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*May 2017 - EZ Economic Chartbook* (My Publications)

The Eurozone optimists are out in numbers...But don't expect economic miracles just yet

*Oct. 2016 - Eurozone. Economic Chartbook* (My Publications)

Political certainty is at a premium in the EZ......But Economic data remain resilient

13 Oct. 2015 Could Higher Rates Really "Spur" Faster Economic Growth? (My Publications)

What should we make of the view of Fed hawks, set out with admirable clarity in the September FOMC minutes, that higher rates "might spur rather than restrain economic activity"? The core story behind this counter-intuitive proposal is the idea that zero rates send a signal to the private sector that the Fed is deeply worried about the state of the economy.

20 Nov. 2015 Economic Conditions Deteriorate in Brazil - No Bottom Just Yet (My Publications)

This week economic data highlighted the severity of Brazil's economic recession and the huge challenges it will face next year to return to growth. The recession further deepened in the third quarter with the economic activity index--a monthly proxy for GDP--surprising, once again, to the downside in September. The index fell 0.5% month-to-month, pushing the year-over-year rate down to 6.2%, the steepest fall on record. The series is very volatile on a monthly basis, but the underlying trend remains grim.

31 May 2017 Argentina's Economic Recovery Continues, but Brazil's is at Risk (My Publications)

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.

28 June. 2016 The Case for Stronger U.S. Economic Growth is Still Robust (My Publications)

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.

22 Mar. 2016 Will Economic Survey Data Step Back From the Brink this Week? (My Publications)

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.

*March 2017 - U.S. Economic Chartbook* (My Publications)

The Fed Is On Course For Four Hikes This Year...And Another Four In 2018

*May 2017 - U.K. Economic Chartbook* (My Publications)

Rising Inflation has ended the consumer boom...Investment and Trade won't fill the void

*March 2017 - U.K. Economic Chartbook* (My Publications)

Consumers are buckling under high inflation...but the MPC won't add to their woes by hiking rates

*March 2017 - Eurozone Economic Chartbook* (My Publications)

Dutch Pro-EU Centrists Carry The Day...But We Can't Assume The Same Will Happen In France

*June 2017 - U.S.. Economic Chartbook* (My Publications)

The Payroll "Slowdown" Won't Last... The Fed Will Hike This Month, and Again Later This Year

*May 2017 - U.S.. Economic Chartbook* (My Publications)

Don't be distracted by weak first quarter GDP...The Fed doesn't care (much)

*Oct. 2016 - LATAM. Economic Chartbook* (My Publications)

Latam activity and markets are improving......but volatility will rise in Q4 due to global factors

*September 2017 - U.S.. Economic Chartbook* (My Publications)

Harvey and Irma will shred late q3/q4 data... ...if the fed doesn't hike in December, they will in march

30 Nov. 2015 Bullish Economic Data Will Not Deter the ECB this Week (My Publications)

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.

31 March 2017 The Economic Outlook is Improving in Brazil, and even in Mexico (My Publications)

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.

*September 2017 - U.K. Economic Chartbook* (My Publications)

The MPC talks up raising bank rate soon...but weak wage growth likely will mean it hesitates

*September 2017 - EZ Economic Chartbook* (My Publications)

The EZ Economy has rarely been in better from...but external risks and policy uncertainty loom.

*Nov. 2016 - U.S.. Economic Chartbook* (My Publications)

More Public Spending and Higher Rates in 2017...Whoever Wins

*June 2017 - U.K. Economic Chartbook* (My Publications)

Real wage falls are slowing the economy...Fears of rate hikes this year are overblown

*Oct. 2016 - U.S.. Economic Chartbook* (My Publications)

The FOMC is split on everything......but a clear majority will vote to hike in December

*Nov. 2016 - Eurozone Economic Chartbook* (My Publications)

The EZ Economy entered Q4 on a solid footing...But the Political Uncertainty Looms

*July 2017 - U.K. Economic Chartbook* (My Publications)

Growth is too slow to warrant a rate hike...domestically-generated inflation remain weak

*August 2017 - U.S.. Economic Chartbook* (My Publications)

Fed tightening is deferred, not cancelled...Expected a December hike after robust fall data

*Dec. 2016 - Eurozone Economic Chartbook* (My Publications)

The EZ economy will finish 2016 strongly...but political risks continue to simmer

*Dec. 2016 - U.K.. Economic Chartbook* (My Publications)

A Consumer and Investment Slowdown Beckons......Tighter Macro Policy will worsen the downturn

*August 2017 - U.K. Economic Chartbook* (My Publications)

Sterling's fall is hurting more than it's helping...Slow GDP and wage growth will keep the MPC inactive

*August 2017 - EZ Economic Chartbook* (My Publications)

The EZ economy finally stretches its legs...but it won't sustain Q1 and Q2 momentum for long

*April 2017 - U.K. Economic Chartbook* (My Publications)

Rising Inflation is Causing a Sharp Slowdown...Sterling's Depreciation has been Harmful so Far

*April 2017 - U.S.. Economic Chartbook* (My Publications)

The Tightening Labor Market is all that Matters...Expect the Fed to Hike at Each Quarter-End

*Dec. 2016 - U.S. Economic Chartbook* (My Publications)

Brace for the Fed's Pushback...But only when Fiscal Easing is in front of Congress

*Feb 2017 - EZ Economic Chartbook* (My Publications)

The EZ Economy is in a good Cyclical Shape.. But Can It Shrug off Political Changes in 2017?

*Jan. 2017 - U.S. Economic Chartbook* (My Publications)

The Fed is fretting over fiscal easing......upside risk to growth, inflation and interest rates

*July 2017 - EZ Economic Chartbook* (My Publications)

The Eurozone economy is in fine form...but this is likely as good as it gets

*July 2017 - U.S.. Economic Chartbook* (My Publications)

The Fed plans to keep on hiking...falling unemployment is the key, not the softer CPI

*Jan 2017 - U.K. Economic Chartbook* (My Publications)

A consumer and investment slowdown beckons...Tighter macro policy will worsen the downturn

*Jan 2017 - Eurozone Economic Chartbook* (My Publications)

The EZ economy powered ahead in 2016...and is so far oblivious to political risks

*Feb 2017 - U.K. Economic Chartbook* (My Publications)

A Consumer slowdown is under way...Policymakers will not provide more stimulus

*Feb 2017 - U.S. Economic Chartbook* (My Publications)

How and when will the Fed respond to Fiscal Easing?

*June 2017 - EZ Economic Chartbook* (My Publications)

The Eurozone Economy Is In Fine Form.. But Don't Believe Everything the ECB is Telling You

*Nov. 2016 - U.K.. Economic Chartbook* (My Publications)

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

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

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.

10 October. 2016 Mexican Consumption is Slowing, as the External Picture Improves (My Publications)

Mexican economic growth was subdued during the first half of the year, and we expect it to remain weak over the coming months. The economy has been held back largely by external headwinds, especially low oil prices and disruptions to activity in the US, its main trading partner.

15 September 2017 Brazil Started Q3 Strongly, and the Recovery Should Continue in Q4 (My Publications)

Brazil's July economic activity index, released yesterday, showed that the economy started the second half of the year strongly. The IBC-Br index, a monthly proxy for GDP, rose 0.4% month-to-month, pushing the year-over-year rate up to 1.4%, from -0.4% in June.

3 July 2017 Will the Argentinian Economy be Oblivious to Political Risks? (My Publications)

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.

15 Jan. 2016 Equity Price Drop Not Yet Big Enough to Darken Growth Outlook (My Publications)

The FTSE 100 fell further yesterday, briefly to levels not seen since November 2012, but its drop over recent months is not a convincing signal of impending economic disaster. The economic recovery is likely to slow further, but this will reflect the building fiscal squeeze and the sterling-related export hit much more than the wobble in market sentiment.

4 September 2017 Will the Economy be Hit by a Snap Back in Households' Saving Ratio? (My Publications)

Households' decision to reduce their saving rate sharply was the main reason why economic growth exceeded forecasters' expectations in the aftermath of the Brexit vote.

6 July. 2016 The EZ Economy is at the Mercy of Rising Political Uncertainty (My Publications)

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.

12 Feb. 2016 Collapse in Equity Prices Still Not a Convincing Signal of Recession (My Publications)

The downturn in equity prices deepened yesterday, with the FTSE 100 index closing at 5,537, 22% below its April 2015 peak. We remain unconvinced, however, that financial market turmoil is set to push the U.K. economy into a recession. We continue to take comfort from the weakness of the past relationship between equity prices and economic activity.

25 April 2017 Mexico's IGAE Confirms a Surprisingly Firm Economy in Q1 (My Publications)

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.

23 Oct. 2015 BCB Stuck Between Inflation Risks and Deep, Long Recession (My Publications)

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.

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

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.

20 Nov. 2015 Will Corporate Yields Become a Good Leading Indicator Again? (My Publications)

In the years before the crash of 2008, if you wanted to know what was likely to happen to the pace of U.S. economic growth, all you needed to know was what happened to corporate bond yields a year earlier. The correlation between movements in BBB industrial yields--not spreads--and the changes in the rate of GDP growth, lagged by a year, was remarkably strong from 1994 through 2008, as our first chart shows. Roughly, a 50 basis point increase in yields could be expected to reduce the pace of year-over-year GDP growth--the second differential, in other words--by about 1.5 percentage points.

20 Jan. 2016 Venezuela Is Collapsing - LatAm's Star--Colombia--Is Merely Slowing (My Publications)

Commodity prices have started the year under further downward pressure. This is yet more negative news for LatAm, as most of the countries have failed to diversify, instead relying on oil or copper for a large share of exports and, critically, tax revenue. Venezuela is the biggest loser in the region from the oil hit, and, together with the worsening political and economic crisis, it has pushed the country even closer to the verge of collapse, threatening its debt payments. Venezuela's central bank last week released economic data for the first time since 2014, showing that inflation spiralled to 141% and that the economy shrank 4.5% in the first nine months of last year.

16 May 2017 Upbeat March's Data in Brazil Confirms the Recession is Over (My Publications)

Economic data released yesterday underscored that Brazil emerged from recession in the first quarter, but further rate cuts are needed. Indeed, the monthly economic activity index--the IBC-Br--fell 0.4% monthto- month in March, though this followed a strong 1.4% gain in February.

18 July. 2016 Chile and Peru Hold Interest Rates, Hikes Will Come but not Until 2017 (My Publications)

Central banks in Chile and Peru kept their reference rates unchanged last week, as expected, as inflation pressures in both countries are starting to ease. But different economic outlooks are emerging. Chile's economy continues to disappoint, while Peru's is picking up. Indeed, Peru is the only country in the region with clear positive momentum.

29 Apr. 2016 Brazil's Central Bank Lays The Groundwork for a Rate Cut in Q3 (My Publications)

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.

04 Jan. 2016 Uncertainty in Brazil Contrasts With Mexico's Benign Outlook (My Publications)

While we were out, Brazil's economic, fiscal and political position continued to deteriorate further. The recession deepened in the fourth quarter, with Brazil's economic activity index surprising yet again to the downside in October, falling for the eight consecutive month. The index fell 0.6% month-to-month and 6.4% year-over-year, the biggest contraction since the index began in 2004. And the prospects for first quarter consumption and industrial output have deteriorated substantially. Unemployment increased further in November, and inflation continues to rise, with the mid-month CPI--the IPCA-15 index-- increasing 1.2% month-to-month in November, after a 0.9% increase in October.

28 Oct. 2015 Domestic Data Point to Robust Third Quarter Growth in Mexico (My Publications)

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.

20 June 2017 Brazil's Recovery Continues, but Politics have Harmed its Prospects (My Publications)

Economic data released in recent weeks underscore that Brazil emerged from recession in Q1, but the recovery is fragile and further rate cuts are badly needed. The political crisis has damaged the reform agenda, and political uncertainty lingers.

17 June. 2015 Brazilian Retailers Face Tough Times As Consumers Tighten Belts (My Publications)

Consumption remains a serious weak spot in Brazil's economic cycle. High inflation, rising interest rates, surging unemployment, plunging confidence, and the government's belt tightening, have trashed Brazilians' purchasing power. Retail sales surprised to the downside in April, falling 0.4% month-to-month, equivalent to a huge 3.5% contraction year-over-year, down from a revised 0.3% gain in March. The underlying trend is awful, as our first chart shows.

24 August. 2015 Better Economic News Fails to Lift LatAm Sentiment - Fx Still Trashed (My Publications)

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.

08 Jan. 2016 Colombia's Economic Resilience Will be Challenged - Oil Is Still Key (My Publications)

Colombia was likely the fastest growing economy in LatAm in 2015, but it is set to slow this year as monetary and fiscal policy are tightened, and commodity prices remain under pressure during the first half of the year, at least. Economic activity was surprisingly resilient during 2015, especially during the second half, despite the COP's sell-off, high inflation, and subdued consumer confidence.

06 Jan. 2016 Chile's Economic Recovery is Still Fragile And China-Dependent (My Publications)

Chile's economic outlook is still clouded, due mostly to the slowdown in China and low copper prices. But the steady, slow increase in the Imacec index, a monthly proxy for GDP, supports our view of a sustained but modest economic recovery this year. The index increased 1.8% year-over-year in November, marginally up from the meagre 1.5% gain in October, but below the 2.2% average seen during Q3 as a whole. November's gain was driven by an increase in services activity, offsetting weakness in mining. Services have been the key engine of growth in the current cycle and likely will remain so in H1.

27 June 2017 Mexican Economic Growth Will be Sustained over the Second Half (My Publications)

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

24 January 2017 EZ Economic Data Will Struggle to Live Up to Expectations in Q1 (My Publications)

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.

6 July. 2016 Economic Activity Remains Soft in the Andes, But Will Improve Ahead (My Publications)

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%.

2 Oct. 2015 Economic Activity Remains Weak in Chile - But the BCCh Will Act (My Publications)

Chile's economic indicators for July were unreservedly weak, confirming that the economic recovery remains sluggish. The industrial production index--comprising mining, manufacturing, and utility output--fell by 5.2% year-over-year in August, after a 1.7% contraction in July. Mining production suffered a sharp 9.3% year-over-year contraction, due mainly to an 8.3% fall in copper production, as strikes and maintenance works badly hit the industry.

07 Jan. 2016 Solid EZ Economic Data Amid Rising Volatility in Equity Markets (My Publications)

Increased volatility has given equity investors a torrid start to the year, but economic reports have been strong, and yesterday's PMIs were no exception. The composite index in the Eurozone rose marginally to 54.3 in December from 54.2 in November, slightly higher than the initial estimate of 54.0. This is consistent with a continuing cyclical recovery, and real GDP growth of 0.4%-to-0.5% in Q4, modestly higher than the 0.3% rise in the third quarter.

18 July 2017 Colombia's Economic Prospects Remain Poor, but they will Improve (My Publications)

May's activity data underline the weakness of Colombia's economic growth. Domestic demand still is under pressure due to the lagged effect of the deterioration in the terms of trade and other temporary shocks in 2016, and the VAT increase in January this year.

22 July. 2015 The Economic Recovery in Spain is Real, But Can it Last? (My Publications)

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 Dec. 2015 Miserable Economic And Political News Keeps Coming For Brazil (My Publications)

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.

25 Sept. 2015 Economic Sentiment is Holding Up amid Investor Angst (My Publications)

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.

20 July. 2015 Brazil's Economic Woes Set to Continue Over the Third Quarter (My Publications)

Brazil's April economic activity index--a monthly proxy for GDP--surprised to the downside, again. The IBC-BR index was unchanged month-to-month but contracted a dreadful 4.8% year-over-year, down from a revised 3.2% contraction in March. These results imply Q2 GDP of about -1.9% quarter-on-quarter, much worse than the 0.2% contraction in Q1. The release offers no details, but the report signals a continued steep, steady deterioration.

25 April 2017A Government Shutdown Would Say More About Politics Than Economics (My Publications)

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.

23 Mar. 2016 Welcome March Rebound in Eurozone Economic Survey Data (My Publications)

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.

6 July. 2015 Colombia's Economic Activity Resilient, but is it Sustainable? (My Publications)

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 Mar. 2015 A more upbeat Mr. Draghi, but QE is not challenged by better economic data (My Publications)

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".

U.K. Economic Research

U.K. Economic Monitor, Datanotes and Presentations

Asia Economic Research

Asia Economic Monitor, Datanotes and Presentations

U.S. Economic Research

U.S. Economic Monitor, Datanotes and Presentations

Latin America Economic Research

Eurozone Economic Monitor, Datanotes and Presentations

Eurozone Economic Research

Eurozone Economic Monitor, Datanotes and Presentations

*Oct. 2016 - U.K. Economic Chartbook* (My Publications)

Inflation and Brexit risks will subdue growth.....Policy action won't prevent a slowdown

DUKASCOPY TV - Claus Vistesen discussing Italy's place in the Eurozone (News and Media)

After disappointing Italian Industrial Output Data, Pantheon Macroeconomics Chief Eurozone Economist Claus Vistesen discusses the current situation in the Eurozone.

INDEPENDENT - The chart that shows the UK economic recovery is "on its knees" (News and Media)

Chief U.K. Economist Samuel Tombs on the U.K. PMI data, April

WALL STREET JOURNAL - ISM Services Report Alleviates Market's Economic Anxiety (News and Media)

Chief U.S. Economist Ian Shepherdson on the latest ISM Non-Manufacturing data release

About Us

Pantheon Macroeconomics' Chief Economist Dr. Ian Shepherdson provides unbiased, independent economic intelligence to financial market professionals.

DAILY TELEGRAPH - Germany's economic revival threatened by Greek crisis and Russian uncertainty (News and Media)

A closely watched indicator of the German economy has come in weaker than analysts had anticipated, dampening hopes for the country's revival

BBC - UK economic growth slows to 0.4% in first quarter (News and Media)

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

CBS NEWS - U.S. economic growth slowed in the fourth quarter (News and Media)

Chief U.S. economist Ian Shepherdson comments on U.S Q4 GDP

8 May 2017 Rocky Commodity Markets Put LatAm FX under Temporary Stress (My Publications)

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.

30 June. 2016 Political Vacuum in the U.K. Prompts the EU to Up the Pressure (My Publications)

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.

8 June. 2015 Inflation improving in key LatAm countries, but risks remain (My Publications)

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.

7 February 2017 Disinflation in Colombia Continues, but Momentum is Easing, for now (My Publications)

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.

28 March 2017 Could a Rebounding Eurozone Prevent a U.K. Slowdown? (My Publications)

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.

29 June 2017 GDP Seasonal Adjustment Problems Persist, a Fix is Promised in July (My Publications)

The third estimate of first quarter GDP growth, due today, will not be the final word on the subject. Indeed, there never will be a final word, because the numbers are revised indefinitely into the future.

Claus Vistesen

Claus Vistesen has several years' experience in the independent macro research space, as a freelancer, consultant and, latterly, as Head of Research of Variant Perception, Inc. He holds Master's degrees in economics and finance from the Copenhagen Business School and the University of Hull.

3 Mar. 2015 Weak Euro Boosts Orders for Manufacturers (My Publications)

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.

4 April 2017 Mexican Markets Had a Good Q1, the Next Test is on the Political Front (My Publications)

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.

Samuel Tombs

Samuel Tombs has focused on the U.K. economy since 2009. Prior to joining Pantheon, he was Senior U.K. Economist at Capital Economics, leading the team which topped the 2014 Sunday Times' poll of forecasters. In 2011, Samuel won the Society of Business Economists' prestigious Rybczynski Prize for an article on quantitative easing in the UK.

4 Nov. 2015 Mexico's Economy Solid in Q3 - Soft Manufacturing No Threat Yet (My Publications)

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.

5 April 2017 The Construction Sector Will Continue to Tread Water (My Publications)

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.

Freya Beamish

Freya Beamish produces the Asia service at Pantheon. She has several years of experience in covering the global economy, with a particular focus on China, Japan and Korea. Previously, she worked at Lombard Street Research (now TS Lombard), where she delivered research on Asia and the Global economy for over five years, latterly as the manager of the Macroeconomics group.

5 May 2017 Surveys Signal a Solid Start to Q2, but "Hard" Data Remain Weak (My Publications)

Activity surveys picked up across the board in April, offering hope that the slowdown in GDP growth--to just 0.3% quarter-on-quarter in Q1-- will be just a blip. The headline indicators of surveys from the CBI, European Commission, Lloyds Bank and Markit all improved in April and all exceeded their 2004-to-2016 averages.

4 July. 2016 A Look into the Abyss - Will the EZ and the EU Disintegrate? (My Publications)

For some economists and political analysts the surprising result of the U.K.'s EU referendum symbolises one of the biggest threats to the structure of the post-war social-liberal market economy. To this school of thought, the vote proved that the discontent of a pressured and disenfranchised working/middle class is rising, threatening to topple economies and political institutions.

Andres Abadia

Andres Abadia, who authors our Latin American service, was previously Head of Research at Bankia in Madrid. Andres is a native of Colombia and has wide and deep experience covering all the Latin American economies. He has degrees in Economics from the Universidad Autónoma de Madrid, Spain and the Universidad Externado de Colombia.

31 May 2017 Manifestos Point to Very Different Public Borrowing Paths (My Publications)

The recent narrowing of the Conservatives' opinion poll lead suggests that investors, particularly in the gilt market, now must consider other parties' fiscal proposals.

Ian Shepherdson

Ian Shepherdson's mission is to present complex economic ideas in a clear, understandable and actionable manner to financial market professionals. He has worked in and around financial markets for more than 20 years, developing a strong sense for what is important to investors, traders, salespeople and risk managers.

9 May 2017 Does the Economy Thrive Under "Strong and Stable" Government? (My Publications)

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."

6 January 2017 Are Markets Complacent About the Chances of a 2017 Rate Hike? (My Publications)

Investors have treated the upbeat message of the Markit/CIPS PMIs this week with caution and continue to think that the chance that the MPC will raise interest rates this year is remote. Overnight index swap rates currently are pricing-in just a one-in-four chance of a 25 basis point increase in Bank Rate in 2017.

30 May 2017 Should Investors Start to Fear a Hung Parliament? (My Publications)

The Conservatives' opinion poll rating has fallen dramatically over the last 10 days or so, pushing sterling down and forcing investors to confront the possibility that Theresa May might not increase her majority much from the current paltry 17 MPs.

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

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.

14 February 2017 Brace for January Data to Show Another Hefty Rise in CPI Inflation (My Publications)

January's consumer price report, released today, likely will show that CPI inflation jumped to 1.9%--its highest rate since June 2014--from 1.6% in December. Inflation will continue to take big upward steps over the coming months, as retailers pass on to consumers large increase in import prices and energy companies increase tariffs.

13 June 2017 NFIB Headline Likely to Decay, but Capex and Jobs Readings are Strong (My Publications)

Under normal circumstances, we can predict movements in the headline NFIB index from shifts in the key labor market components, which are released a day ahead of the official employment report, and, hence, about 10 days before the full NFIB survey appears.

15 February 2017 Poor Brazilian Retail Sales don't Change the Improving Trend (My Publications)

Brazil's consumer spending data yesterday appeared downbeat. Retail sales fell 2.1% month-to-month in December, pushing the year-over-year rate down to 4.9%, from -3.8% in November. This is a poor looking headline, but volatility is normal in these data at this time of the year, and the underlying trend is improving.

15 Jan. 2016 Don't Believe Everything You See in Germany's GDP Data (My Publications)

Yesterday's preliminary full-year GDP data in Germany tell a cautionary tale of the dangers in taking national accounts at face value. The headline data suggest real GDP growth rose to 1.7% in 2015, up slightly from 1.6% in 2014, but these data are not adjusted for calendar effects. The working-day adjusted measure buried in the press release instead indicates that growth slowed marginally to 1.5% from 1.6% in 2014.

16 Dec. 2014 Political Gamble in Greece Raises Market Risks over the Holidays (My Publications)

Political risks have returned to the Eurozone with the decision by Greek Prime Minister Samaras to initiate the election of a president, raising the risk of a Greek parliamentary election early next year.

16 August. 2016 BanRep Will End its Tightening Cycle - Inflation is Set to Fall (My Publications)

The account of BanRep's July meeting revealed a significant tug-of-war between the doves and hawks. The majority argued strongly that Colombia's central bank should hike the main interest rate again, by 25bp. Others judged that the benefits of further tightening did not outweigh the costs.

6 Feb. 2015 Chilean Growth Is Improving, But China's Slowdown Is A Worry (My Publications)

Chilean GDP growth hit bottom in August, but activity is now picking up and will gather speed over the coming quarters. The tailwinds from lower oil prices and fiscal stimulus will soon be visible in the activity data.

13 June 2017 May's Inflation Figures Likely Will Bring Another Upside Surprise (My Publications)

May's consumer price figures, released today, will provide the first clean inflation read for three months, following the distortions created by this year's late Easter. Consensus forecasts and the MPC have underestimated CPI inflation regularly since the middle of last year, when the impact of sterling's depreciation began to push into the data.

10 May. Hold Your Nerve on Brexit Risk, Despite Troubling Polls (My Publications)

With just over six weeks to go, opinion polls continue to suggest that the E.U. referendum will be extremely close. Noisy interventions in the public debate from the Treasury, independent international bodies, President Obama, and from the Prime Minister again today have had no discernible positive impact on the support for "Bremain" relative to "Brexit"

12 October. 2016 After High Volatility in Q4, LatAm Currencies Will Strengthen in 2017 (My Publications)

Investors will increase their focus on exchange rates as the US presidential election and the Fed's next rate hike approach. Markets are becoming concerned that a surge in the USD could trigger another spike in LatAm currency volatility, depressing the good year- to-date performance of most local market assets.

07 May. 2015 How Far Will Yields Rise When the Activity Data Turn Higher? (My Publications)

Along with just about every other commentator and market participant, we have been wondering in recent months how longer Treasuries would react to the Fed starting to raise rates at the same time the ECB and BoJ are pumping new money into their economies via QE.

04 Mar. 2016 Solid Services Activity Continues to Limit the Slide in the PMIs (My Publications)

Yesterday's final February PMI data were slightly stronger than expected, due to upbeat services data. The composite PMI in the Eurozone fell to 53.0, a bit above the initial 52.7 estimate, from 53.6 in January. The PMI likely will dip slightly in Q1 on average, compared to Q4, but it continues to indicate stable GDP growth of about 0.3%-to-0.4% quarter-on-quarter.

02 Mar. 2016 Chile Started the Year on a Soft Note - Mining Still the Main Drag (My Publications)

Chile's weak indicators in January confirm that the economy is struggling. Mining output plunged 12.6% year-over-year, down from a modest 0.6% contraction during Q4, due mostly to falling copper production and an unfavourable base effect. This will reverse in February but we still look for a 5% drop.

28 February 2017 The Eurozone Business Cycle Upturn is Resilient and Robust (My Publications)

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.

16 Feb. 2015 Central Banks in LatAm Concerned about Inflation Pass-Through (My Publications)

Central banks in Chile, Peru, and Mexico hogged the market spotlight last week. Chile left its main interest rate at 3.0% on Thursday, for the fourth consecutive meeting.

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

Argentina's economy continues to recover steadily.

24 June. 2016 Markets Wild After Brexit Vote, LatAm Currencies Under Pressure (My Publications)

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.

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

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.

26 January 2017 GDP Growth Remained Brisk in Q4, but Headwinds are Building (My Publications)

Today's preliminary estimate of Q4 GDP likely will show that the Brexit vote has not caused the economy to slow yet. But growth at the end of last year appears to have relied excessively on household spending, which has been increasingly financed by debt. GDP growth likely will slow decisively in Q1 as the squeeze on households' real incomes intensifies.

13 Feb. 2015 A Tough 2015 Ahead for Brazil as Downside Risks to Growth Intensify (My Publications)

Over the last few months we have started to see hard evidence of Brazil's deceleration, and, as we have argued in previous Monitors, the slowdown is now set to become more visible. Over the coming weeks, markets will focus on whether Brazil is already in recession, its likely severity, and how the country will get out of this mess.

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

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."

17 July 2017 Mexico's Industrial Sector Remains Subdued, Oil is Mainly to Blame (My Publications)

Upbeat survey data and relatively resilient consumer spending numbers indicate that the Mexican economy is in good shape, despite a marginal slowdown in most of Q2.

23 May 2017 The Mexican Economy Shrugged Off Trump in Q1, But Risks Remain (My Publications)

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%.

19 September 2017 Separatists in Catalonia are on the Road to Nowhere (My Publications)

The face-off is intensifying between Madrid and the pro-independent local government in Catalonia. A referendum on independence in the northeastern state has been rejected by the Spanish government and has been declared constitutionally illegal by the high court.

19 July 2017 CPI Inflation Still is set to Exceed 3% this Year, Despite June's Pullback (My Publications)

The fall in CPI inflation to 2.6% in June, from 2.9% in May, greatly undershot expectations for an unchanged rate and it has made a vote by the MPC to keep interest rates at 0.25% in August a near certainty.

19 December 2016 How Much Support can Tourism Provide to the Economy? (My Publications)

The media abounds with anecdotal evidence of a pickup in domestic and inbound tourism following sterling's sharp depreciation, but the reality is that the weaker pound has not had a tangible positive impact yet.

2 February 2017 Rising Inflation Expectations to Yield Hawkish Talk from the MPC Today (My Publications)

Expectations are running high that the MPC will strike a more hawkish tone today in the minutes of this month's meeting and in the quarterly Inflation Report. Investors are pricing in a 45% chance of the MPC raising interest rates before the end of 2017, up from 30% before the last Report in November.

21 July. 2016 The Retail Sales Surge Likely Met an Abrupt End in June (My Publications)

Household spending has been the sole source of growth in the economy so far this year, amid worsening investment and net trade. Today's official retail sales figures, however, look set to show that consumers suffered the Brexit blues in June.

23 June 2017 Fed Officials Cite "Full Employment" but Worry About Recent CPI Data (My Publications)

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.

BLOOMBERG - Are Economic Indicators Pointing to a Fed Rate Hike? (News and Media)

Chief U.S. Economist Ian Shepherdson on the Fed

THE GUARDIAN - Shock UK deficit figures dent George Osborne's economic plan (News and Media)

Chief U.K. Economist Samuel Tombs on the U.K Deficit

*Oct. 2015 - Eurozone Economic Chartbook* (My Publications)

Worries over China and deflation linger...and will likely push the ECB to extend QE this month

13 Apr. 2016 Easter Effect Will Play Tricks With Economic Data in Coming Months (My Publications)

The "timing of Easter" will feature prominently in our reports over the coming weeks, starting with yesterday's German inflation data. Inflation rose to 0.3% year-over-year in March, from 0.0% in February, in line with the initial estimate.

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

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.

22 September 2017 The Earthquake's Economic Hit Appears to be Modest (My Publications)

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.

11 Sept. 2015 Brazil's Cut to Junk Deepens Its Economic And Financial Woes (My Publications)

This year, Brazil has been the perfect example of all the problems faced by EM countries over the last few decades. A long and deep recession, high inflation, fiscal crisis, political chaos, a commodity price crunch, sharp currency depreciation and lack of confidence have all worked together to hammer the economy and investor confidence. These factors all contributed to S&P downgrading Brazil to junk status on Wednesday.

11 July. 2016 Jobs Overstate Economic Volatility, Wages Will Soon Matter More (My Publications)

Whatever you might think about the state of the U.S. economy, it is not as volatile as implied by the past few months' payroll numbers. Assuming steady productivity growth in line with the recent trend, the payroll data suggest the economy swung from bust to boom in one month, with not even a pause for breath.

11 Apr. 2016 Economic Weakness Starting To Reduce Inflation in Brazil and Chile (My Publications)

Brazil's March report reinforced recent evidence indicating that inflation is decelerating. The headline CPI surprised to the downside again, slowing to a nine-month low of 9.4% year-over-year from 10.4% in February. The index rose 2.6% quarter-to-quarter in Q1, well below the 3.8% increase in the same period last year.

19 Jan. 2015 Peru's Central Bank Committed to Boost Economic Growth (My Publications)

In a surprise move, Peru's central bank, BCRP, succumbed to the current weakness of the economy and cut interest rates by 25bp to 3.25% last Thursday, for the first time since August last year. The board also lowered the interest rates on lending and deposit operations between the central bank and financial institutions.

22 August 2017 Economic Activity is Turning Up in LatAm, but no Boom Coming (My Publications)

LatAm's economies are gradually rebounding, boosted by easier monetary policy in most countries, falling inflation, and a relatively calm external backdrop.

17 Mar. 2015 Will core Inflation respond to an economic upturn in the Eurozone (My Publications)

Final inflation for February in the Eurozone likely will be confirmed today at -0.3% year-over-year, up from -0.6% in January. This bounce was mainly driven by a reduced drag from falling oil and food prices, but it is too early to call a trough in headline inflation.

2 June. 2015 Higher Inflation is the Next Big Macroeconomic Story in the EZ (My Publications)

Inflation pressures are slowly, but surely, rising in the Eurozone. Advance data indicate that inflation in Germany rose to 0.7% year-over-year in May, up from 0.5% in April. Reduced drag from the non-core components is the main driver, with energy prices rebounding, and food prices now rising steadily at 1.4% year-over-year.

18 Feb. 2015 Economic Activity Likely to Improve in Peru this Year, Gradually (My Publications)

Peru's central bank, BCRP, left rates unchanged last week, at 3.25%, a four-year low. Above-target inflation and currency volatility prevented the Board from cutting rates.

2 May 2017 Economic Activity in Mexico Remains Strong, but Will Slow (My Publications)

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.

2 Sept. 2015 Chile's Economic Recovery Stutters, Risks To Growth Increase (My Publications)

Chile's activity numbers at the beginning of Q3 were mediocre, suggesting that the economy remains sluggish. The industrial production index--comprising mining, manufacturing, and utility output--fell by 1.7% year-over-year in July, reversing a 1.6% expansion in June. A disappointing 4.5% year-over-year contraction in mining activity depressed the July headline index, following a 1.4% increase in June. The moderation in output growth was due to maintenance-related shutdowns at key processing plants, and disruptions from labor strikes, especially a three-week strike by contract workers at Codelco--the state-owned mining firm--which badly hit production.

17 Mar. Fiscal Squeeze Still Set to Intensify, Despite the Economic Slowdown (My Publications)

The Chancellor chose in his Budget to increase the total size of the forthcoming fiscal consolidation, to ensure that the Office for Budget Responsibility continues to forecast that a budget surplus will be obtained in 2019/20.

21 July 2017 Venezuela's Economic and Political Crisis Deteriorates, Risks is Soaring (My Publications)

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.

28 Jan. 2015 Economic Momentum Means no Easing in Mexico this Year (My Publications)

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.

11 Dec. 2015 Brazil's Economic Woes Deepen as Inflation Hits a 12-Year High (My Publications)

Brazil's inflation rate is in double digits for the first time in 12 years. The benchmark IPCA price index rose 1.0% month-to-month in November, lifting the year-over-year rate to 10.5%, the highest since November 2003. The core IPCA increased 0.7% month-to-month, pushing the year-over-year rate in November up to 8.9% from 8.6% in October.

*Sept. 2015 - U.S. Economic Chartbook* (My Publications)

Fed interrupted? But not for long

3 July 2017 National Accounts Expose Britain's Economic Fragility (My Publications)

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.

5 Jan. 2015 An Era of Outstanding Economic Growth in Brazil Appears To Be Over (My Publications)

Dilma Rousseff was sworn in for a second term as Brazil's president last Thursday, vowing to extend social welfare programmes and promising to investigate the Petrobras corruption scandal.

7 Apr. 2016 Real Economic Data Point to an Upbeat German GDP Story in Q1 (My Publications)

Yesterday's German industrial production data were poor, but better than we expected. Output fell 0.5% month-to-month in February, pushing annual growth down to 1.3% from a revised 1.8% in January. In addition, net revisions to the month-to-month data were a hefty -1.0%, but this is not enough to change the story of a Q1 rebound in industrial production.

8 July. 2015 Mexican Consumers Upbeat, as Economic Fundamentals Improve (My Publications)

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.

*Nov. 2015 - U.K. Economic Chartbook* (My Publications)

Recovery shifting to a lower gear...but price pressures will force rate hikes next year

4 Dec. 2015 Brazil's Economic Mess Worsens Amid Deepening Political Crises (My Publications)

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.

*Oct. 2015 - U.S. Economic Chartbook* (My Publications)

Focussed on the Macro: The Fed will soon hike, despite soft manufacturing

*Sept. 2015 - Latin America Economic Chartbook* (My Publications)

China and commodities still hurting Latam....But Brazil has severe domestic woes

*Sept. 2015 - Eurozone Economic Chartbook* (My Publications)

Ignore the Chinese deflation panic......The cyclical recovery is on track, and inflation is rising

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

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.

*Nov. 2015 - U.S. Economic Chartbook* (My Publications)

Focussed on the Macro: The Fed will soon hike, despite soft manufacturing

31 October. 2016 Mexico and Brazil Are Stabilizing at Different Speeds, For Now (My Publications)

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.

6 Apr. 2016 Is Non-Manufacturing Activity Past Its Cyclical Peak in the Eurozone? (My Publications)

The final Eurozone PMIs indicate that the cyclical recovery continued in Q1, but downside risks are rising. The composite index rose marginally to 53.0 in March, from 53.1 in February, below the initial estimate 53.7. Over the quarter as a whole, though, the index fell to 53.2 from 54.1 in Q4, indicating that economic momentum moderated in the first quarter.

6 Apr. Britain's Happy Period of Strong Growth and Low Inflation is Over (My Publications)

The latest PMIs have added to the weight of evidence that the economic recovery has lost momentum this year. The prevailing view in markets, however, that the Monetary Policy Committee is more likely to cut--rather than raise--interest rates this year continues to look misplaced because inflation pressure is building.

4 July 2017 BanRep Speeds up Rate Cuts, Expect Further Stimulus this Month (My Publications)

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.

5 Oct. 2015 Less Bad Than Expected Data in Brazil, But the Crisis is Not Over (My Publications)

Brazil's economic and fiscal outlook has worsened in recent months, and economic activity will likely contract even further in the short-term. Some of last week's economic reports, however, were a bit less bad than of late. The latest industrial production data were less bad than expected in August, but the picture is still very grim. Industrial output plunged 1.2% month-to-month, above the consensus, and allowing the annual rate to stabilize at -9% year-over-year.

4 July 2017 Will Firms Run Down Their Huge Cash Stockpiles Soon? (My Publications)

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.

5 September 2017 BanRep's Hawks want Proof the Coming In ation Jump is Noise (My Publications)

Colombia's Central Bank is about to face a short-term dilemma. The recent fall in inflation will be interrupted while economic growth, particularly private spending, will struggle to build momentum over the second half.

4 Dec. 2015 How Reliable is the Composite PMI as an Indicator of GDP Growth? (My Publications)

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 Apr. Britain is Living Beyond its Means, Once Again (My Publications)

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.

30 June. 2016 Commodities are Helping LatAm's Recovery - Brexit not a Deal-Breaker (My Publications)

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.

28 Sept. 2015 Don't Believe Case-Shiller Home Price Data - Prices are Rising (My Publications)

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 Sept. 2015 ECB is on Alert, but No Warning, So Far, From the Economy (My Publications)

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.

6 April 2017 ADP Likely Overstates Payrolls, ISM Non-manufacturing Understates (My Publications)

We don't directly plug the ADP employment data into our model for the official payroll number. ADP's estimate is derived itself from a model which incorporates lagged official payroll data, because payrolls tend to mean-revert, as well as macroeconomic variables including oil prices, industrial production and jobless claims -- and actual employment data from firms which use ADP's payroll processing services.

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

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 June. 2015 Inflation is rising, but the ECB will confirm its dovish stance today (My Publications)

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.

29 August 2017 Hurricane Harvey will Depress September Output and Payrolls (My Publications)

The terrible scenes from Texas will play out in the economic data over the next few weeks.

29 August 2017 The next few Months will Test Temer's Capital in Congress (My Publications)

Brazil's economic outlook is gradually improving following a challenging Q2, which was hit by political risk, putting business and consumer confidence under pressure.

3 April 2017 Brazil's Labour Market is Still Poor, but Likely Will Stabilize Soon (My Publications)

Economic data released on Friday underscored our view that bolder rate cuts in Brazil are looming. The BCB's latest BCB's inflation report, released on Thursday, showed that policymakers now see conditions in place to increase the pace of easing "moderately" .

29 July. 2016 Will Household Saving Rise and Tip the Economy into Recession? (My Publications)

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. 2015 Is EM Weakness Threatening Investment Recovery in the EZ? (My Publications)

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.

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

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 March 2017 Banxico is Facing a Tough Dilemma, but the Copom is Sitting Pretty (My Publications)

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 May 2017 BanRep Acted Boldly on Friday. Will the BCRP follow Suit Next Week? (My Publications)

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.

30 May 2017 BanRep Turns Cautious, but Expect Further Cuts as Activity will be Weak (My Publications)

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 Oct. 2015 Can the Recovery in Business Investment Maintain Its Pace? (My Publications)

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 Sept. 2015 Mexico's Labor Market Reflects Its Upbeat Domestic Story (My Publications)

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.

31 August 2017 Third Quarter Consumption off to a Strong Start? (My Publications)

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.

30 June. 2016 The Fed's Focus Will Return to the Wage Outlook, Unchanged by Brexit (My Publications)

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.

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

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".

3 November. 2016 MPC to Catch Out Markets Again with Lingering Dovish Tone (My Publications)

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.

30 August 2017 Argentina's Recovery is Gaining Traction but Inflation is Still a Risk (My Publications)

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 August. 2016 Banxico is Waiting for Fiscal Policy Action, and the Fed (My Publications)

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 June 2017 Q1 National Accounts Won't Meet the Governor's Rate Hike Criteria (My Publications)

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.

31 January 2017 Focus on Strong EZ Q4 GDP Data On a Busy Day in the Eurozone (My Publications)

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.

WALL STREET JOURNAL - Ian Shepherdson wins US Forecasters award, 2014 (News and Media)

The Wall Street Journal is pleased to annouce that Ian Shepherdson, of Pantheon Macroeconomics, has won the US Forecaster of 2014 award.

H2 2017 Asia Outlook - Higher Global Rates Depress China but Stimulate Japan, for now (My Publications)

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

H2 2017 Eurozone Outlook - The Eurozone Economy is Doing Well, but Will it Last? (My Publications)

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

H2 2017 LatAM Outlook - Monetary Policy Easing Continues, Offsetting Political Risk (My Publications)

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

H2 2017 U.K. Outlook - Weak GDP and Wage Growth Will Keep Higher Interest Rates at Bay (My Publications)

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

9 September. 2016 Political Turbulence in Mexico Won't Derail Fiscal Consolidation (My Publications)

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 Oct. 2015 FOMC Members Sticking to Previous Positions, Mostly (My Publications)

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 May 2017 Two Answers and Many Questions, as President Macron Settles in (My Publications)

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. 2016 More Timely EZ GDP Data also Means Larger Revisions (My Publications)

The trade-off between the timeliness and accuracy of the data is fundamental to macroeconomic analysis. Coincident data such as GDP, industrial production and retail sales are the most direct measures of economic activity, but their first estimates don't always tell the full story.

9 November. 2016 Trump Stuns LatAm... Banxico Likely Will Have to Act (My Publications)

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. 2016 Will Wage Growth Keep Up With Rising Inflation? (My Publications)

The strength of the economic recovery next year and the MPC's scope to leave interest rates at ultra-low levels will hinge on whether wage growth picks up in response to rising inflation.

H2 2017 U.S. Outlook - Brace for a Sustained Shift in Interest Rate Expectations (My Publications)

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

WALL STREET JOURNAL - Snow Weighs on Home-Builder Confidence, But It's No Polar Vortex (News and Media)

"We know from last year's experience during the polar vortex, when the headline index fell 10 points, that the NAHB survey is extremely susceptible to severe weather, so we can't right now view it as a reliable indicator of the underlying trend in housing market activity," Ian Shepherdson, chief economist for Pantheon Macroeconomics, said in a note to clients.

BUSINESS INSIDER - Europe's Largest Economy Is Officially In Deflation (News and Media)

Germany's consumer price index fell 0.3% month-over-month in January. It's the first time the inflation rate went negative since September 2009. "Deflation has arrived," Pantheon Macroeconomics' Claus Vistesen said

BLOOMBERG - Yields lower, Equities probably higher - Ian Shepherdson (News and Media)

Pantheon Macroeconomics Founder and Chief Economist Ian Shepherdson discusses his outlook for the economy, equities and European banks. He speaks on "Bloomberg Surveillance."

BLOOMBERG - Economist Says U.S. Consumer Spending Is About To 'Surge' (News and Media)

Ian Shepherdson, Chief Economist at Pantheon MacroEconomics, on U.S. Consumer spending

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

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

BUSINESS INSIDER - Germany's ballooning trade surplus just hit a new record size (News and Media)

Germany's exporters just broke another record: The trade surplus for Europe's biggest economy is now at its highest on record.........Here's how Germany's recent export history looks, according to Pantheon Macroeconomics

BUSINESS INSIDER - This key labor market indicator hasn't been this strong in years (News and Media)

On Thursday morning, we'll get the best-performing indicator of the US labor market: initial jobless claims. For a while now, Pantheon Macroeconomics' Ian Shepherdson has been stressing that the weekly print is noisy, particularly with the volatility the end-of-year season brings

Pantheon Macroeconomics App Launch (News and Media)

Apple and Android app now available

NEW YORK TIMES - U.S. Economy Added 257,000 Jobs in January - Unemployment Rate at 5.7% (News and Media)

The economic momentum evident late last year carried into 2015, the Labor Department said Friday, with American employers adding 257,000 jobs in January as wage growth rebounded and more people joined the workforce

MARKET WATCH - Fed will be scrambling to catch up with improving economy, forecaster says (News and Media)

Ian Shepherdson, chief economist for Pantheon Macroeconomics is the winner of the MarketWatch Forecaster of the Month award for June.

DUKASCOPY TV - Claus Vistesen discussing how the ECB will respond to missed IMF payment (News and Media)

Pantheon Macroeconomics Chief Eurozone Economist Claus Vistesen discusses how the ECB will respond to the missed IMF payment yesterday.

9 June. 2015 New York Fed Says Weather, Not Seasonals, Hit Q1 Growth (My Publications)

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 June. 2015 A flying start to Q2 for German Industrial sector and exports (My Publications)

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.

7 June. Are Falling Car Sales Signalling a Wider Consumer Malaise? (My Publications)

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 November. 2016 EZ Growth is Stable, but Inflation is Rising (My Publications)

The two major EZ economic reports released while we were away conformed to the consensus. Advance data suggest that real GDP in the euro area rose 0.3% quarter-on-quarter in Q3, the same pace as in Q2, and the year-over-year rate was similarly unchanged at 1.6%.

7 Sept. 2015 Mexico's Recovery In Place But Constrained By External Headwinds (My Publications)

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.

7 Sept. 2015 Poor New Orders in Germany, But Expect Rebound Next Month (My Publications)

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 Jan. 2015 The Sharp Slowdown In Chile's Economy Is Almost Over (My Publications)

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 August 2017 Brazil's Central Bank Set to Ease to 7.25% or Lower by Year-End (My Publications)

While we were out, Brazil's economic and political situation continued to improve, allowing the BCB to cut the Selic rate by 100bp to 9.25% at its July 26th meeting, matching expectations.

6 December. 2016 Leading Indicators Point to Rebounding Payroll Gains in 2017 (My Publications)

We aren't much interested in the headline ISM non- manufacturing index, which tends to track the rate of growth of nominal retail sales. In other words, it is not a leading indicator of broad economic activity. We were happy to see the November index rise yesterday, to 57.2 from 54.8, but it doesn't change our core views about anything.

6 February 2017 Growth Indicators Start to Turn Down as Price Pressures Escalate (My Publications)

The run of above-consensus news on the U.K. economy came to an abrupt end last week, as a series of survey indicators for January took a turn for the worse. After six months of breathing space, the economic consequences of the Brexit vote are increasingly being felt.

6 June. 2016 A New Portuguese Debt Crisis is Unlikely in the Shor t Run (My Publications)

The recent deal between Greece and the EU shows that the appetite for a repeat of last year's chaos is low. But investors' attention has turned to whether Portugal is waiting in the wings to reignite the sovereign debt crisis. Complacency is dangerous, but economic data suggest that a Portuguese shock to the Eurozone economy and financial markets is unlikely this year.

6 May. 2016 Chile's Economy Picks Up in Q1, but no Sustained Acceleration (My Publications)

Economic growth in Chile picked up in Q1, but the recovery remains disappointingly weak, due to both global and domestic headwinds. The latest Imacec index, a proxy for GDP, rose just 2.1% year-over-year in March, slowing from a 2.8% gain in February. Assuming no revisions next month, economic activity rose 1.2% quarter-on-quarter in Q1, better than the 0.9% increase in Q4. These data points to a modest pick-up in GDP growth in Q1, to 1.8% year-over-year, from 1.3% in Q4.

7 September. 2016 How Will the U.K. Resolve the Immigration,Trade Dilemma? (My Publications)

Following the summer recess, the U.K. Government has turned to the unenviable task of weighing up how much economic pain to endure in order to reduce immigration. The Government's insistence that Brexit "must mean controls on the numbers of people who come to Britain from Europe" suggests it is prepared to sacrifice access to the single market in order to appease public opinion.

8 August. 2016 Brazil's Economy is Stabilizing. Mexico's is Slowing, Temporarily (My Publications)

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.

9 December 2016 Mexico's Consumers Will Face a Tough 2017 (My Publications)

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 Feb. 2015 Labor Data Forcing the Fed Into a Corner - (My Publications)

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 Feb. 2015 Only Brazil Will Have to Hike, Other LatAm Central Banks On Hold (My Publications)

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 January 2017 The Eurozone Economy Likely Finished 2016 With a Bang (My Publications)

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 Dec. 2015 Chile's Imacec Consistent With Weak But Stable GDP Growth (My Publications)

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.

8 September 2017 Brazil's Central Bank Eases Boldly, but Hints at Slower Cuts Ahead (My Publications)

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 December. 2016 The ECB Will Extend QE Today, but Also Signal its Eventual End (My Publications)

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 July. 2016 German Economy Likely Stalled in Q2, but Don't Forget the Q1 Surge (My Publications)

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

8 November. 2016 Weather--not Brexit--is Culpable for Production and Retail Sales Swings (My Publications)

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.

6 December 2016 Expect More Downbeat Data From Chile, the BCCh Will Ease Soon (My Publications)

Chile's Imacec index confirmed that economic growth is slowing. The Imacec, a monthly proxy for GDP, fell 1.1 month-to-month in October, pushing the year-over-year rate down to -0.4% from an already soft 1.4% in September. This marks the first annual contraction since October 2009, underscoring Chile's fragility. Mining activity plunged 7.1% year-over-year in October, while the non-mining sector rose just 0.3%, supported by services.

30 August 2017 ADP Looks set to Report Another Solid Gain in Payrolls (My Publications)

We're expecting a hefty increase in private payrolls in today's August ADP employment report. ADP's number is generated by a model which incorporates macroeconomic statistics and lagged official payroll data, as well as information collected from firms which use ADP's payroll processing services.

14 November. 2016 How Will the Fed React to Next Year's Inflationary Shock? (My Publications)

Markets are beginning to grasp that President-elect Trump's economic plans, if implemented in full--or anything like it--will constitute substantial inflationary shock to the U.S.

14 Oct. 2015 Soaring Auto Sales Should Offset Yet Another Gas Price Hit (My Publications)

After last week's relatively light flow of data, today brings a wave of information on both the pace of economic growth and inflation. The markets' attention likely will fall first on the September retail sales numbers, which will be subject to at least three separate forces. First, the jump in auto sales reported by the manufacturers a couple of weeks ago ought to keep the headline sales numbers above water.

14 March 2017 Commodity Prices won't Alter the Improving LatAm Picture (My Publications)

The medium-term outlook in most LatAm economies is improving, though economic activity is likely to remain anaemic in the near term. The gradual recovery in commodity prices is supporting resource economies, while the post-election surge in global stock prices has boosted confidence. But country-specific domestic considerations are equally relevant; the growth stories differ across the region.

14 July. 2015 Did Retail Sales Stutter In June after May's Strength? (My Publications)

We are a bit uneasy about today's data on economic activity. The NFIB index of activity in the small business sector is likely to undershoot consensus expectations, while retail sales are something of a black hole, at least at the core level, where we have no reliable month-to-month advance indicators. Our bullish view on the underlying state of the economy, and its likely second-half performance, hasn't changed, but perceptions count in the short-term and these reports will help set the market mood just ahead of Chair Yellen's Testimony tomorrow.

14 July 2017 Brazilian Consumption Slowed in Q2, but it will Rebound in H2 (My Publications)

Brazil's economic situation has improved this year, and we still expect the recovery to continue over the second half, despite recent political volatility and soft Q2 data.

15 Apr. 2016 Chile's Central Bank Holds Rates and Relaxes its Tightening Bias (My Publications)

Chile's central bank left rates unchanged on Tuesday for the fourth consecutive month, as recent data confirmed the sluggish pace of the economic recovery and inflation edges down closer to the target range. In the statement accompanying the decision, the BCCh kept its tightening bias, saying that the normalisation of monetary policy needs to continue at a data-dependent pace, in order to achieve its 3% target.

15 Dec. 2014 Don't Tar All of LatAm With The Same Brush on Weak Oil Prices (My Publications)

We have set out in recent Monitors the differences in the economic and political environment across Latin America, but the plunge in oil prices adds a new element to the analysis.

15 June. 2016 Will Political Risk and Uncertainty Overwhelm the EZ Economy? (My Publications)

Based on key economic indicators, the Eurozone economy is doing splendidly, relative to its performance in recent years. Real GDP has been growing at 1.6%-to-1.7% year-over-year since the first quarter of last year, bank credit has expanded, and the unemployment rate is declining.

15 June. 2015 Colombia's First Quarter GDP Growth Slowed By Low Oil Prices (My Publications)

Colombia is one of the fastest growing economy in LatAm but over the last few quarters the collapse in oil prices, the depreciating currency--fearing higher U.S. interest rates--and rising inflation, have depressed confidence and dragged down economic activity.

15 Jan. 2016 Downside Risk for December Retail Sales and Industrial Output (My Publications)

After a very light week for economic data so far, everything changes today, with an array of reports on both activity and inflation. We expect headline weakness across the board, with downside risks to consensus for the December retail sales and industrial production numbers, and the January Empire State survey and Michigan consumer sentiment. The damage will b e done by a combination of falling oil prices, very warm weather, relative to seasonal norms, and the stock market.

15 Dec. 2014 Stocks Should Start Well in 2015, But Much Still Hinges on the ECB (My Publications)

The equity market this year has been a story of two halves. Hopes of a sustainable economic recovery pushed the benchmark Eurozone equity index to an 7.5% increase in the first six months of the year.

14 February 2017 Global Manufacturing Picks Up Pace, Are Good News for LatAm? (My Publications)

More evidence indicating that the recovery in global industrial activity is underway and gaining momentum- has poured in. In particular, trade data from China, one of LatAm's biggest trading partners, was stronger than the market expected last month. Both commodity import and export volumes increased sharply in January, and this suggests better economic conditions for China's key trading partners.

14 December 2016 Labour Data Set to Show a Clearer Deteriorating Trend (My Publications)

Today's labour market figures likely will bring further signs that firms are recruiting more cautiously and limiting pay awards, due to still-elevated economic uncertainty.

28 November. 2016 GDP Won't Sustain its Recent Momentum Next Year (My Publications)

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.

13 June 2017 Debt-Fuelled Korean Consumption is at Risk as Rates Rise (My Publications)

When Park Geun-hye came to power in Korea 2013, it was to cheers of "economic democratisation". At the time, I wrote a report with a list of reforms that would be needed for Korea to "economically democratise".

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

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 Jan. 2015 Ageing and Export Dependency go Hand-in Hand in the Eurozone (My Publications)

Population ageing is, arguably, the most important long-term socioeconomic trend in the Eurozone. The demographic transition did not end in the 1970s as fertility hit replacement levels, contrary to the prediction by the stylised models of population change.

13 June. Does the Flattening Yield Curve Signal Recession? (My Publications)

The collapse in gilt yields last week--including a drop to a record low at the 10-year maturity--appears to be an ominous sign for the economic outlook. For now, though, the yield curve signals a further easing of GDP growth, rather than a spiral into recession. Low liquidity also means modest changes in demand are generating large movements in yields, undermining gilts' usefulness as a leading indicator.

13 October. 2016 The Chancellor Won't Set Fiscal Policy to Boost Growth Next Year (My Publications)

Many commentators have assumed that the new Chancellor's pledge to "reset" fiscal policy and to stop targeting a budget surplus in this parliament means that fiscal policy will support growth in economic activity next year.

14 Dec. 2015 What Will Happen to the Dots After the Fed Raises Rates? (My Publications)

We have no argument with the consensus view that the language accompanying Wednesday's rate hike will be emollient. The FOMC likely will point out that the policy stance remains very accommodative, and seek to reinforce the idea that it intends to raise rates slowly. That said, recent FOMC statements have not offered any specific guidance on the pace of tightening, saying instead that the Fed "...will take a balanced approach consistent with its longer-run goals... even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

14 Dec. 2015 Peru's Central Bank Tightens Again to Contain Inflation Pressures (My Publications)

Peru's central bank, the BCRP, admitted defeat again in the face of the inflationary effects of the PEN's depreciation and El Niño, increasing interest rates by 25bp to 3.75% last Thursday, following its 25bp increase in September. Peru is the third LatAm economy in the last few months to raise rates in response to currency weakness, despite sluggish economic growth. The key problem for Peru is that inflation has been trending higher since early 2013 and has remained stubbornly high, above 2.8% all this year. "Temporary" factors just keep on coming.

14 Apr. 2015 The Eurozone is on track for strongest growth since Q1 2011 (My Publications)

Eurozone industrial production data today will confirm that economic growth likely accelerated in the first quarter. We think output rose 0.7% month-to-month in February, equivalent to a 0.8% increase year-over-year.

13 September. 2016 Manufacturing is Improving in Mexico, Other Sectors Weaker (My Publications)

Economic growth in Mexico will remain relatively modest over the second half of the year, and the outlook for 2017 remains cloudy, for now. The core fundamentals suggest that growth will increase, but we think that depressed mining output and fiscal tightening might limit the pace of the upturn.

15 Oct. 2015 Headline Inflation to Slip Below Zero, but Not For Long (My Publications)

The headline CPI inflation rate almost certainly dipped below zero in September, barring a startling and deeply improbable surge in the core. We look for a 0.4% month-to-month headline drop, driven by an 11% plunge in gasoline prices, pushing the year-over-year rate to -0.3%. This is of no real economic significance, not least because hugely unfavorable base effects mean the year-over-year rate almost certainly will rise sharply over the next few months, reaching about 1¾% as soon as January.

15 September 2016 August Retail Sales to Shatter Picture of Consumer Resilience (My Publications)

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.

18 April 2017 The Weather is Playing Tricks with EZ Industrial Production Data (My Publications)

As warned--see our Monitor April 7--economic data in the Eurozone disappointed while we were away. Industrial production, ex-construction, in the euro area slipped 0.3% month-to-month in February, and the January month-to-month gain was revised down by 0.6 percentage point to +0.3%.

18 August 2017 Retail Sales Accelerated in June, But Were Weak Over Q2 as a Whole (My Publications)

Economic data in Brazil over the second quarter were relatively positive, and June reports released in recent weeks, coupled with leading indicators for July, are encouraging.

18 Apr. Britain's Employment Miracle is Finally Losing its Shine (My Publications)

One of the most eye-catching features of the U.K.'s economic recovery has been the strength of job creation. It took seven-to-eight years for employment to return to its pre-recession peaks after the recessions of the early 1980s and 1990s. By contrast, employment rescaled its 2008 peak in mid-2012, and it has risen by a further 6% since.

18 Apr. 2016 Solid Colombian Manufacturing Sector Offsetting Soft Demand (My Publications)

Colombia's economic activity surprised to the upside in February, despite the challenging domestic environment. Private spending rose more than expected, but leading indicators suggest that household consumption will remain weak in Q2. Retail sales jumped 4.6% year-over-year in February, up from a 2.1% increase in January, and the fastest pace since August 2015.

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

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.

18 Feb. 2015 Cold Weather Set to Flatter January Production - No Oil Hit Yet (My Publications)

Today brings a raft of January data on both economic activity and prices, but we expect the headline numbers in each report to be distorted by the impact of severe weather or the plunge in oil prices.

18 Jan. 2016 Is it Time to Throw the Baby Out with the Bathwater? (My Publications)

Investors have endured a severe test of their resolve in the last few months. Global equity markets have sunk more than 10%, eclipsing the previous low in September, and credit spreads have widened. The bears have predictably pounced and, as if the torrid price action hasn't been enough, media headlines have been littered with advice to "sell everything" and warnings of a 75% fall in U.S. and global equities. When "price is news" we recognise that views from well-meaning economists--often using lagging and revised economic data to describe the world--are of little value.

18 Nov. 2015 Hawks Want to Hike, but What do They Expect From Higher Rates? (My Publications)

At the October FOMC meeting, policymakers softened their view on the threat posed by the summer's market turmoil and the slowdown in China, dropping September's stark warning that "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term." Instead, the October statement merely said that the committee is "monitoring global economic and financial developments."

18 May. 2016 Did the FOMC Discuss Brexit Risk at the April Meeting? (My Publications)

The April FOMC statement dropped the March assertion that "global economic and financial developments continue to pose risks" to the U.S. economy, even though growth "appears to have slowed". Instead policymakers pointed out that "labor conditions have improved further", perhaps suggesting they don't take the weak-looking March data at face value. We certainly don't.

18 May 2017 Will Strong Employment Growth Be Sustained? (My Publications)

Yesterday's labour market figures revealed that employment growth has picked up this year, despite the shadow cast over the medium-term economic outlook by Brexit. The 122K, or 0.4%, quarter-on-quarter rise in employment in Q1 was the biggest since Q2 2016.

18 Mar. 2015 Tough times for Colombia: Falling Oil Prices and COP Depreciation (My Publications)

Colombia was the fastest growing economy in LatAm last year but it faces major challenges. The collapse of oil prices--which account for about half of exports--the COP depreciation, rising inflation and Fed's impending monetary policy normalization, are dragging down economic activity and damaging confidence.

17 May 2017 Strong Q1 Confirmed for the EZ, but will Momentum Persist in Q2? (My Publications)

Yesterday's economic reports confirmed that the Eurozone economy had a strong start to 2017. Real GDP rose 0.5% quarter-on-quarter in Q1, similar to the pace in Q4, and consistent with the first estimate. The year-over-year rate fell marginally to 1.7%, from 1.8% in Q4, mainly due to base effects.

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

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."

16 Mar. 2016 Can Yellen Reconcile Lower Dots, Rates on Hold and Rising Inflation? (My Publications)

The further improvement in labor market conditions and the jump in core inflation means that the economic data have given the Fed all the excuse it needs to raise rates today. But the chance of a hike is very small, not least because the fed funds future puts the odds of an action today at just 4%, and the Fed has proved itself very reluctant to surprise investors-- at least, in a bad way--in the past.

16 June. Rising Wage Growth Points to a Rate Hike Before Year End (My Publications)

The MPC almost certainly will keep interest rates on hold today and likely won't give a strong steer on the outlook for policy in the minutes of its meeting, which are released at mid-day. On the whole, surveys of economic activity have been weak, indicating that GDP growth has slowed sharply in the second quarter.

16 Jan. 2015 Private Consumption Jumped in Brazil in Q4, But Only Temporarily (My Publications)

This week's economic activity data for Brazil have been upbeat, indicating that the economy is recovering after a recession in the first half of 2014, but at a very gradual pace.

15 September. 2016 Will September's Regional Surveys Follow the ISM's Drop? (My Publications)

Today's huge wall of data will add significantly to our understanding of third quarter economic growth, with new information on consumers' spending, industrial activity, inflation and business sentiment. In light of the unexpected drop in the ISM surveys in August, we are very keen to see the Empire State and Philly Fed surveys for September.

16 Mar. Beware the Contradiction at the Heart of the Fiscal Forecasts (My Publications)

The new fiscal projections in the Budget today likely will be based on implausible economic projections, which assume that wage growth will accelerate soon, lifting inflation, but that interest rates won't rise for three more years. You can coherently forecast one or the other, but not both.

16 May 2017 Eurozone Reforms Likely are Coming, but Patience is Needed (My Publications)

Mr. Macron will be in Berlin today with the message that France wants a strong Eurozone and a tight relationship with Germany. Friendly overtures between Paris and Berlin are good news for investors; they reduce political uncertainty while increasing the chance that the economic recovery will continue. But it is too early to get excited about closer fiscal coordination, let alone a common EZ fiscal policy and bond issuance.

17 January 2017 Peru's Growth is Solid, Will Copper Prices Offer More Support in 2017? (My Publications)

Yesterday's economic activity data from Peru signalled that the relatively firm business cycle continues. The monthly GDP index accelerated to 3.6% year-over-year in November, rising from 2.1% in October, but marginally below the 4.4% on average in Q3. Growth continued to be driven by mining output, including oil and gas, which rose 15% year-over- year. The opening of several new mines explains the upturn, and we expect the sector to remain key for the Peruvian economy this year.

17 Dec. 2015 Why are Retail Sales Losing Momentum? (My Publications)

On the face of it, recent retail spending surveys have been puzzlingly weak in light of the pick-up in employment growth, still-robust real wage gains and renewed momentum in the housing market. We think those surveys are a genuine signal that retail sales growth is slowing, and expect today's official figures to surprise to the downside. But retail sales account for just one-third of household spending, and, in contrast to the early stages of the economic recovery, consumers now are prioritising spending on services rather than goods.

16 Sept. 2015 Will Downbeat Sentiment Push the ECB into More QE this Year? (My Publications)

Economic data are telling a story of a strengthening recovery, but downbeat investor sentiment points to a more difficult environment. The headline ZEW expectations index fell to a ten-month low of 12.1 in September, from 25.0 in August. This takes sentiment back to levels not seen before QE was announced, highlighting the increasing worry that deflation risks and low growth in China will derail the recovery. We don't agree, but we can't be sure the ECB thinks the same, and risks of additional stimulus this year have increased.

16 Nov. 2015 Is Banxico Still Willing to Hike Just After the Fed in December? (My Publications)

Mexico's domestic conditions don't warrant an imminent rate hike in the near term. Headline inflation continues to fall, reaching an all-time low of 2.5% in October. It should remain below 3% in the coming months. And core prices remain wellbehaved, increasing at a modest pace, signalling very little pass-through of the MXN's depreciation. Economic activity gained some momentum in Q3-- this will be confirmed on Friday's GDP report--but demand pressures on inflation are absent and the output gap is still ample. Under these conditions, policymakers should not be in a rush to hike, but they have signalled once again that they will act immediately after the Fed.

13 February 2017 BCCh Says it's not Worried About Inflation, Will it Ease Tomorrow? (My Publications)

Chile's Central Bank's monetary policy meeting, scheduled for tomorrow, likely will be one of the most difficult in recent months. Economic activity remains soft, and GDP likely contracted in Q4, due to weakness in mining output and investment.

13 April 2017 Slowing Labour Income Growth Highlights Consumers' Woes (My Publications)

Yesterday's labour market data showed that growth in households' income has slowed significantly in recent months. Firms are both hiring cautiously and restraining wage increases, due to heightened uncertainty about the economic outlook and rising raw material and non-wage labour costs. Consumers' spending, therefore, will support GDP growth to a far smaller extent this year than last.

09 Mar. 2016 Key Andean Economies Struggling Against External Headwinds (My Publications)

Economic growth in Colombia and--especially-- Chile, braked in the fourth quarter and at the start of this year as the strong USD drove up imported good prices and tepid global demand weighed on exports. Colombia's January exports plunged 36.6% year-over-year, even worse than the 35% average drop in Q4.

1 Apr. 2015 The Dollar is hurting exporters - more pain to come (My Publications)

The easiest way to track the impact of the rising dollar on real economic activity is via the export orders component of the ISM manufacturing survey. We have been profoundly skeptical of the value of the ISM headline index, because it suffers from substantial seasonal adjustment problems, but the export orders index seems not to be similarly afflicted.

08 Jan. 2016 Sterling, Not EM Weakness, Will Hold Exports Back (My Publications)

The Chancellor argued in a speech on Thursday that the U.K.'s economic recovery is threatened by a "dangerous cocktail" of overseas risks, including slowing growth in the BRICs--Brazil, Russia, India, and China--and escalating tensions in the Middle East. Exports are set to struggle this year, but the strong pound, not weakness in emerging markets, will be the main drag.

07 Mar. 2016 Brazil's Economy Collapsed in 2015 - No Sign of Quick Recovery (My Publications)

Brazil's economic news remained grim at the headline level last week, but some of the details were less bad than in recent months. Industrial production fell by 13.8% year-over-year in January, down from the 12.1% drop in December and the worst performance on this basis since mid-2009.

06 Jan. 2016 ADP Likely to Report Slower December Job Gains - Ignore it (My Publications)

None of today's four monthly economic reports will tell us much new about the outlook, and one of them--ADP employment--will tell us more about the past, but that won't stop markets obsessing over it. We have set out the problems with the ADP number in numerous previous Monitors, but, briefly, the key point is that it is generated from regression models which are heavily influenced by the previous month's official payroll numbers and other lagging data like industrial production, personal incomes, retail and trade sales, and even GDP growth. It is not based solely on the employment data taken from companies which use ADP for payroll processing, and it tends to lag the official numbers.

1 Apr. 2015 Tightening Bias Remains as Chile's Inflation Forecast is Increased (My Publications)

Chile's economic sector survey, released on Monday, provides further evidence that the cyclical recovery in the economy continues, albeit at a moderate pace. On the demand side, the rebound is still in place, with retail sales jumping 2.0% month-to-month in February and the underlying trend firm.

1 August. 2016 EZ GDP Growth Slowed in Q2, and Likely Will be Revised Down (My Publications)

Friday's data deluge suggests that EZ economic growth slowed less than we expected in the second quarter. The advance estimate indicates that real GDP in the euro area rose 0.3% quarter-on-quarter in Q2, down from a 0.6% jump in the first quarter. This was in line with the consensus, but it likely doesn't tell the whole story.

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

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.

1 July. 2015 Upside Risk for ADP and ISM Manufacturing - Both of Little Value (My Publications)

We will have a much better idea of the pace of domestic demand growth after today's wave of economic data, though the report which will likely generate the most attention in the markets--ADP employment--tells us nothing of value. The headline employment number in the report is generated by a regression which is heavily influenced by the previous month's official data.

1 July. 2015 LatAm Markets Threatened by the Deepening Greek Crisis (My Publications)

A mix of political and economic events have triggered outflows of capital from emerging markets this year. Tensions in Europe, due to the "Grexit" saga, together with China's slowdown and concerns about Fed lift-off have weighed on EM flows. In recent months, though, some of the pressure on EM currencies has eased as the markets have come to expect fewer U.S. rate hikes in the near term.

1 February 2017 The EZ Economy Finished 2016 Strongly, and Q1 Outlook is Solid (My Publications)

Yesterday was a good day for headline EZ economic data. GDP growth accelerated, inflation rose and unemployment fell further. Advance Q4 data showed that real GDP in the Eurozone rose 0.5% quarter-on-quarter in Q4, marginally faster than the upwardly revised 0.4% in Q3. Full-year growth in 2016 slowed slightly to 1.7% from 2.0% in 2015.

05 Jan. 2016 Credit Flows Aren't Strengthening Enough to Prevent a Slowdown (My Publications)

November's money and credit figures brought welcome news that the recovery in bank lending is strengthening. This revival should continue, now that banks have completed most of the work required to improve their capital positions. But we doubt lending will recover quickly enough to prevent the economic recovery slowing in 2016, as the downward pressure on growth from the fiscal squeeze and the strong pound builds.

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

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.

01 Feb. 2016 Inflation Data Indicate Bund Buyers Should Exercise Caution (My Publications)

Investors were presented with a barrage of mixed EZ economic data on Friday, fighting for attention amid markets celebrating the arrival of negative interest rates in Japan. Advance Eurozone CPI data gave some respite to the ECB, with inflation rising to 0.4% year-over-year in January from 0.2% in December.

*March 2017 - Latin America Chartbook* (My Publications)

Economic Activity Remains Sub-Par... But Downside Risks are Gradually Easing

*June 2017 - Latin America Chartbook* (My Publications)

LatAm economic activity is stabilizing...but the recovery will be modest in Q3.

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01 Feb. 2016 Inflation Report Likely to Nudge Markets to Expect an Earlier Hike (My Publications)

With financial markets still turbulent and the Governor stating only two weeks ago that economic conditions do not yet justify a rate hike, the Inflation Report on Thursday will not signal imminent action. Nonetheless, higher medium-term forecasts for inflation are likely to imply that the Committee still envisions raising interest rates this year.

01 Feb. 2016 Mexico's Mining Sector Still a Drag, Services Doing the Work (My Publications)

Mexico's economy lost some momentum in Q4, due mainly to weakness in industrial and agricultural activity, but this was partly offset by the strength of the services sector as consumers' spending again carried the economic recovery. Real GDP rose 0.6% quarter-on-quarter in Q4, after a 0.8% expansion in Q3, the tenth consecutive increase. Year-over-year growth dipped marginally to 2.5% from 2.6% in Q3, but the underlying trend remains stable. In 2015 as a whole the economy expanded by 2.5%, up from 2.3% in 2014.

04 May. 2015 Andean Countries Will Continue To Recover Despite a Tough Quarter (My Publications)

The major Andean economies had a very challenging first quarter. In Colombia, the effect of the sharp fall in oil prices has become more evident in the last few months. The ISE economic activity index--a monthly proxy for GDP--fell considerably during 2014, with a significant deceleration over the last half of the year.

03 Mar. 2016 Construction Slowdown is Symptomatic of Wider Malaise (My Publications)

The revival in the construction sector is slowing on all fronts as the fiscal squeeze intensifies, business confidence fades and the recovery in housebuilding loses momentum. These headwinds are likely to ensure that construction output only holds steady this year, thereby contributing to the broader economic slowdown.

03 Feb. 2016 Industrial Output Dived in Q4, But Reasons For Optimism in Brazil? (My Publications)

Brazil's economic news this week remained bleak at the headline level, but some of the details were less terrible in than in recent months. Industrial production fell by a worse-than-expected 11.9% year-over-year in December, marginally up from the 12.4% drop in November.

02 Feb. 2016 EZ Public Spending will Support GDP Growth in 2016 (My Publications)

Economic theory tells us that government spending should be counter-cyclical, but recent experience in the Eurozone tells a slightly different story. The contribution to GDP growth from government spending rose during the boom from 2004 to 2007, and remained expansionary as the economy fell off the cliff in 2008. As the economy slowed again following the initial recovery, the sovereign debt crisis hit, driving a severe pro-cyclical fiscal hit to the economy.

1 Oct. 2015 Deflation Will Likely Bully the ECB to Expand QE this Month (My Publications)

Economic survey data have been upbeat recently, but key Eurozone data releases yesterday suggest the ECB will be under pressure to increase monetary policy stimulus further this month. The advance inflation estimate showed that the euro area slipped back into deflation in September, as inflation fell to -0.1% year-over- year, from +0.1% in August. The fall was mainly due to a 8.9% collapse in energy prices, though, and we are very confident the relapse is temporary.

1 September 2017 Banxico's QIR Report is Upbeat, But Rates are on Hold Until 2018 (My Publications)

Banxico's Quarterly Inflation Report--QIR--for Q2 2017, published this week, confirmed that the central bank has become more upbeat about the economic recovery and the outlook for inflation. Banxico believes that the balance of risks to inflation and growth are neutral.

12 Feb. 2016 More Downside Retail Sales Risk, Thanks to Gas, Cheaper Imports (My Publications)

Outside the battered energy sector, the most consistently disconcerting economic numbers last year, in the eyes of the markets, were the monthly retail sales data. Non-auto sales undershot consensus forecasts in nine of the 12 months in 2015, with a median shortfall of 0.3%.

12 Jan. 2015 Recent Data Point to Downside Risks for the Brazilian Economy (My Publications)

Economic growth in Brazil is not likely to improve significantly this year. Our pessimism was underscored by the November industrial production data last week, showing a contraction of 0.7%, and pushing output to its lowest level since June.

12 December. 2016 Participation Won't Rise Enough to Prevent Higher Inflation (My Publications)

It appears to be something of an article of faith among economic advisors to President-elect Trump that substantial fiscal stimulus will generate faster growth without boosting inflation, because both labor participation and productivity growth will rise.

12 August. 2015 China's Devaluation Won't Deter the Fed, Or Wreck the Economy (My Publications)

China's 1.8% downshift in the RMB/dollar reference rate will make only a microscopic difference to the pace of U.S. economic growth and inflation. It will not deter the Fed from raising rates if the domestic labor market continues to tighten, as all the data suggest. The drop in the RMB merely restores the nominal exchange rate to its fall 2012 level, since which time the real exchange rate has risen by some 20%, according to the BIS.

12 Apr. Do Leading Indicators Signal Impending Recession? (My Publications)

Another day, another downbeat survey. The British Chamber of Commerce's comprehensive and long-running Quarterly Economic Survey was published yesterday, and it added to evidence of a Q1 slowdown.

12 Jan. 2016 Drop in November Production to Set the Tone for Q4 GDP (My Publications)

November's industrial production figures, released today, look set to surprise the consensus to the downside, underscoring our view that the economic recovery is continuing to lose momentum. Moreover, with sterling remaining uncompetitive, despite depreciating over recent weeks, and lower oil prices making extracting oil from the North Sea unprofitable, the industrial sector likely will impede the economic recovery further in 2016.

12 July 2017 Andean Policymakers Will Meet Market Expectations Tomorrow (My Publications)

Markets are looking for the BCCh to remain on hold and the BCRP to ease on Thursday; we think they will be right. In Chile, the BCCh will hold rates because inflation pressures are absent and economic activity is stabilizing following temporary hits in Q1 and early Q2.

12 September. 2016 More Poor Data Signal Slow Start to Q3 (My Publications)

Friday's economic data added to the evidence that the German economy stumbled in July. The seasonally adjusted trade surplus slipped to €19.4B, from a revised €21.4B in June.

12 Nov. 2015 US Fed is Set to Hike in December, A Worry For LatAm But not a Crisis (My Publications)

LatAm economies this year have faced a tough external environment of subdued commodity prices, weaker Chinese growth, the rising USD, and the impending Fed lift-off. At the domestic level, lower public spending, low confidence, and economic policy reform have clashed with above-target inflation, which has prevented central bankers from loosening monetary policy in order to mitigate the external and domestic headwinds. In these challenging circumstances, LatAm growth generally continues to disappoint, though performance is mixed.

12 May 2017 Falling Inflation in Brazil Signals Rapid Rate Cuts Ahead (My Publications)

Brazil's April CPI data this week showed that inflation pressures remain weak, supporting the BCB's focus on the downside risks to economic activity. Wednesday's report revealed that the benchmark IPCA inflation index rose 0.1% unadjusted month-to-month in April, marginally below market expectations.

12 June 2017 The Hung Parliament has Hidden Positives for the Economy (My Publications)

Britain's general election has led to another major step-up in political uncertainty, which conventional wisdom assumes will harm the economy. Perhaps surprisingly, however, the government's enfeebled state brings with it some major positives for the U.K.'s economic outlook.

11 November. 2016 Eyes of Hurricanes Pass, then the Real Uproar Begins (My Publications)

Uncertainty about the U.S. economic and political outlook, following Donald Trump's presidential win, likely will cast a long shadow over EM in general and LatAm in particular. On the campaign trail, Mr. Trump argued for tearing up NAFTA and building a border wall.

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

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.

10 November. 2016 How Far Will Trump Loosen Fiscal Policy? And How Will the Fed React? (My Publications)

Note: This updates our initial post-election thoughts, adding more detail to the fiscal policy discussion. Apologies for the density of the text, but there's a lot to say. Our core conclusions have not changed since the election result emerged. The biggest single economic policy change, by far, will be on the fiscal front.

10 May 2017 German GDP Growth Likely Accelerated in the First Quarter (My Publications)

Yesterday's economic data in Germany cemented the story of a strong start to the year, despite the disappointing headlines. Industrial production slipped 0.4% month-to-month in March, pushing the year-over-year rate down to +1.9% from a revised +2.0% in February.

10 July. 2015 June's Inflation Data Underlines Divergent Monetary Paths Ahead (My Publications)

Brazil's central bank has ignored, so far, the severe economic downturn and has continued its aggressive monetary tightening in order to regain credibility and curb stubbornly high inflation. In contrast, Mexico's central bank is in an enviable position, with inflation below target and under control. Its monetary policy is mainly dependent on the Fed's rate normalization.

1 September 2017 EZ Energy Inflation will Fall Soon, but the Core Rate will Edge Higher (My Publications)

Yesterday's aggregate economic data for the euro area showed that inflation rose slightly in August. The headline rate rose to a four-month high of 1.5% in August from 1.3% in July. The rate was lifted mainly by energy inflation, rising to 4.6% from 2.2% in July, but we think the rebound will be short-lived.

11 Apr. 2016 Stronger Growth and Accelerating Wages Will Shift Rate Sentiment (My Publications)

A reader sent us last week a series of five simple feedback loops, all of which ended with the Fed remaining "cautious". For example, in a scenario in which the dollar strengthens--perhaps because of stronger U.S. economic data--markets see an increased risk of a Chinese devaluation, which then pummels EM assets, making the Fed nervous about global growth risks to the domestic economy.

11 April 2017 Why are Small Firms' Capex Plans so Soft even as Sentiment Soars? (My Publications)

Nowhere is the gap between sentiment and activity wider than in the NFIB survey of small businesses. The economic expectations component leaped by an astonishing 57 points between October and December, but the capex intentions index rose by only two points over the same period, and it has since slipped back. In February, the capex intentions index stood at 26, compared to an average of 27.3 in the three months to October.

11 Mar. 2015 Eurozone GDP growth on track for strong Q1 (My Publications)

The latest evidence of firming economic momentum comes from France, where industrial production rose 0.4% month-to-month in January, equivalent to a 0.6% increase year-over-year. Combined with strong consumer spending data in January, this points to a solid first quarter for the French economy.

11 July. 2016 Net Exports Boosted German GDP Growth in Q2, as Imports Fell (My Publications)

The German trade data on Friday completed a poor week for economic reports in the Eurozone's largest economy. The seasonally adjusted trade surplus fell to €22.1B in May, from €24.1B in April, mainly due to a 1.8% month-to-month fall in exports. Imports, on the other hand, were little changed.

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

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 Jan. 2016 Did German GDP Growth Slow Significantly in Q4? (My Publications)

Industrial production and trade data on Friday ended last week on a downbeat note, amid otherwise solid economic reports. In Germany, industrial output fell 0.3% month-to-month in November, pushing the year-over-year rate down to 0.1% from a revised 0.4% in October. The details, however, were better than the headline. Production was hit by a 3.3% plunge in capital goods output, offsetting gains in all other key sectors, and net revisions added 0.3% to the October data.

18 September 2017 China's Monetary Conditions Herald a Slowdown in GDP Growth (My Publications)

The PBoC probably will start soon to run modestly easier monetary policy, but conditions have been tightening consistently for over a year, so a slowdown in economic growth likely is already locked in.

13 June. 2016 Banxico's Dilemma: Help the Recovery or Support the MXN? (My Publications)

Markets are still discounting Banxico rate increases in the near term, despite the fact that Mexico's inflation is under control. Unless the MXN goes significantly above 18.7 per USD in the near term, or activity accelerates, we see little scope for rate increases until after the Fed hikes. After May's soft U.S. payrolls, and in light of the economic and financial risk posed by the U.K. referendum, we think a hike this week is unlikely.

25 Jan. 2016 Last Week's Data Reinforce Brazil's Doves - Rates are Now on Hold (My Publications)

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 Mar. 2015 LatAm Central Banks Will Exploit Market's View on Fed's Stance (My Publications)

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 Feb. 2015 Sharp Increase in Brazil's Inflation Rate - BCB Will Have to Hike Again (My Publications)

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 August. 2015 Market Panic Puts Pressure on ECB, but Fed's Response is Key (My Publications)

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 Apr. Preliminary GDP Data to Confirm Q1 Slowdown (My Publications)

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 May 2017 Balance Sheet Run-off set to Start in the Fall, but Slowly (My Publications)

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 November. 2016 German GDP Growth Will Rebound in Q4 (My Publications)

Yesterday's economic data in Germany confirmed that the economy slowed in Q3, but also added to the evidence that growth will rebound in Q4. The second estimate for Q3 showed that real GDP rose 0.2% quarter-on-quarter, slowing from a 0.4% gain in Q2.

26 August. 2015 Sharp Swings In LatAm Markets Highlights Their Vulnerabilities (My Publications)

LatAm currencies and stock markets have suffered badly in recent weeks, but Monday turned into a massacre with the MSCI stock index for the region falling close to 4%. Markets rebounded marginally yesterday, but remain substantially lower than their April-May peaks. Each economy has its own story, so the market hit has been uneven, but all have been battered as China's stock market has crashed. The downward spiral in commodity prices--oil hit almost a seven-year low on Monday--is making the economic and financial outlook even worse for LatAm.

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

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 Apr. 2016 Focus on the Positive Details in Yesterday's German IFO Survey (My Publications)

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.

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

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 Apr. 2016 Stable, but Weak, Cyclical Upturn to Continue in the EZ Economy (My Publications)

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 Apr. 2016 Brazil is Still Struggling, But Recent Data Are Encouraging (My Publications)

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 February 2017 The BCB Remains on Track to Deliver More Easing this Year (My Publications)

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 April 2017 Brazil's Disinflation Continues, Expect Further Rapid Easing Ahead (My Publications)

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.

23 Oct. 2015 U.K. Consumer Recovery is Not as Robust as Retail Sales Suggest (My Publications)

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 (My Publications)

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.

24 January 2017 Chainstore Sales Growth is Trending Upwards, but not for Long (My Publications)

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 June. Initial Thoughts on the U.K.'s Shock Brexit Vote (My Publications)

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 May 2017 The Eurozone Data Deluge Shows an Economy in Rude Health (My Publications)

Investors in the Eurozone were faced with a busy economic calendar yesterday, but the message from the plethora of survey data was simple. The economic recovery in the euro area is strengthening, and risks to GDP growth are firmly tilted to the upside in coming quarters.

24 May 2017 FOMC Minutes will Reinforce Skepticism over the Q1 Slowdown (My Publications)

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 March 2017 Rapid Disinflation will Allow the BCB to Ease More Quickly (My Publications)

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 Mar. February Retail Sales to Highlight Weakening Trend in Spending (My Publications)

The economic recovery would have lost more momentum last year had consumers not delved so deeply into their pockets. Real household spending increased by 0.7% and 0.8% quarter-on-quarter in Q3 and Q4 respectively, in contrast to investment and exports, which fell in both quarters.

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

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 January 2017 The IFO Points to Solid GDP Growth in Germany, Despite Dip (My Publications)

The trend of consensus-beating EZ economic data was brought to a halt yesterday. The IFO business climate index in Germany slipped to a five-month low of 109.8 in January, from 111.0 in December, mainly due to a fall in the expectations index. But we are not alarmed. The dip in the headline comes after a run of strong data, and the IFO remains consistent with GDP growth of about 1.6% year-over-year.

28 February 2017 Colombia's Economy is Struggling, but Further Easing is Coming (My Publications)

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.

19 Apr. Are the Treasury's Brexit Calculations Plausible? (My Publications)

The Treasury waded in to the Brexit debate yesterday with a 200-page report concluding that U.K. GDP would be 6.2% lower in 2030 than otherwise if Britain left the E.U. and entered into a bilateral trade deal similar to the one recently agreed by Canada. All long-term economic projections should come with health warnings, and the Treasury's precise numbers should be taken with a pinch of salt.

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

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 May. 2016 Mr. Temer Starts to Deliver - Fiscal Measures are Positive, Overall (My Publications)

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 May. 2016 June, July, or September: Evaluating the Fed's Options (My Publications)

After a busy week of data, and a holiday weekend ahead, it's worth stepping back a bit and evaluating the arguments over the timing of the next Fed hike. The first question, though, is whether the data will support action, on the Fed's own terms. The April FOMC minutes said: "Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee's 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June".

28 Jan. 2016 FOMC is Focussed on the Labor Market - Global Events Matter Less (My Publications)

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. 2016 Preliminary GDP Likely to Provide Another Downside Surprise (My Publications)

We expect today's preliminary estimate of Q4 GDP growth to surprise the consensus to the downside, underscoring our view that the economic recovery has shifted down to a much slower gear.

28 May. 2015 The Oil Hit Matters for Capex, but Not for the Labor Market (My Publications)

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 (My Publications)

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 March 2017 Andes' Countries Hit by Temporary Shocks, Monetary Policy to Help (My Publications)

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 July. 2016 Acceleration of Q2 GDP Won't Have Much Bearing on Stimulus Debate (My Publications)

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.

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

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 January 2017 Will Mr. Trump Single out Germany for its Large Trade Surplus? (My Publications)

The uncertainty over the new U.S. administration's economic policies new is clouding the outlook for the Eurozone economy. The combination of loose fiscal policy and tight monetary policy in the U.S. should be positive for the euro area economy, in theory. It points to accelerating U.S. growth--at least in the near term--wider interest rate differentials and a stronger dollar. In a " traditional" global macroeconomic model, this policy mix would lead to a wider U.S. trade deficit, boosting Eurozone exports.

26 May. Second Estimate of Q1 GDP to Highlight Brexit Risk Damage (My Publications)

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 June. 2015 Mexico's Economy Improves in April - Oil Distorts the Picture (My Publications)

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 2017 Markets are Telling Themselves a Story, Shame it's a Fairytale (My Publications)

The core economic narrative in U.S. markets right now seems to run something like this: The pace of growth slowed in Q1, depressing the rate of payroll growth in the spring. As a result, the headline plunge in the unemployment rate is unlikely to persist and, even if it does, the wage pressures aren't a threat to the inflation outlook.

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

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 Nov. 2015 The Chancellor Leaves the Fiscal Shackles Firmly in Place (My Publications)

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 Oct. 2015 Mexico's Private Consumption is the Key Driver of the Upswing (My Publications)

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.

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

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 Feb. 2015 M1 growth is sending a very bullish on the Eurozone economy (My Publications)

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 Apr. 2016 FOMC Statement Today Likely to Offer Little to Rate Hawks (My Publications)

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.

26 September 2016 Is the Markets' Pessimism About Long-Term Rates Warranted? (My Publications)

The bond market has become extremely pessimistic about the long-term economic outlook following Britain's vote to leave the EU. Forward rates imply that the gilt markets' expectation for official interest rates in 20 years' time has shifted down to just 2%, from 3% at the start of 2016.

23 Nov. 2015 How to Scare Yourself Over the U.S. Inflation Outlook (My Publications)

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?

28 February 2017 Should the ESI's Upbeat Growth Signal be Trusted? (My Publications)

The E.C.'s Economic Sentiment Indicator for the U.K., released yesterday, painted an upbeat picture of the economy's recent performance. The ESI picked up to 109.4 in February from 107.1 in January; its average level since 1990 is 100. February's reading was the highest since December 2015, and it slightly exceeded the E.U.'s average of 108.9.

2 Mar. 2015 Falling Confidence, High Inflation, Rising Rates: Brazil in a Mess (My Publications)

Brazil's economic data last week were appalling. The IPCA-15 price index rose 1.3% month-to-month, the fastest pace in 12 years, pushing the annual rate to 7.4% in mid-February from 6.7% in mid-January,well above the 6.5% upper bound of the BCB's target range.

20 December 2016 Will Households Drain Housing Equity to Support Consumption? (My Publications)

One of the most surprising features of the economic recovery has been that households have not responded to the surge in house prices by releasing housing equity to fund consumption. Housing equity rose to 4.2 times annual disposable incomes in 2015, up from 3.7 in 2012. It has more than doubled over the last two decades.

2 June. 2016 Higher Inflation Soon Will Unsettle the ECB's Dovish Story (My Publications)

The ECB will not make any adjustments to its policy stance today. We think the central bank will keep its main refinancing and deposit rates unchanged at 0.0% and -0.4%, respectively, and also that will maintain the pace of QE purchases at €80B a month. The updated macroeconomic projections likely will include a modest upgrade of this year's GDP forecast to 1.5%, from its 1.4% estimate in March.

2 December 2016 Copom is Still Cautious but Hints at Larger Cuts, BRL Permitting (My Publications)

Copom's meeting was the focal point this week in Brazil. The committee eased by 25bp for the second straight meeting, leaving the Selic rate at 13.75%, and it opened the door for larger cuts in Q1. Rates sat at 14.25% for 15 months before the first cut, in October. In this week's post-meeting statement, policymakers identified weak economic activity data, the disinflation process--actual and expectations--and progress on the fiscal front as the forces that prompted the rate cut.

2 Dec. 2015 Yellen to Affirm Labor Market Gains, Promise "Gradual" Hikes (My Publications)

Fed Chair Yellen speaks to the Economics Club of Washington, D.C., at 12.25 Eastern today, a day before she appears before the Joint Economic Committee of Congress at 10.00 Eastern. These will be her last public utterances before the FOMC meeting on December 16. Dr. Yellen won't say anything which could be interpreted as seeking to front-run the outcome of the meeting; that's not her style. But we expect her clearly to repeat that the Fed's decision will depend on whether progress has been made since October towards the Fed's twin objectives of maximum employment and 2% inflation.

20 Feb. 2015 Colombia's Strong Domestic Activity is Neutralizing Oil Price Hit (My Publications)

Colombia's oil industry--one of the key drivers of the country's economic growth over the last decade--has been stumbling over recent months, raising concerns about the country's growth prospects. But the recent weakness of the mining sector is in stark contrast with robust internal demand and solid domestic production.

20 February 2017 Brazil's Momentum Slowed in Q4, but it Will Rebound, Soon (My Publications)

Brazil's December economic activity index, released last week, showed that the economy ended the year on a relatively soft footing. The IBC-Br index, a monthly proxy for GDP, fell 0.3% month-to-month, though the year-over-year rate rose to -1.8%, from -2.2% in November.

20 Mar. 2015 LatAm FX Rally After Fed's Signal, But Relief Will be Temporary (My Publications)

The global economy is heading towards a new scenario, triggered by the impending start of the monetary policy normalization process in the U.S. In some major economies, notably the Eurozone, the Fed's actions will not derail or even jeopardize the cyclical economic upturn.

20 June. 2016 How Can the Fed Escape From the Loop of Endless Inaction? (My Publications)

For some time, the Fed has been locked in a loop of endless inaction. Every time the economic data improve and the Fed signals it is preparing to raise rates, either markets--both domestic and global-- react badly, and/or a patch of less good data appear. The nervous, cautious Yellen Fed responds by dialling back the talk of tightening, and markets relax again, until the next time.

20 June. 2016 Brazil's Macro Conditions are Improving - Rate Cuts During H2? (My Publications)

Brazil's recession carried over into the beginning of Q2, but with diminishing intensity. The IBC-BR economic activity index, a monthly proxy for GDP, fell 5.0% year-over-year in April, up from a revised 6.4% contraction in March. The index's underlying trend has improved in recent months, suggesting that the economy is turning around, slowly.

20 July. 2016 Venezuela's Crisis is Escalating, Made Worse by Low Oil Prices (My Publications)

Venezuela is on the brink o f economic and social collapse. Looting, food scarcity, power rationing, and other problems have become rampant. This week, Venezuela's government allowed citizens to flock across the Colombian border to shop for food and medicine, for the second time this month. Last year, Venezuela's President Maduro shut the border in a bid to crack down on smuggling of subsidized products.

19 September. 2016 Don't Mistake the Fed's Tactical Decisions for a Change in Strategy (My Publications)

The Fed's strategic view of the economy and policy has not changed since last December, when it first said that "The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.

19 October. 2016 Housing Construction has Faltered - Outlook is Cloudy (My Publications)

We have given up, more or less, on the idea that housing construction will be a serious driver of economic growth in this cycle. The next cycle should be different, but it was never realistic to expect the sector which brought down the economy to recover fully as soon as the dust settled.

19 July 2017 Peru's Economy is Recovering But Temporary Political Noise is a Drag (My Publications)

Following a challenging start to this year, Andean economic prospects are improving gradually, thanks to falling interest rates, lower inflation, relatively stable currencies and--in some cases--increased infrastructure spending.

19 Jan. 2016 Market Chaos in January Does Not Drive Fed Actions All Year (My Publications)

To paraphrase recent correspondence: "How can you possibly believe, given the terrible run of economic data and the turmoil in the markets, that the Fed will raise rates in March/June/at all this year?" Well, to state the obvious, if markets are in anything like their current state at the time of the eight Fed meetings this year, they won't hike. That sort of sustained downward pressure and volatility would itself prevent action at the next couple of meetings, as did the turmoil last summer when the Fed met in September. And if markets were to remain in disarray for an extended period we'd expect significant feedback into the real economy, reducing--perhaps even removing--the need for further tightening.

19 Dec. 2014 Further Signs of Diverging Growth Paths in Mexico And Brazil (My Publications)

This year has proved to be challenging for retailers in Mexico. The combination of fiscal reform, the economic slowdown over the first half of the year, and the collapse of consumer sentiment took a significant toll in the sector.

23 June. 2016 What Would Happen in the Eurozone if the U.K. Left the EU? (My Publications)

People across Europe are growing wary over the failure of governments to foster economic security since the 2008 crisis. Their conclusion increasingly is that the EU is to blame, so their support for EU-sceptic, and even right-wing nationalist, parties has increased accordingly.

19 July. 2016 EZ July Survey Data Will be Tainted by the U.K. Referendum Result (My Publications)

Today's ZEW investor sentiment report in Germany will kick off a busy week for Eurozone economic survey data, which likely will be tainted by the U.K. referendum result. We think the headline ZEW expectations index fell to about five in July, from 19.2 in June, below the consensus forecast, 9.2. Our forecastis based on the experience from recent "unexpected" shocks to investors' sentiment.

19 June 2017 Colombia's Economy Started Q2 Poorly, Expect a Sluggish Recovery (My Publications)

Evidence of slowing economic activity in Colombia continues to mount. Retail sales fell 2.0% year- over-rate in April, down from a revised plus 3.0% in March; and the underlying trend is falling. This year's consumption tax increase, low confidence, tight credit conditions, and rising unemployment continue to put private consumption under pressure.

19 Oct. 2015 Chile Follows its Peers, But the Tightening Cycle Will be Brief (My Publications)

Chile's central bank, the BCCh, admitted defeat in the face of the inflationary effects of the CLP's depreciation, increasing interest rates by 25bp to 3.25% last Thursday, the first hike since mid-2011. Chile is the third LatAm economy in a month to increase rates in response to currency weakness, despite sluggish economic growth.

19 Nov. 2015 Fed Set for December Hike, but Expect Two Dissents (My Publications)

At the October FOMC meeting, policymakers softened their view on the threat posed by the summer's market turmoil and the slowdown in China, dropping September's stark warning that "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term." Instead, the October statement merely said that the committee is "monitoring global economic and financial developments."

19 May. Retail Sales Set to Bring Further Signs of a Consumer Slowdown (My Publications)

April's retail sales figures, released today, likely will show only a partial reversal of the sharp 1.3% month-to-month fall in sales volumes in March. This would reinforce the impression that the recovery in consumer spending has been becalmed by slower job growth, the intensification of the fiscal squeeze and heightened uncertainty about the economic and political outlook.

19 May. 2016 Fed on Course to Hike, Soon, but Will Brexit Risk Forestall June? (My Publications)

The April FOMC minutes don't mince words: "Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee's 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June".

20 May. 2015 What Does the Fed Think Really Happened in the First Quarter? (My Publications)

The FOMC's statement on April 29 mentioned the winter--"...economic growth slowed during the winter months"--but did not explicitly blame any of the first quarter's weakness on the extended cold and snowy weather. That was a change from the March statement, which made no mention of the weather and gave the distinct impression that policymakers had no firm view on why growth had "moderated".

19 April 2017 Another Political Hand Grenade is Thrown in European Politics (My Publications)

Economic news in Europe continues to take a back-seat to volatility in politics. Yesterday's announcement by U.K. Prime Minister Theresa May that she is seeking a snap general election on June 8th cast further doubt over what exactly Brexit will look like.

20 Nov. 2015 Will the OBR's New Forecasts Make the Chancellor Cut Deeper? (My Publications)

The Chancellor must feel a sense of foreboding before his pre-Autumn Statement meetings with the Office for Budget Responsibility. Even minor revisions to the independent body's economic forecasts could shred into tatters his plans for a budget surplus by the end of the parliament, given the lack of wiggle room in the July Budget borrowing projections. The OBR won't present the Chancellor with disastrous news ahead of next Wednesday's Autumn Statement, but the already slim margin for error he has in meeting his surplus goal likely will be reduced.

22 June 2017 Falling Oil Prices will hit Mining Capex, but no Repeat of 2014 to 16 (My Publications)

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

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.

22 August. 2016 Fiscal Problems Will be Exposed as Brazil's Political Mess Clears (My Publications)

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 Acceleration in German GDP Growth Likely Won't be Sustained (My Publications)

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.

23 Apr. 2015 Cyclical recovery in the Eurozone will likely moderate in Q2, slightly (My Publications)

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 Apr. 2015 More signs of life in the housing market - This time, for real? (My Publications)

New home sales performed better during the winter than any other indicator of economic activity. At least, we think they did. The mar gin of error in the monthly numbers is enormous, typically more than +/-15%.

23 Feb. 2016 PMIs Suggest Risks to Q1 EZ GDP Growth are Tilted to the Downside (My Publications)

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.

23 Feb. 2015 Mexico's GDP Rising at the Fastest Pace in Two Years - More to Come? (My Publications)

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 June. 2015 More Waiting For Investors, But a Deal With Greece is Coming (My Publications)

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. 2016 Venezuela is Still in Dire Straits - Straining to Avoid Collapse (My Publications)

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.

22 Apr. Progress Towards a Budget Surplus Will Remain Slow (My Publications)

The trend in public borrowing has improved significantly over recent months, but it is far too soon to conclude that the Chancellor is on track to meet his goal of running a budget surplus by the end of this decade. The recent economic slowdown has not impacted the public borrowing numbers, yet.

22 July. 2015 Brazil's Worst Recession In 25 Years Will Stop The BCB, Soon (My Publications)

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.

21 August. 2015 Mexico's Domestic Recovery Remains - But Oil Woes Continue (My Publications)

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 Mar. 2016 Monetary Policy Divergence in LatAm Despite Calm in Markets (My Publications)

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 September. 2016 Sluggish Start to Q3 in Brazil, But Trend is Still Improving (My Publications)

Brazil's recession stretched into the start of the third quarter, but its intensity has eased. The IBC-Br economic activity index--a monthly proxy for GDP--fell 0.1% month-to-month seasonally adjusted in July, following a 0.4% gain in June. The unadjusted year-over-year rate fell to -5.2%, from an upwardly revised -2.9%.

21 July. 2016 Upside Risk for July Existing Home Sales - Price Gains Should Rebound (My Publications)

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 December 2016 Big Current Account Deficit Likely to Cloud Resilient GDP Picture (My Publications)

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 Jan. 2015 Colombia Will Lose Momentum in 2015, But Don't Panic Just Yet (My Publications)

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 February 2017 Are EZ Survey Data Overestimating Momentum in the Economy? (My Publications)

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 November. 2016 Soft Chilean Data Likely Leading to Rate Cuts Next Year (My Publications)

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 Oct. 2015 Recovery Won't Shrug Off The Fiscal Squeeze (My Publications)

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 Sept. 2015 Fed Abstention Increases the Risk of More QE from the ECB this Year (My Publications)

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 2017 The FOMC is not Deterred by the Hurricanes, Expect a December Hike (My Publications)

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.

BLOOMBERG - Markets are telling Yellen it's time to move (News and Media)

Ian Shepherdson, founder at Pantheon Macroeconomics, and Jeff Saut, chief investment strategist at Raymond James, look forward to a potential Federal Reserve rate hike on December 16 and how markets and the U.S. economy may react in the year ahead.

BLOOMBERG - Ian Shepherdson Sees Trump Confusion on U.S. Dollar (News and Media)

Ian Shepherdson, founder and chief economist at Pantheon Macroeconomics, and Paul De Grauwe, London School of Economics professor and former Belgian MP, talk about confusion surrounding the Trump administration's approach to the U.S. dollar.

BLOOMBERG - Fed May Bring Hot, Volatile Summer, Says Shepherdson (News and Media)

Ian Shepherdson, founder at Pantheon Macroeconomics Ltd., discusses the Federal Reserve's rate hike pattern and how it can provide a summer surprise to markets. He speaks with Bloomberg's Mark Barton on "Bloomberg Surveillance."

BLOOMBERG - Has the Crash in Oil Prices Fueled Consumer Spending? (News and Media)

Ian Shepherdson, Pantheon Macroeconomics chief economist, discusses the economic impact of falling oil prices with Bloomberg's Joe Weisenthal and Scarlet Fu

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Bloomberg - Monte Paschi Proceeds With Capital Plan (News and Media)

Banca Monte dei Paschi di Siena SpA will step up efforts to win investors for an expanded debt-to-equity swap over the coming days, pressing ahead with a 5 billion-euro ($5.3- billion) capital increase as its options to avoid a state rescue dwindle. Pantheon Macroeconomics Chief Euro Zone Economist Claus Vistesen weighs in on "Bloomberg Daybreak: Americas."

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AL JAZEERA - EU-Japan free trade (News and Media)

EU-Japan free trade: Japan and the European Union agreed on an outline for a massive trade deal this week that will rival the size of NAFTA, the free trade accord that the United States has with Canada and Mexico, currently the largest one in the world. Claus Vistesen, the chief eurozone economist with Pantheon Macroeconomics, assesses what's in the agreement and why it matters (19mins 10 secs).

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BLOOMBERG - Don't Need Any More Stimulus: Ian Shepherdson (News and Media)

Pantheon Macroeconomics Founder Ian Shepherdson discusses Fed policy. He speaks on "Bloomberg Surveillance."

BLOOMBERG - Seeing Benefits of Lower Oil Prices: Shepherdson (News and Media)

Pantheon Macroeconomics Founder Ian Shepherdson discusses the price of oil, the U.S. economy and the Greek crisis. He speaks on "Bloomberg Surveillance."

CNBC - March rate hike 'as done as it gets': Ian Shepherdson (News and Media)

Ian Shepherdson, chief economist at Pantheon Macroeconomics, discusses the possibility of 4 interest rate hikes in 2017

CNBC - Ian Shepherdson talks Greece on CNBC Squawk box (News and Media)

Discussing the dangers if Greece defaults on its debt, with Ian Shepherdson, Pantheon Macroeconomics.

Dukascopy TV - ECB "Will have more easing" (News and Media)

Chief Eurozone Economist Claus Vistesen discussing key current economic issues

CNBC - Reluctance from the Fed (News and Media)

Ian Shepherdson, Pantheon Macroeconomics, shares his economic view of markets around the world.

BLOOMBERG - Pantheon Chief Economist Worries Wages May Pressure Fed (News and Media)

Ian Shepherdson, chief economist at Pantheon Macroeconomics, discusses the impact of improving wage growth and inflation on the Federal Reserve ahead of today's February jobs report. He speaks on "Bloomberg Surveillance."

IG - US labour market driving the need for a rate rise from the Fed (News and Media)

Dr Ian Shepherdson, chief economist at Pantheon Macroeconomics, says that while US rates will rise by 0.25% on 14th December, the central bank needs to continue to move rates up or wages will spiral up out of control.

FORBES - All Hail The Eurozone's Disaster-Prone Economy (Really) (News and Media)

Provocative notes from Ian Shepherdson, the Chief Economist at Pantheon Macroeconomics

CNBC - Fed will hike rates in June, regardless of jobs data (News and Media)

Ian Shepherdson, chief economist at Pantheon Macroeconomics, speaks about how the U.S. Federal Reserve will react to the latest jobs data.

CNBC - D-Day for Draghi (News and Media)

Ian Shepherdson, Pantheon Macroeconomics, provides insight to the European Central Bank's path and whether to expect Mario Draghi to announce additional stimulus.

BLOOMBERG - Pantheon's Shepherdson Says Inflation Killed Sep. Hike (News and Media)

Ian Shepherdson, chief economist at Pantheon Macroeconomics, and Krishna Memani, chief investment officer at OppenheimerFunds, discuss the impact of low inflation on the Federal Reserve's rate path.

BLOOMBERG - Two decades to unwind from '08 crash: Ian Shepherdson (News and Media)

Ian Shepherdson, founder and chief economist at Pantheon Macroeconomics, discusses low job growth, the continuing recovery from the financial crisis and the state of the U.S. economy. He speaks on "Bloomberg Surveillance."

BLOOMBERG - Shepherdson: Fed at 2% Next Year on Five Rate Hikes (News and Media)

Ian Shepherdson, founder at Pantheon Economics, discusses rising U.S. inflation expectations and his outlook for the Federal Reserve in response to President-Elect Donald Trump's economic plan. He speaks on "Bloomberg Surveillance."

CNBC - Asset prices 'hugely over-inflated' everywhere (News and Media)

Ian Shepherdson, Pantheon Macroeconomics, and Erik Knutzen, Neuberger Berman, provide insight to the markets ahead of the FOMC meeting.

CNBC - August payrolls should be strong (News and Media)

August could be the month to break the mold with regards to payroll figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said.

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THE TELEGRAPH - Eurozone economy 'sizzles' as ECB readies monetary bazooka (News and Media)

Chief Eurozone Economist Claus Vistesen on the Eurozone recovery

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

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

TELEGRAPH - Eurozone's central bankers consider letting inflation run hot (News and Media)

Chief Eurozone Economist Claus Vistesen on the Eurozone Inflation

TELEGRAPH - Blistering US spending growth puts Fed on track for September rate hike (News and Media)

Chief US economist Ian Shepherdson on US Consumer Spending

THE TELEGRAPH - Weak US retail sales put hopes of interest rate hike on ice (News and Media)

Chief U.S. Economist Ian Shepherdson on US Retail Sales

TELEGRAPH - Why Britain's shopping spree will come at a cost (News and Media)

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

THE TELEGRAPH - Boost for George Osborne as UK borrowing drops in December (News and Media)

Chief U.K. economist Samuel Tombs comments on today's retail data release

THE TELEGRAPH - Britain remains stuck in deflation (News and Media)

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

WALL STREET JOURNAL - Economists react to the May jobs report: "Unambiguously Positive" (News and Media)

Chief US economist Ian Shepherdson on the latest Jobs report

WALL STREET JOURNAL - Jobless Claims Rise Slightly in April 18 Week (News and Media)

Chief US Economist Ian Shepherdson on today's Inital Jobless Claims data

WALL STREET JOURNAL - U.S. Construction Spending Surges (News and Media)

Ian Shepherdson comments on strong construction data

MARKETWATCH - You should trust the BLS more than the Dow, economist says (News and Media)

Chief U.S. Economist Ian Shepherdson on the U.S. Economy

WALL STREET JOURNAL - ISM Service-Sector Index Eases in May (News and Media)

Chief US economist Ian Shepherdson on the latest ISM nonmanufacturing data

WALL STREET JOURNAL - Economists react to the May jobs report: "Unambiguously Positive" (News and Media)

Chief US economist Ian Shepherdson on the latest Jobs report

WALL STREET JOURNAL - Economists React to First-Quarter GDP: 'Pretty Lackluster' (News and Media)

Chief U.S. Economist Ian Shepherdson on U.S. Q1 GDP

WALL STREET JOURNAL - Economists React to the January Fed Statement: 'The Door is Still Open to a June Hike' (News and Media)

The Federal Reserve said Wednesday it would keep short-term interest rates near zero until at least the middle of the year. The central bank's policy committee also signaled caution about low inflation and nodded to overseas uncertainty by including new language that it would monitor international developments. Here's how economists reacted

WALL STREET JOURNAL - Economists react to the May jobs report: "Unambiguously Positive" (News and Media)

Chief US economist Ian Shepherdson on the latest Jobs report

WALL STREET JOURNAL - Cheaper Oil Drags Down Business Inflation, but Long Deflationary Period Unlikely (News and Media)

U.S. inflation gauges are sliding toward negative territory for the first time in more than five years. But the oil-fueled tumble in prices is far from the kind of growth-sapping episodes of deflation that tend to worry economists

DAILY TELEGRAPH - Eurozone surveys make for 'grim reading' as region stutters (News and Media)

Eurozone surveys make for 'grim reading' as region stutters

BUSINESS INSIDER - Retail sales tank....then again, the weather was terrible (News and Media)

Chief US Economist Ian Shepherdson attributes bad weather to February US Retail Sales

BUSINESS INSIDER - Retail sales rise less than expected (News and Media)

Chief US Economist Ian Shepherdson on Retail Sales figures, March

BUSINESS INSIDER - New home sales crush expectations (News and Media)

Chief US Economist Ian Shepherdson on "Remarkable" New Home Sales Data for February

BUSINESS INSIDER - The idea that Brexit isn't totally screwing the economy is 'baloney' (News and Media)

Chief U.K. Economist Samuel Tombs on the impact of the Referendum

CBS NEWS - Is Greece headed for eurozone exit? (News and Media)

Claus Vistesen comments on the aftermath of the Greek referendum

BUSINESS INSIDER - Top economist throws shade at the 'research institute' that releases a widely followed jobs number (News and Media)

Ian Shepherdsonon why the ADP report is simply not a reliable indicator

BUSINESS INSIDER - The Tories might not get the crushing victory they expect in this election (News and Media)

Chief U.K. Economist Samuel Tombs discussing the General Election in June

BUSINESS INSIDER - The pound's general election jump faces a 'swift reversal' as reality takes hold (News and Media)

Chief U.K. Economist Samuel Tombs discussing the effect the general election will have on the pound,

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

Ian Shepherdson comments on Retail Sales data for June

BUSINESS INSIDER - Homebuilder confidence tumbles in March (News and Media)

Chief US Economist Ian Shepherdson comments on disappointing Homebuilder Confidence data

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

Senior International Economist Andres Abadia on Chile GDP.

BLOOMBERG - Chile Prices Rise More Than Forecast as Inflation Picks Up (News and Media)

Senior International Economist Andres Abadia comments on the latest Inflation data for Chile

Bloomberg - Brexit: London's status as a Financial Hub (News and Media)

Chief U.S. Economist Ian Shepherdson on Bloomberg Surveillance

ABC NEWS - Trump administration reveals plans for massive tax cuts (News and Media)

Chief U.S. Economist Ian Shepherdson speaking about Donald Trump's plans for sweeping tax cuts

Bloomberg - How Fed Rate Hike Messaging Impacts the Economy (News and Media)

Chief U.S. Economist Ian Shepherdson on Bloomberg Surveillance

Bloomberg - WaPo Op-Ed: 'This Is How Fascism Comes to America' (News and Media)

Chief U.S. Economist Ian Shepherdson on Bloomberg Surveillance

BUSINESS INSIDER - ECONOMIST: 'The wage number is wrong, payrolls are strong.' (News and Media)

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

BUSINESS INSIDER - Car sales are going through the roof with Europe's surprising spending recovery (News and Media)

Chief Eurozone Economist Claus Vistesen on European Car Sales

BUSINESS INSIDER - Brits are hoarding cash post-Brexit -- and it's a 'worrying signal' for the economy (News and Media)

Chief U.K. Economist Samuel Tombs on U.K. Money Supply

BUSINESS INSIDER - Britain's government could make the pound's crash even worse (News and Media)

Chief U.K. Economist Samuel Tombs on the government's fiscal policy

CBS NEWS - Will Syriza win rock the global economy? (News and Media)

Claus Vistesen on the Greek election results impact on the Eurozone

CITY A.M. - Cheap energy and low interest rates lift Eurozone consumers (News and Media)

Chief Eurozone Economist Claus Vistesen comments on Eurozone Consumer Confidence

DAILY TELEGRAPH - Stock markets rocked by US consumer fears (News and Media)

Chief US Economist Ian Shepherdson on Consumer Confidence figures for April

DAILY TELEGRAPH - Eurozone grows at strongest pace in nearly three years (News and Media)

Chief Eurozone Economist Claus Vistesen on Q1 growth in the Eurozone

DAILY TELEGRAPH - Euro slump offers lifeline to ailing Europe (News and Media)

Claus Vistesen comments on Eurozone deflation

DAILY TELEGRAPH - Surprise comeback for France as economy grows twice as fast as UK (News and Media)

Chief Eurozone economist Claus Vistesen comments on the latest GDP figures from France

DAILY TELEGRAPH - US unemployment takes shock tumble to 5.5pc (News and Media)

Ian Shepherdson on strong non-farm payroll numbers for February

MARKETWATCH - So many jobs, so little growth. What gives? (News and Media)

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

MARKET WATCH - Yellen's message this week? Rate hikes are coming (News and Media)

Chief US economist Ian Shepherdson on the latest Jobs report

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

Chief US Economist Ian Shepherdson on Durable Goods Orders, February

DAILY MAIL - US personal incomes rise, spending weak in February (News and Media)

Chief US Economist Ian Shepherdson on US Personal Income, February

DAILY TELEGRAPH - Dollar dives as weak US retail sales data raises growth fears (News and Media)

Ian Shepherdson on December's low US retail sales.

CNBC - ECB controversy over speech that sank the euro (News and Media)

Chief Eurozone Economist Claus Vistesen comments on ECB speech changes

CITY AM - Eurozone economy comes off the boil in January despite rebound in end-of-year retail sales (News and Media)

Chief Eurozone economist Claus Vistesen comments on the Eurozone PMIs

CNBC - Can German shoppers save the euro zone? (News and Media)

Chief Eurozone Economist Claus Vistesen on the latest German consumer figures

CNBC - Fed hike hint surprises economist (News and Media)

Chief U.K. Economist Ian Shepherdson on Brexit risk to a June rate hike

CNBC - Greece hits back at reports of euro zone 'shock' (News and Media)

Chief Eurozone Economist Claus Vistesen on Greece

CITY AM - Eurozone sees faster money supply growth (News and Media)

Chief Eurozone Economist Claus Vistesen comments on the Eurozone's Money Supply

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