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18 Dec. 2015 Sterling Still a Major Constraint on Growth, Despite Its Recent Decline (Publication Centre)

The growing perception that the U.K. MPC will lag further behind the U.S. Fed in this tightening cycle than previously has pushed sterling down to $1.49, a long way below its post-recession peak of $1.72 in mid-2014. But this has done little to enhance the overall competitiveness of U.K. exports, and net trade still looks likely to exert a major drag on real GDP growth in 2016.

11 Nov. 2015 The Revival in North Sea Oil Production Won't Last (Publication Centre)

The large unexpected surge in oil and gas output this year has boosted the overall economic recovery significantly. But this looks like the last hurrah for a sector of the U.K. economy in terminal decline.

17 Nov. 2015 Does the Underperformance of the FTSE Portend a Weaker Economy? (Publication Centre)

The FTSE 100 has fallen by 4% over the last two weeks, exceeding the 1-to-3% declines in the main US, European and Japanese markets. The FTSE's latest drop builds on an underperformance which began in early 2014. The index has fallen by 10% since then--compared to rises of between 10% and 20% in the main overseas benchmarks--and has dropped by nearly 15% since its April 2015 peak. We doubt, however, that the collapse in U.K. equity prices signals impending economic misery. The economy is likely to struggle next year, but this will have little to do with the stock market's travails.

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.

2 Sept. 2015 Slow, but Persistent, Decline in EZ Unemployment Continues (Publication Centre)

Yesterday's surprising decline in the Eurozone unemployment rate adds further evidence to the story of a slowly healing economy. The rate of joblessness fell to 10.9% in July from 11.1% in June, the lowest since the beginning of 2012, mainly driven by a 0.5 percentage point fall in Italy, and improvement in Spain, where unemployment fell 0.2 pp to 22.2%.

Independent - UK pay growth data disappoints again as real wages decline at fastest rate in three years (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Labour Market data for May

WALL STREET JOURNAL - U.S. Jobless Claims Decline (Media Centre)

Chief U.S. Economist Ian Shepherdson on U.S. Unemployment

THE TELEGRAPH - UK construction declines for third straight month (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. construction

City A.M. - Retail sales decline for longest stretch in eight years (Media Centre)

Chief UK Economist Samuel Tombs on UK Retail Sales

13 December 2018 China's November Activity Data are Set to Disappoint (Publication Centre)

China's October activity data showed signs of the infrastructure stimulus machine sputtering into life. Consensus expectations appear to hold out for a continuation into November, but we think the numbers will be disappointing.

6 May. 2016 Payrolls Likely On Trend - Watch Out for a Rebound in Wages (Publication Centre)

Barring some sort of out-of-the-blue shock, we are much more interested in the hourly earnings data today than the headline payroll number. The key question is the extent to which wages rebound after being depressed by a persistent calendar quirk in both February and March.

14 February 2019 The Decline in CPI Inflation has Run its Course (Publication Centre)

January's CPI data contained no major surprises, even though the 1.8% headline rate undershot our forecast and the consensus by one tenth.

5 May. 2016 ISM Non-manufacturing Jobs Up, But are Prior Declines a Threat? (Publication Centre)

Markets and the commentariat seemed not to like the April ADP employment report yesterday but we are completely indifferent. We set out in detail in yesterday's Monitor the case for expecting a below consensus ADP reading--in short, the model used to generate the number includes lagging official data, some of which were hugely depressed by the early Easter--so it does not change our 200K forecast for tomorrow's official number.

15 July. 2015 Brazil's Data Point To A Prolonged Decline in Consumption (Publication Centre)

Retail sales data released yesterday for Brazil confirmed that weakness in private consumption remains a key challenge for the economy. Retail sales plunged 0.9% month-on-month in May, equivalent to a 4.5% fall year-over-year, the lowest rate since late 2003. On a quarterly basis, sales are headed for a 2% contraction in Q2, pointing to a -0.5% GDP contribution from consumer spending.

1 Aug 2019 No-Deal Brexit: A Short Sharp Shock, or a Prolonged Decline? (Publication Centre)

We agree wholeheartedly with the consensus view that the economy would enter a recession in the event of a no-deal Brexit on October 31.

27 Apr. Markets' View that Brexit Odds Have Declined Looks Premature (Publication Centre)

Sterling has rallied against both the dollar and the euro over the last week on the assumption that interventions by the U.K. Treasury and President Obama in the Brexit debate have shifted public opinion towards remaining in the E.U.

5 March 2019 Simultaneous ISM Declines are Disconcerting, but won't Persist (Publication Centre)

The simultaneous weakening of the ISM manufacturing and non-manufacturing surveys in recent months is one of the more disconcerting shifts in the recent macro data.

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.

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.

24 Feb 2020 Virus-Induced Nerves will Persist until Non-China Cases Decline (Publication Centre)

While we were out last week, market nervousness over the Covid-19 outbreak intensified, though most key indicators of the spread of the infection continued to improve.

18 December 2017 The Large Decline in the EZ Trade Surplus is a Sign of More to Come (Publication Centre)

The euro area's external surplus dipped at the start of Q4.

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.

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.

27 September 2016 Housing Market to Remain Fragile Deep into Next Year (Publication Centre)

The further decline in mortgage approvals in August shows that housing market activity remains very subdued. The recent fall in mortgage rates likely will prop up demand soon, but the poor outlook for households' real incomes suggests that both activity and prices will revive only modestly over the next year.

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 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.

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.

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 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.

29 May 2018 GDP will Rebound in Q2, but a Real Revival will have to Wait Until 2019 (Publication Centre)

Last week's second estimate of GDP reaffirmed that quarter-on-quarter growth declined to 0.1% in Q1--the lowest rate since Q4 2012--from 0.4% in Q4.

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.

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.

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.

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.

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.

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 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 2019 China's Q3 GDP was Dire, Official Headlines Don't Tell the Half of it (Publication Centre)

China's official real GDP growth slowed to 6.0% year-over-year in Q3, from 6.2% in Q2 and 6.4% in Q1. Consecutive 0.2 percentage points declines are significant in China.

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 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.

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 August. 2016 The Impetus to Spending From Falling Mortgage Rates Will Wane (Publication Centre)

The proportion of households' annual incomes absorbed by servicing debt has declined steadily this decade, providing a powerful boost to spending. Indeed, the proportion of annual incomes accounted for by interest payments--mainly on mortgages--edged down a record low of 4.6% in Q1, less than half the share in 2008.

24 Jan 2020 Don't Worry About the Downshift in Bank Lending to Businesses, it Lags (Publication Centre)

You could be forgiven for being alarmed at the 1.5% decline in the stock of outstanding bank commercial and industrial lending in the fourth quarter, the first dip since the second quarter of 2017.

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 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 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 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 May. 2016 Will Profit Margins in Germany be Squeezed by Higher Wages? (Publication Centre)

Margins for German manufacturing firms remained depressed at the start of the second quarter. The headline PPI rose 0.1% month-to-month in April, pushing the year-over-year rate down marginally to -3.1% from a revised -3.0% in March. Falling energy prices are the key driver of the overall decline in the PPI.

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.

24 Mar 2020 CPI Inflation Likely Edged Down in February: Bigger Falls to Come (Publication Centre)

We look for February's consumer prices report, released on Wednesday, to show that CPI inflation declined to 1.7%, from 1.8% in January, in line with the consensus.

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.

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 May 2018 The Near-Flat Trend in Retail Sales Won't Improve Anytime Soon (Publication Centre)

Retail sales jumped by 1.6% month-to-month in April, more than reversing the 1.2% March decline. Even so, the level of sales merely matched their November peak and the underlying trend still looks flat, as our first chart shows.

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.

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 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.

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.

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 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.

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.

5 April 2017 EZ Retail Sales Snap Back, but Q1 Outlook Still looks Poor (Publication Centre)

Data yesterday showed that consumers in the euro area increased their spending in February, following recent weakness. Retail sales rose 0.7% month-to-month in February, reversing the cumulative 0.4% decline since November. The year-over-year rate was pushed higher to 1.8% from an upwardly revised 1.5% in January.

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 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. 2015 New York Fed Says Weather, Not Seasonals, Hit Q1 Growth (Publication Centre)

The latest round of Fed analysis on the weakness of first quarter growth, from the New York Fed, completely contradicts the conclusions of the San Fran Fed's work published a couple of weeks ago. The NY Fed found no statistically significant residual seasonality in the GDP numbers, and argued that the reported decline in economic activity was due entirely to the severe weather, which subtracted about two percentage points from headline growth.

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 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 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.

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.

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 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.

ASIAN DATA WRAP 12 June 2019 (Publication Centre)

China's firms aren't passing on tax hikes after all. China takes full advantage of previous oil price declines. Japan's core machine orders better than expected, but that won't help Q2. Japan is heading for a spell of sustained PPI deflation in H2. Better May jobs report will help to keep any BoK rate cuts at bay.

ASIAN DATA WRAP 15 Nov 2019 (Publication Centre)

Easing of curbs so far won't slow property decline

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.

UK Datanote: U.K. Consumer Prices, February (Publication Centre)

In one line: Marginal decline a prelude to a big drop ahead.

CHANNEL NEWS ASIA - US weekly jobless claims fall 14% (Media Centre)

Initial jobless claims, a sign of the pace of layoffs, dropped to a seasonally-adjusted 265,000 in the week ending Jan 24, a hefty decline of 43,000 from the prior week's slightly upwardly revised level of 308,000

U.S. Datanote: U.S. Housing Starts, September (Publication Centre)

In one line: Ignore the headline declines; core picture is improving.

U.S. Datanote: ISM Nonmanufacturing Survey, April (Publication Centre)

In one line: Further declines unlikely, but signals slower payroll gains

EZ Datanote: Unemployment, Germany, January (Publication Centre)

In one line: Stationary, rather than in outright decline.

LatAm Datanote: Bi-weekly CPI, Mexico, March (Publication Centre)

In one line: Underlying inflation pressures are falling, and we expect further declines across the year due to the recession.

Pantheon Macro Daily Coronavirus Update March 18 (Publication Centre)

In one line: The rate of growth of new cases in Italy has levelled off; soon to decline?

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 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%.

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 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 June. 2015 Trade will add to Q2 growth, but normalization still some way off (Publication Centre)

The April foreign trade numbers strongly support our view that foreign trade will make a hefty positive contribution to second quarter GDP growth, after subtracting a massive 1.9 percentage points in the first. The headline April deficit fell further than we expected, thanks in part to an unsustainable jump in aircraft exports and a decline in the oil deficit, but the big story was the 4.2% plunge in non- oil imports.

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 Jan 2020 The Wage Growth Gap Persists: No Sign Yet of a Labor Scarcity Premium (Publication Centre)

It's a myth that the 10-ye ar decline in the unemployment rate has not driven up the pace of wage growth.

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 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.

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.

23 July. 2015 Mortgage Demand Signals Rising Third Quarter Home Sales (Publication Centre)

If the recovery in existing homes hadn't been interrupted by the taper tantrum, in the spring of 2013, sales by now would likely be running at an annualized rate in excess of 6M. The rising trend in sales from late 2010 through early 2013 was strong and stable, as our first chart shows, but the decline was steep after the Fed signalled it would soon slow the pace of QE, and it was made temporarily worse by the severe late fall and early winter weather.

5 April 2017 The Construction Sector Will Continue to Tread Water (Publication Centre)

Evidence that the U.K. economy has slowed significantly this year is starting to come in thick and fast. Following the Markit/CIPS manufacturing PMI on Monday --which signalled that growth in production declined in March to its lowest rate since July--the construction PMI dropped to 52.2 in March, from 52.5 in February.

6 Sept 2019 Sterling Will Struggle to Recover Further this Side of the Election (Publication Centre)

Sterling recovered to $1.23 yesterday, its highest level since late July, in response to the sharp decline in the risk of a no -deal Brexit at the end of October, triggered by MPs' actions.

6 September. 2016 Too Soon to Breathe a Sigh of Relief on Recession Risk (Publication Centre)

The improvement in the August services PMI has generated hyperbolic headlines suggesting the U.K. is on a tear despite the Brexit vote. Taken literally, however, the PMIs suggest that the revival in business activity in August only partially reversed July's decline. Meanwhile, the impact of sterling's sharp depreciation on the purchasing power of firms and consumers has only just begun to be felt.

7 August 2017 Japan's Wage Drop not so Damaging as Regular Wages Rise (Publication Centre)

Japanese average cash earnings posted a surprise drop of 0.4% year-over-year in June, down from 0.6% in May and sharply below the consensus for a rise of 0.5%. The decline was driven by a fall in the June bonus, by 1.5%.

6 Nov. 2015 Woeful German Manufacturing Data Curbs Optimism for Q4 (Publication Centre)

German manufacturing data continues to offer a sobering counterbalance to strong services and consumers' spending data. New orders plunged 1.7% month-to-month in September, well below the consensus, pushing the year-over-year rate down to a 1.0% fall from a revised 1.7% increase in August. These data are very volatile, and revisions probably will lift the final number slightly next month, but the evidence points to clear risks of a further decline in the underlying trend of production.

5 Nov 2019 ISM Non-manufacturing Crushed by the Trade War, has it Bottomed (Publication Centre)

The simultaneous decline in both ISM indexes was a key factor driving markets to anticipate last week's Fed easing.

5 July 2018 EZ Services Activity is Solid, Despite Slowing a Bit in H1 2018 (Publication Centre)

Headline Eurozone PMI data have declined steadily since the beginning of the year, but the June numbers stopped the rot.

5 July. 2016 Can We be Sure The Labor Market is Tight Enough to Boost Wage Gains? (Publication Centre)

We have argued consistently for some time that the next year will bring a clear acceleration in U.S. wage growth, because the unemployment rate has fallen below the Nairu and a host of business survey indicators point to clear upward wage pressures. Nominal wage growth has been constrained, in our view, by the unexpected decline in core inflation from 2012 through early 2015, which boosted real wage growth and, hence, eased the pressure from employees for bigger nominal raises.

5 June 2017 The Election Race is Still Tightening, Setting up Sterling for More Volatility (Publication Centre)

The Conservatives' opinion poll lead continued to decline over the last week, suggesting that a landslide victory on Thursday no longer is likely. Indeed, the Tories' average lead over Labour in the 10 most recent opinion polls has fallen to just 6%, down from a peak of nearly 20% a month ago.

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.

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.

12 July. 2016 Do Pricing Distortions Mean We Should Ignore Weak Help Wanted? (Publication Centre)

Judging from our inbox, economy bulls are pinning a great deal of hope on the idea that the collapse in the Help Wanted Online index is misleading, because the index is subject to distortions caused by shifts in pricing behavior in the online job advertising business. These distortions were analyzed in a recent Fed paper--click here to read on the Fed's website-- which makes a convincing case that at least some of the decline in the HWOL over the past half-year represents a change in recruiters' behavior rather than slowing in labor demand.

12 February 2019 Mexican Manufacturing set to Struggle in the First Half (Publication Centre)

The Mexican industrial sector is struggling. December industrial output fell 0.4% month-to-month, the third consecutive drop, driven mainly by a similar decline in mining/oil output.

12 June. 2015 Industrial Output is on Track for a New Post-Crisis High This Year (Publication Centre)

Eurozone manufacturing probably stalled at the start of the second quarter. We think industrial production rose a mere 0.1% month-to-month in April, lower than the 0.4% consensus forecast, and equivalent to a 0.8% increase year-over-year. Output ex-construction was up 0.8% in Germany, but this is likely to be offset by declines in France and Italy, and a hefty 3.2% fall in Greece.

12 May. 2016 EZ Inflation Expectations are Low, But Will Creep Higher Soon (Publication Centre)

The renewed decline in bond EZ bond yields has raised the question of whether inflation expectations will recover at all in this cycle. We think they will, and we also believe 10-year yields will rise towards 1%-to-1.2% towards the end of the year. But two factors will keep inflation expectations and yields in check in the near term.

12 Nov 2019 The Downside Surprise from Q3 GDP has a Silver Lining (Publication Centre)

The headline figures from yesterday's GDP report gave a bad impression. September's 0.1% month-to- month decline in GDP matched the consensus and primarily reflected mean-reversion in car production and car sales, which both picked up in August.

12 August. 2016 Have Gilt Yields Finally Reached Their Floor? (Publication Centre)

Gilt yields have collapsed this year, aided by a surge in safe-haven demand, the much lower outlook for overnight interest rates and the resumption of QE. Bond yields also have fallen globally, but the drop in the ten-year gilt yields to a record low of 0.53%, from nearly 2% at the beginning of 2016, has greatly exceeded the declines elsewhere, as our first chart shows.

12 August. 2016 Consumption Growth Will Slow in Q3, but Remain Respectable (Publication Centre)

It's unrealistic to have a repeat of the second quarter's 4.2% leap in consumers' spending as your base case for the third quarter. It's not impossible, though, given the potential for the saving rate to continue to decline, and the apparently favorable base effect from the second quarter.

11 October 2017 Japan's Current Account Surplus to Remain Stable in 2018 (Publication Centre)

Japan's official seasonally adjusted current account surplus rose to ¥2.27T in August from ¥2.03T in July. But we don't trust the seasonals, and our adjustment model shows the surplus fell slightly, to ¥1.91T in August. A further small decline likely is coming in Q4.

11 Sept 2019 China's PPI Deflation isn't all Commodity-Driven (Publication Centre)

China's PPI deflation deepened in August, with prices dropping 0.8% year-over-year, after a 0.3% decline in July.

11 Sept. 2015 Falling Stock Set to Depress Consumers' Sentiment (Publication Centre)

People don't like to see the value of their portfolios decline, and it is just a matter of time before the benchmark measures of consumer sentiment drop in response to the 7% fall in the S&P since mid-August. Sometimes, movements in stock prices don't affect the sentiment numbers immediately, especially if the market moves gradually. But the drop in the market in August was rapid and dramatic, and gripped the national media.

12 April 2017 Don't Worry About the Weakness in C&I Lending, it will Rebound (Publication Centre)

Friday's weekly report on the assets and liabilities of U.S. commercial banks will complete the picture or March and, hence, the first quarter. It won't be pretty. With most of the March data already released, a month-to-month decline in lending to commercial and industrial companies of about 0.7% is a done deal. That would be the biggest drop since May 2010, and it would complete a 1% annualized fall for the first quarter, the worst performance since Q3 2010. The year-over-year rate of growth slowed to just 5.0% in Q1, from 8.0% in the fourth quarter and 10.3% in the first quarter of last year.

12 September 2017 CPI Inflation Likely Leapt in August and is Still Set to Peak at 3% Soon (Publication Centre)

The upward trend in CPI inflation likely reasserted itself in August, following a hiatus in the last two months due to the decline in oil prices.

13 Apr. 2016 Downside Risk as Autos Set to Pull Down March Retail Sales (Publication Centre)

The headline March retail sales numbers probably will look horrible, thanks to the unexpected drop in auto sales reported by the manufacturers earlier this month. Their unit sales data don't always move exactly in line with the dollar value numbers in the retail sales report, as our first chart shows, but it's hard to imagine anything other than a clear decline today.

13 Nov. 2015 Retail Sales Data are Misleading When Goods Prices Fall (Publication Centre)

Retail sales account for some 30% of GDP--more than all business investment and government spending combined--so the monthly numbers directly capture more of the economy than any other indicator. Translating the monthly sales numbers into real GDP growth is not straightforward, though, because the sales numbers are nominal. Sales have been hugely depressed over the past year by the plunging price of gasoline and, to a lesser extent, declines in prices of imported consumer goods.

14 Nov 2019 Healthcare Inflation is Gathering Steam How Far will it Rise (Publication Centre)

It's hard to know what to make of the October CPI data, which recorded hefty increases in healthcare costs and used car prices but a huge drop in hotel room rates, and big decline in apparel prices, and inexplicable weakness in rents.

14 September 2018 Core Inflation won't Keep Falling (Publication Centre)

We were right about the below-consensus inflation numbers for June, but wrong about the explanation. We thought the core would be constrained by a drop in used car prices, while apparel and medical costs would rebound after their July declines.

15 Dec. 2015 Core CPI Inflation to Hit 2% for the First Time Since May 2014 (Publication Centre)

Falling gas prices will make themselves felt in the November CPI data today, with a likely 4% seasonally adjusted decline enough to subtract 0.2% from the month-to-month change in the headline index. But gas prices plunged by 7.2% in November last year, so in year-over-year terms gas prices will push aggregate headline inflation up. We look for the rate to rise to 0.4%, up from 0.2% in October and zero in September. The same story will play out in January and February too, by which time the headline rate should have risen to 1¼%, assuming a crude oil price of about $35 per barrel.

13 May. 2016 EZ Manufacturing Jumped in Q1, but Likely Will Nosedive in Q2 (Publication Centre)

Activity in the Eurozone industrial sector cooled at the end of the first quarter. Manufacturing production declined 0.8% month-to-month in March, pushing the year-over-year rate down to 0.2% from a revised 1.0% in February. Over Q1 as a whole, though, the story was positive.

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.

13 August 2018 Core Inflation won't Repeat the Jump of the Past Few Months (Publication Centre)

The jump in core inflation in recent months is about as alarming as the sudden decline in the same period last year; that is, not very.

13 February 2017 Can French Investment Maintain Momentum in 2017? (Publication Centre)

French manufacturing cooled at the end of 2016. Industrial production slipped 0.9% month-to-month in December, partially reversing an upwardly revised 2.4% jump in November. The main hits came from declines in oil refining and manufacturing of cars and other transport equipment.

13 Jan. 2016 Sterling Has Not Priced-in Brexit Risks Yet, Despite Recent Plunge (Publication Centre)

Claims abound that sterling's sharp depreciation since the start of the year--to its lowest level against the dollar since May 2010--partly reflects the growing risk that the U.K. will vote to leave the European Union in the forthcoming referendum. We see little evidence to support this assertion. Sterling's decline to date can be explained by the weakness of the economic data, meaning that scope remains for Brexit fears to push the currency even lower this year.

13 July. 2016 German Inflation is Rising, but Will Bund Yields Pay Attention? (Publication Centre)

The final June inflation report from Germany yesterday confirmed that pressures are rising. Inflation rose to 0.3% year-over-year in June, up from 0.1% in May, mainly due to higher energy prices. Household energy prices--utilities--fell 4.9% year-over-year, up from a 5.7% decline in May, while deflation in petrol prices eased to -9.4%, up from -12.1% in May.

11 May. Will March Industrial Production Break the Run of Bad News? (Publication Centre)

The popular belief that economists rarely agree about anything is reinforced by the extremely wide dispersion of forecasts for March industrial production. The forecasts range from the wildly optimistic prediction of a 1.9% month-to-month rise, to a downright miserable 0.3% decline. We think production rose by about 0.5% month-to-month, and this likely will be interpreted as a decent result, following the recent run of bad news.

11 May 2017 Will the Inflation Report Waken the Gilt Market from its Slumber? (Publication Centre)

Gilt yields have been remarkably stable following their decline in response to the Bank of England's Inflation Report in February. The average 60-day price volatility of gilts with outstanding maturities of greater than one year has fallen back recently to lows last seen in 2014, as our first chart shows.

1 Dec. 2014 Eurozone Inflation Squeezed Down from All Sides (Publication Centre)

Inflation data last week confirmed that the spectre of deflation is slowly but surely encroaching on the euro area. In Germany, inflation slipped to 0.6% year-over- year in November, from 0.8% in October, and in the Eurozone as a whole the he adline rate declined to 0.3%, from 0.4% in September.

08 Mar. 2016 Will German Manufacturing Continue to Flatline in Q1? (Publication Centre)

Yesterday's German factory orders data suggest that manufacturing remained weak in the beginning of Q1. New orders fell 0.1% month-to-month in January, though the year-over-year rate rose to 1.1% from a revised -2.2% in December. The small monthly decline was due to a fall in domestic orders; this offset an increase in export orders to other Eurozone economies.

1 December. 2016 Higher EZ Inflation Won't Prevent the ECB from Extending QE (Publication Centre)

Inflation in the Eurozone rose modestly last month. Yesterday's advance CPI report showed the headline rate rising to 0.6% year-over-year in November, from 0.5% in October, mainly because of a jump in fresh food inflation. Energy prices fell 1.1% year-over-year, slightly more than the 0.9% decline in October, but we expect a sharp increase over the next six months.

1 February 2019 Consumer Confidence Indices Likely are Giving an Overly Downbeat Steer (Publication Centre)

It's tempting to conclude from the recent decline in consumers' confidence that growth in real spending will continue to weaken over the coming quarters, from the already modest 1.8% year-over-year rate in Q3.

1 July. 2016 Brexit Vote Prompts a Rate Hike in Mexico - the MXN Rallies, for Now (Publication Centre)

Mexico's central bank, Banxico, capitulated to the sharp MXN depreciation yesterday and increased interest rates by 50bp, for the second time this year, in a bid to support the currency. Raising rates to 4.25% was a brave step, as the economic recovery remains sluggish, thanks mostly to external headwinds. The hike demonstrates that policymakers are extremely worried about the decline in the MXN and its lagged effect on inflation.

06 Jan. 2016 Spotlight Back on the ECB after Soft Eurozone Inflation Data (Publication Centre)

Disappointing inflation data remain a critical dark spot in the context of otherwise solid evidence of a firming cyclical recovery. Advance data indicate that inflation was unchanged at a mere 0.2% year-over-year in December, with falling food inflation and a dip in services inflation offsetting easing deflation in energy prices. Headline inflation likely will be volatile in coming months. Base effects will push up the year-over-year rate in energy price inflation further in Q1, but we are wary that continued declines in food inflation could offset this effect.

05 Jan. 2016 ISM Manufacturing Shouldn't Fall Further, Seasonals Permitting (Publication Centre)

The first major data release of 2016 showed manufacturing activity slipping a bit further at the end of last year, but we doubt the underlying trend in the ISM manufacturing index will decline much more. Anything can happen in any given month, especially in data where the seasonal adjustments are so wayward, but the key new orders and production indexes both rose in January; almost all the decline in the headline index was due to a drop in the lagging employment index.

*Nov. 2016 - U.K.. Economic Chartbook* (Publication Centre)

Exports won't offset a Consumer Slowdown...Sterling decline has Constrained Policymakers

03 Feb. 2016 Cyclical Optimism, but Structural Pessimism, on EZ Unemployment (Publication Centre)

Data yesterday showed that the downward trend in Eurozone unemployment continued towards the end of last year. The unemployment rate fell to 10.4% in December from 10.5% in November, extending an almost uninterrupted decline which began in the first quarter of 2013.

04 Mar. 2016 Will the MPC Cut Rates to Counteract the Slowdown? (Publication Centre)

The chances of a cut in official interest rates were boosted yesterday by the sharp fall in the business activity index of the Markit/CIPS report on services in February, to its weakest level since April 2013. Its decline, to just 52.8 from 55.6 in January, mirrored falls in the manufacturing and construction PMIs earlier in the week and pushed the weighted average of the three survey's main balances down to a level consistent with quarter-on-quarter GDP growth of just 0.2% in Q1.

05 Feb. 2016 Bonds Signal an Imminent EZ Recession, but Don't Take the Bait (Publication Centre)

Strong real M1 growth suggests the cyclical recovery is in good shape. But recent economic data indicate GDP growth slowed in Q4, and survey evidence deteriorated in January. This slightly downbeat message, however, is a far cry from the horror story told by financial markets. The recent collapse in stock-to-bond returns extends the decline which began in Q2 last year, signalling the Eurozone is on the brink of recession.

1 July. 2016 The MPC Likely Will Dash Expectations of Substantial Easing (Publication Centre)

Mark Carney's assertion that "...some monetary policy easing will likely be required over the summer" is a clear signal that an interest rate cut is in the pipeline. But easing likely will be modest, due to the much higher outlook for inflation following sterling's precipitous decline.

1 June. 2015 Brazil's GDP Growth Better Than Expected - But Still Very Bad (Publication Centre)

The fact that Brazilian economy shrank in the first quarter was never in doubt; what really mattered was the pace of contraction. Surprisingly; the decline was just 0.2% quarter-on-quarter in Q1, above market expectations, but still down after the meagre 0.3% gain in Q4.

11 January 2017 Slowdown in C&I Loan Growth Worrisome? (Publication Centre)

On the face of it, the slowdown in bank loan growth to commercial and industrial companies over the past two years looks alarming. In the year to November, the stock of loans outstanding rose by 8.0%, the smallest gain since January 2014. A further decline in the year-over-year rate, taking it below the rate of growth of nominal GDP--we expect 4.7% in the first quarter--for the first time in six years, is now a fair bet. The three- and six-month annualized growth rates of C&I lending in November were just 6.2% and 4.7% respectively, and still falling.

11 January 2018 Chinese Manufacturing Goods Inflation Slows with Commodities (Publication Centre)

Chinese PPI inflation fell to 4.9% in December, from 5.8% in November. The decline was expected, but underneath the slowdown in commodity price inflation, the rate of increase of manufacturing goods prices is slowing sharply too.

11 January 2019 Chinese Inflation will Fall a bit Further, but Deflation is Off the Table (Publication Centre)

Yesterday's price data for China showed continued declines in both CPI and PPI inflation.

11 July. 2016 Lower Inflation in Brazil and Fiscal Tightening Point to Q4 Easing (Publication Centre)

The latest IPCA inflation data in Brazil show the year-over-year rate fell to 8.8% in June from 9.3% in May. This is the slowest pace since May 2015, with inflation pulled lower by declines across all major components, except food. Indeed, food prices were the main driver of the modest 0.4% unadjusted monthto-month increase, rising by 0.7%, following a 0.8% jump in May. The year-over-year rate rose to 12.8% in June from 12.4%.

11 January 2017 France Joins Germany in Picking up Momentum at the End of 2016 (Publication Centre)

Another day, another solid economic report in the Eurozone. Data yesterday showed that industrial production in France jumped 2.2% month-to-month in November, pushing the year-over-year rate up to +1.8%, from -1.8% in October. The 2.3% jump in manufacturing output was the key story, offsetting a 0.3% decline in construction activity. Production of food and beverages rebounded from weakness in October, and oil refining also accelerated.

11 Dec. 2015 Upturn in French Industrial Output is Misleading and Won't Last (Publication Centre)

October industrial production data in France surprised to the upside yesterday, with headline output rising 0.5% month-to-month, well above the consensus estimate and our own forecast for a monthly fall. Production was lifted by a 5.1% month-to-month jump in energy output, due to unusually cold weather, offsetting a 0.5% decline in manufacturing output, the fifth drop in the past six months.

1 June. 2015 Consumption Started Q2 Slowly, but May Looks Much Better (Publication Centre)

The first look at real consumers' spending for the second quarter will be discouraging, at least at the headline level. We expect to see a 0.1% month-to-month decline in real consumers' spending in April, below the +0.1% consensus.

10 Dec. 2015 Lower Oil Prices are Only Modestly Positive for the U.K. Economy (Publication Centre)

The U.K. is one of the smallest winners among advanced economies from the precipitous decline in oil prices. British oil production still fulfils about 55% of the U.K.'s demand, even though it has declined by two-thirds since its 1999 peak. Oil consumption therefore exceeds production by a much smaller margin in the U.K. than in most other European countries. As a result, the boost to the U.K. economy from the $10 decline in oil prices over the last month isn't much to write home about.

10 June. 2016 Falling Real Imports Will Lift German Net Trade in Q2 (Publication Centre)

Germany's external balance was virtually stable at the beginning of the second quarter. The seasonally adjusted trade surplus rose marginally to €23.9B in April from a revised €23.7B in March, mainly due to weakness in imports. Demand for goods abroad fell 0.2% month-to-month, which pushed up the surplus despite amid unchanged exports. Imports fell 1.5% year-over-year in April, up slightly from a 2.5% decline in March.

10 October. 2016 EURGBP close to parity will sting EZ trade surplus (Publication Centre)

The euro has been one of the main "beneficiaries" of the pound's relentless decline, which took on ridiculous dimensions as the GBP crashed almost 10% in the early hours of Friday. EURGBP briefly touched 0.94, before settling at 0.9, up just shy of 30% since November.

15 June 2017 Yellen to Markets: Core Inflation is Noisy, the Labor Market is the Key (Publication Centre)

The Fed's action, statement, and forecasts, and Chair Yellen's press conference, made it very clear the Fed is torn between the dovish signals from the recent core inflation data, and the much more hawkish message coming from the rapid decline in the unemployment rate.

13 June. 2016 Germany Escapes Deflation, and it Won't Return Anytime Soon (Publication Centre)

Inflation in Germany rebounded last month, rising to plus 0.1% year-over-year in May, from minus 0.1% in April. We think the economy has escaped the claws of deflation, for now. Household energy prices fell 5.7% year-over-year in May, up from a 6.3% decline in April, and the rate will rise further. Base effects and higher oil prices point to a surge in energy inflation in the next three-to-six months.

20 December 2017 The IFO Signals a Solid Q4 in Germany, Despite December Dip (Publication Centre)

German survey data did something out of character yesterday; they fell. The IFO business climate index declined to 117.2 in December from a revised 117.6 in November.

15 March 2018 Retail Sales have Corrected from the Post-Hurricane Surge (Publication Centre)

Don't worry about the weakness of the recent retail sales numbers. The three straight 0.1% month-to- month declines tell us nothing about the underlying state of the consumer.

20 Jan. 2015 Current Account Surplus Stays Robust, but Watch Deficit in Spain (Publication Centre)

Eurozone current account data yesterday provided further evidence of stabilisation in the economy despite a headline deterioration. The adjusted current account surplus fell to €18.1B in November from a revised €19.5B in October, but the decline was mainly driven by an increase in current transfers; the core components remain solid.

20 Jan. 2016 EZ Inflation is Weak, but Dip in Services Inflation Won't Last (Publication Centre)

Final inflation data yesterday confirmed Eurozone inflation pressures are still low. Inflation rose to 0.2% year-over-year in December from 0.1% in November, lifted by easing deflation in energy prices. Base effects likely will lift energy price inflation in January and February, but the year-over-year rate will dip in Q2, if the oil price remains depressed. Food inflation fell in December due to a decline in unprocessed food prices, and we see further downside in Q1. Core inflation was unchanged, with the key surprise that services inflation fell to 1.1% from 1.2% in November. We think this dip will be temporary, however, and our first chart shows that risks to services inflation are tilted to the upside.

20 January 2017 Retail Sales Likely Finished the Fourth Quarter on a Softer Note (Publication Centre)

Today's official figures likely will show that retail sales weakened a touch in December. Indeed, we think that the consensus forecast for a 0.1% month-to-month decline in sales volumes is too timid; we look for a 0.5% drop. Retail sales surged by 1.8% month-to-month in October and then rose by 0.2% in November, so a correction is overdue. Clothing sales, in particular, likely fell sharply in December.

2 September. 2016 German Manufacturing is Doing Well, but Others are Struggling (Publication Centre)

Yesterday's final EZ PMIs imply that growth in manufacturing slowed marginally in August. The PMI fell to 51.7, from 52.0 in July, trivially below the initial estimate, 51.8. Output and new orders growth declined, pushing down the pace of new job growth. But we think the hard data for industrial production in Q3 as a whole will be decent.

2 Oct. 2015 Expect Decent September Payrolls, But Sluggish Wage Gains (Publication Centre)

Whatever you think is the underlying tr end in payroll growth, you probably should expect a modest undershoot in today's report, thanks to the persistent tendency for the first estimate of September payrolls to undershoot and then be revised higher. The good news is that the initial September error tends not to be as big as in August--the median revision from the first estimate to the third over the past six years has been 49K, compared to 66K--and it has declined recently. Over the past three years, September revisions have ranged from only 18K to 27K. Still, we can't ignore six straight years of initial undershoots.

19 September. 2016 Soft Colombian Activity Data Pave the Way for Rate Cuts in Early 2017 (Publication Centre)

Recent data have added to the evidence that the Colombian economy stumbled in July. Retail sales plunged 3.3% year-over-year, from an already poor and downwardly revised 0.9% decline in June. The underlying trend is negative, following two consecutive declines, and July's data were the weakest since September 2009.

2 Apr 2020 Tankan Implies a Severe Tightening of Japan's Financial Conditions (Publication Centre)

The Q1 Tankan survey headlines were close to our expectations, chiming with our call for year-over-year contraction in Japanese GDP of at least 2%, after the 0.7% decline in Q4.

2 July. 2015 Slow, but Steady, Recovery for Private Investment in the Eurozone (Publication Centre)

The PMI survey points to a slow, but steady improvement, in Eurozone manufacturing. The gauge rose marginally to 52.5 in June, up from 52.2 in May. This pushed the quarterly average in Q2 to 52.2, up from 51.1 in Q1. The survey is also telling a story of broad-based manufacturing strength in the two major peripheral economies, despite declines in June.

2 March 2017 Money and Credit Data Continue to Sound the Alarm (Publication Centre)

January's money and credit data provided another warning sign that the economy has started 2017 on a weak footing. For a start, the three-month annualised growth rate of M4, excluding intermediate other financial corporations--the Bank's preferred measure of the broad money supply-- declined to 1.8% in January, from 3.1% in December.

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 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.

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 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.

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 Feb. 2016 PMIs Suggest Risks to Q1 EZ GDP Growth are Tilted to the Downside (Publication Centre)

Advance PMI data yesterday supported our suspicion that Q1 economic survey data will paint a picture of slowing growth in the Eurozone economy. The composite PMI in the Eurozone fell to a 13-month low of 52.7 in February from 53.6 in January, driven by declines in both the French and German advance data.

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 Feb. 2016 Survey Data Will Weaken in Q1, But Won't Signal a Major Downturn (Publication Centre)

Economic survey data this week will give the first clear evidence on whether recent market volatility has dented Eurozone confidence. The key business and consumer surveys dipped in January, and we now expect further declines, starting with today's PMI data. We think the composite index fell slightly to 53.0 in February from 53.6 in January.

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 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.

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 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.

19 September 2018 Italian Budget Math Doesn't Add Up (Publication Centre)

Bond yields in Italy remain elevated, but volatility has declined recently; two-year yields have halved to 0.7% and 10-year yields have dipped below 3%.

20 December 2016 Fiscal Easing Likely Would Boost Productivity, but not by Enough (Publication Centre)

The two key planks of the argument that a substantial easing of fiscal policy won't be inflationary are that labor participation will be dragged higher, limiting the decline in the unemployment rate, while productivity growth will rebound, so unit labor costs will remain under control.

16 Sept. 2015 Industry in Less-Bad Shape Than August Data Suggest - Q4 Better? (Publication Centre)

We aren't going to pretend for a minute that the manufacturing sector is anything other than weak, but the 0.5% drop in output in August--the worst month since January 2014--hugely overstates the extent of industry's struggles. All the decline was due to a 6.4% plunge in auto output, but a glance at the recent path of production in this sector makes it very clear that its short-term swings aren't to be taken seriously. Auto production fell by 4.5% in June, rocketed by 10.6% in July, and then dropped sharply in August.

17 February 2017 Slowing Real Incomes Threaten Spending (Publication Centre)

The rate of growth of real personal incomes is under sustained downward pressure, slowing to 2.1% year-over-year in December from 3.4% in the year to December 2015. In January, we think real income growth will dip below 2%, thanks to the spike in the headline CPI, reported Wednesday. Our first chart shows that the 0.6% increase in the index likely will translate into a 0.5% jump in the PCE deflator, generating the first month-to-month decline in real incomes since January last year.

17 June. 2015 FOMC to Acknowledge Rebound, but Rate Dots Likely Unchanged (Publication Centre)

The tone of today's FOMC statement likely will be different to the gloomy April missive, which began with a list of bad news: "...economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated... underutilization of labor resources was little changed. Growth in household spending declined... Business fixed investment softened, the recovery in the housing sector remained slow, and exports declined."

17 June. 2016 As Core Inflation Rises, Upside Wage Risks Increase Too (Publication Centre)

Core CPI inflation is heading for 2½% by the end of this year, and perhaps sooner. The trend in the monthly numbers is now a solid 0.2%, and that's before the weaker dollar arrests the decline in goods prices. Goods account for only a quarter of the core CPI, and right now they are the only part of the index under downward pressure. If--when--that changes, core inflation could rise quite rapidly.

16 November 2017 The Eurozone's Trade Surplus Won't Stay so High for Long (Publication Centre)

We are sticking to our view that the Eurozone's trade surplus will fall in the next six months, despite yesterday's upbeat report. The seasonally adjusted trade surplus leapt to a record high of €25.0B in September from revised €21.0B in August, lifted by an increase in exports and a decline in imports.

19 Sept 2019 CPI Inflation won't Remain Below- Target for Long (Publication Centre)

The decline in CPI inflation to 1.7% in August, from 2.1% in July, has not materially boosted the chances of the MPC cutting interest rates within the next six months.

15 May. 2015 Oil Still Depressing Industrial Production (Publication Centre)

The consequences of the collapse in oil prices continue to reverberate through the sector. The number of rigs in operation is still falling rapidly, but the rate of decline is slowing. According to data from Baker Hughes, Inc., an average of 23 rigs per week have ceased operation over the past four weeks, the slowest decline since December.

15 September 2016 August Retail Sales to Shatter Picture of Consumer Resilience (Publication Centre)

Today's retail sales figures for August likely will rebut the widespread view that spendthrift consumers will prevent a sharp economic slowdown. We look for a 1% month-to-month decline in retail sales volumes in August, well below the -0.4% consensus forecast.

16 December 2016 The Eurozone Manufacturing Sector is Picking up Momentum (Publication Centre)

Yesterday's euro area PMI data continue to tell a story of a firm business cycle upturn. The composite PMI was unchanged at 53.9 in December; an increase in the manufacturing index offset a decline in the services PMI.

16 February 2017 Slowdown in Wage Growth Further Reduces 2017 Rate Hike Chances (Publication Centre)

Yesterday's labour market data delivered a further blow to hopes that consumers' spending will retain enough momentum for the MPC to press ahead and raise interest rates this year. The most striking development is the decline in year-over-year growth in average weekly wages to just 1.9% in December, from 2.9% in November.

17 September 2018 CPI Inflation Likely Returned to its Downward Path in August (Publication Centre)

We expect August's consumer price figures, released on Wednesday, to show that CPI inflation declined to 2.4%, from 2.5% in July, matching the consensus and the Bank of England's forecast.

16 June. 2016 Don't Fret Over One Jobs Report, Says Yellen, Doing Exactly That (Publication Centre)

If the Fed really believed its own rhetoric--"Inflation is expected... to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further"--it would have raised rates yesterday, given the very long lags between policy action and the response from the real economy.

18 Dec. 2014 Outright Deflation is Now a Real Risk for the Eurozone in Q1 (Publication Centre)

Inflation in the euro area remains under pressure, with both the core and the energy components contributing to the downward trend evident in our first chart. Headline inflation fell to 0.3% year-over-year in November, from 0.4% in October, and we expect a further decline this month.

19 June 2017 Don't be Deceived by Jumping EZ Car Sales, Momentum is Slowing (Publication Centre)

Demand for new cars in the Eurozone rebounded last month. New car registrations jumped 10.3% year-over-year in May, reversing the 5.1% decline in April. The headline was boosted by solid growth in all the major economies.

19 Nov. 2015 A Rebound in Construction Could Lift Investment in the Eurozone (Publication Centre)

The construction sector in the Eurozone remains moribund. Output fell 0.4% month-to-month in September, pushing the year-over-year rate up to 1.8% from a revised 1.4% fall in August. Declines were recorded in France, Germany, and Italy, with a small increase in Spain. These data could, in theory, lead to revisions in the final Q3 Eurozone GDP data released December 8th, but we very much doubt they will move the needle. Our first chart shows the relationship between construction and GDP growth has broken down since the crisis.

19 October. 2016 Consumers Still Under Strain in Brazil, but Rate Cuts will Help (Publication Centre)

Yesterday's retail sales data in Brazil surprised to the downside. Consumers are still being squeezed by high interest rates and a deteriorating labour market. Retail sales declined 0.6% month-to-month in August, leaving the year-over-year rate little changed at -5.5%.

19 Jan. 2016 RPI Inflation Will Strengthen More Rapidly Than Markets Expect (Publication Centre)

RPI inflation has declined in importance as a measure of U.K. inflation and was stripped of its status as a National Statistic in 2013. Yet it is still used to negotiate most wage settlements, calculate interest payments on index-linked gilts, and revalue excise duties. We have set out our above-consensus view on CPI inflation several times, including in yesterday's Monitor. But the potential for the gap between RPI and CPI inflation to widen over the coming years also threatens the markets' view that the former will remain subdued indefinitely.

19 Jan. 2016 Services Will Push up German Core Inflation this Year (Publication Centre)

Detailed German inflation data today likely will confirm that inflation fell to 0.3% year-over-year in December from 0.4% in November, mainly due to falling food inflation. Preliminary data suggest that food inflation declined sharply to 1.4% from 2.3% in November, offsetting slower energy price deflation, due to base effects. Food and energy prices are wild cards in the next three-to-six months, and could weigh on the headline, given the renewed weakness in oil prices, and lower fresh food prices. Core inflation, however, is a lagging indicator, and will continue to increase this year.

19 August. 2016 Retail Data Point to Soft Second Quarter GDP Growth in Colombia (Publication Centre)

Data this week confirmed that private spending in Colombia stumbled in June. Retail sales fell 0.7% year-over-year, from an already poor -0.4% in May. The underlying trend is negative, following two consecutive declines, for the first time since late 2009. Domestic demand remains subdued as consumers are scaling back spending due to weaker real incomes, lower confidence and tighter credit and labor market conditions.

18 Oct 2019 Housing Investment Looks Set for a Double-Digit Q4 Jump (Publication Centre)

The declines in headline housing starts and building permits in September don't matter; both were driven by corrections in the volatile multi-family sector.

18 Feb. 2016 Has the Chancellor's Room for Manoeuvre Disappeared? (Publication Centre)

The stubbornly slow rate of decline of public borrowing casts doubt on whether the Chancellor will run a budget surplus before the end of this parliament, as his fiscal rule stipulates. But downward revisions to debt interest forecasts by the Office for Budget Responsibility are likely to absolve him again from intensifying the impending fiscal squeeze in the Budget on March 16.

18 December 2017 Why We're Below the Consensus on CPI Inflation Next Year (Publication Centre)

Our forecast that CPI inflation will return to the 2% target by the end of 2018 sets us apart from the MPC and consensus, which expect a more modest decline, to 2.4%.

18 July 2019 Multi-family Construction has Peaked Vacancy Rate to Fall Further (Publication Centre)

The declines in headline housing starts and building permits in June don't matter; both were depressed by declines in the wildly volatile multi-family components.

REUTERS - UK manufacturing outlook darkens, retail sales slip (Media Centre)

Chief U.K. Economist Samuel Tombs comments on U.K. Manufacturing

LA TIMES - Durable goods orders unexpectedly tumble sharply in February (Media Centre)

Chief US Economist Ian Shepherdson on Durable Goods Orders, February

BLOOMBERG - Fiscal spending cushions Chile's first contraction in 6 years (Media Centre)

Senior International Economist Andres Abadia on Chile GDP.

BLOOMBERG - Chile's Economy Grows More Than Forecast as Demand Picks Up (Media Centre)

Senior International economist Andres Abadia comments on Chile's economic growth

BUSINESS INSIDER - It was a rough morning for the US economy (Media Centre)

Ian Shepherdson comments on Retail Sales data for June

Financial Times - US housing starts rise for second month in April (Media Centre)

Chief U.S. Economist Ian Shepherdson on U.S. housing starts

BBC - UK industrial production shrank in 2015 (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Industrial Production

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