, Will the Trend Continue? (Publication Centre)

This week's March economic activity reports in Chile have been relatively strong, with the industrial sector expanding briskly and retail sales solid.

4 May 2018 Weak PMIs Mean Even a "Hawkish Hold" is Off the MPC's Table (Publication Centre)

The failure of the Markit/CIPS services PMI to rebound fully in April, following its fall in March, provides more evidence that the economy is in the midst of an underlying slowdown.

4 May. 2016 Eurozone Manufacturing Firms' Selling Prices Continue to Fall (Publication Centre)

Eurozone manufacturing selling prices remain under pressure from deflationary headwinds. The PPI index, ex-construction, in the euro area fell 4.2% year-over-year in March, matching February's drop. Weakness in oil prices continues to drive the headline.

4 May. 2016 Will the March Easter Depress the April ADP Employment Number? (Publication Centre)

The official payroll numbers seem not to be consistently affected by seasonal adjustment problems when Easter falls in March, probably because the earliest possible date for the holiday, the 23rd, comes long after the payroll data are captured. The BLS data cover the week of the 12th.

4 May. 2016 The Recent Recovery of LatAm's Currencies Poses No Threat, Yet (Publication Centre)

The recovery of some key commodity prices, policy action in China, and stronger expectations that the U.S. Fed will start hiking rates later during the year, have helped reduce volatility in LatAm financial markets. Oil prices have rise by around 20% year-to-date, iron ore prices are up about 60% and copper has risen by 7%.

4 May 2017 How to Interpret the Results from Today's Local Elections (Publication Centre)

Today's local elections are more important than usual, because they will enable investors to assess if the Conservatives really are on track for a landslide victory in the general election, as suggested by the opinion polls and priced-in by the forex market.

4 March 2019 The EZ Core CPI Rate Remains Motionless at About 1% (Publication Centre)

Last week's final barrage of data showed that EZ headline inflation rose slightly last month, by 0.1 percentage points to 1.5%, driven mainly by increases in the unprocessed food energy components.

4 Mar. 2015 Mean Reversion Makes ADP Look Like a Leading Indicator - It's Not (Publication Centre)

Mean-reversion is a wonderful thing; it's what gives the ADP employment report the wholly unjustified appearance of being a useful leading indicator of payroll growth. Over time, the best single forecast of payroll gains or losses in any particular month is whatever happened last month.

4 Mar. 2015 Brazil's Central Bank Set to Respond As Inflation Fails to Slow (Publication Centre)

Brazil is now paying the price of President Rousseff's first term, which was characterized by unaffordable expansionary policies. As a result, inflation is now trending higher, forcing the BCB to tighten at a more aggressive pace than initially intended--or expected by investors--depressing business and investment confidence.

4 March 2019 A Solid Finish to 2018 for Colombia Momentum Will be Sustained (Publication Centre)

Colombia's GDP growth hit a relatively solid 2.8% year-over-year in Q4, up from 2.7% in Q3, helped by improving domestic fundamentals, which offset the drag from weaker terms of trade.

4 March 2019 Does the Flatter Phillips Curve Mean the Next Downturn will be Severe (Publication Centre)

Investors focussed last week on Chair Powell's semi-annual Monetary Policy Testimony, but he said nothing much new.

4 March 2019 No Light at the End of the Tunnel for Japan's Softening Labour Market (Publication Centre)

Japan's jobless rate inched up to 2.5% in January, from 2.4% in December.

4 March 2019 Is the Slowdown in Money Growth an Ominous Sign (Publication Centre)

January's money supply figures continued the nerve-jangling flow of data on the economy's momentum.

4 May. The MPC Won't Cut Rates to Alleviate the Manufacturing Slump (Publication Centre)

The nosedive in the Markit/CIPS manufacturing PMI in April provides an early sign that GDP growth is likely to slow even further in the second quarter. The MPC, however, looks set to keep its powder dry. We continue to think that the next move in interest rates will be up, towards the end of this year.

4 Nov. 2015 Mexico's Economy Solid in Q3 - Soft Manufacturing No Threat Yet (Publication Centre)

The Mexican economy had a decent start to the second half of the year, thanks to resilient domestic demand, amid signs of recovery in industrial activity. GDP rose 0.6% quarter-on-quarter in Q3, a bit faster than in Q2, lifting the year-over-year rate to 2.4% from 2.2% in Q2. This is the first time the statistics office, INEGI, published an advance reading on GDP, reducing the time between the end of the quarter to the report date to 30 days from 52.

4 October 2018 ADP Likely Overstates September Payrolls (Publication Centre)

The ADP employment report suggests that the hit to payrolls from Hurricane Florence was smaller than we feared, so we're revising up our forecast for the official number tomorrow to 150K, from 100K.

4 October 2017 The Current Account Deficit Still Poses Downside Risks for Sterling (Publication Centre)

Sterling's depreciation has done little to remedy the U.K.'s dependence on external finance.

4 October 2017 Survey Data Suggest Recoveries in Brazil and Mexico are on Track (Publication Centre)

The Brazilian economy has been recovering at a decent pace in recent months. The labor market is on the mend, with the unemploymen t rate falling rapidly to 12.5% in August from 14% at the end of Q1.

4 October 2018 Japan Looks Set for a Weak Q3 Unsurprising After the Q2 Leap (Publication Centre)

Japan's real GDP seems unlikely to have risen in Q3, and could even have edge down quarter-on- quarter, after the 0.7% leap in Q2.

4 October 2018 September's PMIs are Consistent with Slow Growth and MPC Inaction (Publication Centre)

September's Markit/CIPS PMIs indicate that the economy still is stuck in a low gear.

4 Sept 2019 A Japanese Stimulus Package is on its Way, but not a Rate Cut (Publication Centre)

The BoJ has no good options, and its leeway for changes to existing policy instruments is limited.

4 October 2018 Will the Consumer Carry the EZ Economy amid External Risks (Publication Centre)

The news-flow in the Eurozone was almost unequivocally bad over the summer.

4 October 2017 Can EZ Investors Still Exploit Monetary Policy Divergence? (Publication Centre)

Global monetary policy divergence has returned with a vengeance. In the U.S., despite recent soft CPI data, a resolute Fed has prompted markets to reprice rates across the curve.

4 October 2017 BoJ QE Programme Slows to a Trickle but Reflation on the Cards (Publication Centre)

The rapidity with which the BoJ's QE programme has been scaled back is dramatic. Growth in the monetary base slowed to 15.6% year-over-year in September from 16.3% in August.

4 Nov. 2015 Why Has the Supply of Homes For Sale Fallen so Much? (Publication Centre)

The current momentum in house prices partly reflects a dearth of homes offered for sale by existing homeowners. This scarcity reflects a series of constraints, which we think will ease only gradually. Further punchy gains in house prices therefore look sustainable and we expect average prices to rise by about 8% next year.

4 Nov. 2015 Today's PMIs Will Send a Signal o f a Continuing Cyclical Recovery (Publication Centre)

Final October PMI data today will confirm the Eurozone's recovery remains on track. We think the composite PMI rose to 54.0 from 53.6 in September, in line with the consensus and initial estimate. Data on Monday showed that manufacturing performed better than expected in October, and the composite index likely will enjoy a further boost from solid services. The PMIs currently point to a trend in GDP growth of 0.4%-to-0.5% quarter-on-quarter, the strongest performance since the last recession.

4 November. 2016 October Payrolls Likely Were Good Enough (Publication Centre)

For analysts with a broadly positive view of the U.S. economy, it is tempting to argue that the slowdown in payroll growth this year reflects supply constraints, as the pool of qualified labor dries up.

4 November. 2016 Inflation Concerns Now Dominate on the MPC (Publication Centre)

The MPC surprised markets and ourselves yesterday by the extent to which it abandoned its previous stance and is now emphasising inflation over growth risks.

4 October 2017 ADP to Show Slower Job Gains Last Month, but will Overstate BLS Data (Publication Centre)

Today brings the first glimpse of the post-hurricane employment picture, in the form of the September ADP report.

4 November. 2016 Markets Stress in LatAm Increases as Fed and U.S. Election Loom (Publication Centre)

LatAm markets and central banks have been paying close attention to developments in the U.S. The FOMC left rates on hold on Wednesday, as expected, but underscored its core view that inflation will rise in the medium-term, requiring gradual increases in the fed funds rate.

4 June. 2015 Inflation forecasts up, but Doves remain in charge at the ECB (Publication Centre)

Mr. Draghi struck a dovish tone yesterday, despite the new ECB staff projections upgrading the inflation forecast this year to an average of 0.3%, up from the zero predicted in March. The president reiterated that the central bank's expectation of a gradual improvement in inflation and real GDP growth is conditional on the full implementation of QE.

4 June 2019 The Q2 Fall in Manufacturing Output Won't Alter the MPC's Course (Publication Centre)

The downbeat tone of Markit's May manufacturing survey shouldn't come as a surprise, given the weak global backdrop and the inevitable fading of the boost to output from Brexit preparations.

4 January 2017 Surging EZ Inflation will Comfortably Beat the Consensus Today (Publication Centre)

German inflation surged in December, pointing to an upside surprise in today's advance EZ report. The headline inflation rate rose to a three-year high of 1.7% year-over-year in December, from 0.8% in November. This was the biggest increase in the year- over-year rate since 1993.

4 January 2017 Stronger Surveys Should Not Foster Optimism about Manufacturing (Publication Centre)

A cluster of surveys suggest that the manufacturing sector finished 2016 with a flourish, after a dismal performance for most of the year. But momentum will drain away from the sector's recovery in 2017, as higher oil prices make low value-added work unprofitable again and resurgent inflation causes domestic consumer demand to crumble.

4 January 2017 December's ISM looks great, but it's not definitive (Publication Centre)

It probably would be wise to view the increase in the ISM manufacturing index in December with a degree of skepticism. The index is supposed to record only hard activity, but we can't help but wonder if some of the euphoria evident in surveys of consumers' sentiment has leaked into responses to the ISM. That said, the jump in the key new orders index-- which tends to lead the other components--looked to be overdue, relative to the strength of the import component of China's PMI.

4 January 2018 2018-to-2019 will Expose Asian Imbalances, Hurting GDP Growth (Publication Centre)

Let's say we are right, and global yields go up this year. Somewhere in the world, imbalances will be exposed, causing financial ructions and damaging GDP growth.

4 January 2018 ADP Likely Will Show a Solid Gain in December Private Employment (Publication Centre)

Today's ADP employment report for December ought to show private payrolls continue to rise at a very solid pace

4 January 2019 December Payrolls Look Set for Hefty Gain, but Downside AHE Risk (Publication Centre)

Today's December payroll number was a tricky call even before yesterday's remarkably strong ADP report, showing private payrolls soaring by 271K.

4 January 2018 Unemployment in Germany is Close to Nairu. Will Wages Rise? (Publication Centre)

The labour market in Germany tightened further at the end of last year. The headline unemployment rate--unemployment claims as a share of the labour force--fell to 5.5% in December, from 5.6% in November, driven by a 29K plunge in claims.

4 February 2019 Unboxing--and Making Sense--of the Collapse in China's Caixin PMI (Publication Centre)

The Caixin manufacturing PMI for January was grim, indicating that China's start to the year wasn't as benign as the official surveys suggested.

4 February 2019 MPC to Break its Radio Silence With a Hawkish Message, Despite Brexit (Publication Centre)

Investors have revised down their expectations for interest rates since the November Inflation Report and now only a 50% chance of a 25bp hike in Bank Rate is priced-in by the end of this year.

4 December 2018 The Manufacturing Cycle has Peaked, but No Rollover Yet (Publication Centre)

The rebound in the ISM manufacturing index was a relief, after the sharp drop in October, though the strength in last week's Chicago PMI meant that it wasn't a complete surprise.

4 December 2018 The China-U.S Trade Truce Eases Downside Risks for Chile and Peru (Publication Centre)

LatAm assets and currencies enjoyed a good start to the week, following the agreement between the U.S. and China to pause the trade war.

4 Feb. 2015 ADP Should Beat Consensus, but it's not a Reliable Indicator (Publication Centre)

The least-bad way to forecast the ADP employment number is to look at the official private payroll number for the previous month. ADP's methodology generates employment numbers from a model incorporating lagged data from the Bureau of Labor Statistics as well as information from companies which use ADP for payroll processing.

4 Feb. 2015 Divergent Manufacturing Stories in LatAm's Biggest Economies (Publication Centre)

The manufacturing indexes for January showed a small improvement for the biggest economies in LatAm: Brazil and Mexico. In Brazil, the PMI manufacturing index increased marginally to 50.7 in December from 50.2 in November, thanks to stronger output and new orders components, which rose together for the first time in ten months.

4 February 2019 Brazil's Q4 Industrial Weakness was Offset by Robust Consumption (Publication Centre)

Brazil's December industrial production and labour reports, released late last week, confirmed that the recovery was struggling at the end of last year.

4 Feb. 2015 The Eurozone consumer is in fine shape (Publication Centre)

Retail sales data later today will provide further support for the upbeat consumer story in the Eurozone. We expect a third monthly gain in a row, taking retail sales to a 0.8% expansion quarter-on-quarter in Q4, the fastest since the end of 2006. We are seeing clear signs of improvement in the Eurozone economy, and the data are forcing us to recognise upside risks to our Q4 GDP forecast of 0.3-to-0.4%

4 January 2019 Mexican Economic Growth Will Continue, but at a Very Modest Pace (Publication Centre)

The economic calendar in Mexico was relatively quiet over Christmas, and broadly conformed to our expectations of resilient economic activity in Q4.

4 January 2019 No Need to Lower 2019 Economic Forecasts for Equity Market Drama (Publication Centre)

The 15% fall in the FTSE 100 since its May 2018 peak undoubtedly is an unwelcome development for the economy, but past experience suggests we shouldn't rush to revise down our forecasts for GDP growth.

4 June 2018 Chinese PPI Inflation is Set to Head Higher, it will be Short-lived (Publication Centre)

The Caixin manufacturing headline was unremarkable, but the input price index signals that PPI inflation is set to rise again in May, to 4.0%-plus, from 3.4% in April.

4 June 2018 All the Bogeymen are Back in the Eurozone Economy (Publication Centre)

At the start of the year, #euroboom was the moniker used in financial media to describe the EZ economy.

4 July. 2016 Industrial Output in Brazil has Hit Bottom, but No Quick Recovery (Publication Centre)

Friday's Brazilian industrial production data were relatively positive. Output was unchanged month-to-month in May, and April's marginal gain was revised slightly higher. The flat monthly reading pushed year-over-year growth in output up marginally to -8.9% from -9.1%. May production rose month-to-month in two of the four major categories.

4 June 2018 The Economy Should be Less Lethargic in 2019 (Publication Centre)

We're relatively optimistic--yes, you read that correctly--on the outlook for the U.K. economy in 2019.

4 June 2019 Dark Clouds Still Linger Over Manufacturing in the Eurozone (Publication Centre)

The most positive thing to say about the EZ manufacturing PMI at the moment is that it has stopped falling.

4 June 2019 The Official PMI has it Right Tariff hit has Derailed China's Trade Recovery (Publication Centre)

The Caixin manufacturing PMI was steady in May, at 50.2, in contrast to the official gauge published on Friday, which dropped to 49.5, from April's 50.2.

4 June 2019 More Negative News for the Andes Economies, due to Trade Tensions (Publication Centre)

Economic prospects in the Andes have deteriorated significantly in recent weeks, due mainly to the escalation of the trade war.

4 July 2019 Investors are Seeing Carney's Comments Through a Dovish Prism (Publication Centre)

Investors have concluded from June's Markit/CIPS PMIs and Governor Carney's speech on Tuesday that the chance of the MPC cutting Bank Rate before the end of this year now is about 50%, rising to 55% by the time of Mr. Carney's final meeting at the end of January.

4 July 2019 Japan's Services PMI Holds up, is the Sector Really so Resilient? (Publication Centre)

We were surprised to see Japan's services PMI edging up to 51.9 in June, from 51.7 in May. We attributed apparent service sector resilience in April and May to the abnormally long holiday this year.

4 July 2017 BanRep Speeds up Rate Cuts, Expect Further Stimulus this Month (Publication Centre)

BanRep accelerated the pace of easing last Friday, cutting Colombia's key interest rate by a bold 50 basis points, to 5.75%. Economic activity has been under severe pressure in recent months. The economy expanded by only 1.1% year-over-year in Q1, following an already weak 1.6% in Q4.

4 January 2019 Poor End to 2018 Underscores the Hastiness of the Bank of Korea Hike (Publication Centre)

Korean hard data for December, so far, leave the door ajar for the possibility that the Bank of Korea will roll back its November hike sooner than we expect.

4 July 2017 Will Firms Run Down Their Huge Cash Stockpiles Soon? (Publication Centre)

British firms have adopted a cautious mindset since the Brexit vote and are saving a huge share of their earnings, even though high profit margins make a strong case for investing more. Firms likely will run down their cash stockpiles when they become more confident about the medium-term economic outlook, potentially boosting GDP growth powerfully.

4 July 2017 Mr Abe Trounced in Tokyo Elections just as Recovery Gains Traction (Publication Centre)

The Tankan survey powered ahead in Q2, pulling away from Q1 and mostly beating consensus. This confirms our impression of the strength of the recovery ,just as Prime Minister Abe's Liberal Democratic Party is trounced at the polls in Tokyo. The drubbing is understandable as the main benefits of Abenomics have gone to the business sector, at the expense of the household sector.

4 July 2018 Household Balance Sheets in the Eurozone are in Good Shape (Publication Centre)

Data yesterday showed that Momentum in the EZ retail sector stumbled through middle of Q2.

4 July 2018 Consumption is on the Mend in LatAm but Downside Risks Abound (Publication Centre)

Consumption remains an important source of economic growth in LatAm.

31 January 2019 A Two-Week Delay is All the Prime Minister has Achieved (Publication Centre)

The Prime Minister achieved a rare victory yesterday, when the Commons passed the government-backed Brady amendment.

31 January 2018 The Mexican Economy Rebounded Strongly in Q4, Thanks to Services (Publication Centre)

Yesterday's first estimate of full-year 2017 GDP in Mexico indicates that growth was relatively resilient, despite domestic and external threats and the hit from the natural disasters over the second half of the year.

30 Jan. 2015 Leading indicators are sending a clear signal of higher GDP growth ahead (Publication Centre)

Money supply data in the euro area are sending an increasingly upbeat signal on the economy. The increase in narrow money growth is the key variable here, now pointing to a noticeable acceleration in GDP growth later this year. Allowing for the usual lags between upturns in M1 and the economy, we should start to see this in the second and third quarter.

30 August. 2016 Strong Consumption Set to Support Robust Third Quarter GDP Growth (Publication Centre)

In the wake of the robust July data and the upward revisions to June, real personal consumption--which accounts for 69% of GDP--appears set to rise by at least 3% in the third quarter, and 3.5% is within reach. To reach 4%, though, spending would have to rise by 0.3% in both August and September, and that will be a real struggle given July's already-elevated auto sales and, especially, overstretched spending on utility energy.

30 August. 2016 Reports of the Economy's Resilience are Greatly Exaggerated (Publication Centre)

Over the sleepy August holidays, a view has gained traction in the media that the U.K. economy is showing little damage from the Brexit vote. Optimists argue that the size and composition of the 0.6% quarter-on-quarter rise in Q2 GDP, the 1.4% month-to-month jump in retail sales volumes in July, and the slight dip in the unemployment claimant count demonstrate that the recovery is in good shape.

30 Jan. 2015 Plunging Oil Prices Boost Chile's Consumers - Businesses Still Weak (Publication Centre)

Chile's economy is showing the first reliable signs of improvement, at last. December retail sales rose 1.9% year-over-year, up from 0.4% in November, indicating that household expenditure is starting to revive, in line with a pick-up in consumer confidence and the improving labor market.

30 January 2017 Can the Second Half Growth Momentum Carry into this Year? (Publication Centre)

We were nervous ahead of the GDP numbers on Friday, wondering if our forecast of a 1.5 percentage point hit from foreign trade was too aggressive. In the event, though, the trade hit was a huge 1.7pp, so domestic demand rose at a 3.5% pace.

30 January 2017 Real M1 Indicates a Solid Start to 2017, but What Happens Next? (Publication Centre)

The business cycle upturn in the Eurozone likely will remain resilient in the first half of 2017. Friday's money supply data showed that headline M3 growth increased to 5.0% in December, from 4.9% in November.

30 January 2017 Mexico's Trade Gap is Shrinking, but Medium-Term Outlook is Cloudy (Publication Centre)

Mexico's trade balance shrank slightly last year, to USD13B, from USD14.6B in 2015. An improvement in the non-energy deficit was the main driver, while the energy gap worsened.

30 August. 2016 Real GDP Growth in the Eurozone is About to Come Down a Notch (Publication Centre)

Money supply data in the euro point to a cyclical peak in GDP growth this year. Headline M3 growth fell to 4.8% year-over-year in July, from 5.0% in June, chiefly due to a slowdown in narrow money. M1 growth declined to 8.4%, from 8.7%, as a result of weaker momentum in overnight deposits and currency in circulation.

30 August. 2016 Banxico is Waiting for Fiscal Policy Action, and the Fed (Publication Centre)

The minutes from Banxico's August 11 monetary policy meeting--in which Board members unanimously voted to keep rates on hold at 4.25%--confirmed that the bank's policy guidance remains broadly neutral. Subdued economic activity, favourable inflation and gradual fiscal consolidation explain policymakers' position.

30 Aug 2019 Brazil's Economy Averts Recession, but the Recovery will be Sluggish (Publication Centre)

The Brazilian economy managed to avert a technical recession over the first half of the year.

30 April 2019 Three Soft Core PCE Deflator Numbers Don't Make a Trend (Publication Centre)

It's pretty easy to spin a story that the recent core PCE numbers represent a sharp and alarming turn south.

30 Aug 2019 Markets are Underestimating the Risk of Higher Core Inflation (Publication Centre)

Markets remain convinced that the U.S. faces no meaningful inflation risk for the foreseeable future.

30 Aug 2019 More Cheery Data in France, but the German Numbers Look Grim (Publication Centre)

Yesterday's economic news in the French economy was solid.

30 August 2018 The Base is Low for a Q3 Rebound in French Consumers' Spending (Publication Centre)

Yesterday's data in the French economy provided the final confirmation that growth remained sluggish in Q2, and showed that households had a slow start to the third quarter.

30 August 2017 Argentina's Recovery is Gaining Traction but Inflation is Still a Risk (Publication Centre)

Recently data from Argentina continue to signal a firming cyclical recovery. According to INDEC's EMAE economic activity index, a monthly proxy for GDP, the economy grew 4.0% year-over-year in June, up from an already-solid 3.4% in May.

30 January 2018 China's January PMIs Should be Stable but then Drop in February (Publication Centre)

The Caixin PMI likely remained stable or even strengthened in January. The December jump was driven by the forward-looking components, with both the new export orders and total new orders indices picking up.

30 January 2018 Core PCE Inflation has Bottomed, and Will Rise Sharply in March (Publication Centre)

The 0.18% increase in the core PCE deflator in December was at the lower end of the range implied by the core CPI. It left the year-over-year rate at just 1.5%.

30 July 2019 No Pre-Brexit Panic Signalled by Monetary Indicators (Publication Centre)

The alarming pace at which the Government is marching towards the Brexit cliff edge still shows no sign of instilling panic among households or firms.

30 July 2019 Japan's LDP Sails Through Election Consumers Wary of Tax Hike (Publication Centre)

Japan returned the ruling LDP coalition to power in an upper house election over the weekend.

30 July 2019 Data released last week confirmed that economic activity improved significantly in Argentina in Q2. (Publication Centre)

Argentina's Recession Has Ended, Supporting Mr. Macri's Odds

30 July. 2015 Ignore Volatile Commodity Prices, and Focus on Core Inflation (Publication Centre)

Volatile commodity prices make this week's inflation data in Germany and the Eurozone a wild card. Crude oil in euro terms is down about 20% month-to-month in July, which will weigh on energy prices. In Germany, though, we think higher core inflation offset the hit from oil, pushing inflation slightly higher to 0.4% year-over-year in July from 0.3% in June.

30 June 2017 China's Government Still has Room to Clean up, but what if they Balk? (Publication Centre)

In the yesterday's Monitor, we presented an exagerated upper-bound for China's bad debt problem, at 61% of GDP. The limitations of the data meant that we double-counted a significant portion of non-financial corporate--NFC--debt with financial corporations and government.

30 June 2017 EZ Inflation Data are Complicating Life for the ECB and Markets (Publication Centre)

Advance country data indicate that headline EZ inflation fell slightly in June; we think the rate dipped to 1.3% year-over-year, from 1.4% in May.

30 June 2017 Core PCE Inflation set to Fall Again, but it won't Sway the Fed (Publication Centre)

We have argued recently that the year-over-year rates of core CPI and core PCE inflation could cross over the next year, with core PCE rising more quickly for the first time since 2010.

30 July 2018 Will the MPC's Neutral Rate Estimate Trigger a Sell-Off of Gilts? (Publication Centre)

The MPC will take a step forward on Thursday when it publishes an estimate of the medium term equilibrium interest rate--the rate which would anchor real GDP growth at its trend and keep inflation stable--in the Inflation Report.

30 July 2018 Mexican Data are Upbeat, Strong Retail Sales and Low Unemployment (Publication Centre)

Economic data in Mexico continue to come in strong.

30 January 2019 A Mixed Bag of PMI Readings in China won't Put Off Fresh Stimulus (Publication Centre)

China's official PMIs for January, due out tomorrow, will give the first indications of how the economy started the year.

30 January 2018 Mexico's Trade Gap Shrank in 2017, Helped by NAFTA-Related Fears (Publication Centre)

Mexico's trade balance shrank slightly last year, to USD11B, from USD13B in 2016. The main driver was a big swing in the non- energy balance, to a record USD8.0B surplus, following a USD0.4B deficit in 2016.

30 January 2019 Colombia's Economic Growth Prospects will Improve Soon (Publication Centre)

Recently released data in Colombia signal that the economy ended last year quite strongly.

30 January 2019 Did the "Yellow Vests" Ruin French GDP Growth in Q4? (Publication Centre)

Today's barrage of data kicks off a couple of busy days in the Eurozone economic calendar.

30 July 2018 Growth is Strong, but 4%-plus Cannot be Sustained (Publication Centre)

The biggest single surprise in the second quarter GDP report was the unexpected $28B real-terms drop in inventories.

30 January 2019 Extremely Downbeat Leading Indicators Should not be Trusted (Publication Centre)

Some closely-watched composite leading indicators for the U.K. economy, and for many others, are flashing red.

30 April 2019 No Boost to Business Confidence from the Brexit Delay (Publication Centre)

News that the U.K.'s departure from the E.U. has been delayed by six months, unless MPs ratify the existing deal sooner, appears to have done little to revive confidence among businesses.

30 April 2019 High Political Risk in Argentina Offsetting Upbeat Economic News (Publication Centre)

Argentina's financial markets and embattled currency have been under severe pressure in recent weeks, with the ARS hitting a new record low against the USD and government bonds sinking to distress levels.

3 October 2018 Are Higher Wages Squeezing EZ Manufacturing Margins? (Publication Centre)

Producer price inflation in the euro area almost surely peaked over the summer.

3 October 2017 Robust Overseas Demand Isn't Persuading Manufacturers to Invest (Publication Centre)

U.K. manufacturers are benefiting from rapid growth in the Eurozone, but increasingly they are being held back by weak domestic demand.

3 October 2017 Manufacturing Powers Ahead, Supported by External Demand (Publication Centre)

The Asian PMIs point to a strengthening manufacturing sector in September but external demand is the driver.

3 October 2018 Chuseok Hit Clouds the End of Marginally Stronger Q3 in Korea (Publication Centre)

Korean industrial production surprised to the upside in August, according to data released yesterday.

3 October 2018 Investment is Dropping, but Don't Rule out a Rebound Next Year (Publication Centre)

One of the more disheartening aspects of the Q2 national accounts, released last week, was the downward revision to business investment. Quarteron-quarter growth was revised to -0.7%, from +0.5% previously.

3 October 2018 September ADP Employment Likely Subdued, thanks to Florence (Publication Centre)

We're fully expecting to see a hit to September payrolls from Hurricane Florence, which struck during the employment survey week.

3 October 2018 Mixed Activity Data in Brazil Ahead of a Contested Presidential Election (Publication Centre)

Brazil's industrial production surprised to the downside in August, suggesting that manufacturing is struggling to gather momentum over the second half of the year.

3 October 2017 EZ Manufacturing is Helping to Propel the Cyclical Upturn (Publication Centre)

Manufacturing in the Eurozone remained a strong driver of GDP growth in the third quarter. The headline EZ manufacturing PMI rose to 58.1 in September, from 57.4 in August, only a tenth below the initial estimate 58.2.

3 October 2017 BanRep Leaves Rates on Hold, But Further Stimulus Will Come Soon (Publication Centre)

Colombia's Central Bank is facing a short-term test. The recent fall in inflation was interrupted in August--data due on Thursday will show another increase in September--while economic growth, particularly consumption, is struggling, at least for now.

3 November 2017 The EZ Manufacturing Sector is in No Mood for a Slowdown (Publication Centre)

Survey data signal that Eurozone manufacturing retained momentum at the start of Q4. Yesterday's final PMI reports showed that the EZ manufacturing index rose to 58.5 in October from 58.1 in September, trivially below the first estimate.

3 November 2017 Expecting Rocketing Payrolls, AHE and Unemployment to Disappoint? (Publication Centre)

We expect a 350K print for October payrolls today. The ADP report was stronger than we expected, suggesting that the post-hurricane rebound will recover more of the ground lost in September than we initially expected.

3 November 2017 The MPC Signals no Rush to Hike Rates Again (Publication Centre)

Markets were surprised yesterday by the absence of hawkish comments or guidance accompanying the MPC's decision to raise interest rates to 0.50%, from 0.25%.

3 November. 2016 Rates Will Rise in December, If Events Don't Intervene (Publication Centre)

The Fed left rates on hold yesterday, as expected, repeating its long-held core view that inflation will rise to 2% in the medium-term, requiring gradual increases in the fed funds rate.

3 October 2017 Auto Sales Rebounded in September, but by How Much? (Publication Centre)

Auto industry watchers at WardsAuto and JD Power are in agreement that today's September sales numbers will be little changed from a year ago, at around 17.5M.

3 November. 2016 MPC to Catch Out Markets Again with Lingering Dovish Tone (Publication Centre)

Markets are pricing-in just a 10% chance of the MPC cutting interest rates again within the next six months, odds that look too low given the strong likelihood that the economic recovery loses more pace.

3 Sept 2019 Don't Rely on the Manufacturing PMI for an Accurate Read in Q3 (Publication Centre)

The fall in the Markit/CIPS manufacturing PMI to 47.4 in August--its lowest level since July 2012--from 48.0 in July suggests that pre-Brexit stockpiling isn't countering the hit to demand from Brexit uncertainty and the global industrial slowdown.

3 Sept 2019 If China Doesn't Budge as Tariffs Rise, Mr. Trump will Blink, Eventually (Publication Centre)

After a week--yes, a whole week!--with no significant new developments in the trade war with China--it's worth stepping back and asking a couple of fundamental questions, which might give us some clues as to what will happen over the months ahead.

30 April 2018 The BoJ is Getting Cold Feet on its 2% Inflation Target (Publication Centre)

The BoJ kept policy unchanged last week, but made a significant change to its communication, dropping its previous explicit statement on the timing for hitting the inflation target.

30 Apr. 2015 Real M1 Growth Points to Strengthening Cyclical Recovery (Publication Centre)

Survey and money supply data remain consistent with an improving Eurozone economy. Yesterday's EC sentiment index fell to 103.7 in April, from 103.9 in March, due to weakness in France and Germany, but it is consistent with GDP growth of about 0.4% quarter-on-quarter in Q2.

30 Apr. 2015 FOMC acknowledges slowdown in Q1, but core view unchanged (Publication Centre)

The FOMC delivered no big surprises yesterday, but seemed keen to make it clear that policymakers are sticking to their core views, despite the slowdown in growth in the first quarter. Unlike the March statement, yesterday's note pointed out that the slowdown came in the winter months, though it did not directly blame the weather for the sluggishness in growth.

30 April 2018 Hospital Services Inflation is now the Biggest Near-Term Threat to the Fed (Publication Centre)

We already have a pretty good idea of what happened to consumers' spending in March, following Friday's GDP release, so the single most important number in today's monthly personal income and spending report, in our view, is the hospital services component of the deflator.

30 April 2018 Q1 Slowdown Confirmed in the EZ, but Don't Push the Panic Button (Publication Centre)

Friday's advance GDP data provided the first solid evidence of a Q1 slowdown in the euro area economy.

30 April 2019 Focus on Accelerating M1 Growth amid Still-Poor Survey Data (Publication Centre)

Yesterday's economic numbers in the Eurozone were mixed, but we are inclined to see them through rose-tinted glasses.

30 April 2019 Q1 Data have Spooked Japanese Policymakers is it Temporary (Publication Centre)

Japan's Q1 is coming more sharply into focus.

3 September 2018 The ECB is Fighting an Uphill Battle to Push Core Inflation to 2% (Publication Centre)

We are all for ambitious economic targets, but the ECB's pledge to drive EZ core inflation in the Eurozone up to "below, but close to" 2% is particularly fanciful.

3 September 2018 China's PMIs Point to Tariff Pain, and Only Minimal PPI Inflation Slowdown (Publication Centre)

China's official PMIs were little changed in August, with the manufacturing gauge up trivially to 51.3, from 51.2 in July and the non-manufacturing gauge up to 54.2, from 54.0.

3 Sept 2019 Andean Economies Start Q3 on a Good Note, Argentina on the Brink (Publication Centre)

Data released on Friday show that the Chilean economy had a weak start to the second half of the year.

3 Sept 2019 Still Mostly Bad News in the Eurozone Manufacturing Sector (Publication Centre)

Yesterday's final EZ manufacturing PMIs for August provided little in the way of relief for the beleaguered industrial sector.

3 Sept 2019 China's Policymakers Hold Their Breath as Recovery Takes its Time (Publication Centre)

China's PMIs show no sign of a recovery yet, but the authorities are sticking to the playbook; they've done the bulk of the stimulus and are waiting for the effects to kick in, but are recognising that they need to make some adjustments.

3 Sept. 2015 No Additional Easing, but ECB to Face Tough Questions on Inflation (Publication Centre)

Today's ECB meeting will be accompanied by an update of the staff projections, where the inflation outlook will be in the spotlight. The June forecasts predicted an average inflation rate of 0.3% year-over-year this year, currently requiring a rather steep increase in inflation towards 1.1% at the end of the year. We think this is achievable, but we doubt the ECB is willing to be as bold, and it is reasonable to assume this year's forecast will be revised down a notch.

3 September 2018 Brazil's Economy was Resilient in Q2, but the Recovery is Sluggish (Publication Centre)

The Brazilian economy enjoyed a decent Q2, with GDP rising 0.2% quarter-on-quarter, despite the disruptions caused by the truck drivers' strike, after a 0.1% decline in Q1.

3 Sept. 2015 Trade Deficit Likely Dropped in July, but Q3 Picture Still Unclear (Publication Centre)

The July trade deficit likely fell significantly further than the consensus forecast for a dip to $42.2B from $43.8B in June, despite the sharp drop in the ISM manufacturing export orders index. Our optimism is not just wishful thinking on our p art; our forecast is based on the BEA's new advance trade report. These data passed unnoticed in the markets and the media. The July report, released August 28, wasn't even listed on Bloomberg's U.S. calendar, which does manage to find space for such useless indicators as the Challenger job cut survey and Kansas City Fed manufacturing index. Baffling.

30 June 2017 Q1 National Accounts Won't Meet the Governor's Rate Hike Criteria (Publication Centre)

Markets will be extremely sensitive to economic data in the run-up to the MPC's next meeting on August 3, following signals from several Committee members that they think the cas e for a rate rise has strengthened.

30 June 2017 Temer's Fate Carries Risks, but a Currency Meltdown Isn't One (Publication Centre)

Brazil's unadjusted current account surplus soared to USD2.9B in May, its highest level since 2006, from USD1.1B in May 2016.

30 October 2018 Fiscal Loosening Creates Space for Two MPC Rate Hikes Next Year (Publication Centre)

This Budget will be remembered as the moment when the Government finally threw in the towel on plans to run sustainable public finances.

30 October 2018 Are Chinese Pro ts Normalising But the Headwinds Remain (Publication Centre)

Chinese headline industrial profits data show that growth slowed to just 4.1% year-over-year in September, from 9.2% in August.

30 October 2018 Airline Fares Lifted September's Core PCE Deflator Noise not Signal (Publication Centre)

The modest overshoot to consensus in September's core PCE deflator won't trouble any lists of great economic surprises, but it did serve to demonstrate that the PCE can diverge from the CPI, in both the short and medium-term.

30 October 2018 Mrs. Merkel's Exit as CDU Leader is the End of an Era in EU Politics (Publication Centre)

The big news in the EZ yesterday was the announcement by German chancellor Angela Merkel that she will step down as party leader for CDU later this year, and that she will hand over the chancellorship when her term ends in 2021.

30 October 2018 Policymakers in Chile and Colombia Opting for Divergent Paths, For Now (Publication Centre)

Inflation pressures remain under control in most LatAm economies, allowing central banks to keep interest rates on hold, despite the challenging external environment.

30 Sept. 2015 No Slowdown in Key Jobs Data, But Expect "Weak" ADP Today (Publication Centre)

Barely a day passes now without an email asking about "evidence" that the U.S. economy is slowing or even heading into recession. The usual factors cited are the elevated headline inventory-to-sales ratio, weak manufacturing activity, slowing earnings growth and the hit from weaker growth in China. We addressed these specific issues in the Monitor last week, on the 23rd--you can download it from our website--but the alternative approach to the end-of-the-world-is-nigh view is via the labor market.

30 Sept. 2015 Mexico's Labor Market Reflects Its Upbeat Domestic Story (Publication Centre)

Mexico's data over the last few weeks have confirmed our view that private consumption remains the key driver of the current economic cycle. Solid economic fundamentals, thanks to stimulative monetary policy and structural reforms, have supported the domestic economy in recent quarters. Falling inflation has also been a key driver, slowing to 2.5% by mid-September, a record low, from an average of 4% during 2014.

30 October 2017 The MPC Will Hike Rates, but Won't Jawbone Sterling Higher (Publication Centre)

The MPC likely will raise interest rates on Thursday, for the first time since July 2007, in response to the uptick in GDP growth and the upside inflation surprise in Q3.

30 October 2017 New Elections in Catalonia Beckon as Madrid Activates Article 155 (Publication Centre)

The headlines from Catalonia are as confusing as ever, but we are sticking to our view--see here--that regional elections are the only reasonable outcome of the chaos.

30 Oct. 2015 Can the Recovery in Business Investment Maintain Its Pace? (Publication Centre)

Business investment has punched above its weight in the economic recovery from the crash of 2008; annual real growth in capex has averaged 5% over the last five years, greatly exceeding GDP growth of 2%. This recovery is unlikely to grind to a halt soon, since profit margins are still high and borrowing costs will remain low. But corporate balance sheets are not quite as robust as they seem, while capex in the investment-intensive oil sector still has a lot further to fall.

30 Oct. 2015 Brazil's Central Bank Minutes Underline Policymakers' Problems (Publication Centre)

The key message of the minutes of the Copom meeting, released yesterday, is that policymakers remain worried about the inflation outlook and, in particular, about uncertainties surrounding fiscal tightening. But the Committee reinforced the signal that the Selic rate is likely to remain at the current level, 14.25%, for a "sufficiently prolonged period". The economy is in a severe recession and the rebalancing process has been longer and more painful than the Central Bank anticipated.

30 Oct. 2015 The Third Quarter ECI is Set to Rebound, but How Far? (Publication Centre)

We have been asked by a few readers how much confidence we have in our forecast of a 1% rebound in the third quarter employment costs index, well above the 0.6% consensus and the mere 0.2% second quarter gain. The answer, unfortunately, is not much, though we do think that the balance of risks to the consensus is to the upside.

30 October 2017 A Year from now, the Fed Will be Tightening, with More to Come (Publication Centre)

Cast your mind forward to late October 2018. The Fed is preparing to meet next week. What will the economy look like? The key number is three.

30 October 2017 Is China's Profits Surge Driving up Developers' Short-term Borrowing? (Publication Centre)

Chinese industrial profits continue to surge, rising 27.7% year-over-year in September, up from 24.0% in August.

30 October 2017 Brazil's Central Bank is Easy to Read, BanRep is Unpredictable (Publication Centre)

While we were out, Brazil's central bank delivered a widely-expected 75bp easing, cutting the benchmark rate to 7.5% in an unanimous vote.

30 Sept. 2015 The Eurozone is Probably Back in Deflation, But Not For Long (Publication Centre)

Advance inflation data from Germany and Spain yesterday indicate that the Eurozone slipped back into deflation in September. German inflation fell to 0.0% in September from 0.2% in August, and deflation intensified in Spain as inflation fell to -0.9% from -0.4% last month. This likely pushed the advance Eurozone estimate--released today--below zero. We think inflation fell to -0.1% in September, down from +0.1% in August. The fall will be due mainly to falling energy prices, and we continue to think that the underlying trend in inflation is stabilising, or even turning up.

30 September. 2016 Trump Fears Prompts a Rate Hike in Mexico, the MXN Rallies, for Now (Publication Centre)

Mexico's central bank, Banxico, last night capitulated again to the depreciation of the MXN and increased interest rates by 50bp, for the third time this year. This week's rebound in the currency was not enough to prevent action.

31 January 2017 Focus on Strong EZ Q4 GDP Data On a Busy Day in the Eurozone (Publication Centre)

Today will be an incredibly busy day for EZ investors with no fewer than eight major economic reports. Overall, we think the data will tell a story of a stable business cycle upturn and rising inflation. Markets will focus on advance Q4 GDP data in France and in the euro area as a whole. Our mo dels, and survey data, indicate that the EZ economy strengthened at the end of 2016, and we expect the headline data to beat the consensus.

31 August. 2016 German Core Inflation Slipped in August, but Should Rebound Soon (Publication Centre)

The upward trend in German inflation stalled temporarily in August, with an unchanged 0.4% year-over-year reading in August. A dip in core inflation likely offset a continued increase in energy price inflation. The detailed final report next month will give the full story, but state data suggest that the core rate was depressed by a dip in price increases of household appliances, restaurant services, as well as "other goods and services."

31 August. 2016 Colombia's Economy Slowed in Q2, Will it Rebound Soon? (Publication Centre)

Colombia's second quarter GDP data, released Monday, revealed a dismal 2.0% year-over-year growth rate, down from 2.5% in Q1. GDP rose by a very modest 0.2% quarter-on-quarter, for the second consecutive quarter. The year-over-year rate was the slowest since the end of the financial crisis, but it is in line with our 2.1% forecast for this year as a whole.

31 January 2017 Will Faster Wage Growth Finally Trigger An Acceleration in the ECI? (Publication Centre)

The headline employment cost index has been remarkably dull recently, with three straight 0.6% quarterly increases. The consensus forecast for today's report, for the three months to December, is for the same again.

31 January 2017 Will the MPC Need to Raise Rates to Cool Consumer Credit Growth? (Publication Centre)

December's money data likely will bring further signs that the U.K. economy's growth spurt late last year was paid for with unsecured borrowing. Retail sales fell by 1.9% month-to-month in December, so we doubt that unsecured borrowing will match November's £1.7B increase, which was the biggest since March 2005.

31 January 2018 FOMC Likely More Bullish on Growth, but No Policy Changes (Publication Centre)

Chair Yellen's final FOMC meeting today will be something of a non-event in economic terms.

31 January 2018 2017 was a Record-Breaking Year for the Eurozone Economy (Publication Centre)

Yesterday's advance Eurozone Q4 GDP report conformed to expectations. Headline GDP increased 0.6% quarter-on-quarter, slowing trivially from an upwardly-revised 0.7% rise in Q3, and nudging the year-over-year rate down marginally to 2.7%.

31 August. 2016 Cheaper Borrowing Costs Won't Reignite Firms' Investment Appetite (Publication Centre)

July's money and credit figures provided more evidence that firms have become reluctant to invest following the Brexit vote. Lending by U.K. banks to private non-financial companies--PNFCs--rose by just 0.2% month-to-month in July, below the average 0.5% increase of the previous six months.

31 August. 2015 Fed Officials All Over the Map, But September Still Looks Unlikely (Publication Centre)

FOMC members in fleeces took to the airwaves en masse on Friday morning from Jackson Hole, but most said pretty much what you'd expect them to say. Arch-hawks Loretta Mester and no-quite-so-hawkish Jim Bullard strongly suggested that they think the time to raise rates is very near, while super-dove Naryana Kocherlakota said he doesn't regard a near-term hike as "appropriate". No surprises there.

31 August 2017 Does the Corporate Borrowing Surge Signal a Capex Recovery? (Publication Centre)

The summer usually is a quiet time for business, but seemingly not for CFOs this year. Yesterday's money and credit figures from the Bank of England showed that borrowing by private non-financial corporations has rocketed. Net finance raised by PNFC's from all sources increased by £8.9B in July, compared to an average increase of just £2.5B in the previous 12 months.

30 September. 2016 August Spending is Less Worrying than the Scope for Higher In ation (Publication Centre)

Yesterday's relatively good news--we discuss the implications of the August trade data below--will be followed by rather more mixed reports today. We hope to see a partial rebound, at least, in the September Chicago PMI, but we fully expect soft August consumer spending data.

31 August 2017 Third Quarter Consumption off to a Strong Start? (Publication Centre)

Today's wave of economic reports are all likely to be strong. The most important single number is the increase in real consumers' spending in July, the first month of the third quarter.

31 August 2018 Andean Economies Remain Strong, but External Threats are Significant (Publication Centre)

Data released yesterday show that the Chilean economy had a weak start to the second half of the year.

31 August. 2015 Brazil's Recession, Worse Than Feared And No Respite In Sight (Publication Centre)

Brazil's recession has deepened. Overall, the economy has sunk into its worst slump in six years, and the recovery will be painful and slow. This is not surprising, but the sharper than expected 3% contraction over the first half of the year may have thrown a further bucket of cold water on President Rousseff, whose popularity ratings have fallen to a level not seen since 1992, when President Collor de Mello was forced out of office after being impeached for corruption. Real GDP in Brazil fell 1.9% quarter-on-quarter in Q2, much worse than the downwardly revised 0.7% contraction in Q1.

31 August 2018 Did Eurozone Core Inflation Decline Slightly in August (Publication Centre)

Yesterday's advance CPI data in Germany suggest that inflation fell slightly in August.

30 November. 2016 Recovery in Lending Unlikely to Maintain October's Momentum (Publication Centre)

October's money data show that households and firms have regained the appetite for borrowing that they lost immediately after the referendum. But the recent rise in swap rates and the deterioration in consumers' confidence likely will cut short the revival in consumer lending, while persistent Brexit uncertainty likely will continue to subdue firms' investment intentions.

30 November. 2016 Brazilian Political Risk is Rising, But Won't Derail the Fiscal Adjustment (Publication Centre)

Political volatility is a recurrent theme in Brazil. Six members of President Michel Temer's cabinet resigned last Friday due to allegations of conflict of interest on a construction deal. Rumours that President Temer was involved in the affair stirred up market volatility and revived political risk concerns

30 March 2017 Money Data Highlight the Weak Start to 2017 (Publication Centre)

February's money and credit figures supported recent labour market and retail sales data suggesting that consumers are increasingly financially strained. Households' broad money holdings increased by just 0.2% month-to-month in February, half the average pace of the previous six months.

30 March 2017 How will French Consumers React to Lower Real Wage Growth? (Publication Centre)

Leading indicators for consumers' spending in France are sending conflicting signals. Survey data suggest that households are in a spendthrift mood. Data yesterday showed that the headline consumer sentiment index was unchanged in March at 100, the cycle high.

30 March 2017 Can Unemployment Fall to 4% or Less? What Would the Fed do? (Publication Centre)

The unemployment rate hit its post-1970 low in April 2000, at the peak of the first internet boom, when it nudged down to just 3.8%. The low in the next cycle, first reached in October 2006, was rather higher, at 4.4%.

30 May 2017 Why Don't Markets Take the Fed's Interest Rate Forecasts Seriously? (Publication Centre)

Markets expect the Fed will fail to follow through on its current intention to raise rates twice more this year and three times next year. Part of this skepticism reflects recent experience.

30 May 2017 BanRep Turns Cautious, but Expect Further Cuts as Activity will be Weak (Publication Centre)

BanRep cut Colombia's key interest rate by 25 basis points last Friday, to 6.25%. We were expecting a bolder cut, as economic activity has been under severe pressures in recent months.

30 May 2018 Does Italy's Crisis Really Mean Slower U.K. Rate Hikes? (Publication Centre)

Investors have concluded that Italy's political crisis will compel the U.K. MPC to increase interest rates even more gradually than they thought previously.

30 May 2018 Argentina's Economy had a Solid Q1, but the Pain is Starting to Show (Publication Centre)

Hard data released in Argentina over recent weeks showed that the economy was resilient in Q1 and early Q2.

30 Mar. 2015 Same Old Song - The Fed and the MXN are key factors for Banxico (Publication Centre)

Mexico's central bank left its main interest rate unchanged last week, citing the need for cautious monetary policy as the economy has lost some momentum during the first months of the year, despite the risk of inflation pass-though effects from the weaker MXN.

30 Mar. 2015 Output Gap Uncertainty Paralysis Keeps the Fed's Focus on Wages (Publication Centre)

Perhaps the biggest single reason for the Fed's reluctance, so far, to move away from monetary policy designed to cope with catastrophe is that no-one knows for sure how much of the damage has been repaired, and how close the economy is to normalizing.

30 June. 2015 Slowing Aircraft Orders Holding Back Chicago PMI - No Hit to ISM (Publication Centre)

The seasonal adjustment problems which tend to drive up the national ISM manufacturing survey in late spring and summer are more or less absent from the Chicago PMI, which will be released today. As far as we can tell, the biggest short-term influence on the Chicago number is variations in the order flow for Boeing aircraft; the company moved its headquarters to the city from Seattle in 2001.

30 June. 2015 Greece and the Eurozone in Limbo Until the Referendum in Greece (Publication Centre)

Eurozone politicians are likely scrambling for a last gasp return to negotiations before the Greek bailout program ends at the end of today. But progress will likely be limited until we have the result of the planned Greek referendum on Sunday. Voters will be asked essentially on whether they agree with the proposal presented by the institutions. The government will campaign for a "no," but a "yes" looks more likely, based on polls that Greeks want to stay in the Eurozone.

30 June. 2016 Commodities are Helping LatAm's Recovery - Brexit not a Deal-Breaker (Publication Centre)

The downturn in LatAm is finally bottoming out, but the economy of the region as a whole will not return to positive year-over-year economic growth until next year. The domestic side of the region's economy is improving, at the margin, thanks mainly to the improving inflation picture, and relatively healthy labor markets.

30 June. 2016 Political Vacuum in the U.K. Prompts the EU to Up the Pressure (Publication Centre)

Leaders of the major Eurozone economies were in no mood to give concessions as they met with outgoing U.K. Prime Minister David Cameron this week for the first time since the referendum. German Chancellor Angela Merkel said that she sees "no way back from the Brexit vote." This followed comments that the U.K. couldn't be expected to "cherry-pick" the EU rules that it would like to follow after a new deal.

30 June. 2016 Will the New Government Sweeten the Fiscal Pill? (Publication Centre)

Fiscal policy is in limbo until a new leader of the Conservative party has been elected on September 9. Shortly after, however, a new Budget--or a Budget disguised as an Autumn Statement--will be held.

30 June. 2016 The Fed's Focus Will Return to the Wage Outlook, Unchanged by Brexit (Publication Centre)

We aren't materially changing our U.S. economic forecasts in the wake of the U.K.'s Brexit vote, though we have revised our financial forecasts. The net tightening of financial conditions in the U.S. since the referendum is just not big enough--indeed, it's nothing like big enough--to justify moving our economic forecasts.

30 May 2018 New Elections Loom in Italy as Bond Markets Panic (Publication Centre)

Price action in Italian bonds went from hairy to scary yesterday as two-year yields jumped to just under 3.0%.

30 May 2019 Are Markets Underpricing the Risk of a Corbyn Government? (Publication Centre)

The risk of a snap general election has jumped following Theresa May's resignation and the widespread opposition within the Conservative party to the compromises she proposed last week, which might have paved the way to a soft Brexit.

30 November 2018 Fourth Quarter Consumption is Headed for a Solid 3% Gain (Publication Centre)

Neither the strength in October consumption nor the softness of core PCE inflation, reported yesterday, are sustainable.

30 November 2018 EZ Inflation Likely Fell More than Markets Expected in November (Publication Centre)

Yesterday's November inflation reports from Germany and Spain suggest that today's data for the Eurozone as a whole will undershoot the consensus.

30 November 2017 Moderating Credit Flows Signal the Economy has Little Momentum (Publication Centre)

October's money and credit report indicates that the economy had little momentum at the start of the fourth quarter.

30 November 2018 Fraying Confidence and Slowing Money Growth Point to a Weak Q4 (Publication Centre)

Further political wrangling yesterday distracted from data showing that the risk of no -deal Brexit is placing increasing strain on the economy.

30 November 2018 Japan's Retail Sales Deliver a Rosy October Jump - Blip or Trend? (Publication Centre)

Japan's retail sales values jumped 1.2% month-on-month in October, after the upwardly-revised 0.1% increase in September.

30 November. 2016 ADP Likely to Signal Decent Payroll Growth (Publication Centre)

The November ADP employment report today likely will show private payrolls rose by about 180K. We have no reason to think that the trend in payroll growth has changed much in recent months, though the official data do appear to be biased to the upside in the fourth quarter, probably as a result of seasonal adjustment problems triggered by the crash of 2008. We can't detect any clear seasonal fourth quarter bias in the ADP numbers.

30 November 2018 Will AMLO Make a Defiant "Mexico First" Inauguration Pledge (Publication Centre)

We have witnessed a dramatic shift in just a few weeks in perceptions of Mexico as an investment destination.

30 November 2017 Japanese Retail Sales Disappoint but Confidence Rebounds (Publication Centre)

Japanese retail sales were unchanged in October month-on-month, after a 0.8% rise in September.

30 November 2017 A Strong Start to Fourth Quarter Consumption, Probably (Publication Centre)

The rate of growth of third quarter consumers' spending was revised up by 0.3 percentage point to 3.3% in the national accounts released yesterday.

30 May 2019 More Pain Before the Gain Will Markets Force Trump to the Table (Publication Centre)

The trade war with China is not big enough or bad enough alone to push the U.S. economy into recession.

30 May 2019 China's Manufacturing PMIs will Give the First Hint of Trade War Hit (Publication Centre)

China's official manufacturing PMI for May, out tomorrow, will give the first indication of the coming hit from the resumption of its tariff war with the U.S.

30 Nov. 2015 Bullish Economic Data Will Not Deter the ECB this Week (Publication Centre)

Bullish money supply data last week added to the evidence that the Eurozone's business cycle is strengthening. Broad money growth--M3--rose to 5.3% year-over-year in October from 4.9% in September. Most of the increase came from a surge in short-term debt issuance, rising 8.4% year-over-year, following an inexplicable 1.4% fall in September.

30 Nov. 2015 Capex to Rebound--Modestly--as the Oil Hit Is Overtaken (Publication Centre)

Capex data by industry are available only on an annual basis, with a very long lag, so we can't directly observe the impact the collapse in the oil sector has had on total equipment spending. But we can make the simple observation that orders for non-defense capital goods were rising strongly and quite steadily-- allowing for the considerable noise in the data--from mid-2013 through mid-2014, before crashing by 9% between their September peak and the February low. It cannot be a coincidence that this followed a 55% plunge in oil prices.

30 Nov. 2015 Stress Tests Should Underline Greater Resilience of U.K. Banks (Publication Centre)

The resilience of the U.K. financial system will be in focus this week. On Tuesday, the Bank of England's Prudential Regulation Authority, the PRA, will publish the results of stress tests of the U.K.'s seven largest banks. Concurrently, the Bank's Financial Policy Committee, the FPC, will publish its semi-annual Financial Stability Report and announce whether it will deploy any of its macroprudential tools.

30 Nov. 2015 South American Central Banks Still Worrying About Inflation (Publication Centre)

Colombia's peso has been one of the most battered currencies in LatAm this year, due mainly to the sharp fall in oil prices, the country's primary export. The COP has dropped about 23% this year against the USD. At the same time, other temporary factors, most notably the impact of El Niño on food prices, have done a great deal of inflation damage too. October's food prices increased 1.4% month-to-month, pushing the year-over-year rate up to 8.8% from an average of 6.6% in the first half of the year. Overall inflation has jumped to 5.9% in October from 3.8% in January, forcing BanRep's board to act aggressively.

4 Sept 2019 Manufacturing in Brazil Struggles, Supporting the Case for Rate Cuts (Publication Centre)

Yesterday's Brazilian industrial production data were downbeat.

4 Sept 2019 The Conservatives' Poll Lead Does Not Have Strong Foundations (Publication Centre)

A general election this year now looks inevitable, after the defection of Phillip Lee MP from the Tories to the Lib Dems, and the PM's threat to seek an election if MPs take control of the Order Paper on Tuesday evening.

6 June 2017 Andes Economies to Recover in H2, Thanks to Loose Monetary Policy (Publication Centre)

Recent data have confirmed that growth in the Andean economies--Colombia, Chile and Peru--faced downward pressure in Q1, but some leading indicators and recent hard data suggest that we should expect better news ahead.

6 July. 2016 The EZ Economy is at the Mercy of Rising Political Uncertainty (Publication Centre)

Yesterday's economic data point to a sea of calm in the Eurozone economy. The composite PMI was unchanged at 53.1 in June, a slight upward revision from the initial estimate, 52.8. The index suggests real GDP growth was stable at 1.5%-to-1.6% year-overyear in Q2, though the quarter-on-quarter rate likely slowed markedly, following the jump in Q1.

6 July. 2016 ISM Non-manufacturing Jobs Should Rebound, but How Far? (Publication Centre)

The shock of the weak May payroll report means that the June numbers this week will come under even greater scrutiny than usual. We are not optimistic that a substantial rebound is coming immediately. The headline number will be better than in May, because the 35K May drag from the Verizon strike will reverse.

6 June 2017 ISM Non-manufacturing Jobs Up Sharply. Summer Payrolls to Surge? (Publication Centre)

The 6.4-point rebound in the May ISM non-manufacturing employment index, to a very high 57.8, supports our view that summer payroll growth will be strong. On the face of it, the survey is consistent with job gains in excess of 300K, as our first chart shows, but that's very unlikely to happen.

6 June 2017 May Services PMI Dents Second Quarter Rebound Hopes (Publication Centre)

The fall in the services PMI to 53.8 in May, from 55.8 in April, is a setback for hopes that the slowdown in GDP growth in Q1 will be fleeting. Both business activity and orders rose at their slowest rates since February.

6 June 2018. Brazil's Industrial Sector Maintained Momentum in April, Will it Last? (Publication Centre)

Yesterday's industrial production report in Brazil was sizzling. Headline output jumped 0.8% month- to-month in April--well above the 0.4% consensus-- pushing the year-over-year rate up to 8.9%, a five- year high.

6 June 2017 The Spanish Economy is Punching Above its Weight. Can it Last? (Publication Centre)

Yesterday's final May PMI data in the Eurozone confirmed the strength of the cyclical upturn. The composite PMI was unchanged at 56.8, in line with the initial estimate.

6 July. 2016 Economic Activity Remains Soft in the Andes, But Will Improve Ahead (Publication Centre)

Economic activity is slowing in Colombia. The ISE activity index--a monthly proxy for GDP--rose only 0.6% year-over-year in April, down from 2.3% in March, and we expect it to rise at this pace over the coming months. During the first quarter, the index rose at an average year-over-year rate of 3.0%.

6 July. 2015 Greece Votes No, and Takes a Step Closer to Exiting the Euro (Publication Centre)

The Greek polls released Sunday evening indicate a comfortable victory for "no," rejecting the latest EU proposal. This is not a good outcome for the market, and volatility will likely increase substantially today. The result--not confirmed as we go to press but very clearly indicated by the count so far--gives an air of legitimacy to Syriza's brinkmanship, but the creditors' reaction to a "no" vote, which they likely did not expect, is uncertain.

6 July 2017 Sluggish Growth and Slowing Price Rises Undermine Rate Hike Case (Publication Centre)

Investors have stuck to their view that interest rates are just as likely to rise this year as not, despite the soft round of PMIs released this week.

6 July 2017 Monte dei Paschi Finally is Restructured. Will it Work? (Publication Centre)

It's probably happening a decade too late, but the EU is now moving in leaps and bounds to restructure the continent's weakest banks. Yesterday, the Monte dei Paschi saga reached an interim conclusion when the Commission agreed to allow the Italian government to take a 70% stake in the ailing lender.

6 July 2017 Downside Risk for June ADP Jobs, but Official Data Will be Stronger (Publication Centre)

Today's June ADP employment report likely will undershoot the 183K consensus, but we then expect the official payroll number tomorrow to surprise to the upside.

6 July 2018 Finally, a Bit of Good News in German Manufacturing (Publication Centre)

Demand in German manufacturing rebounded strongly midway through the second quarter.

6 July 2018 Industrial Activity in LatAm Taking Different Paths, Temporarily at Least (Publication Centre)

Industrial activity in LatAm, at least in the largest economies, is taking different paths.

6 July. 2015 Colombia's Economic Activity Resilient, but is it Sustainable? (Publication Centre)

Colombia started the second quarter strongly, with the ISE economic activity indicator--a monthly proxy for GDP--expanding a solid and surprising 3.6% year-over-year in April, up from 2.9% in March. The rate of growth is well above the 2.8% gain in Q1, con firming the country's resiliency in the face of lower oil prices. Still, growth has slowed sharply since the 4.4% increase in activity in 2014, as our first chart shows.

6 July 2018 June Payroll Growth Likely Slowed, a Bit, Hourly Earnings are a Wild Card (Publication Centre)

The ADP private sector employment number was a bit weaker than we expected in May, and the undershoot relative to our forecast has pulled down our model's estimate for today's official number

6 June 2018. Productivity Growth is Improving, Ignore the Lackluster Q1 Numbers (Publication Centre)

Revisions to the first quarter productivity numbers, due today, likely will be trivial, given the minimal 0.1 percentage point downward revision to GDP growth reported last week.

6 June 2018. Q2 Rebound on Track, Giving the MPC a Brief Window to Hike Rates (Publication Centre)

Business surveys released over the last week have made us more confident in our call that quarter-on- quarter GDP growth will recover to about 0.4% in Q2, from Q1's weather-impacted 0.1% rate.

6 Mar. 2015 The BCB Hikes Again But The Tightening Cycle is Not Quite Over (Publication Centre)

The Brazilian industrial sector started this year on a very downbeat note, despite a 2% month-to-month jump in output. The underlying trend in activity is still very weak. Production fell 5.2% year-over-year.

6 Mar. 2015 Decent But Unspectacular Job Gains in February? (Publication Centre)

Our base forecast for today's February payroll number is an unspectacular 220K, though if you twist our arms we'd probably say that we'd be less surprised by a big overshoot to this estimate than an undershoot. The single biggest argument against a big print today is simply that February payrolls have initially been under-reported in each of the past five years and then revised higher.

6 Mar. 2015 A more upbeat Mr. Draghi, but QE is not challenged by better economic data (Publication Centre)

Mr. Draghi was in a slightly more bullish mood yesterday, noting that the significant easing of financial conditions in recent months and improving sentiment show that monetary policy "has worked". Economic risks are tilted to the downside, according to the president, but they have also "diminished".