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

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

20 June 2018 Today's Brexit Bill Vote is a Close Call, but Bigger Decisions Lie Ahead (Publication Centre)

The vote in the House of Commons today on whether MPs should effectively take control of Brexit negotiations, if Theresa May can't strike a deal by mid-January, looks finely balanced.

5 December 2017 The PMI Signals Construction has Stabilised, but Won't Recover Soon (Publication Centre)

November's Markit/CIPS construction report brings hope that the sector no longer is contracting. The PMI increased to a five-month high of 53.1 in November from 50.8 in October, exceeding the 52-mark that in practice has separated expansion from contraction.

18 August 2017 Sluggish Income Growth has Held Back Consumption, that will Change (Publication Centre)

Consumer confidence surveys have risen since the elections to levels consistent with very rapid growth in real spending.

18 April 2018 Patience is a Virtue in Eurozone Construction, the Trend is Decent (Publication Centre)

Today's economic data will add to the evidence that construction in the Eurozone slowed in the first quarter.

4 May 2017 How to Interpret the Results from Today's Local Elections (Publication Centre)

Today's local elections are more important than usual, because they will enable investors to assess if the Conservatives really are on track for a landslide victory in the general election, as suggested by the opinion polls and priced-in by the forex market.

18 April 2018 Mortgage Applications Wilting Under the Weight of Higher Rates (Publication Centre)

Mortgage applications appear to have recovered from their reported February drop, which was due mostly to a very long-standing seasonal adjustment problem

20 June 2017 EZ Construction Upturn Signals Upside Risks to GDP Growth (Publication Centre)

We continue to see signs of a strengthening upturn in Eurozone construction. Output in construction rose 0.3% month-to-month in April, pushing the year-over-year rate down to 3.2%, from an upwardly revised 3.8% in March.

20 July. 2016 EZ Construction Capex Plunged in Q2, Depressing GDP Growth (Publication Centre)

Yesterday's EZ construction data confirmed that capex in the building sector plunged in the second quarter. Construction output fell 0.5% month-to-month in May, pushing the year-over-year rate up trivially to -0.8%, from a revised -1.0% in April. Our forecast for construction investment in Q2 is not pretty, even after including our assumption that production rebounded by 0.5% month-to-month in June.

24 Feb. 2016 Mortgage Applications are Rising, Despite the Usual February Drop (Publication Centre)

If, like us, you have been cheered by the upturn in mortgage applications since November, you don't need to worry about the apparent drop in activity in the past couple of weeks. The numbers don't look great: The MBA's index capturing the number of applications for new mortgages to finance house purchase has dropped from a peak of 237.7 in the third week of January--ignoring September's spike, which was triggered by a regulatory change--to 213.3 last week.

18 Feb. 2016 Construction Investment Turned Up in Q4 - More Upside Ahead (Publication Centre)

Fourth quarter construction activity in the Eurozone was much better than in Q3, despite a dip in December. Output fell 0.6% month-to-month in the final month of the year, pushing the year-over-year rate down to -0.4% from a revised 0.3% in November.

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

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

5 May. 2016 Growth in Eurozone Consumers' Spending is Slowing (Publication Centre)

Evidence of slowing growth in Eurozone consumers' spending continues to mount. Retail sales in the euro area fell 0.5% month-to-month in March, pushing the year-over-rate down to 2.1% from a revised 2.7% in February. The headline likely was depressed by the early Easter. March had one trading day less than February, which was not picked up the seasonals.

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

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

18 Dec. 2015 Spanish Elections this Weekend Unlikely to Move Markets (Publication Centre)

Spain heads to the polls on Sunday, but unlike the chaos that descended on Europe following Greece's elections earlier this year, we expect a market-friendly outcome. The key political story likely will be the end of the two-party system, as polls indicate neither of the two largest mainstream parties--Partido Popular and PSOE--will be able to form a majority. Markets' fears have been that the fall of the established parties would allow anti-austerity party, Podemos, to lead a confrontation with the EU, but this looks very unlikely.

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

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

4 July 2018 Consumption is on the Mend in LatAm but Downside Risks Abound (Publication Centre)

Consumption remains an important source of economic growth in LatAm.

31 May 2017 A Consumer Rebound is Underway, but Watch out for Healthcare Costs (Publication Centre)

In the wake of April's 0.2% increase in real consumers' spending, and the upward revisions to the first quarter numbers, we now think that second quarter spending is on course to rise at an annualized rate of about 3.5%.

17 October. 2016 Retail Sales are Noisy, but the Trend in Consumption Looks Solid (Publication Centre)

In the wake of the September retail sales report, we can be pretty sure that real consumers' spending rose at a 2¾% annualized rate in the third quarter, slowing from the unsustainable 4.3% jump. That would mean consumption contributed 1.9 percentage points to headline GDP growth.

17 October. 2016 Eurozone Car Registrations Slowed Significantly in Q3 (Publication Centre)

Growth in new EZ car sales remained brisk last month, growth slowed in Q3. New registrations rose 9.4% year-over-year in September, marginally lower than the 9.6% increase in August. Growth in France fell most, sliding to 2.5% from 6.7% in August, but sales in Germany picked up to 9.4%, from 8.3%.

31 March 2017 Eurozone Inflation Data will Undershoot the Consensus Today (Publication Centre)

Yesterday's advance data from Germany and Spain suggest that today's Eurozone inflation report will undershoot the consensus. In Germany, headline inflation slipped to 1.6% in March from 2.2% in February, and in Spain the headline rate plunged to 2.3% from 3.0%.

31 Mar. 2015 Soft first quarter consumption will change course in the second (Publication Centre)

We now have consumption data for two-thirds of the first quarter, making it is easy to see that a near-herculean spending effort is required to lift the quarter as a whole into anything like respectable territory. After February's 0.1% dip, real spending has to rise by at least 0.4% in March just to generate a 2.0% annualized gain for the quarter, and a 2.5% increase requires a 0.7% jump.

31 March 2017 February Consumption Will Look Grim (Publication Centre)

On the face of it, the February consumer spending data, due today, will contradict the upbeat signal from confidence surveys. The dramatic upturn in sentiment since the election is consistent with a rapid surge in real consumption, but we're expecting to see unchanged real spending in February, following a startling 0.3% decline in January.

31 October 2017 Consumption Set for a Sluggish Q4, Capex Will Take up the Slack (Publication Centre)

The September consumption data were a bit better than median expectations, with real spending rebounding by 0.6%, led by an 15.1% leap in the new vehicle component.

17 September 2018 Brazilian Consumers' Spending is Slowing, but it Won't Collapse (Publication Centre)

Evidence of slowing growth in Brazil consumers' spending continues to mount.

4 Feb. 2015 The Eurozone consumer is in fine shape (Publication Centre)

Retail sales data later today will provide further support for the upbeat consumer story in the Eurozone. We expect a third monthly gain in a row, taking retail sales to a 0.8% expansion quarter-on-quarter in Q4, the fastest since the end of 2006. We are seeing clear signs of improvement in the Eurozone economy, and the data are forcing us to recognise upside risks to our Q4 GDP forecast of 0.3-to-0.4%

20 March 2017 Construction in the EZ is Doing Fine, Despite January Plunge (Publication Centre)

The Eurozone construction sector ground to a halt at the start of 2017. Data on Friday showed that output plunged 2.3% month-to-month in January, pushing the year-over-year rate down to -6.0%, from a revised +3.0% in December. The weakness was broad-based across the major economies, but it was concentrated in France and Spain where output fell by 3.5% and 3.8%, respectively.

16 August 2017 Strong July Sales and Revisions Signal Robust Consumption (Publication Centre)

July's retail sales report signalled a good start to the third quarter but also implied that second quarter spending was stronger than previously thought. The upward revisions--totalling 0.5% for total sales and 0.4% for non-auto sales--were the biggest for some time, but we were not unduly surprised.

16 Dec. 2015 Sizzling Growth in the Periphery Lifting EZ Car Registrations (Publication Centre)

Demand for new cars rebounded strongly last month, following the dip in October. Registrations in the EU27 rose 13.7% year-over-year in November, up from 2.9% in October, lifted mainly by buoyant growth in the periphery. New registrations surged 25.4% and 23.4% year-over-year in Spain and Italy respectively, while growth in the core was a more modest 10%. We also see few signs of the VW emissions scandal hitting the aggregate data. VW group sales have weakened, but were still up a respectable 4.1% year-over-year. This pushed the company's market share down marginally compared to last year. But sizzling growth rates for other manufacturers indicate that consumers are simply choosing different brands.

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

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

24 August. 2016 Mexican Consumers' Spending Still Robust, but Set to Slow in H2 (Publication Centre)

Mexican consumers' spending improved toward the end of Q2. Retail sales jumped by 1.0% month-to-month in June, pushing the year-over-year rate up to 9.4%, from an already solid 8.6% in May. Still, private spending lost some momentum in the second quarter as a whole, rising by 2.5% quarter-on-quarter, after a 3.8% jump in Q1. A modest slowdown in consumers' spending had to come eventually, following surging growth rates in the initial phases of the recovery.

6 April 2018 EZ Consumers' Spending Likely Remained Sluggish in Q1 (Publication Centre)

Consumers' spending in the Eurozone slowed in the second half of 2017, providing a favourable base for growth in H1 2018.

20 February 2017 Is the Eurozone Construction Sector is Back in Business? (Publication Centre)

Construction in the euro area stumbled at the end of last year. Output fell 0.2% month-to-month in December, but the year-over-year rose to 2.4%, from a revised 1.6% in November.

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

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.

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

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

2 June. 2015 Q2 Consumption Heading for 2.5% - Q3 Should be Far Stronger (Publication Centre)

Markets weren't impressed by the sub-consensus consumption numbers for April, reported yesterday, but the undershoot was all in the we ather-related utility component, where spending plunged 5.1% month-to-month. The process of post-winter mean reversion is now complete.

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

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

15 December 2017 Strong November Sales Mean Q3 Consumption Heading for 3% (Publication Centre)

The 0.8% jump in nominal November retail sales is consistent with a 0.4% rise in real total consumption, which in turn suggests that the fourth quarter as a whole is likely to see a near-3% annualized gain.

2 March 2018 Markets Don't fear Sunday's elections in Italy (Publication Centre)

Earlier this week the New York Times bleakly suggested--see here--that people in Italy are too depressed to care about this weekend's parliamentary elections.

15 December 2017 Brazil's Consumption Slowed at the Start of Q4, but Expect a Rebound (Publication Centre)

Consumers' spending in Brazil slowed at the start of Q4, but we don't see this as the start of a downtrend.

14 December 2016 Brazil Consumption Under Strain in Early Q4, but it Will Improve, Soon (Publication Centre)

Brazil's consumer recession seems never-ending. Retail sales fell 0.8% month-to-month in October, pushing the headline year-over-year rate down to -8.2% in October, from -5.7% in September. Recent financial market volatility, credit restrictions and the ongoing deterioration of the labour market continue to hurt consumers.

24 Mar. 2016 EZ Consumers' Spending Is Slowing, but Won't Collapse (Publication Centre)

All the evidence indicates that growth in Eurozone consumers' spending is slowing. We think data today will show that the advance GfK consumer sentiment index in Germany was unchanged at 9.5 in April, but the headline index does not correlate well with spending. The "business expectations" index is better, and while it likely will increase slightly, our first chart shows that it continues to signal a slowdown in consumers' spending growth.

2 August 2017 An Advance Preview of July's Consumer Price Figures (Publication Centre)

July's consumer price figures--published on August 15th, while we are on vacation--look set to show that June's drop in CPI inflation was just a blip. We think that CPI inflation ticked up to 2.7% in July, from 2.6% in June, on track to slightly exceed 3% toward the end of this year.

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

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.

18 October. 2016 Conditions are Right For Brazil to Ease Tomorrow, More to Come (Publication Centre)

Inflation pressures in LatAm are moderating, and governments have been taking steps to pursue fiscal consolidation. These factors, coupled with a relatively favourable external environment, are providing policymakers with the opportunity to start relaxing monetary policy.

7 June. Are Falling Car Sales Signalling a Wider Consumer Malaise? (Publication Centre)

Consumer spending has been the main locomotive of the economic recovery over the last couple of quarters, as investment and net trade have dragged on growth. Signs are emerging, however, that consumption is slowing too.

7 June 2017 The Slowing in Consumer Credit Demand is Good News (Publication Centre)

Today's consumer credit report for April likely will show that the stock of debt rose by about $15B, a bit below the recent trend. The monthly numbers are volatile, but the underlying trend rate of increase has eased over the past year-and-a-half, as our first chart shows. The slowdown has been concentrated in the non-revolving component, though the rate of growth of the stock of revolving credit--mostly credit cards--has dipped recently, perhaps because of weather effects and the late Easter.

7 June 2018 Slower Growth in Consumer Credit is a Correction, not a Warning (Publication Centre)

We've been hearing a good deal about the slowdown in the rate of growth of consumer credit in recent months, and with the April data due for release today, it makes sense now to reiterate our view that the recent numbers are no cause for alarm.

24 June. 2015 Mexico's Soft April Consumption Will Change Course Ahead (Publication Centre)

Mexico's private spending stumbled at the start of the second quarter. Retail sales fell 0.3% month-to-month in April after three consecutive increases, hit by an unexpected 1.6% drop in both supermarket and apparel sales, and a surprising 1.2% fall in food sales. In year-over-year terms, total sales rose 4.6% in April, down from 5.6% in March.

11 April 2018 Sanctions against Russia are a mixed blessing for the EZ (Publication Centre)

The plunge in Russia's financial markets, in response to targeted U.S. sanctions--see here--against Russian oligarchs and government officials, was the main EU news story yesterday.

11 December 2018 Macro Data set to Split: Consumer Strength, Industrial Weakness (Publication Centre)

The next few months, perhaps the whole of the first quarter, are likely to see a clear split in the U.S. economic data, with numbers from the consumer side of the economy looking much better than the industrial numbers.

24 July 2018 EZ Consumption Accelerated in H1, But Will Slow in H2 (Publication Centre)

Eurozone consumer confidence remained at its low for the year at the start of Q3.

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

Consensus forecasts expect further gains in this week's key EZ business surveys, but the data will struggle to live up to expectations. The headline EZ PMIs, the IFO in Germany, and French manufacturing sentiment have increased almost uninterruptedly since August, and we think the consensus is getting ahead of itself expecting further gains. Our first chart shows that macroeconomic surprise indices in the euro area have jumped to levels which usually have been followed by mean-reversion.

6 June 2018. We Have High Hopes for the Eurozone Consumer in Q2 (Publication Centre)

Eurozone consumers had a slow start to the second quarter. Retail sales increased a modest 0.1% month- to-month in April, but the March headline was revised up by 0.3 percentage points, and the year-over-year rate increased by 0.2pp to 1.7% due to base effects.

20 December 2017 Single-Family Permits Hit a Cycle High, Q1 Construction Set to Jump (Publication Centre)

The single most important number in the housing construction report is single-family permits, because they lead starts by a month or two but are much less volatile.

20 December 2016 Will Households Drain Housing Equity to Support Consumption? (Publication Centre)

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.

20 April 2017 Don't Miss Today's Soaring Eurozone Construction Data (Publication Centre)

Markets tend to ignore Eurozone construction data, but we suspect today's report will be an exception to that rule. Our first chart shows that we're forecasting a 8.5% month-to-month leap in February EZ construction output, and we also expect an upward revision to January's numbers.

18 July. 2016 EZ Car Registrations Continue to Grow Briskly, But Will Slow Soon (Publication Centre)

Growth in new EZ car registrations slowed last month, but the data continue to tell a story of strong consumer demand for new cars. New registrations in the euro area rose 6.9% y/y in June, down from a 16.9% jump in May, mainly due to slowing growth in France. New registrations in the euro area's second largest economy rose a mere 0.8% year-over-year, after a 22% surge in May.

2 October 2017 Four Reasons Why the Treasury Selloff Might be the Real Thing (Publication Centre)

The recent sell-off in Treasuries has not yet reached significant proportions.

18 May 2017 The Revival in Eurozone Construction is Real. Don't Miss It (Publication Centre)

The Eurozone construction sector took a step back at the end of Q1, but only temporarily. Construction output fell 1.1% month-to-month in March, after a revised 5.5% jump in February. The year-over-year rate slipped to +3.6%, from a two-year high of 5.5% in February.

18 Mar. 2015 Strong position for the EU in the coming negotiations with Greece (Publication Centre)

Demands that Germany pay reparations from the Second World War, and the apparently deteriorating relationship between Messrs. Varoufakis and Schauble, have further complicated talks between the Eurogroup and Greece in recent weeks.

6 September 2017 EZ Consumers' Spending Likely will Slow in Q3, but don't Panic (Publication Centre)

EZ consumers' spending slowed at the start of Q3. Retail sales slipped 0.3% month-to-month in July, pushing the year-over-year rate down to 2.6% from an upwardly revised 3.3% in June.

20 Apr. 2016 EZ Credit Supply Conditions Eased in Q1, but Loan Demand Stumbled (Publication Centre)

Lending conditions in the EZ economy continued to improve in Q1, according to the ECB's bank lending survey. Business and consumer credit supply conditions eased, but mortgage lending became more difficult to come by as standards tightened sharply in Germany, France, and the Netherlands. Demand for new loans also rose, but the increase was due entirely to gains in the mortgage and consumer credit components.

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

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

14 October. 2016 Retail Sales Rebounded Last Month, Q3 Consumption Looks Solid (Publication Centre)

Retail sales have lost steam over the past couple of months, even if you look through the headline gyrations triggered by swings in auto sales and gasoline prices.

17 November 2017 Respite for Consumers from Price Rises will be Short-Lived (Publication Centre)

October's retail sales figures confirm that consumers have adopted a more cautious mindset since the summer, when retail sales increased at a faster rate than incomes.

21 September 2018 The EZ Consumer is Still in Good Shape (Publication Centre)

Consumer sentiment in the euro area has slipped this year, though the headline indices remain robust overall.

13 May. 2015 Eurozone Q1 GDP Should Beat Consensus - Best since 2011 (Publication Centre)

Monthly manufacturing and retail sales data point to upside risk to the consensus expectation of 0.4% quarter-on-quarter in Q1 Eurozone real GDP growth. Advance country data indicate that industrial production was unchanged month-to-month in March, equivalent to a 0.9% increase quarter-on-quarter.

29 Jan. 2016 Little to Console the Optimists in Fourth Quarter GDP (Publication Centre)

The preliminary estimate of a 0.5% quarter-on-quarter rise in GDP in Q4 slightly exceeded our expectation and the third quarter's growth rate, both 0.4%. Nonetheless, there was little to console the optimists in the figures. The recovery remains unbalanced, with industrial production and construction output falling by 0.2% and 0.1% respectively, while services output rose 0.7% quarter-on-quarter.

29 Apr. 2015 Upbeat French consumers, but unemployment is a dark spot (Publication Centre)

Household sentiment in France continues to improve, consistent with tailwinds from low energy prices and accommodative monetary policy. INSEE's measure of consumer confidence rose to 94 in April, up from 93 in March, the highest since November 2010.

23 January 2017 ECB: Can the Eurozone Consumer Keep Up the Good Work in 2017? (Publication Centre)

The Eurozone has come under the spotlight for its growing external surplus, but domestic households have been doing the heavy lifting for GDP growth in this business cycle. During the last four quarters, consumers' spending has boosted year-over-year GDP growth by an average of 1.0 percentage points, in contrast to a 0.4pp drag from net exports.

23 Jan. 2015 Brazil Continues to Combat Expectations for Surging Inflation (Publication Centre)

Brazil's central bank is finally decisively facing its demon, persistently high inflation. The eight-member policy board, known as Copom, decided unanimously on Wednesday to increase the Selic rate by 50bp to 12.25%, the highest level in more than three years, in line with the consensus.

13 Nov. 2015 Will the Drag on the Recovery From Construction Fade? (Publication Centre)

The underlying health of the construction sector isn't as poor as today's official output figures likely will imply. Nonetheless, growth in construction output, which accounts for 6% of GDP, probably won't return to the stellar rates seen in 2013 and 2014, and the sector can't be relied upon to provide much support to overall growth.

14 June 2017 Korean Growth Probably Peaked in Q1. Construction to Slow (Publication Centre)

Construction accounted for the entire 1.1% quarter-to- quarter expansion of the Korean economy in Q1, but the sector is now set to slow.

14 June 2017 Retail Sales Show Brazil's Gradual Consumer Recovery Continues (Publication Centre)

Evidence of a modest upturn in Brazilian consumers' spending continues to mount. Retail sales rose 1.0% month-to-month in April, pushing the year-over-rate up to +1.9%, from an upwardly-revised -3.2% in March.

21 November 2018 October Retail Sales Cast Doubt on Consumers' Resilience (Publication Centre)

October's retail sales figures, published last Thursday, extended the month-long run of near consistent downside data surprises.

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

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

17 February 2017 EZ consumers' demand for new cars will slow in 2017 (Publication Centre)

EZ households' demand for new cars was off to a strong start in 2017. Car registrations in the euro area jumped 10.9% year-over-year in January, accelerating from a 2.1% rise in December. We have to discount the headline level of sales by about a fifth to account for dealers' own registrations. Even with this provision, though, the January report was solid. Growth rebounded in France and Germany, and a 27.1% surge in Dutch car registrations also lifted the headline. We think car registrations will rise about 1.5% quarter-onquarter in Q1, rebounding from a weak Q4. But this does not change the story of downside risks to private spending.

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

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

23 January 2018 Plunging Oil Output Points to Below-Consensus Q4 GDP (Publication Centre)

We see considerable downside risk to the consensus forecast that GDP increased by 0.4% quarter-on-quarter in Q4, the same as in Q3.

17 Feb. 2016 Brazil Consumers' Spending Fell Yet Again in Q4, but it is Stabilizing (Publication Centre)

The rate of growth of Brazil consumers' spending is perhaps beginning to stabilize, though at a very low pace. Core retail sales volumes were flat in Q4 after a 2.7% contraction in Q3, and sentiment data suggest this improving trend should continue, at least in the very near term.

13 Oct. 2015 Construction to Push Up EZ GDP Growth in Coming Quarters? (Publication Centre)

Households remain the key driver of the cyclical recovery in the Eurozone. We have seen, so far, little sign that investment will be able convincingly to take over the baton if momentum in consumers' spending slows. The average rate of growth of investment since 2013 has been 0.5%, about two-thirds of the pace seen in previous cyclical upturns. Weakness in construction--about 50% of total euro area investment--has been one of the key factors behind of the under performance.

13 October 2017 Brazilian Consumption is Picking Up, Despite August's Poor Data (Publication Centre)

Brazil's retail sales data undershot consensus in August, falling by 0.5% after four straight gains. But we think this merely a temporary softening, following the strong performance in recent months.

23 February 2017 Q4 GDP Flatters to Deceive, a Consumer-led Slowdown is Coming (Publication Centre)

Taken at face value, the GDP data continue to suggest that the Brexit vote has had no adverse consequences for the economy. The official estimate of quarter-on-quarter GDP growth in Q4 was revised up yesterday to 0.7%, from 0.6%. The revision had been flagged earlier this month by stronger industrial production and construction output figures.

16 November 2018 The EU's New Car Emissions Rules Cast a Long Shadow over the EZ (Publication Centre)

Economic data in the Eurozone auto sector remain under the influence of the aftershock from the EU's new emissions regulation--WLTP-- introduced in September.

23 Feb. 2016 Falling Stock Prices Won't Kill Consumers Enjoying Cheap Gas (Publication Centre)

Dire warnings that the plunge in s tock prices would depress consumers' confidence and spending have not come to pass. It's too soon to draw a definitive conclusion--the S&P hit its low as recently as the 11th--but peoples' end-February brokerage statements are on track to look less horrific than the end-January numbers, provided the market doesn't swoon again over the next few days.

14 August. 2015 Robust Real Spending Signals Consumers aren't Saving More (Publication Centre)

The robust July retail sales numbers, coupled with the substantial upward revisions to prior data, should finally put to bed the idea that consumers have chosen spontaneously to raise their saving rate, accelerating the pace of deleveraging seven years after the financial crash. People just don't behave like that unless interest rates are soaring and the economy is rolling over, and that's not happening.

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

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

16 Nov. 2015 Wage Gains to Drive Consumption as the Gas Price Boost Fades (Publication Centre)

The acceleration in real consumption over the past year reflects the upturn in real after-tax income growth. This, in turn, is mostly a story of falling gasoline prices, which have depressed the PCE deflator. Gross nominal incomes before tax rose 4.2% year-over-year in the three months to September, exactly matching the pace in the three months to September 2014. But real income growth, after tax, accelerated to 3.3% from 2.5% over the same period, as our first chart shows.

14 February 2018 Elections and Economic Turnaround Key Factors to Watch in Colombia (Publication Centre)

Legislative and presidential elections in Colombia will be held on March 11 and May 27, respectively, with a run-off presidential election on June 17 if no candidate secures more than half the votes.

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

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

22 Jan. 2016 Consensus Looks too Sanguine on December Retail Sales (Publication Centre)

The consensus forecast of a mere 0.3% month-to-month decline in retail sales volumes in December, following the 1.7% surge in November, looks far too timid. We anticipate a much bigger decline, about 1%, bringing volumes back in line with their underlying trend. We can't rule out a bigger fall.

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

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

28 November. 2016 Household Consumption in France Will Recover Lost Ground in Q4 (Publication Centre)

The outlook for French consumers' spending improved this month, at the margin. The headline consumer sentiment index was unchanged at 98 in November, but most forward-looking indicators rose. Consumers' spending in was flat in Q2 and Q3, following a 1.1% jump in the first quarter.

13 September 2017 Brazilian Consumers' Spending set to Keep Rising Steadily (Publication Centre)

Data released yesterday in Brazil are consistent with our view that private consumption will continue to drive the recovery over the second half, offsetting the ongoing weakness in private investment.

16 October 2018 Q3 Consumption Rose by Nearly 4%, Despite So September Retail Sales (Publication Centre)

The softness of the headline September retail sales numbers hid a decent 0.5% increase in the "control" measure, which is the best guide to consumers' spending on non-durable goods.

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

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

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

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

13 July 2018 Consumers' Spending Was Resilient in Q2, but Growth Will Slow in Q3 (Publication Centre)

Yesterday's economic data in Brazil suggest that retailers suffered in the second quarter, hit by the effect of the truckers' strike, but private consumption remains somewhat resilient.

30 March 2017 How will French Consumers React to Lower Real Wage Growth? (Publication Centre)

Leading indicators for consumers' spending in France are sending conflicting signals. Survey data suggest that households are in a spendthrift mood. Data yesterday showed that the headline consumer sentiment index was unchanged in March at 100, the cycle high.

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

On the face of it, the surge in retail sales volumes in September suggests that the U.K. consumer is in fine fettle and can prevent the economic recovery from losing momentum as exporters struggle and government spending retrenches. But the underlying picture is less encouraging and consumers won't be able to sustain the recent robust growth in real spending when inflation revives next year.

21 August 2017 Construction is Propelling the Eurozone Economy in 2017 (Publication Centre)

The construction sector remains a stand-out performer in the Eurozone economy, despite stumbling at the end of Q2.

30 Jan. 2015 Plunging Oil Prices Boost Chile's Consumers - Businesses Still Weak (Publication Centre)

Chile's economy is showing the first reliable signs of improvement, at last. December retail sales rose 1.9% year-over-year, up from 0.4% in November, indicating that household expenditure is starting to revive, in line with a pick-up in consumer confidence and the improving labor market.

17 Mar. 2016 Will Consumer Demand for New Cars in the Eurozone Ever Slow? (Publication Centre)

Demand for new cars in the Eurozone bounced back strongly last month. Accelerating growth in the major economies lifted new registrations by 14.6% year-over-year in February, up from a 6.8% increase in January. Surging growth in Italy was a key driver, with new registrations jumping 27.3%, up from an already sizzling 17.4% in January.

30 August. 2016 Strong Consumption Set to Support Robust Third Quarter GDP Growth (Publication Centre)

In the wake of the robust July data and the upward revisions to June, real personal consumption--which accounts for 69% of GDP--appears set to rise by at least 3% in the third quarter, and 3.5% is within reach. To reach 4%, though, spending would have to rise by 0.3% in both August and September, and that will be a real struggle given July's already-elevated auto sales and, especially, overstretched spending on utility energy.

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

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

30 November 2017 A Strong Start to Fourth Quarter Consumption, Probably (Publication Centre)

The rate of growth of third quarter consumers' spending was revised up by 0.3 percentage point to 3.3% in the national accounts released yesterday.

20 September 2017 Construction in the Eurozone Will Continue to Lift GDP Growth in Q3 (Publication Centre)

Construction in the Eurozone had a decent start in the third quarter. Output rose 0.5% month-to- month in July, pushing the year-over-year rate down to 1.9% from 2.8% in June.

31 August 2017 Third Quarter Consumption off to a Strong Start? (Publication Centre)

Today's wave of economic reports are all likely to be strong. The most important single number is the increase in real consumers' spending in July, the first month of the third quarter.

30 October 2017 New Elections in Catalonia Beckon as Madrid Activates Article 155 (Publication Centre)

The headlines from Catalonia are as confusing as ever, but we are sticking to our view--see here--that regional elections are the only reasonable outcome of the chaos.

20 September 2017 August Retail Sales to Confirm Consumption Still Weak in Q3 (Publication Centre)

August's retail sales figures, released today, look set to show that growth in consumers' spending has remained subpar in Q3, casting doubt over whether the MPC will conclude that the economy can cope with a rate hike this year.

30 November 2018 Fourth Quarter Consumption is Headed for a Solid 3% Gain (Publication Centre)

Neither the strength in October consumption nor the softness of core PCE inflation, reported yesterday, are sustainable.

12 June. 2015 Consumption Back on Track as the Winter Weather Hit Reverses (Publication Centre)

Consumers' spending in the second quarter is still set to be less than great, thanks in part to unfavorable base effects from the first quarter, but a respectable showing of about 2¾% now seems likely. The core May retail sales numbers were a bit stronger than we expected, with gains in most sectors, and the upward revisions to April and March were substantial.

23 November 2017 Olympics Preparations Should Lift Japan's GDP Growth Next Year (Publication Centre)

Japan will host the Olympics in 2020 and the preparatory surge in construction investment makes 2017-to-2018 the peak spending period.

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

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

23 March 2018 The MPC Keeps its Options Open, Instead of Committing to May (Publication Centre)

The Monetary Policy Committee chose to keep its options open in the minutes of this week's meeting, rather than signal as clearly as it did last year that interest rates will rise very soon.

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

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

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

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

17 July 2017 Eurozone Consumers' Demand for New Cars is Slowing (Publication Centre)

Consumers' demand for cars slowed in the Eurozone at the end of the second quarter. New car registrations in the euro area rose 3.0% year-over-year in June, slowing dramatically from a 10.3% rise in May.

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

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

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

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

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

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

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

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

21 Dec. 2015 Corporations Still Over-leveraged, but Little Near-Term Danger? (Publication Centre)

The markets' favorite story of the moment, aside from the Fed, seems to be the idea that overstretched corporate finances are an accident waiting to happen. When the crunch comes, the unavoidable hit to the stock market and the corporate bond market will have dire consequences, limiting the Fed's scope to raise rates, regardless of what might be happening in the labor market. We don't buy this. At least, we don't buy the second part of the narrative; we have no problem with the idea the finances of the corporate sector are shaky.

17 June. 2016 Surging Growth in Eurozone Car Registrations Won't Last (Publication Centre)

The market for new cars in the Eurozone remained red-hot last month. New registrations surged 18.4% year-over-year in May, up from a 9.4% rise in April, and pushing the 12-month average level of registrations to a post-crisis high of 843K units. Accelerating growth in Italy and France was the key driver.

13 April 2018 Stock Price Hit May Hurt Consumers' Sentiment (Publication Centre)

Whatever happened to consumers' sentiment in March, the level of University of Michigan's index will be very high, relative to its long-term average.

23 November 2017 Is EZ Consumption on Track for Grand Finish to 2017? (Publication Centre)

Yesterday's advance consumer sentiment index in the Eurozone confirmed the upside risks for consumers' spending in Q4. The headline index rose to a 17- year high of +0.1 in November, from -1.0 in October.

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

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

14 March 2018 Fundamentals for Brazilian Consumers Continue to Improve (Publication Centre)

The consumer in Brazil was off to a strong start to the first quarter, and we expect household spending will continue to boost GDP growth in the near term.

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

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.

2 July 2018 Construction Activity is Accelerating, it's not Just Hurricane Repairs (Publication Centre)

Perhaps the single strongest U.S. economic data series in recent months has been construction spending, which has risen by more than 1%, month-to-month, in four of the past five months.

15 June 2018. Will Private Consumption in Brazil Continue to be the Key Driver in H2 (Publication Centre)

Private consumption remains resilient in Brazil and recent data suggest that growth will continue over the coming months.

05 October. 2016 Construction Still Set to Struggle, Despite the Looser Fiscal Stance (Publication Centre)

Promises of new money to facilitate construction on public sector land from the Chancellor and the pick-up in the construction PMI have fostered optimism that the sector's downturn is over.

05 May. 2015 No Signs of Surging Consumption, But Much too Soon for Gloom (Publication Centre)

We have argued for some time that investors began much too soon to look for stronger consumption in the wake of the drop in gasoline prices. Typically, turning points in gas prices trigger turning points in the rate of growth of retail sales with a lag of six or seven months.

1 May 2018 Why has Consumers' Confidence Suddenly Deteriorated Again? (Publication Centre)

On the face of it, the timing of the drop in the E.C.'s measure of consumers' confidence, to its lowest level since July 2016 in April, is peculiar.

1 August 2018 Is Consumers' Confidence Really at a 21-month High? (Publication Centre)

We're inclined to place little weight on July's E.C. Economic Sentiment Survey, which showed that consumers' confidence has picked up to its highest level since October 2016; see our first chart.

9 Mar. 2015 A Strong Consumer is Helping to Lift GDP Growth in the Eurozone (Publication Centre)

The second estimate of Eurozone GDP confirmed that the economy grew 0.3% quarter-on-quarter in the final three months of last year, up slightly from 0.2% in the third quarter. Gross fixed capital formation and household consumption both rose 0.4%, but the improving trend in euro area GDP growth is almost exclusively driven by consumer spending.

24 October 2017 EZ Consumers' Spending Slowed in Q3, but Should Rebound in Q4 (Publication Centre)

Eurozone consumers' spending jumped in Q2, but we are pretty certain that a slowdown in retail sales constrained growth in Q3.

15 May 2017 April's Consumer Price Figures Will Surprise to the Upside (Publication Centre)

April's consumer price figures, released on Tuesday, look set to reveal that CPI inflation jumped to 2.7%--its highest rate since September 2013--from 2.3% in March. Inflation likely will be driven up entirely by a jump in the cor e rate to 2.3%, from 1.8% in March.

1 September. 2016 Will Construction Rebound in Q3, Despite Weaker Jobs Numbers? (Publication Centre)

Last fall and winter, when the weather was warmer than usual--thanks largely to El Nino--construction employment rocketed. Between October and March, job gains averaged 36K, compared to an average of 20K per month over the previous year. When these strong numbers began to emerge, we expected to see a parallel acceleration in construction spending.

19 July 2017 Credit Conditions in the Eurozone Continue to Support the Recovery (Publication Centre)

Yesterday's ECB bank lending survey suggests that credit conditions remain favourable for the EZ economy. Credit standards eased slightly for business and mortgage lending and were unchanged for consumer credit.

19 July 2017 Falling CPI Physicians Fees are a Response to Rising Part B Premiums (Publication Centre)

The closer we look at the data, the more convinced we become that the rollover in CPI physicians' services prices, which has subtracted nearly 0.1% from core CPI inflation since January, is a response to sharply higher Medicare part B premiums, especially for new enrollees.

1 Dec. 2015 Plunging Oil Prices Shift Income to Consumers From Producers (Publication Centre)

The big story in global macro over the past 18 months or so has been the gigantic transfer of income from oil producers to oil consumers. The final verdict on the net impact of this shift--worth nearly $2T at an annualized rate--is not yet clear, because the boost to consumption takes longer than the hit to oil firms ' capex, which began to collapse just a few months after prices began to fall sharply. But our first chart, which shows oil production by country as a share of oil consumption, plotted against the change in real year-over-year GDP growth between Q2 2014 and Q2 2015, tells a clear story.

02 Mar. 2016 State and Local Government Construction Set to Boost Q1 GDP (Publication Centre)

Markets reacted strongly to yesterday's consensus-beating data, with the ISM manufacturing survey drawing most of the attention as the industrial recession thesis took another body blow. But we are more interested in the strong construction spending data for January, which set the first quarter off on a very strong note.

02 Feb. 2016 First Quarter Consumption Will be Better - Weather Effects Will Help (Publication Centre)

The upward revisions to real consumers' spending in the fourth quarter, coupled with the likelihood of a hefty rebound in spending on utility energy services, means first quarter spending ought to rise at a faster pace than the 2.2% fourth quarter gain. Spending on utilities was hugely depressed in November and December by the extended spell of much warmer-than-usual weather.

1 August. 2016 Negative Interest Rates Won't Be Part of the MPC's Policy Response (Publication Centre)

The collapse in business activity and consumer confidence since the referendum has sealed the deal on policy easing from the MPC on Thursday. The Committee has cut Bank Rate by 50 basis points when the composite PMI has been near July's level in the past, as our first chart shows.

03 Mar. 2016 Construction Slowdown is Symptomatic of Wider Malaise (Publication Centre)

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.

04 Feb. 2016 EZ Consumers' Spending Stalled in Q4, but Should Rebound in Q1 (Publication Centre)

Data yesterday suggest Eurozone consumers' spending rebounded towards the end of Q4. Retail sales rose 0.3% month-to-month in December, pushing the year-over-year rate down to 1.4%, from a revised 1.6% in November. A +0.3 percentage point net revision to the month-to-month data added to the optimism, but was not enough to prevent a slowdown over the quarter as a whole.

1 June. 2015 Modest Slowdown Likely Ahead for Consumers' Spending in Q2 (Publication Centre)

Last week's consumption releases were the first data from the real economy in the second quarter. In Germany, retail sales jumped 1.7% month-to-month in April, equivalent to a 1.0% rise year-over-year, an impressive start to the quarter. But our first chart shows that this still points to a moderate slowdown in Q2, consistent with mean-reversion following rapid gains in Q4 and Q1.

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

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

1 June 2018 Do All Roads in Italian Politics Lead to New Elections Later this Year? (Publication Centre)

The political limbo in Italy currently appears to have three possible solutions, in the short term. The 5SM and Lega can try to form a coalition, again.

19 Feb. 2016 Even Spendthrift U.K. Consumers Will Have to Slow Down in 2016 (Publication Centre)

January's retail sales figures, released today, look set to indicate that consumers are keeping the recovery going, amid deteriorating business sentiment and faltering external trade.

19 February 2018 EZ Construction Slowed in H2 2017, but Will Pick Up Soon (Publication Centre)

Data today will show that the EZ construction sector finished 2017 on a decent note.

19 September 2016 Construction Investment Will Boost EZ GDP Growth in Q3 (Publication Centre)

Construction data in the Eurozone usually don't attract much attention, but today's July report will provide encouraging news, compared with recent poor manufacturing data. We think construction output leapt 2.1% month-to-month, pushing the year-over-year rate up to 2.3%, from 0.7% in June. This strong start to the third quarter was due mainly to a jump in non-residential building activity in France and Germany.

19 May. 2016 EZ Construction is Recovering, but Output Likely Will Slow in Q2 (Publication Centre)

The construction sector in the Eurozone probably stumbled in March. Advance data for the major economies suggest that output fell 1.2% month-to-month, pushing the year-over-year rate down to 1.6% from 2.4% in February.

19 Apr. 2016 Weaker Dollar Will Boost Q2 Retail Sales, but not March Consumption (Publication Centre)

If we're right in our view that the strength of the dollar has been a major factor depressing the rate of growth of nominal retail sales, the weakening of the currency since January should soon be reflected in stronger-looking numbers. In real terms--which is what matters for GDP and, ultimately, the lab or market--nothing will change, but perceptions are important and markets have not looked kindly on the dollar-depressed sales data.

19 October 2017 Q3's Slowdown in EZ Construction is no Threat, the Trend is Firm (Publication Centre)

The upturn in the Eurozone construction sector likely paused in Q3. Yesterday's August report showed that output fell 0.2% month-to-month, pushing the year-over-year rate down to +1.6%, from a revised +2.8% in July.

19 December 2017 New Home Sales and Construction Appear Set to Rocket Next Year (Publication Centre)

In the short-term, all the housing data are volatile. But you can be sure that if the recent pace of new home sales is sustained, housing construction will rise.

25 Feb. 2016 Fundamentals for French Consumers Remain Resilient (Publication Centre)

A downbeat French INSEE consumer sentiment report yesterday continued the run of poor survey data this week. The headline index fell to 95 in February from 97 in January, indicating downside risk f or Q1 consumers' spending. But we remain optimistic that private consumption will rebound solidly, following a 0.4% quarter-on-quarter fall in Q4.

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

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

15 January 2018 Inflation to Undershoot Consensus as it Begins its Downward Trend (Publication Centre)

December's consumer price figures, released on Tuesday, likely will show that CPI inflation fell more than most analysts expect.

10 February 2017 Can we Explain Rising Consumer Confidence? What does it Mean? (Publication Centre)

We have questioned the reliability of the recent consumer confidence numbers, and are very skeptical of their signal that spending is set to accelerate rapidly, but we see no real sign yet of any significant reversal of the post-election spike.

15 May. 2015 No Rest For Brazilian Consumers - Even Tougher Times Ahead (Publication Centre)

Consumption has been a serious weak spot in Brazil over the past year. After reaching record growth rates in 2010, it has gradually slowed to its lowest pace in more than ten years.

8 February 2017 Seasonal Problems set to Depress Mortgage Applications Data (Publication Centre)

Mortgage applications have risen, net, over the past couple of months, despite the 70bp surge in 30-year mortgage rates since the election. Indeed, we'd argue that the increase in applications is a result of the spike in rates, because it likely scared would-be homebuyers, triggering a wave of demand from people seeking to lock-in rates, fearing further increases.

8 July. 2015 Mexican Consumers Upbeat, as Economic Fundamentals Improve (Publication Centre)

Household sentiment in Mexico continues to improve, consistent with tailwinds from low inflation, accommodative monetary policy, and the improving labor market. The consumers confidence index rose to 94.7 in June from 92.0 in May, with four of the five components improving, especially big-ticket purchasing expectations and expectations for the economy.

9 Dec. 2015 Chile's Imacec Consistent With Weak But Stable GDP Growth (Publication Centre)

Economic activity data in Chile have been soft and uneven this year, due mainly to the hit from low commodity prices and uncertainty surrounding the reform agenda, which has badly damaged consumer and investor sentiment. The latest Imacec index, a proxy for GDP, increased just 1.7% year-over-year in October, down from the 2.7% gain in September, and below the 2.2% average seen during Q3 as a whole.

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

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

19 June 2018 The Eurozone Construction Sector Started Q2 on the Front Foot (Publication Centre)

Today's construction data in the Eurozone will inject a dose of optimism amid the series of poor economic reports at the start of Q2.

19 August. 2016 The Consumer Bubble Will Pop Around the Year-End (Publication Centre)

It would be a serious mistake to conclude from July's retail sales figures that consumers' spending will be immune to the fallout of the Brexit vote. Households have yet to endure the hiring freeze and pay squeeze indicated by surveys of employers, or the price surge signalled by sterling's sharp depreciation. The real test for consumers' spending lies ahead.

2 May 2017 The Rebounding Auto Sales to Signal the Start of a Q2 Consumer Rebound (Publication Centre)

March auto sales were much weaker than expected, falling by 5.5% month-to-month to a 25-month low, 16.5M. The average for the previous six months was 17.8M. The sudden drop in March likely was driven in large part by the huge snowstorm which tracked across the Northeast in the middle week of the month, so we think a decent rebound in April is a good bet.

2 October 2017 Revisions Leave Economy Looking Weaker, Undermining the Hawks (Publication Centre)

Last week's national accounts were a setback for the hawks on the MPC seeking to raise interest rates at the next meeting, on November 2.

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

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.

16 June 2017 Housing Construction Should Rebound (Publication Centre)

We were surprised by the weakness of the April housing starts report; we expected a robust recovery after the March numbers were depressed by the severe snowstorms across a large swathe of the country. Instead, single-family permits rose only trivially and multi-family activity--which is always volatile--fell by 9% month-to-month.

5 July 2017 The Consumer Slowdown will Ripple out to the Services Sector Soon (Publication Centre)

The slowdown in quarter-on-quarter growth in households' real spending to 0.4% in Q1--just half 2016's average rate--was driven entirely by a 0.1% fall in purchases of goods. Households' spending on services, by contrast, continued to grow briskly. Indeed, the 0.8% quarter-on-quarter rise in households' real spending on services exceeded 2016's average 0.5% rate.

20 September 2018 Consensus is Wrong in Thinking the BoJ will Sit on its Hands Next Year (Publication Centre)

The BoJ kept all policy measures unchanged at its meeting yesterday.

19 February 2018 Colombia's Economy is Improving, but Fell Short of Expectations in Q4 (Publication Centre)

Colombia's GDP growth was a poor 1.6% year-over- year in Q4, down from 2.3% in Q3, despite the oil recovery and the COP's rebound since mid-year. GDP rose a modest 0.3% quarter-on-quarter, after a 0.8% increase in Q3.

18 July 2018 Car Sales Likely Lifted EZ Durable Goods Consumption in Q2 (Publication Centre)

Momentum in the EZ auto sector rebounded at the end of the second quarter.

16 March 2018 Colombia's Consumption and Investment are Strengthening (Publication Centre)

Colombia's economy defied rising political uncertainty at the start of the year. Retail sales growth jumped to plus 6.2% year-over-year in January, up from -3.8% in December and -1.8% in Q4.

16 October 2018 Mexican Consumption Growth will Improve Over the Next Quarters (Publication Centre)

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

4 October 2018 Will the Consumer Carry the EZ Economy amid External Risks (Publication Centre)

The news-flow in the Eurozone was almost unequivocally bad over the summer.

18 June 2018 The U.S. Will Blink Before Imposing Tariffs on Chinese Consumer Goods (Publication Centre)

The imposition of 25% tariffs on $50B-worth of imports from China, announced Friday, had been clearly flagged in media reports over the previous couple of weeks.

4 October 2018 September's PMIs are Consistent with Slow Growth and MPC Inaction (Publication Centre)

September's Markit/CIPS PMIs indicate that the economy still is stuck in a low gear.

19 September 2017 Four Reasons Why the MPC Likely Will Procrastinate in November (Publication Centre)

For the record, we think the Fed should raise rates in December, given the long lags in monetary policy and the clear strength in the economy, especially the labor market, evident in the pre-hurricane data.

19 May. 2015 Dip in Investors' Expectations is Nothing to Worry about Yet (Publication Centre)

This week sees the release of most of the key May surveys. The prospect of mean reversion following a very strong start to the year, coupled with the impact of recent market volatility, points to a modest loss of momentum, especially for surveys of investors.

18 May 2018 Are Valuations a Silver Lining for Eurozone Equities Into Year-End? (Publication Centre)

"Disappointing" is probably the word that most EZ equity investors would use to describe their market so far this year.

2 June. 2016 ADP Likely to be Constrained by the Verizon Strike (Publication Centre)

We think today's ADP private sector employment report for May will reflect the impact of the Verizon strike, which kept 35K people away from work last month, but we can't be sure. ADP's methodology should in theory only capture the strike if Verizon uses ADP for payroll processing--we don't know--but there's nothing to stop them from manually tweaking the numbers to account for known events. Indeed, it would be absurd to ignore the strike.

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

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

28 February 2018 The BoK is in Wait-And-See Mode, Consumer Confidence Dented (Publication Centre)

Data and events have gone against the idea of further BoK policy normalisation since the November hike.

28 Jan. 2015 QE will boost equities this year, but valuations will be stretched to the extreme (Publication Centre)

The ECB will receive most of the credit for the recent gain in stock markets, but the main leading indicator for the stock market, excess liquidity, was already turning up late last year. With the MSCI EU ex-UK up 21%, in euro terms, since October, a lot is already priced in, but in the medium term the outlook is upbeat, and we look for further gains this year.

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

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

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

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

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

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

28 November 2017 Consumers' Spending Ought to be Strong this Holiday Season (Publication Centre)

Media reports suggest that the underlying trends in retailing--rising online sales, declining store sales and mall visits--continued unabated over the Thanksgiving weekend.

29 June 2018 Trade Tensions Unveil Chinese Financial Fragility (Publication Centre)

In previous Monitors, we have outlined our base case that the direct impact of tariffs on Chinese GDP will be minimal this year.

30 August 2018 The Base is Low for a Q3 Rebound in French Consumers' Spending (Publication Centre)

Yesterday's data in the French economy provided the final confirmation that growth remained sluggish in Q2, and showed that households had a slow start to the third quarter.

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

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

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

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

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

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

31 May 2017 Eurozone Core Inflation Likely will Undershoot the Consensus Today (Publication Centre)

Today's advance EZ CPI report likely will show that inflation pressures eased in May. We think inflation slipped to 1.5% year-over-year, from 1.9% in April, as the boost to the core rate from the late Easter faded.

5 March 2018 Consumers' Spending in Germany Probably will Rebound in Q1 (Publication Centre)

Friday's economic data in Germany suggest that households had a slow start to the year.

24 March 2017 Q1 Consumption will be Weak, Despite February's Retail Recovery (Publication Centre)

The 1.4% month-to-month rise in retail sales volumes in February is not a game-changer for the economy's growth prospects in Q1. The increase reversed just under half of the 2.9% decline between October and January. The 1.5% fall in retail sales in the three months to February, compared to the previous three months, is the worst result in seven years.

23 October 2018 China's Retail Sales Show that Tax Reductions were Badly Needed (Publication Centre)

China's September activity data, released at the end of last week, back up our claim that GDP growth weakened in Q3, on a quarter-on-quarter basis.

22 December 2017 Strong November Consumption Sets Course for 3½% Q4 Gain? (Publication Centre)

This is the final U.S. Economic Monitor of 2017, a year which has seen the economy strengthen, the labor market tighten substantially, and the Fed raise rates three times, with zero deleterious effect on growth.

31 October 2018 The October ADP will be Constrained by the Soft September Payroll Data (Publication Centre)

Today's October ADP measure of private payrolls likely will overshoot Friday's official number.

24 September 2018 BoJ Still Likely to Shift the Focus to Capacity-Responsive Prices (Publication Centre)

Japan's CPI inflation jumped to 1.3% in August, from 0.9% in July.

25 April 2018 Korean Q1 GDP Growth will Bounce Back, A er Q4 Distortions (Publication Centre)

Korean real GDP growth--to be published on Thursday--should bounce back in Q1 to 1.0% quarter-on-quarter, after the 0.2% drop in Q4.

31 May 2018 Recovering Consumer Confidence Won't Lift Spending, Much (Publication Centre)

The widespread view, which we share, that GDP will rebound in Q2 following the disruption caused by bad weather in Q1, was supported yesterday by the E.C.'s Economic Sentiment survey.

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

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

25 Nov. 2015 Q3 Inventory Revisions Limit the Potential for Q4 Growth Rebound (Publication Centre)

The hefty upward revision to Q3 inventories means we have to lower our working assumption for fourth quarter GDP growth, because the year-end inventory rebound we previously expected is now much less likely to happen. Remember, the GDP contribution from inventories is equal to the change in the pace of inventory accumulation between quarters, and we're struggling to see a faster rate of accumulation in Q4 after the hefty revised $90B third quarter gain. Inventory holdings are in line with the trend in place since the recession of 2001; firms don't need to build inventory now at a faster pace.

25 Jan. 2016 Oil Capex Crash Nearly Over - What Happens Next to Consumers? (Publication Centre)

If we had known back in June 2014 that oil prices would drop to about $30, the collapse in capital spending in the oil sector would not have been a surprise. Spending on well-drilling, which accounts for about three quarters of oil capex, has dropped in line with the fall in prices, after a short lag, as our first chart shows. We think spending on equipment has tracked the fall in oil prices, too.

21 July 2017 Q2 Consumption will be Weak, Despite the Pickup in Retail Sales (Publication Centre)

On the face of it, June's retail sales figures suggest that households have splurged in Q2, re-energising GDP growth after its slowdown in Q1. Sales volumes rose by 0.6% month-to-month in June, completing a 1.5% quarter-on-quarter jump in Q2.

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

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".

10 December 2018 EZ Consumption Slowed Sharply in Q3, is a Q4 Rebound Coming? (Publication Centre)

Friday was a busy day in the Eurozone. The final and detailed GDP report confirmed that growth in the euro area slowed to 0.2% quarter-on-quarter in Q3, from 0.4% in Q2, with the year-over-year rate slipping by 0.6 percentage points to 1.6%, just 0.1pp below the first estimate.

1 September 2017 Expect Strong August Payrolls, but Calendar Distortions will hit Wages (Publication Centre)

Leading indicators all point to a solid August payroll number. Survey-based measures of the pace of hiring signal a 200K-plus increase, and jobless claims--a proxy for the pace of gross layoffs--are at a record low as a share of the workforce.

1 November. 2016 The Credit-Driven Consumer Recovery is Reaching its Limits (Publication Centre)

Taken at face value, September's money supply data suggest that the economy is ebullient, quickly recovering from the shock referendum result. Year-over-year growth in notes and coins in circulation has accelerated to its highest rate since June 2002.

1 June 2018 Money Data Cast Doubt on Q2 Recovery in Consumers' Spending (Publication Centre)

A rebound in quarter-on-quarter growth in households' spending in Q2, following the slowdown to just 0.2% in Q1, looks less likely following April's money data.

10 May 2018 Still-Weak Consumption Means the MPC has to Tread Carefully (Publication Centre)

The MPC was relatively bullish on the outlook for households' spending when it signalled its view, in February's Inflation Report, that the case for raising interest rates before the end of this year had strengthened.

10 November. 2016 A Trump Victory Means Revisions to EU Leaders' Playbooks (Publication Centre)

EZ equity futures predictably fell out of bed as the news of the Trump victory gradually became clear overnight yesterday. The reaction was less violent than after the U.K. Brexit referendum, though, and Mr. Trump's balanced victory speech appears to have calmed nerves for now.

16 January 2018 Will Surging Equity Prices Boost Consumption? (Publication Centre)

The recent surge in equity prices is not a game- changer for the outlook for households' spending. Like last year, slowing growth in real disposable incomes and house prices will have a far greater impact on spending than rising paper wealth.

10 September 2018 Japan's Big Wage Increases Point to Robust Q3 Private Consumption (Publication Centre)

Japan's labour cash earnings rose by 1.5% year-over- year in July, a strong result in the Japanese context, if it hadn't been preceded by the 3.6% leap in June.

6 December 2018 November's Services PMI Bolsters our Below-Consensus Q4 GDP Call (Publication Centre)

The slump in the Markit/CIPS services PMI in November to its lowest level since July 2016 provides the clearest indication yet that uncertainty about Brexit has driven the economy virtually to a stand-still.

10 September 2018 EZ Investment will Slow in Q3, but Consumption Should Pick Up (Publication Centre)

Friday was a busy day in the Eurozone economy. The third detailed GDP estimate confirmed that growth was unchanged at 0.4% quarter-on-quarter in Q2, pushing the year-over-year rate down by 0.4 percentage points to 2.1%, marginally below the first estimate,2.2%.

1 February 2017 Sharp Slowdown in Money Growth Consistent with Weaker 2017 GDP (Publication Centre)

December's money data brought clear signs that the economy's growth spurt in the second half of 2016 is about to come to an abrupt end. Growth in households' money holdings and borrowing slowed sharply in December, and the pick-up in corporate borrowing shortly after the MPC cut interest rates and announced corporate bond purchases, in August, has run out of steam already.

6 Oct. 2015 Stable GDP Growth in Q3, due to Firmer Consumers' Spending? (Publication Centre)

The PMI survey points to a slight loss of momentum in Eurozone growth towards the end of Q3. The composite index fell to 53.6 in September from 54.3 in August, trivially lower than the initial estimate of 53.9. This is not enough to move the needle on the survey's signal for Q3 GDP growth, though; our first chart shows it pointing to stable growth of 0.4% quarter-on-quarter.

8 November 2018 September GDP Set To Undershoot the Consensus (Publication Centre)

Friday's GDP report likely will fuel concerns the economy has little underlying momentum. Granted, quarter-on-quarter growth probably sped up to 0.6% in Q3--exceeding the economy's potential rate--from 0.4% in Q2.

9 Dec. 2015 Sub-$40 WTI Boosts Consumers' Cashflow - Oil Capex to Fall Further (Publication Centre)

OPEC's decision at the weekend to turn the oil market into a free-for-all means that the rebound in headline inflation over the next few months will be less dramatic than we had been expecting. Falling retail gas prices look set to subtract 0.2% from the headline index in both November and December, and by a further 0.1% in January. These declines are much smaller than in the same three months a year ago, so the headline rate will still rise sharply, to about 1.3% by January from 0.2% in October, but it won't approach 2% until the end of next year or early 2017,

9 Jan. 2015 Weak Manufacturing amid Signs of Strength in Consumption (Publication Centre)

New orders data released yesterday for Germany confirmed that weakness in the manufacturing sector remains a key challenge for the economy. Factory orders fell 2.4% month-on-month in November, equivalent to a 0.4% fall year-over-year.

9 May. 2016 More Timely EZ GDP Data also Means Larger Revisions (Publication Centre)

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.

8 November 2018 Is it Time to Worry About Consumers' Spending in Japan (Publication Centre)

The recent slowdown in labour cash earnings growth in Japan halted in September.

01 Feb. 2016 Outlook Improving as Oil Capex Hit Fades and Consumers Step Up (Publication Centre)

The pitiful 0.7% expansion of the economy in the fourth quarter is not, in our view, a sign of things to come. It is also not, by any means, a definitive verdict on what happened in the fourth quarter; the data are subject to indefinite revision. As they stand, the numbers are impossible to square with the 2.0% annualized increase in payroll employment over the quarter, so our base case has to be that these data will be revised upwards.

03 October. 2016 First Signs of Recovery in Brazilian Private Consumption? (Publication Centre)

Brazil's recession has been severe, triggered by the downturn in the commodity cycle, which revealed the underlying structural weaknesses in the economy. This set off an acute shock in domestic demand, but it has bottomed in recent months and we now expect a gradual recovery to emerge.

03 October. 2016 The Economy's Near-Term Resilience Has Brittle Foundations (Publication Centre)

Last week's official data unequivocally indicated that the Brexit vote has not had a detrimental impact on the economy yet.

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

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.

8 August 2018 Chainstore Sales Growth is Strong, but the Tax Cuts aren't Responsible (Publication Centre)

The release yesterday of the weekly Redbook chainstore sales report for the week ended Saturday August 4 means that we now have a complete picture of July sales.

11 July 2018 Will the Strength of Mexican Capex and Consumption Continue in Q3 (Publication Centre)

Recent economic indicators in Mexico have been relatively positive.

11 April 2018 Core Inflation to Rise Sharply, the Fed will be Watching Expectations (Publication Centre)

Today's March CPI ought to provide further support for the idea that the trend rate of increase in the core index is running at about 0.2% per month, an annualized rate, if sustained, of about 2.5%.

15 January 2018 Mexico's Industrial Sector Remains Unresponsive, but Q1 Will be Better (Publication Centre)

Upbeat survey data, a competitive MXN, and the strong U.S. manufacturing sector indicate that Mexican industry should be rebounding.

15 February 2017 The EZ Economy is Resilient, but Fell Short of Expectations in Q4 (Publication Centre)

The Eurozone economy was resilient at the end of last year, but yesterday's reports indicated that growth was less buoyant than markets expected. Real GDP in the euro area rose 0.4% quarter-on-quarter in Q4, the same pace as in Q3, but slightly less than the initial estimate 0.5%.

14 May 2018 Brazil's Domestic Consumption Will Continue to do Well, Despite Threats (Publication Centre)

Data released last week in Brazil reinforced our view of a modest, final, interest rate cut this week, despite the recent strength of the USD and volatility in global markets.

14 March 2018 Services and Construction are Boosting French Employment (Publication Centre)

Unemployment in France remains high, but the trend is turning. The mainland rate of joblessness fell to a five-year low of 8.6% in Q4, and yesterday's employment report continued the good news.

15 Mar. 2016 Downside Risk for Retail Sales, but Real Consumption is What Counts (Publication Centre)

This week's wave of data starts today, but most of the attention will fall on just one report, February retail sales. We expect weak-looking numbers, thanks to the plunge in gas prices, which likely will subtract some 0.6% from the non-auto sales number.

15 October 2018 Below-Consensus CPI Data will Dull any Brexit Deal Rally in Sterling (Publication Centre)

Brexit talks will dominate the headlines this week, with the focal point set to be a meeting of the European Council on Wednesday, where E.U. leaders might give the green light for an extraordinary summit next month to formalise the Withdrawal Agreement.

16 January 2018 Brazil's Macro Conditions are Improving, But Fiscal Progress is Key (Publication Centre)

The IBC-Br index, a monthly proxy for Brazil's GDP--rose 0.5% month-to-month in November, pushing the year-over-year rate down to 2.8%, from an upwardly-revised 3.1% in October.

16 Apr. 2015 Manufacturing constrained by the Oil capex collapse (Publication Centre)

More evidence emerged yesterday of the fading impact of the severe winter on the data, in the form of the strength of the NAHB survey and the weakness of the headline industrial production number.

15 September 2017 Chinese Consumption and Investment is Weakening in Q3 (Publication Centre)

The Chinese activity data published yesterday were much weaker than expected; growth rates fell resoundingly. Did analysts really get it wrong, or is this just another example of erratic Chinese data?

5 October 2017 Consumers' Spending in the Eurozone Slowed in Q3 (Publication Centre)

Yesterday's economic reports in the Eurozone will rekindle the debate on hard versus soft data. The final composite PMI rose to 56.7 in September, from 55.7 in August, in line with the first estimate.

11 June 2018 German Construction is Pushing Ahead, Manufacturing is Stalling (Publication Centre)

The bad news in German manufacturing keeps coming thick and fast.

14 June 2018 Chinese Monetary Conditions Point to Slowing Growth into Next Year (Publication Centre)

Chinese M2 growth was stable at 8.3% year- over-year in May, despite favorable base effects.

5 October 2017 Japan's Domestic Demand Slowed in Q3 as Consumers Pulled Back (Publication Centre)

Japan's Nikkei services PMI dropped to 51.0 in September from 51.6 in August, continuing the downtrend since June. For Q3 as a whole, the headline averaged 51.5, down from 52.8 in Q2; that's a clear loss of momentum.

12 December 2017 Banxico Likely Will Keep Rates on Hold, but Options Are Wide Open (Publication Centre)

November's inflation data in Mexico, showing a modest increase in the headline rate, have strengthened the case for further monetary tightening. But we stick to our long-standing view that the Board will leave rates at 7.0% on Thursday.

11 September 2017 Hurricane Reconstruction Will Lift Wages, Inflation, and the Deficit (Publication Centre)

As we reach our Sunday afternoon deadline, Hurricane Irma is pounding Florida's west coast with an intensity not seen since Andrew, in 1992.

5 September 2018 Order Books Point to a Q3 Rebound in Korean Construction Activity (Publication Centre)

Headline GDP growth in Korea was revised down, to a seasonally-adjusted 0.6% quarter-on-quarter in Q2, from 0.7% in the preliminary report.

12 October 2018 Higher Oil Prices are no Threat to Eurozone Consumers, Yet (Publication Centre)

Oil prices remain sticky, poised to hover close to a four-year high for the rest of the year.

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

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.

30 May 2018 New Elections Loom in Italy as Bond Markets Panic (Publication Centre)

Price action in Italian bonds went from hairy to scary yesterday as two-year yields jumped to just under 3.0%.

13 September 2017 Hurricane Reconstruction and Clean-up will Lift PPI, but not Yet (Publication Centre)

The surge in gasoline prices triggered by refinery outages after Hurricane Harvey came much too late to push up the August PPI, but gas prices had risen before the storm so the headline PPI will be stronger than the core.

13 October 2017 Japan's Commodity-Driven PPI Inflation Hits Consumer Goods (Publication Centre)

Japanese PPI inflation continues to be driven mainly by imported metals and energy price inflation. Metals, energy, power and water utilities, and related items, account for nearly 30% of the PPI.

23 August 2018 Political Risks is Rising Sharply in Brazil When Will Pressures Abate (Publication Centre)

The beginning of the electoral campaign last week in Brazil bodes uncertain results and a very close competition for the presidential elections on October 7.

23 February 2017 The IFO Agrees with the PMI: German GDP Growth to Rise in Q1 (Publication Centre)

Yesterday's German IFO survey broadly confirmed the bullish message from the PMIs earlier this week. The headline business climate index rose to 111.0 in February from a revised 109.9 in January, boosted by increases in both the current assessment and the expectations index.

23 August. 2016 EZ PMIs to Signal Stable GDP Growth in the Third Quarter (Publication Centre)

Today's market attention will be focused on the advance August PMI data in the major EZ economies. We think the composite PMI in the euro area was unchanged at 53.2 in August, consistent with stable GDP growth of 0.3%-to-0.4% quarter-on-quarter in Q3. The signal of "stability" in the Eurozone business cycle has been consistently relayed by the PMI since the beginning of the year.

23 February 2018 IFO and INSEE Business Surveys Compound February Misery (Publication Centre)

Yesterday's national surveys in the EZ confirmed the downbeat message from the PMIs and consumer sentiment data earlier this week.

24 April 2017 It Looks Like Mr. Macron Against Mrs. Le Pen in the Second Round (Publication Centre)

The initial "official estimate" of the French presidential election--released 20.00 CET--suggest that the runoff will be between the centre-right Emmanuel Macron and Front National's Marine Le Pen. This is consistent with opinion polls. The average of five early estimates also suggests that Mr. Macron won the vote with 23.1% of the vote against Mrs. Le Pen's 22.5%.

24 October 2018 September New Home Sales Likely Hit by Hurricane Michael (Publication Centre)

The path of new home sales over the past couple of years has followed the mortgage applications numbers quite closely.

24 February 2017 German Economy did Well in Q4, but What Happened to Net Trade? (Publication Centre)

Yesterday's detailed German GDP report raised more questions than it answered. The headline confirmed that growth accelerated to 0.4% quarteron- quarter in Q4, from 0.1% in Q3, leaving the year-over- year rate unchanged at 1.7%.

24 February 2017 Did the Warmer-than-Usual January Lift New Home Sales? (Publication Centre)

New home sales have tended to track the path of mortgage applications over the past year or so, with a lag of a few months. The message for today's January sales numbers, show in our next chart, is that sales likely dipped a bit, to about 525K.

24 Feb. 2016 Downside Surprise from Fourth- Quarter GDP Likely (Publication Centre)

The second estimate of Q4 GDP, published on Thursday, probably will show that the economy slowed more abruptly last year than previously thought and that it has become very dependent on consumers for momentum.

24 October 2018 EZ Households Face Uncertainty, Despite Solid Fundamentals (Publication Centre)

Consumer confidence in the Eurozone rose marginally at the start of Q4, though it is still down since the start of the year.

24 July. 2015 Retail Sales on Track for New High, Despite Dip in Sentiment (Publication Centre)

Advance Eurozone consumer sentiment fell disappointingly to -7.1 in July, from -5.6 in June, but it is consistent with a solid trend in retail sales growth. Household consumption in the zone has surged in the last four quarters, and a modest loss of momentum in Q3 and Q4 is a reasonable bet. But we see little risk of a sharp slowdown in the shor t run, and the trend in spending growth should stabilize at an annualised 1.5% this year.

24 March 2017 TLTROs Finish with a Bang, but it Probably does not Mean Much (Publication Centre)

Robust demand in the ECB's final TLTRO auction was the main story in EZ financial markets yesterday. Euro area banks--474 in total-- took up €233.5B in the March TLTRO, well above the consensus forecast €110B. To us, this strong demand is a sign that EZ banks are taking advantage of the TLTROs' incredibly generous conditions.

24 Mar. February Retail Sales to Highlight Weakening Trend in Spending (Publication Centre)

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.

24 June. 2015 Q1 GDP to be Revised up, But the Big Shift Will Come Next Month (Publication Centre)

The third estimate of first quarter GDP growth, due today, will not be the final word. The BEA will revise the data again on July 30, when it will also release its first estimate for the second quarter and the results of its annual revision exercise. Quarterly estimates back to 2012 will be revised. The revisions are of greater interest than usual this year because the new data will incorporate the first results of the BEA's review of the seasonal problems.

24 May 2018 April's Inflation Data aren't a Blow to August Rate Hike Chances (Publication Centre)

CPI inflation dropped to 2.4% in April, from 2.5% in March, undershooting the no-change consensus and prompting many commentators to argue that the chances of an August rate hike have declined further.

24 Feb. 2016 Distress Signal from IFO Confirm Downside Risks are Increasing (Publication Centre)

Yesterday's IFO survey sent a clear signal that the German economy's engine is stuttering. The business climate index fell to a 14-month low of 105.7 in February from 107.3 in January, and the expectations index slumped to 98.8 from 102.3. The weakness was driven by weaker sentiment in manufacturing, which plunged at its fastest rate since November 2008.

24 Feb. 2015 Germany is Growing, But Not as Fast as Implied by the Surge in Q4 (Publication Centre)

Sentiment in Germany has improved slightly this month with the IFO business climate index rising to 106.8 from 106.7 in January, pushed higher by a small increase in the expectations index.

23 November 2017 The Chancellor Softens the Fiscal Squeeze and Hopes for the Best (Publication Centre)

The Chancellor was bolder than widely expected yesterday and scaled back the fiscal consolidation planned for the next two years significantly, even though his borrowing forecast was boosted by the OBR's gloomier prognosis for the economy.

23 Nov. 2015 Domestic Demand Offsets External Woes in Mexico and Colombia (Publication Centre)

Mexico's economy gathered momentum in Q3, thanks mainly to solid gains in industrial and services activity. Real GDP rose 0.8% quarter-on-quarter in Q3, the fastest pace since Q3 2013 and the ninth consecutive increase. Year-over-year growth rose to 2.6% year-over-year, from 2.3% in Q2. In short, a positive report, surprising to the upside, and above the INEGI's advance estimate, released in late October.

23 March 2017 Warm Weather Points to Upside Risk for February New Home Sales (Publication Centre)

New home sales are much more susceptible to weather effects -- in both directions -- than existing home sales. We have lifted our forecast for today's February numbers above the 575K pace implied by the mortgage applications data in recognition of the likely boost from the much warmer-than-usual temperatures.

23 Mar. 2015 Savings Rate Jump is Temporary - It Will Reverse in Spring (Publication Centre)

If we are right in our view that the lag between shifts in gasoline prices and the response from consumers is about six months--longer than markets seem to think--then the next few months should see spending surge.

23 October 2017 Wage Inflation Still Subdued, but a Decisive Turning Point is Coming (Publication Centre)

In the absence of any significant data releases today, we want to take a closer look at the outlook for wage growth, and the implications of an acceleration in hourly earnings for inflation.

23 September 2016 French Manufacturing Confidence Rebounds Solidly in September (Publication Centre)

French manufacturers recovered their optimism towards the end of Q3. The headline INSEE manufacturing sentiment index rose to 103 in September, from 101 in August, and the composite business confidence gauge also increased. A rebound in transport equipment firms' own production expectations was the key driver of the recovery.

24 April 2018 Surveys are Stronger than Hard Data, but with no Common Cause (Publication Centre)

The levelling-off in the industrial surveys in recent months is reflected in the consumer sentiment numbers. Anything can happen in any given month, but we'd now be surprised to see sustained further gains in any of the regular monthly surveys.

24 May 2017 FOMC Minutes will Reinforce Skepticism over the Q1 Slowdown (Publication Centre)

The minutes of the May 2/3 FOMC meeting today should add some color to policymakers' blunt assertion that "The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term."

24 April 2017 Past Errors Mean Investors Should Treat the Latest Polls Cautiously (Publication Centre)

Sterling jumped last week to its highest level against the dollar since last October in response to news that a general election will be held on June 8. Markets are betting that the Conservative Government will sharply increase its majority, enabling Theresa May to ignore Eurosceptic backbenchers when she strikes a deal with the EU.

23 January 2018 Unemployment in Mexico Close to Cyclical Lows, Despite Rising Risks (Publication Centre)

High inflation and interest rates, coupled with increasing uncertainty, both economic and political, put Mexican consumption under strain last year.

20 July 2017 Retail Sales Likely Jumped in June, but the Trend Remains Weak (Publication Centre)

Surveys suggest that today's retail sales figures will show that sales volumes increased by around 1% month-to-month in June, significantly exceeding the consensus, 0.4%. But the pickup in June likely will be just a blip; the further intensification of the squeeze on real wages and a tightening of unsecured lending standards will keep retail sales on a flat path in the second half of 2017.

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

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.

20 December 2016 BanRep Brings Forward the Start of Rate Cuts on Growth Concerns (Publication Centre)

BanRep surprised the markets on Friday with a 25bp interest rate cut, bringing rates to 7.50%. We expected the Colombian central bank to start easing in January, due to the uncertainties surrounding the tax reform package and the ongoing minimum wage negotiations.

20 December 2016 The IFO Points to a Strong Finish for the German Economy to 2016 (Publication Centre)

Yesterday's IFO survey capped a fine Q4 for German business survey data. The headline business climate index climbed to a 34-month high of 111.0 in December, from 110.4 in November. An increase in the "current assessment" index was the main driver of the gain, while the expectations index rose only trivially.

2 November 2018 Ignore the October Surge in Korean Exports, but Take Heed of Imports (Publication Centre)

Korea's trade data have been extremely volatile over the past two months, thanks to distortions caused by last year's odd holiday calendar.

2 May. 2016 ECI Core Wages Tell the Story Hidden by Calendar Quirks in AHE (Publication Centre)

For most of the decade since the whole-economy average hourly earnings numbers were first published, the year-over-year rate of increase has run faster than the ECI measure of private sector wages and salaries, excluding incentive-paid occupations. But in the first quarter of this year, the ECI measure rose 2.5% year-over-year, the fastest increase in six years, while hourly earnings rose 2.3%. That difference might not sound like much, but it matters a good deal when put into context.

2 March 2018 Q1 Growth is Set to Disappoint, Again, the Big Picture is Unchanged (Publication Centre)

This week has seen a huge wave of data releases for both January and February, but the calendar today is empty save for the final Michigan consumer sentiment numbers; the preliminary index rose to a very strong 99.9 from 95.7, and we expect no significant change in the final reading.

2 March 2018 Brazil GDP Ended 2017 Softly, but the Recovery Will Accelerate in Q1 (Publication Centre)

Brazil's GDP growth slowed to just 0.1% quarter- on-quarter in Q4, from an upwardly-revised 0.2% in Q3. This pushed the year-over-year rate up to 2.1%, from 1.4%, but this was weaker than market expectations.

20 December 2017 Brazil's Fiscal Outlook is Blurred, But Argentina's Has Just Improved (Publication Centre)

Politics will be the key factor in LatAm over the coming quarters, as presidential and legislative elections take place throughout the region.

20 February 2017 Should Sterling Investors Fear a Snap General Election? (Publication Centre)

Elections will be held on Thursday in two constituencies vacated recently by Labour MPs. Betting markets are pricing-in a 70% chance that the Conservatives will win the by-election in Copeland--even though they trailed Labour there by eight points in the general election in 2015--mainly because around 60% of Copeland's electorate voted to leave the EU last year.

20 March 2018 Brazil and Chile are Strengthening Expect Further Good News this Year (Publication Centre)

Brazil's recovery is consolidating, with recent data flow confirming that the economy had an encouraging start to the year.

20 May. Retailers Can't Slash Prices to Boost Demand for Much Longer (Publication Centre)

April's consensus-beating retail sales figures fostered an impression that the recovery in consumer spending is in fine fettle, even though the rest of the economy is suffering from Brexit blues. Retailers have stimulated demand, however, by slashing prices at an unsustainable rate. With import prices and labour costs now rising, retailers are set to increase prices, sapping the momentum in sales volumes.

20 November 2017 The Chancellor Will Stick to Plans for an Intensifying Fiscal Squeeze (Publication Centre)

Chancellor Hammond likely will broadly stick to the current plans for the fiscal consolidation to intensify next year when he delivers his second Budget on Thursday.

20 March 2017 February's Above-Target Inflation Rate won't be the Last (Publication Centre)

February's consumer price report, released tomorrow, likely will show that CPI inflation has breached the MPC's 2% target for the first time since November 2013. Indeed, we think the headline rate jumped to 2.2%, from 1.8% in January, exceeding the 2.1% rate expected by the MPC and the consensus.

20 March 2017 The BCCh Leaves Open a Tiny Space for Further Easing (Publication Centre)

Chile's central bank cut the policy rate 25bp last week to 3.0%, in line with consensus, amid easing inflationary pressures. The timing of the rate cut was no surprise; in January, the BCCh cut rates for the first time in more than two years, and kept a dovish bias.

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

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

24 September 2018 Battle Lines are Drawn Between the EU and U.K. over Brexit (Publication Centre)

EU negotiations tend to go down to the wire; and last week's summit in Salzburg, and Theresa May's statement on Friday, suggest that the Brexit negotiations will do just that.

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

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

2 March 2017 Is it all over for Mr. Fillon? (Publication Centre)

The French presidential election campaign remains chaotic. Republican candidate François Fillon had to defend himself again yesterday as investigations into his potential misuse of public funds deepened. Mr. Fillon and his wife have now been summoned to court to explain themselves. Markets expected Mr. Fillon to resign as the Republican front-runner. Instead, he used his unscheduled media address to defiantly declare that he is staying in the race.

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

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

19 June 2018 A Trade War of Attrition Looks Likely, but the Damage for now is Minimal (Publication Centre)

On the face of it, trade negotiations have deteriorated in the last week.

19 June 2018 Sales by Buy-to-Let Investors Won't Swamp the Market, For Now (Publication Centre)

The RICS Residential Market Survey caught our eye last week for reporting that new sale instructions to estate agents rose in May for the first month since February 2016.

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

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 July. 2016 Why is Homebuilding not Keeping Pace with Demand? (Publication Centre)

The sustained upturn in mortgage applications since last fall ought to have driven up the pace of new home construction quite sharply. But our first chart shows that single-family building permit issuance--we use permits rather than starts, as they are much less volatile--rose only 8.3% year-over-year in the three months to May, while applications for new mortgages to finance house purchase jumped by 18.8% over the same period.

19 July. 2016 Domestic Demand is Slowing in Colombia - Rate Cuts Soon? (Publication Centre)

Markets are reacting to Colombia's disappointing activity figures, released Friday, by pulling forward expectations for the country's first rate cut to December. The data certainly looked weak--especially upon close examination--and we expect growth to slow further. But we think that inflation is still too high to expect rate cuts this year.

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

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 March 2018 CPI Inflation will Start to Undershoot the MPC's Forecast from February (Publication Centre)

February's consumer price figures, released tomorrow, likely will show that CPI inflation fell to 2.8%--one tenth below the MPC's forecast--from 3.0% in January.

19 May 2017 Don't Mistake April's Retail Sales Surge for a Turning Point (Publication Centre)

Retail sales volumes jumped by 2.3% month-to-month in April, exceeding the 1.0% consensus and even our 2.0% forecast. It would be a big mistake to conclude, however, that households' spending will propel the economy forward this year like it did between 2013 and 2016.

2 January 2018 Bank Lending in the Eurozone Will Strengthen Further in 2018 (Publication Centre)

The economic calendar in the euro area was relatively quiet over Christmas, and broadly conformed to our expectations.

2 Mar. 2015 Eurozone Deflation Pressures Eased Slightly in February (Publication Centre)

Advance inflation data in the Eurozone will likely surprise to the upside today. The consensus forecast expects inflation to rise slightly to -0.5% year-over-year in February from -0.6% in January, but we expect a much bigger jump, to -0.2% year-over-year.

2 Feb. 2015 Will core inflation push the ECB to do even more QE this year? (Publication Centre)

The ECB moved ahead of the curve this month with its QE program of €60B per month, starting in March. But still-abysmal inflation data will prompt journalists to ask Mr. Draghi, at the next ECB meeting, about the conditions under which the central bank plans to do more.

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

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.

19 November 2018 Keep the Faith in Stronger Sterling by the End of March (Publication Centre)

Sterling took another pounding last week. Resignations from the Cabinet, protests by the DUP, and the public submission of letters by 21 MPs calling for a confidence vote in Mrs. May's leadership, imply that parliament won't ratify the current versions of the Withdrawal Agreement and the Political Declaration on the future relationship with the E.U. next month.

19 September 2018 How Would the MPC Respond to a No-deal Brexit? (Publication Centre)

A no-deal Brexit is a remote possibility. The U.K. government and EU are closing in on a deal and Brexiteers within the Conservative party have failed, so far, to trigger a confidence vote on Mrs. May's leadership.

20 November 2018 The PM is Likely to Hang on, Even if a Confidence Vote is Triggered (Publication Centre)

As we write, 25 Conservative MPs have confirmed publicly that they have submitted no-confidence letters to the Chairman of the 1922 Committee. That's 23 short of the 48 required to trigger a leadership contest, though some MPs might have submitted letters without making it public.

20 Oct. 2015 Slowdown in U.K. GDP Growth to Dent EZ Exports Next Year? (Publication Centre)

Our new Chief U.K. economist, Samuel Tombs, initiated his coverage yesterday with a sombre, non-consensus, message on the economy. Headwinds from fiscal tightening and net trade will weigh on GDP growth next year, but the BoE will likely have to look through such cyclical weakness, and hike as inflation creeps higher. An intensified drag from net trade in the U.K. will, other things equal, benefit the Eurozone. But a slowdown in U.K. GDP growth still poses a notable risk to euro area headline export growth, especially in the latter part of next year.

22 August 2017 Is the Worst Over for State and Local Government Spending? (Publication Centre)

Consumption and investment spending by state and local government accounts for just over 10% of the U.S. economy, making it more important than exports or consumers' spending on durable goods, and roughly equal to all business investment in equipment and intellectual property.

22 December 2017 BoJ: Concerns over Fluffy Kitty- Cats and an Aggressive Dove (Publication Centre)

The BoJ left policy unchanged yesterday, but we noted some significant additions and modifications in the statement and the press conference.

22 February 2017 Easier lending standards to boost housing market? (Publication Centre)

Whatever today's report tells us about existing home sales in January, the underlying state of housing demand right now is unclear. The sales numbers lag mortgage applications by a few months, as our first chart shows, so they're usually the best place to start if you're pondering the near-term outlook for sales. But the applications data right now are suffering from two separate distortions, one pushing the numbers up and the other pushing them down. Both distortions should fade by the late spring, but in they meantime we'd hesitate to say we have a good idea what's really happening to demand.

21 September 2018 Recent Momentum in Retail Sales won't be Sustained (Publication Centre)

August's retail sales figures create a misleading impression that consumers can be relied upon to pull the economy through the next six months of heightened Brexit uncertainty unscathed.

21 September 2016 A Reverse Twist by the BOJ would move EZ bond markets (Publication Centre)

Financial markets in the Eurozone will be pushed around by global events today. The Bank of Japan kicks off the party in the early hours CET, and the spectrum of investors' expectations is wide.

21 November 2017 Cutting Stamp Duty for FTBs Will Boost Prices, not Home Ownership (Publication Centre)

Reforms to Stamp Duty Land Tax paid by first-time buyers likely will take centre stage in the Budget. At the Conservatives' party conference, Theresa May pledged another £10B to expand the Help to Buy Scheme, which helps first-time buyers obtain a mortgage which just a 5% deposit.

21 October. 2016 Do September Retail Sales Mark the Start of a Weaker Trend? (Publication Centre)

Retail sales volumes held steady in September, undershooting the consensus, 0.3%, and they were unchanged in August too. At this stage, evidence of a slowdown in retail sales growth is only tentative, but the trend will weaken decisively when retailers raise prices sharply next year.

22 February 2017 Q4 GDP Likely to be Revised up, but Momentum won't Endure (Publication Centre)

We expect the official estimate of quarter-on-quarter GDP growth in Q4 to be revised up to 0.7% today, from last month's preliminary estimate of 0.6%. The consensus forecast is for no revision, so the data likely will boost interest rate expectations and sterling, if we're right.

22 Jan. 2016 Mr. Draghi Won't Give Up On Low Inflation, Promising More Easing (Publication Centre)

Yesterday's ECB meeting provided no immediate relief to nervous investors. The central bank kept its main interest rates unchanged, and maintained the pace of QE purchases at €60B per month. Mr. Draghi compensated for the lack of action, however, by hinting heavily at further easing at its next meeting. The president emphasized that the ECB's policies will be "reviewed and reconsidered" in light of the March update to the staff projections. Mr. Draghi also admitted that inflation has been "weaker than expected" since the last meeting, and that downside risks have increased further. The central bank does not pre-commit, but we think it is a good bet that the ECB will do more in March.

22 November 2017 LEIs Point to Stabilising Japanese Domestic Demand Growth in Q4 (Publication Centre)

Japan's all-industry activity index fell 0.5% month-on- month in September after a 0.2% rise in August. Construction activity continued to plummet, with the subindex dropping 2.3%, after a 2.2% fall in August.

22 November. 2016 Trade Data are Improving in the Andes... Better Still in 2017? (Publication Centre)

Colombia's trade deficit continued to narrow in Q3; a postive development now that EM are back in the firing line. Assuming no revisions, the marginal year-over-year dip in the September trade deficit means that the third quarter deficit was USD3.1B, down from US4.6B a year ago.

22 Sept. 2015 Nominal Retail Sales Set to Slow Further, Thanks to the Dollar (Publication Centre)

The rate of growth of chain store sales has levelled off in recent months, after slowing dramatically in the first four months of this year, almost certainly in response to falling prices for dollar-sensitive goods like household electronics. In the fourth quarter of last year, the Redbook recorded same-store sales growth averaging 4.3%, but that has slowed to a 1-to-2% range since April.

22 June. 2016 Resilient EZ Survey Data Ahead, but Sentiment Would Fall on Brexit (Publication Centre)

Yesterday's ZEW investor sentiment in Germany shows showed no signs that uncertainty over the U.K. referendum is taking its toll on EZ investors. The expectations index surged to 19.2 in June, from 6.4 in May, the biggest month-to-month jump since January last year, when investors were eagerly expecting the ECB's QE announcement.

22 June 2018 Copom Likely will Keep Rates on Hold, if the BRL Permits (Publication Centre)

Brazil's central bank looked through the recent dip in the BRL and left interest rates at 6.50% at Wednesday's Copom meeting, in line with the consensus.

22 July. 2015 Chain Store Sales Growth Will Slow Further - Don't be Misled (Publication Centre)

The downshift in the rate of growth of retail sales, which has caused a degree of consternation among investors, likely has further to run. The Redbook chain store sales survey clearly warned at the turn of the year that a slowdown was coming, but forecasters didn't want hear the warning: Five of the seven non-auto retail sales numbers released this year have undershot consensus.

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

We have to pinch ourselves when looking at economic data in Spain at the moment. Real GDP rose a dizzying 0.9% quarter-on-quarter in Q1, driven by solid gains of 0.7% and 1.1% in consumer's spending and investment respectively. Retail sales and industrial production data indicate GDP growth remained strong in Q2, even if survey data lost some momentum towards the end of the quarter. We will be looking for signs of further moderation in Q3, but surging private deposit growth indicate the cyclical recovery will continue.

21 May 2018 Inflation Likely Fell Further in April, but a Summer Rebound Looms (Publication Centre)

April's consumer price figures, due on Wednesday, are set to show that CPI inflation has fallen, primarily due to the earlier timing of Easter this year than last. We

21 March 2017 Will Investors Shorting Sterling Remain Frustrated? (Publication Centre)

Speculators who have sold sterling over the last six months have been frustrated. Investors have been overwhelmingly net short sterling, but the pound has hovered between $1.20 and $1.25, as our first chart shows. Undeterred, investors increased their net short positions last week to 107K contracts-- the most since records began in 1992--from 81K a week earlier.

20 September 2018 August's Jump in CPI Inflation is More Noise than Signal (Publication Centre)

August's consumer price figures caught everyone by surprise. CPI inflation increased to 2.7%, from 2.4% in July, greatly exceeding the consensus and the MPC's forecast, 2.4%.

20 September. 2016 Homebuilders Need to Catch up to Rising Sales - Expect a Q4 Surge (Publication Centre)

The information available to date--which is still very incomplete--suggests that new housing construction will decline in the third quarter. This would be the second straight decline, following the 6.1% drop in Q2. We aren't expecting such a large fall in the third quarter, but it is nonetheless curious that housing investment--construction, in other words--is falling at a time when new home sales have risen sharply.

21 Apr. 2015 Survey evidence signalling faster wage gains is mounting (Publication Centre)

We have argued for some time that the plunge in gasoline prices will constrain core inflation over the course of this year, by reducing production and distribution costs for a broad array of goods.

20 September 2017 The MXN Remains Strong, but Further Upside Potential is Modest (Publication Centre)

Banxico's tightening cycle has totalled 400 basis points, lifting rates to 7.0%. Since late 2015, Banxico has followed the Fed closely, but other external factors also have guided many of its decisions.

20 September 2017 Is China set to Open Further its Financial Sector to Foreigners? (Publication Centre)

Bloomberg reported on Monday that the PBoC is drafting a package of reforms to give foreign investors greater access to the China's financial services sector. This could involve allowing foreign institutions to control their local joint ventures and raising the 25% ceiling on foreign ownership of Chinese banks.

20 October 2017 Domestic Fundamentals Remain Positive for Brazilian Markets (Publication Centre)

Recent economic indicators in Brazil have undershot consensus in recent weeks, but the economy nonetheless continues to recover.

20 October. 2016 Rising Prices Will Arrest the Strong Trend in Retail Sales Next Year (Publication Centre)

It's hard to have much conviction in any forecast for September retail sales, as the relationship between the official data and the surveys has weakened considerably.

21 April 2017 Faites vos Jeux! Anything is Possible in France this Weekend (Publication Centre)

This weekend's first round of the French presidential election is too close to call. Our first chart indicates that a runoff between Marine Le Pen and Emmanuel Macron remains the best bet. But the statistical uncertainty inherent in the predictions, and the proximity of the two remaining candidates--the centre-right Mr. Fillon and far-left Mr. Melenchon-- mean that this is now effectively a four-horse race.

21 August 2017 The Peak in CPI Inflation Still Hasn't Been Reached Yet (Publication Centre)

After soaring in the Spring, inflation has slipped back in the Summer. July's consumer prices report, released while we were away last week, showed that CPI inflation held steady at 2.6% in July, one -tenth below the consensus and three tenths below May's year-to-date peak.

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

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.

21 June 2017 Home Sales set for new Cycle Highs, but not in May (Publication Centre)

Over the past couple of weeks, the number of applications for new mortgages to finance house purchase have reached their highest level since late 2010, when activity was boosted by the impending expiration of a time-limited tax credit for homebuyers.

21 December 2016 Home Sales Likely Fell in November, Before the Hit from Higher Rates (Publication Centre)

After two big monthly gains in existing home sales, culminating in October's nine-year high of 5.60M, we expect a dip in sales in today's November report. This wouldn't be such a big deal -- data correct after big movements all the time -- were it not for the downward trend in mortgage applications.

21 December 2016 Big Current Account Deficit Likely to Cloud Resilient GDP Picture (Publication Centre)

The third quarter national accounts, due to be published on Friday, likely will not alter the picture of economic resilience immediately after the referendum. The latest estimate of GDP growth often is revised in this release, but revisions have not exceeded 0.1 percentage points in either direction in the last four years, as our first chart shows.

21 August 2018 The End of the Beginning for the Greek Public Debt Tragedy (Publication Centre)

Greece's exit from eight years of near constant bail-out programs raises as many questions as it answers.

21 Dec. 2015 Paris Attacks Unlikely to Dent Q4 French GDP Growth Severely (Publication Centre)

Manufacturing confidence in France remained resilient in the fourth quarter. The INSEE sentiment index rose to 103 in December from 102 in November, lifted by a jump in firms' own production expectations, and a small increase in the new orders-to-inventory ratio. We think production will increase in Q4, lifted by energy output, but the recent jump in the year-over-year rate is unlikely to be sustained, even if we factor in the marginal increase in new orders this month.

22 September 2017 The Earthquake's Economic Hit Appears to be Modest (Publication Centre)

Before this week's earthquake, the resilience of Mexico's economy in the face of a volatile and challenging global backdrop owed much to the strength of domestic demand, especially private consumption.

28 September 2016 No Scope For Complacency on Inflation as Import Prices Rise (Publication Centre)

Our forecast that CPI inflation will shoot up to about 3% in the second half of 2017, from 0.6% last month, assumes that pass-through from the exchange rate to consumer goods prices will be as swift and complete as in the past. Our first chart shows that this relationship has held firm recently, with core goods prices falling at the rate implied by sterling's appreciation in 2014 and 2015.

5 March 2018 Whatever the Problem is, Tariffs aren't the Answer (Publication Centre)

The apparently imminent imposition of 25% tariffs on imported steel and 10% on aluminum does not per se constitute a serious macroeconomic shock.

5 Nov. 2015 A Rebound in German New Orders? But the Trend is Subdued (Publication Centre)

Factory orders in Germany probably jumped in September, following a string of losses in the beginning of Q3. We think new orders rose 1.0% month-to-month, pushing the year-over-year rate slightly lower, to 1.8% from 2.0% in August. A rebound in non- Eurozone export orders likely will be the key driver of the monthly gain, following a 14.8% cumulative plunge in the previous two months. The rise will be concentrated in capital and consumer goods, and should be enough to offset a fall in export orders within the euro area. Our forecast is consistent with new orders falling 2.0% quarter-on-quarter in Q3, partly reversing the 3.0% surge in the second quarter, and raising downside risks for production in Q4.

5 September 2017 Services PMI set to Show Economy Still Struggling in Q3 (Publication Centre)

August's Markit/CIPS services survey, released today, likely will show that the economy's biggest sector is continuing to slow. We think that the PMI fell to just 53.0--its lowest level since it plunged immediately after the Brexit vote--from 53.8 in July, below the consensus, 53.5.

6 April 2017 Firms in the EZ are Investing Again, but What About Wages? (Publication Centre)

Readers have asked us about the availability of flow-of-funds data in the Eurozone similar to the detailed U.S. reports. The ECB's sector accounts come close and cover a lot of ground, but are also released with a lag. We can't cover all sectors in one Monitor, but the investment data for non-financial firms, excluding construction, suggest that investment growth slowed last year.

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

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

5 January 2018 LatAm FX Started 2018 Strongly, but Risks Remain, Particularly in H1 (Publication Centre)

LatAm financial markets have performed solidly in the first sessions of the year, with most regional currencies trading more strongly against the USD.

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

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

5 August. 2016 German Manufacturing Orders Likely Jumped at the End of Q2 (Publication Centre)

The forecasts compiled by Bloomberg for today's June German factory orders data look too timid to us. The consensus is pencilling in a 0.5% month-to month rise, which would push the year-over-year rate down to -2.1%, from zero in May. But survey data point to an increase in year-over-year growth, which would require a large month-to-month rise due to base effects from last year.

5 Feb. 2015 December Trade Data Likely to Signal Upward Q4 GDP Revision (Publication Centre)

Today's December international trade numbers could easily signal a substantial upward revision to fourth quarter GDP growth. When the GDP data were compiled, the December trade numbers were not available so the BEA had to make assumptions for the missing numbers, as usual.

6 April 2017 GDP Growth Likely Slowed in Q1, Despite The Rising Services PMI (Publication Centre)

The rise in Markit/CIPS services PMI to 55.0 in March, from 53.3 in February, brings some relief that GDP growth has not stalled in Q1, following manufacturing and construction surveys that signalled near-stagnation.

6 December 2017 Retail Sales in the EZ Plunged in October, but Will Improve Soon (Publication Centre)

Consumers' spending in the Eurozone stalled at the start of Q4. Retail sales slid 1.1% month-to-month in October, pushing the year-over-year rate down to a four-year low of 0.4%, from an upwardly-revised 4.0% jump in September.

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

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

6 October 2017 Political Risks are Rising in the Eurozone, Should Markets Care? (Publication Centre)

Political risks have been making an unwelcome comeback in the Eurozone in the past month. In Germany, last month's parliamentary elections--see here--has left Mrs. Merkel with a tricky coalition- building exercise.

6 October 2017 The Q3 Recovery in Car Sales Will Prove to be a Dead Cat Bounce (Publication Centre)

Car sales were predictably weak in September, but they could have been a lot worse. Private registrations were down 8.8% year-over-year in the second most important month of the year.

6 October 2017 The Mining Recovery is Driving Chile's Rebound, Will it Last? (Publication Centre)

Chile's growth dynamics were robust in August, according to the latest data. Production rose and consumption remained strong during most of Q3. Indeed, industrial output increased 5.1% year-over- year, up from an already strong 3.1% increase in July, and contrasting sharply with the 2% fall in Q2.

6 March 2018 Catch-22 for Italy's anti-establishment parties (Publication Centre)

The results of Sunday's parliamentary elections in Italy carry two key messages.

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

Mr. Draghi was in a slightly more bullish mood yesterday, noting that the significant easing of financial conditions in recent months and improving sentiment show that monetary policy "has worked". Economic risks are tilted to the downside, according to the president, but they have also "diminished".

6 February 2017 EZ Households are in Good Shape, But Spending Will Slow in 2017 (Publication Centre)

Consumers' spending in the euro area weakened at the end of Q4, but we think households will continue to boost GDP growth in the first quarter. Data on Friday showed that retail sales fell 0.3% month-to-month in December, pushing the year-over-year rate down to 1.1%, from a revised 2.8% in November.

6 February 2017 Growth Indicators Start to Turn Down as Price Pressures Escalate (Publication Centre)

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 February 2018 No Change in the Bullish Message From the Eurozone PMI Data (Publication Centre)

Real M1 growth is slowing, and financial conditions are beginning to tighten in the Eurozone, but shortleading indicators continue to signal firm momentum in the economy.

4 September 2018 Is Fear of Further Tariffs Boosting Capex and Inventory-Building? (Publication Centre)

While we were out, most of the core domestic economic data were quite strong, with the exception of the soft July home sales numbers and the Michigan consumer sentiment survey.

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

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.

30 September 2016 Britain is Turning to Debt to Maintain an Illusion of Prosperity (Publication Centre)

Today's balance of payments figures for the second quarter likely will underline that the U.K. has financed strong growth in domestic consumption by amassing debts with the rest of the world at a breakneck pace.

31 August. 2016 Colombia's Economy Slowed in Q2, Will it Rebound Soon? (Publication Centre)

Colombia's second quarter GDP data, released Monday, revealed a dismal 2.0% year-over-year growth rate, down from 2.5% in Q1. GDP rose by a very modest 0.2% quarter-on-quarter, for the second consecutive quarter. The year-over-year rate was the slowest since the end of the financial crisis, but it is in line with our 2.1% forecast for this year as a whole.

31 January 2017 Will Faster Wage Growth Finally Trigger An Acceleration in the ECI? (Publication Centre)

The headline employment cost index has been remarkably dull recently, with three straight 0.6% quarterly increases. The consensus forecast for today's report, for the three months to December, is for the same again.

31 January 2018 2017 was a Record-Breaking Year for the Eurozone Economy (Publication Centre)

Yesterday's advance Eurozone Q4 GDP report conformed to expectations. Headline GDP increased 0.6% quarter-on-quarter, slowing trivially from an upwardly-revised 0.7% rise in Q3, and nudging the year-over-year rate down marginally to 2.7%.

30 November. 2016 Recovery in Lending Unlikely to Maintain October's Momentum (Publication Centre)

October's money data show that households and firms have regained the appetite for borrowing that they lost immediately after the referendum. But the recent rise in swap rates and the deterioration in consumers' confidence likely will cut short the revival in consumer lending, while persistent Brexit uncertainty likely will continue to subdue firms' investment intentions.

30 November. 2016 EZ Inflation Data Will Disappoint Today, but it Will Rise Further (Publication Centre)

Yesterday's advance inflation data in Germany fell short of forecasts--ours and the consensus--for a further increase. Inflation was unchanged at 0.8% year-over-year in November, but we think this pause will be temporary.

30 May 2017 Should Investors Start to Fear a Hung Parliament? (Publication Centre)

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.

30 November 2018 EZ Inflation Likely Fell More than Markets Expected in November (Publication Centre)

Yesterday's November inflation reports from Germany and Spain suggest that today's data for the Eurozone as a whole will undershoot the consensus.

30 November. 2016 Brazilian Political Risk is Rising, But Won't Derail the Fiscal Adjustment (Publication Centre)

Political volatility is a recurrent theme in Brazil. Six members of President Michel Temer's cabinet resigned last Friday due to allegations of conflict of interest on a construction deal. Rumours that President Temer was involved in the affair stirred up market volatility and revived political risk concerns

31 March 2017 Q4 National Accounts will Show Stronger, but Fragile, Growth (Publication Centre)

The national accounts look set to show that GDP growth in the fourth quarter was even stronger than previously estimated. Earlier this month, quarter-on-quarter growth in construction output in Q4 was revised up to 1.2%, from 0.2%. As a result, construction's contribution to GDP growth will rise by 0.07 percentage points.

31 May 2017 Manifestos Point to Very Different Public Borrowing Paths (Publication Centre)

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

4 December 2017 GDP Growth Will Rise in Brazil Next Year, but Political Risk is Looming (Publication Centre)

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

4 January 2017 December's ISM looks great, but it's not definitive (Publication Centre)

It probably would be wise to view the increase in the ISM manufacturing index in December with a degree of skepticism. The index is supposed to record only hard activity, but we can't help but wonder if some of the euphoria evident in surveys of consumers' sentiment has leaked into responses to the ISM. That said, the jump in the key new orders index-- which tends to lead the other components--looked to be overdue, relative to the strength of the import component of China's PMI.

4 January 2017 Stronger Surveys Should Not Foster Optimism about Manufacturing (Publication Centre)

A cluster of surveys suggest that the manufacturing sector finished 2016 with a flourish, after a dismal performance for most of the year. But momentum will drain away from the sector's recovery in 2017, as higher oil prices make low value-added work unprofitable again and resurgent inflation causes domestic consumer demand to crumble.

4 May. 2016 Eurozone Manufacturing Firms' Selling Prices Continue to Fall (Publication Centre)

Eurozone manufacturing selling prices remain under pressure from deflationary headwinds. The PPI index, ex-construction, in the euro area fell 4.2% year-over-year in March, matching February's drop. Weakness in oil prices continues to drive the headline.

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

A further rise in the business activity index of the November Markit/CIPS report on services offset declines in the manufacturing and construction surveys' key balances. The composite PMI--a weighted average of three survey's activity indices -- therefore rose, to a level consistent with quarter-on-quarter GDP growth strengthening to 0.6% in the fourth quarter, from 0.5% in Q3. Nonetheless, we do not think this is a convincing signal that the economic recovery is regaining strength.

4 April 2017 The Spanish and U.K. Navies won't Have to Fight over Gibraltar (Publication Centre)

The EU's negotiations with the U.K. over Brexit are off to a bad start. The position in Brussels is that negotiations on a new relationship can't begin before the bill on the U.K.'s existing membership is settled. But this has been met with resistance by Westminster; the U.K. does not recognise the condition of an upfront payment to leave.

31 May 2018 Will Chinese Authorities Allow Developer Defaults? Probably (Publication Centre)

Defaults by Chinese companies have been on the rise lately. Most recently, China Energy, an oil and gas producer with $1.8B of offshore notes outstanding, missed a bond payment earlier this week. We've highlighted the likelihood of a rise in defaults this year, for three main reasons.

31 October 2018 Plans for a Modest Near-Term Fiscal Expansion are Future-Proof (Publication Centre)

The Chancellor's decision immediately to spend all the proceeds from the OBR's upgrade to its projections for tax receipts appears to leave his plans exposed to future adverse revisions to the economic outlook.

4 Apr. Britain is Living Beyond its Means, Once Again (Publication Centre)

The clear message from the fourth quarter's national accounts, released last week, is that the economic recovery rests on unsustainable foundations. The U.K. has returned to bad habits and is financing expenditure today by borrowing. As this undermines future spending, it is only a matter of time before the U.K.'s recovery loses steam.

6 September 2017 Harvey set to Distort Chainstore, MBA Data Today, but no hit on ISM (Publication Centre)

Last Friday's August auto sales numbers were overshadowed by the below-consensus payroll report and the six-year high in the ISM manufacturing index, but they are the first data to reflect the impact of Hurricane Harvey.

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

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

8 September 2017 Production Likely Jumped in July, but it Won't Drive a Q3 Revival (Publication Centre)

The consensus that industrial production increased by just 0.2% month-to-month in July looks too cautious.

9 April 2018 March Payrolls Don't Signal a Shift in the Trend, Expect 200K-plus in April (Publication Centre)

March payrolls were constrained by both the impact of colder and snowier weather than usual in the survey week, and a correction in the construction and retail components, which were unsustainably strong in February.

9 August 2018 June GDP Data to Show Economy has Little Underlying Momentum (Publication Centre)

Investors with long sterling positions should not pin their hopes on Friday's GDP report to reverse some of the losses endured over the last week.

9 Dec. 2015 Services will Push up Core Inflation in the EZ Next Year (Publication Centre)

Core inflation--a long lagging indicator in the euro area-- will rise next year, in response to surging consumers' spending. Our first chart shows that services inflation likely will be a key theme in this story. Even allowing for a structural drag on inflation due to high unemployment outside Germany, cyclical risks to services inflation are tilted firmly to the upside.

8 September 2017 China Probably is Content with its Modest "Safe-haven" Role, for now (Publication Centre)

Geopolitical tensions have risen sharply for Asia in the last few months, yet the RMB has appreciated sharply. China's currency appears to be playing some kind of safe haven role.

8 Oct. 2015 Flat Mortgage Demand Signals a Pause in the Housing Recovery (Publication Centre)

We planned to write today about the rebound in housing market activity over the past few months, arguing that it is about to run out of steam in the face of the recent flat trend in mortgage applications. The Mortgage Bankers Associations' purchase applications index rocketed in the spring, but then moved in a narrow range from mid-April through late September. Then, out of the blue, the MBA reported a 27% leap in applications in the week ended October 2, taking the index to its highest level in more than five years.

8 November 2017 Mexico's Leading Indicators Remain Strong Despite Mixed Hard Data (Publication Centre)

Recent economic indicators in Mexico have been mixed, distorted by temporary factors, including the effect of the natural disasters in late Q3. Private consumption has lost some momentum, hit by the lagged effect of high interest rates and inflation, as well as the earthquakes.

8 November. 2016 Focus on the Improving Trend in German Manufacturing (Publication Centre)

Demand for German manufacturing goods slipped at the end of Q3. Yesterday's report showed that factory orders fell 0.6% month-to-month in September, constrained by weakness in domestic demand and falling export orders to other EZ economies.

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

It would be a mistake to conclude much about the economic impact of the Brexit vote from today's official industrial production figures for September, and the British Retail Consortium's figures for retail sales in October.

9 December. 2016 The Oil Hit Spread Widely Across the Economy - Now, it's Over (Publication Centre)

A core element of our relatively upbeat macro view before the implementation of fiscal stimulus under the new administration is that the ending of the drag from falling capex in the oil sector will have quite wide, positive implications for growth. The recovery in direct oil sector spending is clear enough; it will just track the rising rig count, as usual.

9 February 2017 Weak December Production to Raise Spectre of GDP Revision (Publication Centre)

Figures due on Friday likely will show that the increase in industrial production in December was much smaller than the 0.6% month-to-month assumed by the ONS in its preliminar y Q4 GDP estimate. We expect a 0.2% rise, which would leave production down 0.1% quarter-on-quarter, rather than up 0.1% as the ONS initially estimated.

9 May 2018 Faster Productivity Growth and Higher Inflation will Lift Wage Gains (Publication Centre)

We just can't get away from the deeply vexed question of wages; specifically, why the rate of growth of nominal hourly earnings has risen only to just over 2.5%, even though the historical relationship between wage gains and the tightness of the labor market points to increases of 4%-plus.

9 October 2018 Anti-Establishment Sentiment Lands a Big Win in Brazil on Sunday (Publication Centre)

Since April, the presidential elections in Brazil have dominated local discourse, prompting several market moves.

9 October 2018 German Manufacturing Slowed Sharply in Q3, Denting Growth (Publication Centre)

Yesterday's industrial production data in Germany were better than we feared. Output slipped 0.3% month-to-month in August, depressing the year- over-rate to -0.4% from 1.6% in July, a minor fall given evidence of a big hit from weakness in the auto sector ahead of the EU emissions tests.

US 19 January 2018 Where is the Rebound in CPI Physicians' Services? (Publication Centre)

Today brings only the preliminary Michigan consumer sentiment data for January so we want to take some time to look at how recent changes to Medicare Part B premiums, which cover doctors' fees, are likely to affect inflation over the next few months.

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

The Prime Minister has argued repeatedly during the general election campaign that Britain will prosper under a "strong and stable" Conservative government with a large majority. "Division in Westminster," she argued when calling the election last month, "...will risk our ability to make a success of Brexit and it will cause damaging uncertainty and instability to the country."

9 March 2017 ADP Report Raises the Chance of a Blockbuster February Jobs Number (Publication Centre)

We expected a consensus-beating ADP employment number for February, but the 298K leap was much better than our forecast, 210K. The error now becomes an input into our payroll model, shifting our estimate for tomorrow's official number to 250K; our initial forecast was 210K.

9 February 2018 China's Trade Surplus Knocked by Calendar Effects, RMB Takes a Cue (Publication Centre)

China's trade surplus tumbled to $20.3B in January, from $54.7B in December, surprising the consensus for little change.

9 June 2017 Markets Continue to Distrust Opinion Polls Indicating a Tight Race (Publication Centre)

The final flurry of opinion polls indicates that voting intentions have changed little over the last few days. The Conservatives have an average lead over Labour of 7.5% in the final p olls conducted by 10 different agencies, only slightly more than their 6.5% lead at the 2015 election.

9 June. The Surge in April Industrial Production is Just Noise (Publication Centre)

April's 2.0% month-to-month leap in industrial production was the biggest upside surprise on record to the consensus forecast, which predicted no change. The surge, however, just reflects statistical and weather-related distortions. These boosts will unwind in May, ensuring that industry provides little support to Q2 GDP growth. Make no mistake, the recovery has not suddenly gained momentum.

8 March 2018 The Spring Statement Really Will Be a Non-Event (Publication Centre)

The Treasury has tried to dampen expectations for Tuesday's Spring Statement, which has replaced the Autumn Statement since the Budget was moved last year to November.

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

Tomorrow, Mexico's INEGI will release its inflation report for the second half of May, which is of key importance for Banxico's monetary policy. The Bank, in particular governor Agustin Carstens, has said on many occasions that it will watch external conditions and their impact on consumer prices closely. We expect inflation to edge down to 2.9% year-over-year in May, thanks to a 0.1% increase in the second half.

7 December 2017 China Regulates in an Attempt to Avoid a Korea-style Credit Spiral (Publication Centre)

China last week banned unlicensed micro-lending and put a ceiling on borrowing costs for the sector, in an effort to curtail the spiralling of consumer credit.

7 December. 2016 Steady as She Goes for the EZ Economy, Despite Political Turmoil (Publication Centre)

Yesterday's detailed EZ GDP report showed that real output rose 0.3% quarter-on-quarter in Q3, the same pace as in Q2. The year-over-over rate rose marginally to 1.7% from 1.6%, trivially higher than the first estimate, 1.6%. The details showed that consumers' spending and public consumption were the key drivers of growth in Q3, offsetting a slowdown in net trade.

7 February 2017 January's Rise in Car Sales is Misleading, it won't be Sustained (Publication Centre)

The 5% year-over-year increase in private new car registrations in January ended a nine-month period of falling sales. January's increase, however, is unlikely to be a bellwether for car sales over the whole year, or for the strength of consumer spending more generally.

7 February 2018 The Economic Fallout from the Plunge in Equities will be Modest (Publication Centre)

As things stand, we see little reason to revise down our forecasts for the U.K. economy in response to the tailspin in equity markets

7 Dec. 2015 German Factory Orders are Slowing, Despite October's Jump (Publication Centre)

Manufacturing activity in Germany rebounded at the start of the fourth quarter, following a miserable Q3. New orders jumped 1.8% month-to-month in October, lifted by increases in consumer and capital goods orders, both domestic and export. But the year-over-year rate fell to -1.4%, from a revised -0.7% in September, due to unfavorable base effects, and the three-month trend remained below zero. Our first chart shows that non-Eurozone export orders are the key drag, with export orders to other euro area economies doing significantly better.

7 August 2018 Car Sales will Remain Stuck in the Slow Lane (Publication Centre)

It would be a mistake to conclude from July's car registrations data that the market finally has turned a corner.

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

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.

7 Apr. The Fiscal Squeeze on Household Incomes Just Got Tougher (Publication Centre)

The new fiscal year began on April 6, marking the post-election intensification of the fiscal squeeze for many households. The Office for Budget Responsibility estimates net tax and benefit changes will subtract 1.2 percentage points from year-over-year growth in households' disposable incomes in 2016.

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

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.

7 July 2017 Production Likely Jumped in May, but Q2 GDP Still Will b e Soft (Publication Centre)

Markets likely will be particularly sensitive to May's industrial production and construction output figures, released today, as they will provide a guide to the strength of the preliminary estimate of Q2 GDP, released shortly before the MPC's key meeting on August 3.

7 June 2017 A Tory Victory Wouldn't Necessarily Boost Sterling this Time (Publication Centre)

Predicting which way markets would move in response to potential general election outcomes has been relatively straightforward in the past. But the usual rules of thumb will not apply when the election results filter through after polling stations close on Thursday evening.

8 August 2018 July Brought Neither Feast Nor Famine for Retailers (Publication Centre)

The run-up to the release of the official retail sales figures has become so congested with other indicators, following alterations by the ONS to its publication schedule, that we now have to preview the data earlier than usual.

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

While we were out, Brazil's economic and political position continued to improve. The recession eased in the second quarter and into July. Industrial production, for example, increased in June for the fourth consecutive month, rising by 1.1% month-to-month.

8 February 2017 Banxico to Hike Rates Tomorrow, but its Tone Likely Will be Softened (Publication Centre)

Banxico's likely will deliver the widely-anticipated rate hike this Thursday. Policymakers' recent actions suggests that investors should expect a 50bp increase, in line with TIIE pric ing and the market consensus. The balance of risks to inflation has deteriorated markedly on the back of the "gasolinazo", a sharp increase in regulated gasoline prices imposed to raise money and attract foreign investment.

7 September 2018 Are Chinese Efforts to Stabilise Growth Starving Private Firms (Publication Centre)

China's authorities recognised, around the middle of this year, that activity was slowing and that monetary conditions had become overly tight.

7 September 2018 Low Inflation Means Policymakers to Stay Steady in Brazil and Colombia (Publication Centre)

Brazil's benchmark inflation index, the IPCA, fell 0.1% month-to-month unadjusted in August, below market expectations.

7 June 2017 Sentiment Indicators Signal Better Times for the Mexican Economy (Publication Centre)

Mexico's survey data have improved significantly over the last few months, reaching levels last since before Donald Trump won the U.S. election in November. This suggest that the economy is in much better shape than feared earlier this year. Consumer confidence, for instance, has continued its recovery.

7 November 2017 Car Sales are Falling Rapidly, with no End in Sight (Publication Centre)

The downturn in car sales is showing no sign of abating. Data released yesterday by the Society of Motor Manufacturers and Traders showed that private registrations fell 10.1% year-over-year in October, much worse than the 6.6% average drop in the previous 12 months.

7 September 2017 Scrappage Schemes Will Only Postpone the Slump in Car Sales (Publication Centre)

Car manufacturers have been at the sharp end o f the slowdown in consumers' spending this year. In response, several brands have launched generous scrappage schemes, giving buyers a big discount when they trade in their old vehicle.

30 March 2017 Money Data Highlight the Weak Start to 2017 (Publication Centre)

February's money and credit figures supported recent labour market and retail sales data suggesting that consumers are increasingly financially strained. Households' broad money holdings increased by just 0.2% month-to-month in February, half the average pace of the previous six months.

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

We aren't materially changing our U.S. economic forecasts in the wake of the U.K.'s Brexit vote, though we have revised our financial forecasts. The net tightening of financial conditions in the U.S. since the referendum is just not big enough--indeed, it's nothing like big enough--to justify moving our economic forecasts.

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

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

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

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

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

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

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

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

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

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

26 June 2017 Equity Markets will Worry if EZ PMIs Fall Further in Q3 (Publication Centre)

The Eurozone PMIs stumbled at the end of Q2. The composite index slipped to a five-month low of 55.7 in June, from 56.8 in May, constrained by a fall in the services index. This offset a marginal rise in the manufacturing index to a new cyclical high. The dip in the headline does not alter the survey's upbeat short- term outlook for the economy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

27 January 2017 Q4 Growth Likely Hit by Foreign Trade, Temporarily (Publication Centre)

We expect to learn today that the economy expanded at a 1.7% rate in the fourth quarter. At least, that's our forecast, based on incomplete data, and revisions over time could easily push growth significantly away from this estimate. The inherent unreliability of the GDP numbers, which can be revised forever--literally--explains why the Fed puts so much more emphasis on the labor market data, which are volatile month-to-month but more trustworthy over longer periods and subject to much smaller revisions.

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

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

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

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

27 February 2018 Is Shorting Italian Government Bonds the New Widowmaker? (Publication Centre)

Eurozone bond traders of a bearish persuasion are finding it difficult to make their mark ahead of Italy's parliamentary elections next weekend.

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

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

26 January 2017 The IFO Points to Solid GDP Growth in Germany, Despite Dip (Publication Centre)

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.

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

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

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

The bad news on economic activity keeps coming for Brazil. The formal payroll employment report-- CAGED--for December was very weak, with 120K net jobs eliminated, compared to a 40K net destruction in December 2014, according to our seasonal adjustment. The severe downturn has translated into huge job losses. The economy eliminated 1.5 million jobs last year, compared to 152K gains in 2014. Last year's job destruction was the worst since the data series started in 1992. The payroll losses have been broad-based, but manufacturing has been hit very hard, with 606K jobs eliminated, followed by civil construction and services. Since the end of 2014, the crisis has hit one sector after another.

25 July 2017 The July PMIs Provide a Dose of Reality on the Eurozone Economy (Publication Centre)

Yesterday's PMIs kicked off a busy week for Eurozone data on a downbeat note. The composite EZ PMI fell to a five-month low of 55.8 in July, from 56.3 in June; it was constrained by a 0.6 point dip in the manufacturing index to 56.8.

25 July 2018 China's Scope for Fiscal Expansion is Surprisingly Limited (Publication Centre)

The PBoC and Ministry of Finance have been locked in a relatively public debate recently over which body should shoulder the burden of stimulating the economy as growth slows and trade tensions take their toll.

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

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

25 August. 2015 The Stock Drop is Unwelcome, but the Market is not the Economy (Publication Centre)

If you want to know what's going to happen to the real economy over, say, the next year, don't look to the stock market for reliable clues. The relationship between swings in stock prices over single quarters and GDP growth over the following year is nonexistent, as our next chart shows.

25 April 2018 Mortgage Demand Faltering in the Face of Higher Rates (Publication Centre)

Today brings new housing market data, in the form of the weekly applications numbers from the MBA. The weekly data are seasonally adjusted but are still very volatile, especially in the spring.

25 April 2017 Are Further Tax Rises After the Election Inevitable? (Publication Centre)

The Prime Minister's refusal last week to reaffirm her party's 2015 election pledge not to raise income tax, National Insurance or VAT has fuelled speculation that taxes will rise if the Conservatives are re-elected on June 8. Admittedly, Mrs. May asserted that her party "believes in lower taxes", and the tax pledge s till might appear in the Conservatives' manifesto, which won't be published for a few weeks.

25 April 2017A Government Shutdown Would Say More About Politics Than Economics (Publication Centre)

A shutdown of the federal government, which could happen as early as this weekend, is a political event rather than a macroeconomic shock. But if it happens--if Congress cannot agree on even a shortterm stop-gap spending measure in order to keep the lights on after the 28th--it would demonstrate yet again that the splits in the House mean that the prospects of a substantial near-term loosening of fiscal policy are now very slim.

25 April 2018 Brazil's Labour Market Recovery Has Lost Momentum, but it will Improve (Publication Centre)

In Brazil, last week's formal payroll employment report for March was decent, with employment increasing by 56K, well above the consensus expectation for a 48K gain.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

25 September 2018 A Solid IFO and Mr. Draghi Send Bund Yields Higher (Publication Centre)

The IFO survey signals that markets shouldn't be too downbeat on the German economy, even as it faces uncertainty from global trade tensions.

27 May. Q1 GDP Just the Beginning of a Prolonged Slowdown (Publication Centre)

The second estimate of Q1 GDP confirmed that the recovery has lost momentum and revealed that growth would have ground to a halt without consumers. GDP growth likely will slow further in Q2, as Brexit risk undermines business investment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

29 June. 2015 Greek Exit Looms, but Don't Ignore Bullish Leading Indicators (Publication Centre)

Negotiations between Greece and its creditors collapsed over the weekend, greatly increasing the risk of a Grexit. The decision by Syriza to call a referendum on the bailout proposal next weekend, initially advocating rejection, forced the Eurogroup to abandon negotiations and focus on "damage control." Hope of a final retreat from the brink rests with the Greek parliament deciding not to hold the referendum, and accepting the proposal presented on Friday.

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

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

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

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

3 February 2017 Upside Risk For Payrolls and Hourly Earnings in January Data Today (Publication Centre)

Our payroll model relies heavily on lagged indicators of the pace of hiring, most of which have improved in recent months after a sustained, though modest, softening which began last spring. That's why we expected an above-consensus reading from ADP on Wednesday and from the BLS today.

3 July 2018 Tariffs and Truck Shortages are Creating Industrial Bottlenecks (Publication Centre)

The startling jump in supplier delivery times in the June ISM manufacturing survey, to a 14-year high, was due--according to the ISM press release--to disruptions to steel and aluminum supplies, transportation problems and "supplier labor issues".

3 September 2018 Brazil's Economy was Resilient in Q2, but the Recovery is Sluggish (Publication Centre)

The Brazilian economy enjoyed a decent Q2, with GDP rising 0.2% quarter-on-quarter, despite the disruptions caused by the truck drivers' strike, after a 0.1% decline in Q1.

30 April 2018 Hospital Services Inflation is now the Biggest Near-Term Threat to the Fed (Publication Centre)

We already have a pretty good idea of what happened to consumers' spending in March, following Friday's GDP release, so the single most important number in today's monthly personal income and spending report, in our view, is the hospital services component of the deflator.

30 August. 2016 Reports of the Economy's Resilience are Greatly Exaggerated (Publication Centre)

Over the sleepy August holidays, a view has gained traction in the media that the U.K. economy is showing little damage from the Brexit vote. Optimists argue that the size and composition of the 0.6% quarter-on-quarter rise in Q2 GDP, the 1.4% month-to-month jump in retail sales volumes in July, and the slight dip in the unemployment claimant count demonstrate that the recovery is in good shape.

30 January 2017 Will the Inflation Report Support Markets' 2017 Rate Hike View? (Publication Centre)

Markets' expectations for official interest rates have shifted up over the last fortnight, and the consensus view now is that the MPC will hike rates before the end of this year. As our first chart shows, the implied probability of interest rates breaching 0.25% in December 2017 now slightly exceeds 50%.

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

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

3 May. 2016 BanRep Opts For Bold Rate Hike - Inflation a Priority, For Now (Publication Centre)

Policymakers in Colombia last Friday took aim at inflation by hiking interest rates by 50 basis points to 7.0%. The consensus expectation was for a 25bp increase. BanRep's bold move, which came on the heels of six consecutive 25bp increases since November, took Colombia's main interest rate to its highest level since March 2009.

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

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

3 May 2017 EZ Q1 GDP Growth Likely won't Live up to the Soaring Surveys (Publication Centre)

Survey data point to a very strong headline, 0.6%-to-0.7% quarter-on-quarter, in today's Q1 advance Eurozone GDP report. But the hard data have been less ebullient than the surveys. A GDP regression using retail sales, industrial production and construction points to a more modest 0.4% increase, implying a slowdown from the upwardly-revised 0.5% gain in Q4.

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

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

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

Households' saving decisions will play a key role in determining whether the economy slips into recession over the next year. Indeed, all of the last three recessions coincided with sharp rises in the household saving rate, as our first chart shows. Will households save more in response to greater economic uncertainty?

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

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

28 Jan. 2016 Preliminary GDP Likely to Provide Another Downside Surprise (Publication Centre)

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 July 2017 Korean GDP and Chinese Pro ts Con rm China is Slowing (Publication Centre)

Korean real GDP growth slumped in Q2 to 0.6% quarter-on-quarter, from 1.1% in Q1, as both the main drivers--construction and exports--ran out of steam simultaneously. Construction investment grew by 1.0%, sharply slower than the 6.8% in Q1 and contributing just 0.2% to GDP growth in Q2, a turnaround from the 1.1 percentage point contribution in the first quarter.

28 July. 2016 Acceleration of Q2 GDP Won't Have Much Bearing on Stimulus Debate (Publication Centre)

Taken at face value, the preliminary estimate of Q2 GDP suggests that the economic recovery weathered Brexit risk well. But growth received support from some unsustainable sources, and also probably was boosted by a calendar quirk. Meanwhile, with few firms or consumers expecting a vote for Brexit prior to the referendum, Q2's brisk growth tells us little about how well the economy will cope in the current climate of heightened uncertainty.

28 July. 2016 EZ M1 Growth Slips Further, Signalling Lower Growth in 2017 (Publication Centre)

The headline in yesterday's EZ money supply report gave the illusion that monetary conditions are stable, but the details tell a different story. M3 growth accelerated marginally to 5.0% year-over-year in June, from 4.9%, but momentum in narrow money fell further. M1 growth slowed to 8.5% year-over-year, from 9.0% in May due to a fall in overnight deposits and currency in circulation.

28 February 2018 Why Hasn't Britain Enjoyed a Significant Trade Boost? (Publication Centre)

Sterling's depreciation, which began over two years ago, has inflicted pain on consumers but fostered a negligible improvement in net trade.

28 April 2017 Preliminary GDP Estimate Likely to Reveal Q1 Slowdown (Publication Centre)

The preliminary estimate of Q1 GDP looks set to show that the economy started 2017 on a weak footing. We share the consensus view that quarter-on-quarter GDP growth slowed to 0.4%, from 0.7% in Q4.

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

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

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

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

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

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

28 June. 2016 New Government in Spain Will be Given Time to Cut its Deficit (Publication Centre)

okThe weekend's election result in Spain provided relief for investors anxiously looking for another "surprise." Exit polls on Sunday showed a big majority for the anti-establishment party Podemos, but in the end Spanish voters opted for safety. The incumbent Partido Popular, PP, was the election's big winner compared with the elections six months ago, gaining 15 seats.

28 March 2017 EZ Money Supply Hit by Non-M1 Components in February (Publication Centre)

Momentum in the euro area's money supply slowed last month. M3 growth dipped to 4.7% year-over-year in February, from a downwardly-revised 4.8% in January. The headline was mainly constrained by the broad money components. The stock of repurchase agreements slumped 24.3% year-over-year and growth in money market fund shares also slowed sharply.

28 Sept. 2015 ECB is on Alert, but No Warning, So Far, From the Economy (Publication Centre)

Mr. Draghi used his introductory statement at the ECON--EU Economic and Monetary Affairs Committee-- hearing last week to assure investors that the central bank is vigilant to downside risks. The president noted the governing council "would not hesitate to act" if it deems growth and inflation to be undershooting expectations. Market volatility has increased the ECB's worries, but economic data continue to tell a story of a firm business cycle upturn.

19 July 2018 Sub-2% Core Inflation is Here to Stay, But the MPC Won't Blink (Publication Centre)

June's consumer price figures threw a last minute curve-ball at the MPC ahead of its key meeting on August 2.

28 September 2017 A Slowdown in Unsecured Lending will Hurt More than the Bank Thinks (Publication Centre)

The risk posed by consumer borrowing was once again the focus of the Financial Policy Committee's discussion last week.

28 Oct. 2015 Q3 Slowdown Marks the Start of a Sustained Softening (Publication Centre)

Markets responded to yesterday's disappointing GDP figures by pushing back expectations for the first rise in official interest rates even further into 2017. The first rate hike is now expected--by the overnight index swap market--in April 2017, two months later than anticipated before the GDP release. The figures certainly look weak--particularly when you scratch below the surface--and we expect growth to slow further over the coming quarters. But we don't agree they imply an even longer period of inaction on the Monetary Policy Committee.

28 Oct. 2015 Budget Deal Means Fiscal Policy Will Ease Slightly Next Year (Publication Centre)

The two-year budget deal agreed between the administration and the Republican leadership in Congress will avert a federal debt default and appears to constitute a modest near-term easing of fiscal policy. The debt ceiling will not be raised, but the law imposing the limit will be suspended through March 2017, leaving the Treasury free to borrow as much as necessary to cover the deficit. As a result, the presidential election next year will not be fought against a backdrop of fiscal crisis.

28 November 2018 Argentina's Near-term Outlook is Murky, But 2019 Will be Better (Publication Centre)

Argentina's near-term economic outlook remains murky, as recent data has highlighted, hit by tighter financial conditions.

28 November 2018 Is Mr Macron About to Lose to the Street Like his Predecessors (Publication Centre)

Our hopes that tax cuts and lower energy inflation would lift French household consumption in Q4 were badly dented by yesterday's consumer sentiment report.

28 November. 2016 The Housing Slowdown Next Year Will be Offset by Fiscal Easing (Publication Centre)

We have been asked how we can justify raising our growth forecasts but at the same time arguing that the housing market is set to weaken quite dramatically, thanks to the clear downshift in mortgage applications in recent months. Applications peaked back in June, so this is not just a story about the post-election rise in mortgage rates.

25 Apr. Preliminary GDP Data to Confirm Q1 Slowdown (Publication Centre)

The preliminary estimate of first quarter GDP likely will confirm that the economic recovery lost considerable pace in early 2016. Bedlam in financial markets in January and business fears over the E.U. referendum are partly responsible for the slowdown. The deceleration, however, also reflects tighter fiscal policy, uncompetitive exports, and the economy running into supply-side constraints.

7 March 2017 Mexicans' Confidence Rebounds, Partly, but the Trend is Still Poor (Publication Centre)

Mexican asset prices and sentiment have been helped in recent weeks by less-harsh rhetoric from the Trump administration. The headline consumer confidence for February, reported yesterday, rose to 75.7 from 68.5 in January; all the sub-components improved. The data are not seasonally adjusted, so most local analysts look at the data in year-over-year terms.

16 July 2018 Mr. Duque Inherits a Colombian Economy Firing on all Cylinders (Publication Centre)

Last week's hard data in Colombia were upbeat, confirming that economic growth accelerated in the first half. Retail sales rose 5.9% year-over-year in May, overshooting consensus.

10 April 2017 Inflation's Rise Likely Arrested in March by this Year's Later Easter (Publication Centre)

March's consumer price figures, released tomorrow, look set to show that inflation's ascent was kept in check by the later Easter this year compared to last. Nonetheless, CPI inflation will take big upward strides over the coming months, and it likely will exceed 3% by the summer.

12 September 2018 Mortgage Demand Spiked in August, but Expect a Weak Fall (Publication Centre)

The key piece of evidence supporting our view that housing market activity has peaked for this cycle is the softening trend--until recently--in applications for new mortgages to finance house purchase.

1 Sept. 2016 Soft EZ Inflation Data Pave the Way for QE Extension Next Week (Publication Centre)

Yesterday's EZ CPI report points to a dovish backdrop for next week's ECB meeting. Advance data show that inflation was unchanged at 0.2% year-overyear in August, lower than the consensus, 0.3%. The headline was held back by a dip in the core rate to 0.8%, from 0.9% in July; this offset a lower deflationary drag from energy prices.

16 February 2018 Retail Sales Likely Started this Year on a Soft Note (Publication Centre)

January's retail sales figures look set to show that growth in consumers' spending remains stuck in low gear.

16 January 2017 Inflation Pressure Remains High in Argentina, but Will Fade This Year (Publication Centre)

Inflation pressure remained relatively high in Argentina last year, due mostly to the legacy of the Kirchner era. But we think inflation will ease this year, given the lagged effects of the recession and the fiscal consolidation.

12 Nov. 2015 German Inflation Will Rise Faster than the ECB and Market Expect (Publication Centre)

CPI data today in France and Germany will confirm that current inflation rates remain very low in the euro area. Inflation in Germany likely rose to 0.3% year-over-year from 0.0% in September, in line with the consensus and initial estimate. State data indicate that the rise was driven by surging fresh food prices and slightly higher services inflation, principally due to a jump in the volatile recreation and culture sector. Looking ahead, food prices will drop back, but energy inflation will rise rapidly as last year's plunge drops out of the year-over-year comparison, while upward core pressure is now emerging too.

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

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.

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

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

16 March 2018 Housing Starts and Manufacturing Likely Shone in February (Publication Centre)

Today brings yet another broad array of data, with new information on housing construction, industrial production, consumer sentiment, and job openings.

10 Dec. 2014 German Exports are Holding Up, But Greek Election Risks Loom (Publication Centre)

The German manufacturing sector is showing signs of stabilisation with industrial production rising 0.2% month-on-month in October, equivalent to 0.8% year-over- year. This is consistent with a decent retracement in production this quarter, but growth is still only barely above zero.

12 Mar. 2015 Cheap Gas to Boost Spring Sales, but February Looks Soft (Publication Centre)

Sooner or later, the surge in consumers' spending power triggered by the drop in gas prices and the acceleration in payrolls will appear in the retail sales data.

12 May 2017 Falling Inflation in Brazil Signals Rapid Rate Cuts Ahead (Publication Centre)

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.

16 Mar. 2016 EZ Employment Rising Steadily, but Structural Challenges Persist (Publication Centre)

The Eurozone labour market is slowly healing following two severe recessions since 2008. Unemployment fell to a two-year low of 10.3% in January, and yesterday's quarterly labour force survey was upbeat. Fourth quarter employment rose 1.2% year-over-year, up from 1.1% in Q3, pushing total EZ employment to a new post-crisis high of 152 million.

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

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

12 September. 2016 Everything Changes in the Second Half (Publication Centre)

This week brings a wave of data on all aspects of the economy, bar housing. By the end o f the week, we'll have a better idea of the shape of consumers' spending, the industrial sector and the inflation picture, and estimates of third quarter GDP growth will start to mean something.

15 November 2017 Too Soon to Claim Peak Inflation, But it Will Fall Swiftly in 2018 (Publication Centre)

CPI inflation held steady at 3.0% in October, undershooting our forecast and the consensus by 0.1 percentage point and the MPC's forecast by 0.2pp.

15 November 2018 CPI Inflation is Set to Undershoot the 2% Target as Soon as Q1 (Publication Centre)

CPI inflation held steady at 2.4% in October, undershooting the 2.5% consensus expectation and the MPC's forecast in this month's Inflation Report.

15 November 2017 Core CPI to Mean-Revert as Rents and Vehicle Prices Rebound? (Publication Centre)

A modest dip in gasoline prices will hold down the October CPI, due today, but investors' attention will be on the core, after five undershoots to consensus in the past six months.

13 August. 2015 More Soft-Looking Sales as Falling Prices Depress Nominal Activity? (Publication Centre)

Retail sales have consistently disappointed markets this year, but investors' concerns are misplaced. The rate of growth of core sales has slowed because the strength of the dollar has pushed down the prices of an array of imported consumer goods, and people appear to have spent a substantial proportion of the saving on services.

13 December 2017 October's Dip in EZ Industrial Production is no Cause for Alarm (Publication Centre)

Today's industrial production data will confirm that EZ manufacturing suffered a slow start to Q4. Advance country data signal a 0.2% month-to-month fall in October, slightly worse than the consensus, 0.0%.

13 December 2016 CPI Inflation Likely Picked up in November, Bigger Advances Ahead (Publication Centre)

November's consumer price report likely will show that October's dip in CPI inflation was just a blip against a strong upward trend. We think that CPI inflation picked up to 1.1% in November, from 0.9% in October, in line with the consensus.

13 August 2018 Japan's Households Finally Stage a Come Back, Time for a BoJ Hike? (Publication Centre)

Japan's GDP growth came roaring back in Q2, thanks to a strong rebound in private consumption, and an acceleration in business capex.

15 Sept. 2015 August Retail Sales "Soft" Again? But the Real Story is Different (Publication Centre)

Today's wave of data will be mixed, but most of the headlines are likely to be on the soft side, so the reports are very unlikely to trigger a wave of last minute defections to the hawkish side of the FOMC. As always, though, the headlines don't necessarily capture the underlying story, and that's certainly been the case with the retail sales data this year. Plunging prices for gas and imported goods, especially audio-video items, have driven down the rate of growth of nominal retail sales, but real sales have performed much better.

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

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 Feb. 2015 Central Banks in LatAm Concerned about Inflation Pass-Through (Publication Centre)

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.

15 September 2017 Growth in EZ Car Sales Rose in August, but the Trend Has Slowed (Publication Centre)

Momentum in new EZ car sales improved slightly in the middle of Q3. New registrations in the euro area rose 6.8% year-over-year in August, accelerating marginally from a 5.3% increase in July.

15 Sept. 2015 Subdued EZ Manufacturing is in Line with the Rest of the OECD (Publication Centre)

Industrial production data yesterday indicate manufacturers in the Eurozone enjoyed a decent start to Q3, thanks to strength in Germany, Italy and Spain, which offset weakness in France. Production ex-construction rose 0.6% month-to-month in July, boosted in part by a 3% jump in energy output. If production is unchanged in August and September, output will rise 0.3% quarter-on-quarter in Q3, but this estimate is uncertain, and we look for an increase of about 0.4%-to-0.5%.

13 April 2018 Decent Industrial Data in Mexico, but Brazilian Retail Sales Weaken (Publication Centre)

Mexico's February industrial production report was weaker than markets expected. Output expanded by 0.7% year-over-year, below the consensus, 1.2%, and slowing from 0.9% in January.

16 March 2018 New Car Sales in the Eurozone are Solid, But Italy is a Grim Outlier (Publication Centre)

Growth in new EZ car sales slipped last month, following a strong start to the year. New registrations rose 4.4% year-over-year in February, slowing from a 8.7% rise in January.

12 June 2018 Inflation Likely Held Steady in May, but a Brief Pick-up Lies Ahead (Publication Centre)

May's consumer price figures, released on Wednesday, likely will show that CPI inflation held steady at 2.4%--matching the consensus and the MPC's forecast--though the risks lie to the upside.

12 April 2018 Q1 Slowdown Leaves a May Rate Hike Hanging in the Balance (Publication Centre)

February's industrial production and construction output data leave us little choice but to revise down our forecast for quarter-on-quarter GDP growth in Q1 to 0.2%, from 0.3% previously.

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

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.

10 January 2018 Production Likely Rose in November Before Plunging in December (Publication Centre)

The stagnation of industrial production in October ended a run of six consecutive month-to-month increases, the longest spell of unbroken growth since 1994.

12 December 2017 After Micro-loans Crackdown, China's Offshore Borrowing is Next (Publication Centre)

Chinese monetary conditions show signs of a temporary stabilisation. M2 growth picked up to 9.1% year-over-year in November from 8.8% in October, though largely as a correction for understated growth in recent months.

17 April 2018 China will Loosen the Macropru by Year-end, for now, it's Intense (Publication Centre)

China's March money and credit data, published last Friday, showed that conditions continue to tighten, posing a threat to GDP growth this year.

17 August 2017 China's Reform Scorecard Part Five: Monetary Policy Operation (Publication Centre)

Chinese monetary policymakers can rely on several different instruments to affect market and broad liquidity, ranging from various forms of open market operations to interest rates to FX intervention. The tool kit is constantly changing as the PBoC refines its operations.

17 August. 2016 Oil Sector Capex is Rebounding, and Will Add to Q3 GDP Growth (Publication Centre)

The most important number released yesterday was hidden well behind the headline inflation, production and housing construction data. We have been waiting to see how quickly the upturn in the number of rigs in operation would translate into rising oil and gas well-drilling, and now we know: In July, well-drilling jumped by 4.7%

10 July 2017 Banxico Will Start to Mull Lower Interest Rates Early Next Year (Publication Centre)

Mexico's underlying inflation pressures and financial conditions are gradually stabilizing. Eventually, this will open the door for rate cuts in order to ease the stress on the domestic economy, particularly capex.

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

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.

11 September 2017 Will the MPC Step up its Rhetoric to Support the Pound? (Publication Centre)

The key question for the MPC at this week's meeting is whether it is prepared to tolerate the consequences for inflation of sterling's further depreciation since its last meeting in August.

17 July 2017 CPI Inflation Likely Held Steady in June, but will Exceed 3% Soon (Publication Centre)

Economists are divided evenly on whether Tuesday's consumer price figures will show that CPI inflation held steady at 2.9% or edged down to 2.8% in June.

11 September 2018 July's Strong-Looking GDP Growth Rate Will Be This Year's Peak (Publication Centre)

Markets rightly interpreted yesterday's above consensus GDP report as having little impact on the outlook for monetary policy.

12 April 2017 Inflation Pressures Remain more Intense than the MPC Expected (Publication Centre)

CPI inflation held steady at 2.3% in March, as we and the consensus had expected. Nonetheless, the consumer price figures boosted sterling and bond yields, as the details of the report made it clear that inflation is on a very steep upward path.

17 February 2017 Retail Sales Likely got off to a Soft Start This Year (Publication Centre)

Today's official retail sales figures look set to show that consumers tightened their purse strings at the start of this year, following last year's spending spree. We think that retail sales volumes rose by just 1.0% month-to-month in January; that would be a poor result after December's 1.9% plunge. Surveys of retailers have been weak across the board. The reported sales balance of the CBI's Distributive Trade Survey collapsed to -8 in January, from +35 in December. The balance is notoriously volatile, but the 43-point drop is the largest since the survey began in 1983.

16 September 2016 Evidence of a Slowdown in EZ New Car Sales is Mounting (Publication Centre)

Yesterday's data on EZ car sales added to the evidence that consumers' spending is slowing. We now reckon sales will rise by 1% quarter-on-quarter in the third quarter, after gains averaging 2.6% in the first half of the year.

16 October 2018 No Further Step Up in Wage Growth Likely in August (Publication Centre)

Consensus expectations for August's labour market data, released today, look well grounded.

12 July 2018 Trade Skirmishes are on the Brink of Spiralling into War, but not Quite Yet (Publication Centre)

The U.S. Commerce Department on Tuesday released a list of Chinese imports, with an annual value of $200B, on which it is threatening to impose a 10% tariff, after a two-month consultation period.

16 November 2017 Retail Sales to Surprise to the Downside Again in October (Publication Centre)

The consensus view that today's retail sales data will show volumes increased by 0.2% month-to-month in October is too sanguine.

10 Feb. 2016 Downside Production Surprise to Take its Toll on Sterling (Publication Centre)

December's industrial production figures, released today, look set to surprise the consensus to the downside, pushing down the pound and increasing the chances that the preliminary estimate of a 0.5% quarter-on-quarter increase in fourth quarter GDP will be revised down.

09 Feb. 2016 Investors Should Brace for Poor German GDP Data this Week (Publication Centre)

German Q4 GDP data this week will give little comfort to investors searching for signs of a resilient economy in the face of increased market volatility. The consensus expects unchanged GDP growth of 0.3% quarter-on-quarter, consistent with solid and stable survey data. But downbeat industrial production and retail sales data point to notable downside risk.

12 June 2018 Andes' Disinflation is Over, but Risks will Remain Under Control (Publication Centre)

In yesterday's report we discussed the recent performance of current inflation and inflation expectations in the biggest economies in LatAm, highlighting that risks are tilted to the upside, given the recent FX sell-off and rising political and external risks.

12 June 2017 China's Policy Choices are all Difficult, can Disaster be Averted? (Publication Centre)

China faces three possible macro outcomes over the next few years. First, the economy could pull off an active transition to consumer-led growth. Second, it could gradually slide into Japan-style growth and inflation, with government debt spiralling up. Third, it could face a full blown debt crisis, where the authorities lose control and China drags the global economy down too

12 January 2017 GDP Growth Likely Edged Down in Q4, Despite November's IP Surge (Publication Centre)

Yesterday's industrial production, construction output and trade data for November collectively suggest that the economy lost a little momentum in the fourth quarter. GDP growth likely slowed to 0.5% quarter-on-quarter in Q4, from 0.6% in Q3. Growth remains set to slow further this year, as inflation shoots up and constrains consumers.

10 Feb. 2016 No Relief for German Q4 GDP Forecasts in Yesterday's Data (Publication Centre)

Yesterday's German manufacturing and trade data did little to allay our fears over downside risks to this week's Q4 GDP data. At -1.2% month-to-month in December, industrial production was much weaker than the consensus forecast of a 0.5% increase. Exports also surprised to the downside, falling 1.6% month-to-month. Our GDP model, updated with these data, shows GDP growth fell 0.2%-to-0.3% quarter-on-quarter in Q4, reversing the 0.3% increase in Q3.

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

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%.

16 October 2017 Rate Hike Bets Likely Will Fade After September's CPI Data (Publication Centre)

September's consumer price figures likely will surprise to the downside, prompting markets to reassess their view that the MPC will almost certainly raise interest rates next month.

16 Oct. 2015 No Signs of Recovery in Brazil's Domestic Demand (Publication Centre)

Brazil's retail sales plunged in August, falling 0.9% month-to-month--the seventh consecutive contraction -- and with a net revision of -0.6%. The broad retail index, which includes vehicles and construction materials, dropped 2.0% month-to-month, the biggest fall this year, due mainly to a 5.2% collapse in auto sales, reversing July's unexpected increase. In annual terms, headline sales fell by an eye-popping 6.9% in August, after the downwardly-revised 3.9% drop in July. In short, the sales data show that consumers are suffering. They will struggle for some time yet.

12 February 2018 Stable CPI Inflation in January Won't Set the Tone for 2018 (Publication Centre)

January's consumer price figures, due on Tuesday, likely will show that CPI inflation held steady at December's 3.0% rate.

16 November 2018 Banxico is Pushed to Hike Rates Further Tactical Tightening is Likely (Publication Centre)

Banxico hiked its policy rate by 25bp to a cyclical-high of 8.0% yesterday, in line with market expectations.

15 May 2017 Mexican Manufacturing set to Remain Resilient in Q2 and Q3 (Publication Centre)

Recent industrial data for Mexico point to renewed upside risks for GDP growth, despite the likely headwind to consumption from high inflation and depressed confidence.

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

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

14 May. 2015 Core Retail Sales Aren't Bad, but They Aren't Good, Either--Yet (Publication Centre)

So, what should we make of the fourth straight disappointment in the retail sales numbers? First, we should note that all is probably not how it seems. The 0.2% upward revision to March sales was exactly equal to the difference between the consensus forecast and the initial estimate, neatly illustrating the danger of over-interpreting the first estimates of the data.

13 November 2017 October's CPI Inflation Rate Should Represent the Peak (Publication Centre)

October's consumer price figures, released Tuesday, likely will show that CPI inflation increased to 3.1%, from 3.0% in September.

14 May 2018 China's M1 Points to a Substantial GDP Growth Downtrend (Publication Centre)

China's monetary conditions remain tight, pointing to a substantial downtrend in GDP growth this year and next.

1 June 2017 ADP Likely to Rebound Strongly, but Probably Will Overstate Payrolls (Publication Centre)

We're expecting a strong-looking 225K increase in the May ADP measure of private sector payroll growth, due today. The consensus forecast is 180K.

14 June 2018 Weakness in Services Inflation Means the MPC Can Sit Tight (Publication Centre)

May's consumer prices figures bolster the case for the MPC to sit tight and wait until next year to raise interest rates, when the economy should have more momentum.

14 June. Higher Inflation to Highlight Broad Recovery in Cost Pressures (Publication Centre)

We expect today's consumer prices figures to show that CPI inflation picked up to 0.5% in May, from 0.3% in April, exceeding the 0.4% rate anticipated by both the consensus and the MPC, in last month's Inflation Report. We expect the increase to be driven by a jump in the core rate to 1.4%, from 1.2% in April.

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

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

14 November 2017 Are Investors Complacent to Expect a Smooth Brexit Transition in 2019? (Publication Centre)

Sterling weakened yesterday, to $1.31 from $1.32, following news that 40 Conservative MPs have agreed to sign a letter of no-confidence in the Prime Minister.

1 June. 2016 ISM Set to Slip Below 50, but Will the Fed Care Enough to Hold Fire? (Publication Centre)

When the Fed raised rates in December, it subverted one of its own long-standing conventions by hiking with the ISM manufacturing index below 50. The December survey, released just 15 days before the meeting, showed the headline index slipping to 48.6, the third straight sub-50 reading. It has since been revised down to 48.0, the lowest reading since June 2009.

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

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 November. 2016 Brazil's Private Spending was Weak in Q3 (Publication Centre)

Volatility and risk will remain high in L atAm for the foreseeable future. President-elect Donald Trump's uncertain foreign policies could have a considerable impact on LatAm economies in the months and years ahead.

1 June. 2016 Chile's Domestic Demand Growth to Slow in Q2, A fter a Solid Q1 (Publication Centre)

Chile's April retail sales data, released on Monday, show that private consumption started the second quarter on a solid footing. Sales rose 3.0% month-to-month, pushing the year-over-rate up to 7.9% from 1.4% in March and an average of 4.0% in Q1. The headline was boosted by a favourable calendar effect, as April this year had two more trading days than April 2015.

14 November 2017 Slowing Chinese Money Growth Points to Lower PPI Inflation (Publication Centre)

Chinese monetary conditions have tightened sharply in the past year. Conditions have stabilised in recent months but Fed policy normalisation implies the increase in the money stock should slow again in 2018.

13 Nov. 2015 Mexican Domestic Industrial Sectors Offset External Headwinds (Publication Centre)

Mexican manufacturing data continue to offer a counterweight to strong consumers' spending and services numbers. Output in the key manufacturing sector contracted by 0.2% month-to-month in September, due mainly to severe external headwinds. But the year-over-year rate was unchanged at 3.3%, with a flat underlying trend. Total industrial output, by contrast, rose 0.4% month-to-month in September, pushing the year-over-year rate up to 1.7%, from an upwardly-revised 1.1% gain in August.

14 June 2017 The Squeeze on Real Wages is Intensifying Rapidly (Publication Centre)

CPI inflation increased to 2.9% in May, from 2.7% in April, exceeding the no-change expectation of both the consensus and the MPC, as well as our own 2.8% forecast.

13 September 2018 A Leadership Contest Might be Imminent, but Mrs. May Won't Lose (Publication Centre)

Sterling held on to its recent gains yesterday despite mounting speculation that Eurosceptic Conservative MPs are plotting a leadership challenge.

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

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.

14 August. 2015 Brazil's Weakness Remains - And Mexico Still Eyeing the Fed (Publication Centre)

The macro data reported in Brazil this week added weight to the view that the economy ended the second quarter in a severe recession. Brazil's retail sales fell 0.4% month-to-month in June, the fifth consecutive contraction. The broad retail index, which includes vehicles and construction materials, fell 0.8% month-to-month, with a sharp contraction in auto sales, down 2.8%.

14 December 2017 The ECB Will Deliver a Carbon Copy of its October Meeting Today (Publication Centre)

Car registrations, French inflation, advance PMIs and a central bank meeting make up today's substantial menu for investors in the euro area.

14 December 2017 Black Friday Likely Gave a Fleeting Boost to Retail Sales in November (Publication Centre)

The consensus for a mere 0.3% month-to-month rise in retail sales volumes in November looks too timid; we anticipate a 0.7% gain.

14 Dec. 2015 November Data Will Mark the First Step in Inflation's Long March Up (Publication Centre)

November's consumer prices figures, released tomorrow, look set to show that the U.K.'s spell of negative inflation has ended. CPI inflation is set to pick-up decisively over the coming months, even if oil prices continue to drift down. In fact, fuel prices likely will contribute to the pick-up in inflation from October's -0.1% rate. November's 1.5% fall in prices at the pump was smaller than the 2.3% drop in the same month last year, so the year-over-year rate will rise. Fuel's contribution to CPI inflation therefore will pick up, albeit very marginally, to -0.47pp from -0.50pp in October.

14 December 2016 German and Eurozone Inflation is About to Shoot Higher (Publication Centre)

German inflation pressures were unchanged last month. The CPI index rose 0.8% year-over-year, matching the increase in October, and in line with the consensus and initial estimate. Energy deflation intensified marginally, as a result of lower prices for household utilities.

14 February 2018 The Rise in Services Inflation Shouldn't Make the MPC Flinch (Publication Centre)

CPI inflation held steady at 3.0% in January, above the consensus by one tenth and thus pushing up the market-implied probability of a May rate hike to 65%, from 62% earlier this week.

14 August 2018 CPI Inflation Likely Rose in July, but it Remains on a Downward Trend (Publication Centre)

July's consumer price figures, released on Wednesday, look set to show that CPI inflation rose to 2.5%, from 2.4% in June.

1 February 2017 Expect a Slightly More Hawkish FOMC Tone, to Keep March Alive (Publication Centre)

We're expecting the FOMC to vote unanimously not raise rates today, but we do expect a modestly hawkish tilt in the statement. Specifically, we're expecting an acknowledgment of the upturn in business investment reported in the Q4 GDP data, and of the increase in market-based measures of inflation expectations, given that 10-year TIPS breakevens are now above 2% for the first time since September 2014.

08 Feb. 2016 If the Fed Focuses on Wages, They'll Hike in March (Publication Centre)

The Fed's decisions over the next few months hinge on the relative importance policymakers place on the apparent slowdown in payroll growth and the unambiguous acceleration in wages. We qualify our verdict on the payroll numbers because the January number was very close to our expectation, which in turn was based largely on an analysis of the seasonals, not the underlying economy.

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

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.

14 August 2017 China's Slowdown Surprised Japan, Inventories to Boost Q2 GDP (Publication Centre)

Japanese domestic demand probably strengthened in Q2, with both private consumption and fixed investment accelerating. Trade and inventories are the key swing components for GDP growth.

1 December 2017 Will the Improvement in Brazil's External Accounts Continue? (Publication Centre)

External conditions continue to favour Brazil. The recovery in domestic demand in the world's major economies, particularly the rebound in business investment, has driven a gradual revival of global exports.

14 Oct. 2015 Stable Manufacturing, but External Risks Are Still Present (Publication Centre)

Mexican industrial production data for August were a little stronger-than-expected. Output rose 1.0% year-over-year, for the second consecutive month, and marginally higher than the 0.6% average growth in the second quarter. The rise in production in August is encouraging, especially the strong manufacturing component, which accounts for about half of all output.

14 October. 2016 Mexican Manufacturing is Recovering, But Oil Still a Big Drag (Publication Centre)

Wednesday's Mexican industrial production report was upbeat for manufacturing, but it revealed that the oil and public construction sectors remain under severe strain.

15 February 2018 New Weights Won't Affect Inflation's Trend, But Will Influence its Path (Publication Centre)

The ONS published provisional new weights for the main components of the CPI on Tuesday. The changes boost our forecast for the average rate of CPI inflation this year by a trivial 0.03 percentage points.

13 January 2017 BCB to Continue Easing Rapidly, Amid Falling Inflation (Publication Centre)

Brazil's central bank started the year firing on all cylinders. The Copom surprised markets on Wednesday by delivering a bold 75bp rate cut, bringing the Selic rate down to 13.0%. In October and November, the Copom eased by only 25bp, but inflation is now falling rapidly and consistently. The central bank said in its post-meeting communiqué that conditions have helped establish a "new rhythm of easing", assuming inflation expectations hold steady.

13 January 2017 The Eurozone Economy Remains Oblivious to Political Risks (Publication Centre)

The euro area economy continues to defy rising political uncertainty. Data yesterday showed that industrial production, ex-construction, in the Eurozone jumped 1.5% month-to-month in November, pushing the year-over-year rate up to 3.2% from a revised 0.8% in October. Output rose in all the major economies, but the headline was flattered by a 16.3% month-to-month leap in Ireland. This was due to a production jump in Ireland's "modern sector" which includes the country's large multinational technology sector.

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

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 Feb. 2016 Upbeat Q4 GDP Headline, but Private Demand Likely Slowed (Publication Centre)

Eurozone GDP data last Friday suggest the cyclical recovery continued at the end of last year. Real GDP in euro area rose 0.3% quarter-on-quarter in Q4, the same as in Q3, lifted by growth in all the major economies. This was in line with the consensus forecast, but noticeably higher than implied by monthly industrial production and retail sales data.

1 November 2016 Will Core PCE Inflation hit 2% This Year? (Publication Centre)

In the absence of an unexpected surge in auto sales or a sudden burst of unseasonably cold weather, lifting spending on utilities, fourth quarter consumption is going to struggle to rise much more quickly than the 2.1% annualized third quarter increase.

15 January 2018 Chinese Import Growth Slowdown Paints an Overly Gloomy Picture (Publication Centre)

China's import growth in dollar terms slowed sharply to 4.5% year-over-year in December from 17.7% in November, significantly below the consensus forecast.

13 February 2018 Is a Second Referendum May's Only Way to Break the Impasse? (Publication Centre)

Suggestions that the U.K. government might choose to hold a second referendum have been constantly rebuffed by the Prime Minister.

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

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.

15 March 2017 Mexican Manufacturing will do Fine in Q1, Despite Threats (Publication Centre)

The collapse in capital spending in the oil sector and poor construction spending have constrained aggregate Mexican industrial output in recent months, despite the strength of the manufacturing sector. Total production fell 0.1% year-over-year in January, though note this was a clear improvement after the 0.6% drop in December, and better than the average 0.4% contraction over the second half of 2016.

15 March 2017 Headline Inflation in Germany will Ease in the Next Few Months (Publication Centre)

The German inflation rate soared at the start of 2017, but it likely will fall in the next few months. Final February data yesterday showed that inflation rose to 2.2% in February, from 1.9% in January, consistent with the initial estimate. Since December, headline inflation in Germany, and in the EZ as a whole, has been lifted by two factors. Base effects from the 2016 crash in oil prices have pushed energy inflation higher, and a supply shock in fresh produce--due to heavy snowfall in southern Europe--has lifted food inflation.

13 February 2018 Brazilian Households are in Good Shape, Despite Ending Q4 Poorly (Publication Centre)

Consumers' spending in Brazil weakened at the end of Q4, but we think households will support GDP growth in the first quarter.

13 February 2018 China's Firms Mindful of Intensified Enforcement of Financial Regulation (Publication Centre)

Chinese monetary conditions remain tight. Systemic tightening through higher interest rates last year is playing a role, but intensified and ever- more public regulatory enforcement is becoming the primary driver of tightening credit conditions for businesses.

15 June 2018 A Classic ECB Decision Day A Dovish Tightening of Policy (Publication Centre)

On a headline level, the ECB conformed to expectations yesterday.

1 March 2018 The PM's Inevitable Capitulation is Still a Way Off ,Clouding Sterling's Outlook (Publication Centre)

Sterling fell to $1.38, from $1.39, in the hour following the EU's publication of a draft Article 50 withdrawal treaty, which set out the practical consequences of the principles the U.K. agreed to in December.

04 Jan. 2016 While We Were Out... (Publication Centre)

...The data were all over the map, with existing home sales plunging while consumer confidence rose; Chicago-area manufacturing activity plunged but national durable goods were flat; real consumption rose at a decent clip but pending home sales dipped again. Markets, by contrast, are little changed from the week before the holidays. What to make of it all?

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

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

1 March 2018 China PMIs Trend Down but the February Dip is an Overshoot (Publication Centre)

China's PMIs surprised the consensus forecasts to the downside for February. The manufacturing PMI dropped to 50.3 in February from 51.3 in January, while the non-manufacturing PMI fell to 54.4 from 55.3 in January.

06 May. 2015 Monthly Drop in Retail Sales Not Enough to Dent Spending in Q1 (Publication Centre)

Today's March retail sales report will likely disappoint, despite the already- downbeat consensus forecast of a 0.7% month-to-month fall. We think sales fell 1.2%, equivalent to a 1.3% increase year-over-year, due mostly to the bigger-than-expected 2.3% plunge in German sales, reported too late to be incorporated in the Bloomberg consensus.

14 Sept. 2015 Fed Likely on Hold this Week, but Action is Merely Deferred (Publication Centre)

This could have been a momentous week, but now it very likely will be just another week with another Fed meeting where rates are left on hold. Our call has very little to do with the underlying state of the economy, which we think can cope with higher rates, and needs them, given the tightness of the labor market. Instead, the story is all about the perceptions--misplaced, in our view--of both the Fed and the markets.

13 March 2018 Piñera Takes Office in Chile Will he be Able to Deliver on his Promises? (Publication Centre)

The second presidency of Chile's conservative Sebastián Piñera, a billionaire turned politician, began on Sunday, March 11, in favourable economic circumstances.

1 March 2017 The Mexican Labor Market is Solid, But it Likely will soon Disappoint (Publication Centre)

Strong fundamentals have supported private consumption in Mexico recently, but we now expect a slowdown. Spending will not collapse, though, because consumer credit growth, formal employment, real wage income and remittances will continue to underpin consumption for the next three-to-six months.

14 September. 2016 Brazil's Soft July Retail Sales Don't Change the Improving Trend (Publication Centre)

The Brazilian consumer will continue to suffer from high interest rates and a deteriorating labour market this year. But sentiment data imply that the fundamentals are stabilising, at least at the margin. The headline consumer sentiment gauge, published by the FGV, has improved significantly in the past five months, and we expect another modest increase later this month

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

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.

15 August. 2016 July Inflation Figures to Show Adverse Brexit Impact (Publication Centre)

July's consumer price figures, due tomorrow, likely will bring early evidence that sterling's Brexit-driven depreciation already is pushing up inflation. We think that CPI inflation picked up to 0.6% in July from 0.5% in June, exceeding the consensus forecast for an unchanged reading. Experience of past depreciations suggests that July's figures likely won't be the last time the consensus is surprised by the speed of the rise in inflation.

04 Mar. 2016 Downside Risks for Payrolls and Wages, but Trends are Solid (Publication Centre)

The underlying trend in payroll growth probably has not changed significantly from the 228K average monthly gains recorded last year. But the average hides wide variations, some triggered by seasonal adjustment problems and others by one-time weather effects or unavoidable and random sampling error. January's below-trend 151K increase was likely a victim of seasonal problems, because payroll gains in recent years have tended to be soft at the start of the year after outsized fourth quarter increases.

13 July. 2015 Industrial Production in Mexico stalled in May - But no panic, yet (Publication Centre)

Mexico's latest industrial production figures, released on Friday, showed that the recovery is stuttering. May output fell 0.9% year-over-year, down from the 1.2% gain in April. Total production was depressed by a 1.5% month-to-month drop in construction output, after two consecutive increases.

04 October. 2016 The August ISM Plunge was a Fluke, After all, What Happens Next? (Publication Centre)

The substantial, though incomplete, rebound in the September ISM manufacturing survey is consistent with our view that the outlook for the industrial economy right now is better than at any time since before the crash in oil prices

13 July. 2016 Grim Retail Sales in Brazil Highlight the Painful Stabilization Process (Publication Centre)

Evidence that Brazil's consumption recession has hit bottom seemed to vanish yesterday with the May retail sales report. Sales plunged 1.0% month-to-month, pushing the year-over-rate down to a terrible-looking -9.0%, from a revised -6.9% in April. Adding insult to injury, the month-to-month number for April was revised down by 0.2 percentage points.

17 July 2018 External Threats and Domestic Woes Will Limit LatAm's Recovery (Publication Centre)

External conditions are becoming more demanding for LatAm economies, with global trade tensions intensifying in recent weeks.

16 Nov. 2015 Slightly Disappointing Q3 GDP Data Likely Enough for ECB Doves (Publication Centre)

Eurozone GDP data on Friday were better than we expected, but were still soft compared to upbeat market expectations. Real GDP rose 0.3% quarter-onquarter in the third quarter, down slightly from 0.4% in Q2, and lower than the consensus forecast for another 0.4% gain. These data are not a blank check for ECB doves, but they probably are enough to push through further easing in December. This looks odd given growth in the last four quarters of an annualised 1.6%--the strongest since 2011--and probably slightly above the long-run growth rate.

10 October 2018 Why aren't Households Draining Plentiful Housing Equity? (Publication Centre)

The economy's recovery from the 2008/09 recession has been weaker than after the previous two downturns partly because households have not depleted housing equity to fund consumption.

10 October 2018 Did German GDP Growth Crash in Q3 (Publication Centre)

The hard data now point to a horrendous Q3 GDP print in Germany, which almost surely will constrain the advance EZ GDP print released on October 30.

18 Sept. 2015 No Need to Put the Weekend on Hold for Greek Election Results (Publication Centre)

Greece goes to the polls this weekend, but unlike the chaos in the summer, we doubt it will be a nail-biting experience for investors. Polls put Syriza and the conservative New Democracy neck-and-neck, but neither party likely will be able to form a majority. Syriza has ruled out a grand coalition, which potentially means tricky negotiations with minority parties. But we are confident that any new government will be committed to euro membership, and a constructive dialogue with the EU and IMF.

18 April 2017 The Weather is Playing Tricks with EZ Industrial Production Data (Publication Centre)

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 October. 2016 September Inflation Jump Just a Prelude to its Upcoming Surge (Publication Centre)

We expect today's consumer price figures to show that CPI inflation jumped to 0.9% in September, from 0.6% in August.

11 December 2018 Probably No Help From Net Exports for German GDP in Q4 (Publication Centre)

German net exports were treading water at the start of the fourth quarter. The seasonally adjusted trade surplus slipped to €17.4B in October, from a revised €17.7B in September, constrained by a 1.3% month-to-month rise in imports, which offset a 0.7% increase in exports.

18 Dec. 2014 - Fed on Course to Raise Rates in Spring, Unless the Data Intervene (Publication Centre)

If clarity is the first test of written English, the FOMC failed miserably yesterday. "Considerable time" is gone, but the new formulation--"the Committee judges that it can be patient in beginning to normalize the stance of monetary policy"--was not clearly defined, though the FOMC did say it is "consistent with its previous statement".

18 October 2018 CPI inflation Remains on Course to Undershoot the 2% Target Next Year (Publication Centre)

September's consumer price figures helped to curb expectations that the MPC might raise Bank Rate again before the March Brexit deadline.

11 Feb. 2015 Chile's Outlook Improving Slowly - Oil Price are a Clear Tailwind (Publication Centre)

The resilience and adaptability that the Chilean economy has shown over previous cycles has been tested repeatedly over the last year. Uncertainty on the political front, falling metal prices, and growing concerns about growth in China have been the key factors behind expectations of slowing GDP growth.

18 September 2018 Andean Economies Started Q3 Strongly, Can this Trend Continue (Publication Centre)

Colombia's economy remained resilient in July, thanks to strong domestic demand and relatively good external conditions for the country's top exports.

18 Apr. 2016 Solid Colombian Manufacturing Sector Offsetting Soft Demand (Publication Centre)

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 The Market is Underestimating How Quickly EZ Inflation is Rising (Publication Centre)

Final October inflation data surprised to the upside yesterday, consistent with our view that inflation will rise faster than the market and ECB expect in coming months. Inflation rose to 0.1% year-over-year in from -0.1% in September, lifted mainly by higher food inflation due to surging prices for fruits and vegetables. This won't last, but base effects will push the year-over-year rate in energy prices sharply higher into the first quarter, and core inflation is climbing too. Core inflation rose to 1.1% in October from 0.9% in September, higher than the consensus forecast, 1.0%.

17 May 2018 Japan has Paid for Breaking the Speed Limit in H1 Last Year (Publication Centre)

The Japanese GDP report yesterday contained substantial revisions to Q4. We had expected the Q1 contraction, but the revisions recast the health of the recovery, making the domestic demand performance look much less impressive recently, with the economy struggling since the burst of growth in the first half last year.

10 November 2017 Data to Confirm Production Picked Up but Net Trade Hit Growth in Q3 (Publication Centre)

September's industrial production figures likely will not surprise markets today. We look for a 0.3% month-to-month rise in production, matching the consensus and the ONS assumption in the preliminary estimate of Q3 GDP.

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

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 November 2017 Commodities Tailwind Helping Andean Economies to Recover (Publication Centre)

Colombian activity data released this week were relatively strong, but mostly driven by the primary sectors; consumption remains sluggish compared to previous standards.

17 November. 2016 October Retail Sales Likely Spurred by a Weather-related Tailwind (Publication Centre)

The consensus for a modest 0.5% month-to- month rise in retail sales volumes in October looks too timid; we expect today's data to show a 1% increase.

18 Apr. 2016 EZ Demand for New Cars Slowed in Q1, and will Slow A gain in Q2 (Publication Centre)

Growth in Eurozone car sales slowed slightly at the end of the first quarter. New car registrations in the euro area rose 5.8% year-over-year in March, down from a 14.4% increase in February. But the 12-month average level of new registrations jumped to new cyclical highs of 440,000 and 252,000 in the core and periphery respectively.

18 September 2018 RPI Inflation Won't Fall in Lockstep with the CPI Over the Next Year (Publication Centre)

It is a truth universally acknowledged that the RPI is a terrible measure of inflation. The ONS describes it as "very poor" and discourages its use.

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

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

18 Dec. 2015 Should We be Worried by the Rise in the Saving Rate? (Publication Centre)

We have argued consistently since oil prices first began to fall that U.S. consumers would spend most of their windfall, so real spending would accelerate even as nominal retail sales growth was dragged down by the drop in the price of gas and other imported goods. At the same time, we argued that capital spending in the oil business would collapse, and that exports would struggle in the face of the stronger dollar.

18 Feb. 2015 Brinkmanship is being taken to the extreme in Greece, but a deal is close. (Publication Centre)

We remain confident that a deal with Greece will be made, and that the country will stay in the euro area. But the need for both parties to avoid losing face domestically is still complicating the negotiations. Most importantly, Greece is no longer pledging an unconditional exit from the bailout program.

11 January 2017 Black Friday Drove Sales Higher in Brazil, is a Hangover Coming? (Publication Centre)

Brazil's consumer recession finally eased in November. Retail sales jumped 2.0% month-to- month, following an upwardly-revised 0.3% drop in October, and the year-over-year rate rose to -3.5% from -8.1%. November's astonishing performance probably reflects seasonal adjustment problems related to Black Friday discounting. Sales have climbed in the last four Novembers, suggesting that consumers' pre-Christmas spending patterns have shifted permanently.

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

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

18 May 2018 Did Markets Jump the Gun on Japan's Recovery? (Publication Centre)

Downward revisions to Japan's Q4 real GDP growth, published on Wednesday, lead us to revisit our main worry over the durability of the recovery; namely, that monetary conditions appear to be signalling a slowdown.

11 August. 2016 Household Spending Will Not Defy Gravity For Long Surveys (Publication Centre)

Recent retail surveys have indicated that consumers are not suffering yet from Brexit blues. The BRC reported that year-over-year growth in total sales values picked up to 1.9% in July, from 0.2% in June. After adjusting for falling prices, this measure suggests that year-over-year growth in official retail sales volumes held steady at about 4% last month.

11 Feb. 2016 Markets Still Underestimate the Looming Pick-Up in Inflation (Publication Centre)

Markets' inflation expectations have fallen in recent weeks, maintaining the trend seen over the previous 18 months. The fall in expectations for the next year or so is justified by the sharp fall in oil prices. But expectations for inflation further ahead have drifted down too, even though lower oil prices will have no effect on the annual comparison of prices beyond a year or so from now.

18 May. 2015 A Dovish Mr. Draghi Confirms Pledge to Implement QE in Full (Publication Centre)

Comments by Mr. Draghi in Washington last week point to a high bar for an adjustment to the QE program. The ECB president noted that while asset purchases and negative interest rates have driven a notable improvement in confidence and asset prices, the real key to the central bank's policies' success is a lasting boost to investment, consumption and inflation.

11 Dec. 2015 Don't be Swayed by Soft Nominal Retail Sales (Publication Centre)

Retail sales ex-autos have undershot consensus forecasts in eight of the 11 reports released so far this year, prompting interest rate doves to argue that consumers have not spent their windfall from falling gas prices. But this ignores the impact of falling prices--for gasoline, electronics, furniture, and clothing--on the sales numbers, which are presented in nominal terms.

11 Jan. 2016 Did German GDP Growth Slow Significantly in Q4? (Publication Centre)

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 November. 2016 New Car Sales Growth is Slowing in the Eurozone (Publication Centre)

Growth in EZ car sales slowed further at the beginning of Q4. New registrations in the euro area fell 1.2% year-over-year in October, down from a 7.2% increase in September.

18 Mar. Don't Believe Reports that the Fiscal Squeeze Has Been Eased (Publication Centre)

Media reports allege that the Chancellor's Budget pared back the fiscal squeeze planned for the next couple of years. The Director of the Office for Budget Responsibility, Robert Chote, even compared the Chancellor to Saint Augustine, who supposedly said "make me pure, but not yet."

18 June. 2015 Slow Upturn in Private Investment Amid Weak End-Demand (Publication Centre)

Speaking in Brussels earlier this week, Mr. Draghi noted that the ECB is encouraged by signs that private investment is finally turning up, to complement strong consumption. It is too early to make that assumption, we think, but we agree with the president that the trend is moving slowly in the right direction.

11 Mar. 2015 Eurozone GDP growth on track for strong Q1 (Publication Centre)

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.

18 October 2018 China's Monetary Transmission Mechanism Working...with Wrinkles (Publication Centre)

China's monetary and credit data--released yesterday, two days behind schedule--suggest that monetary conditions are loosening at the margin, while credit conditions have remained stable, but easier than in the first half.

10 September 2018 Inflation in Mexico is Edging Higher, but it Will Fall in the Fourth Quarter (Publication Centre)

The Mexican economy's brightest spot continues to be private consumption.

18 January 2018 China's Regulation Juggernaut Rolls into 2018. Enforcement Intensifies? (Publication Centre)

At the end of last year, after October's Party Congress, the Chinese authorities came out with significant new directives and regulations on an almost weekly basis.

18 October 2017 Housing Activity is Poised for a Hefty Q4 Rebound as Demand Rebounds (Publication Centre)

Today brings the September housing construction report, which likely will show that activity was depressed by the hurricanes.

18 November. 2016 Price Rises Will Soon Curtail the Surge in Retail Sales (Publication Centre)

October's colossal 1.9% month-to-month jump in retail sales volumes greatly exceeded the 0.5% consensus and even our own top-of-the- range 1.0% forecast.

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

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

18 July. 2016 Core Inflation is Grinding Slowly Higher, but Bigger Risks Ahead (Publication Centre)

Trouble is brewing in the core inflation data, despite the benign-looking 0.17% increase in the June report, released Friday. If you annualize that rate indefinitely, core inflation will reach a steady state of 2.1%, so the Fed never needs to raise rates. Alas this only makes sense if you think that single monthly CPI numbers tell the whole truth, and that the fundamental forces acting on inflation are stable. Neither of these propositions is remotely true.

19 August. 2015 Colombia's Domestic Economy is Resilient, But Real Risks Remain (Publication Centre)

The Colombian economy has been able to grow this year despite the plunge in oil prices since the middle of 2014. Gains in consumers' spending and investment have offset part of the hit from falling exports. But private spending growth, nonetheless, slowed considerably during the first few months of the year, as shown in our char t below, in part due to rising prices for imported goods after the depreciation of the COP, as well as broad-based concerns over the state of the economy.

18 August 2017 Japan's Trade Surplus Bounced. Exports to U.S. Strengthen (Publication Centre)

Japan's July adjusted trade surplus rebounded to ¥337.4B from ¥87.3B in June, far above consensus. On our seasonal adjustment, the rebound is slightly smaller but only because we saw less of a drop in June.

17 July. 2015 A Dovish Mr. Draghi Assures Markets the ECB is Here to Help (Publication Centre)

Yesterday's ECB press conference confirmed our view that Mr. Draghi is the periphery's friend, not enemy. Crucially, the central bank agreed to increase emergency liquidity assistance--ELA--to Greek banks by €900M. This is consistent tent with the agreement by the Eurogroup to give Greece €7B bridge financing, and shows the ECB is ready to act on the back of only a temporary truce between Greece and the EU. The increase in ELA is modest, and we doubt a painful restructuring of the banking system can be avoided. But with Greek bond yields falling, the available pool of collateral will go up, allowing the central bank to provide further relief in coming weeks.

19 Dec. 2014 Still Weak, but Stable, GDP Growth in the Fourth Quarter? (Publication Centre)

Construction data released yesterday provided further evidence that the Eurozone economy had a decent start to the fourth quarter. Output rose 1.3% month-on-month in October, equivalent to a 1.4% year-over-year increase.

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

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.

11 October 2018 Weak GDP in August Sets the Tone for the Rest of this Year (Publication Centre)

The stagnation of GDP in August, following five consecutive month-to-month gains, confirms that the economy's momentum in prior months was simply weather-related.

17 March 2017 Embattled Pro-EU Parties Secure Decisive Victory in the Netherlands (Publication Centre)

Centrist politicians and markets breathed a sigh of relief yesterday as the results of the Dutch parliamentary elections rolled in. The incumbent conservatives, led by PM Mark Rutte, lost ground but emerged as parliament's biggest party with 33 seats out of the total 150.

17 July. 2015 Colombia's Business Sector Continues to Feel the Oil Pain (Publication Centre)

Colombia is one of the fastest growing economies in LatAm but over the last few quarters the country has been adjusting to the collapse in oil prices, the depreciating currency and rising inflation. But the slowdown, especially on the domestic side of the economy, has been less dramatic than expected, so far. Our main scenario is that the adjustment process to challenging external conditions will continue over the coming quarters.

10 Nov. 2015 Ignore the Myths About Monetary Policy Turning Points (Publication Centre)

Some commentators have asserted that the Monetary Policy Committee won't raise interest rates until all its members agree and investors have fully priced in an increase, arguing that an earlier move would create excessive market turmoil and muddy the Committee's message. But a look back to previous turning points in the interest rate cycle suggests that the Monetary Policy Committee--MPC--hasn't paid much heed to those considerations before.

11 Nov. 2015 Mexico Relying on the Fed - Chile Looking for China's Recovery (Publication Centre)

Mexico's inflation remains the envy of LatAm, having consistently outperformed the rest of the region this year. Headline inflation slowed marginally to 2.5% in October, a record low and below the middle of Banxico's target, 2-to-4%, for the sixth straight month. The annual core rate increased marginally to 2.5% in October from 2.4% in September, but it remains below the target and its underlying trend is inching up only at a very slow pace. We expect it to remain subdued, closing the year around 2.7% year-over-year. Next year it will gradually increase, but will stay below 3.5% during the first half of 2016, given the lack of demand pressures and the ample output gap.

10 May. Hold Your Nerve on Brexit Risk, Despite Troubling Polls (Publication Centre)

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"

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

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

17 May 2017 Is Housing Activity set to Reach New Cycle Highs this Summer? (Publication Centre)

Last week, the MBA's measure of the volume of applications for new mortgages to finance house purchase rose 1.7%.

17 June. Price Rises Will Soon Call Time on the Retail Sales Splurge (Publication Centre)

Sharp increases in retail sales over the last two months suggest that consumers are not overly concerned by the risk that the U.K. could leave the E.U. next week. Sales volumes rose 0.9% month-on-month in May, and April's surge was revised larger, to 1.9% from 1.3%.

19 December 2016 Yellen Backs Away from the "High- Pressure" Economy (Publication Centre)

Judging by conversations we have had with investors since October, the idea that the Fed will be willing to let inflation overshoot the 2% target for a time has become received wisdom in the markets.

13 June 2018 Is Japan's Consumer Price Index Fit for Purpose? Will the BoJ Change it? (Publication Centre)

For more than two years, the BoJ has fretted, in the outlook for economic activity and prices, that "there are items for which prices are not particularly responsive to the output gap."

3 Sept. 2015 No Additional Easing, but ECB to Face Tough Questions on Inflation (Publication Centre)

Today's ECB meeting will be accompanied by an update of the staff projections, where the inflation outlook will be in the spotlight. The June forecasts predicted an average inflation rate of 0.3% year-over-year this year, currently requiring a rather steep increase in inflation towards 1.1% at the end of the year. We think this is achievable, but we doubt the ECB is willing to be as bold, and it is reasonable to assume this year's forecast will be revised down a notch.

16 July 2018 Upside Risks to the Consensus for June CPI Inflation (Publication Centre)

We expect June's consumer prices report, released on Wednesday, to show that CPI inflation increased to 2.7%, from 2.4% in May, above the consensus, 2.6%, and the Bank of England's forecast, 2.5%.

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

Pantheon Macroeconomics is pleased to make available to you our Outlooks for the second half of 2017 for the US, Eurozone, UK, Asia, and Latin America. These reports present our key views, giving you a concise summary of our economic and policy expectations. If you are interested in seeing publications which you don't already receive, please request a complimentary trial

18 January 2017 Will Slower Growth in EZ Car Sales Hit Total Consumption this Year? (Publication Centre)

Demand for new cars in the Eurozone has climbed a long way since the last recession, but growth is slowing. Overall, new car registrations in the EZ rose a solid 15.2% in 2016 as a whole. But momen tum slowed in the second half, and sales likely will remain comparatively muted this year. In December, registrations in the euro area rose 2.1% year-over-year in December, down from 5.8% in November. The headline was depressed by plunging growth in some of the smaller countries, offsetting better numbers in the major four economies.

9 Mar. 2015 Currency Depreciation is Affecting Inflation Expectations in LatAm (Publication Centre)

Brazil's central bank is in a very delicate situation. The economy is on the verge of another recession, but at the same time the BRL is falling, inflation expectations are rising and the inflation rate is overshooting. Fiscal policy is also tightening to restore macro stability magnifying the squeeze on growth.

1 October 2018 First Round of Brazil's Elections on Sunday, the Outcome is Uncertain (Publication Centre)

The first round of Brazil's presidential elections will take place this Sunday, followed by a probable runoff on October 28.

U.K. H1 2017 Outlook - High Inflation Will Cripple Consumers and Tie Policymakers' Hands (Publication Centre)

The adverse consequences of the Brexit vote will become painfully clear in 2017.....

21 November 2017 Is Germany Headed for New Elections Next Year? (Publication Centre)

Political uncertainty in the Eurozone is the story that won't die. Coalition talks in Germany collapsed yesterday when the centre-right FDP walked out of the negotiations.

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

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

5 June. 2015 Payroll consensus looks low, but watch out for the birth death model (Publication Centre)

All the fundamentals point to a very strong payroll number for May. The NFIB hiring in tentions index, the best single leading indicator of payrolls five months ahead, signalled back in December that May employment would rise by about 300K. The NFIB actual net hiring number, released yesterday, is a bit less bullish, implying 250K, but the extraordinarily low level of jobless claims, shown in our first chart, points to 300K. Finally, the ISM non-manufacturing employment index suggests we should be looking for payrolls to rise by about 260K. Our estimate is 280K.

23 Sept. 2015 Expansions don't die of old age - the Fed kills them, with rates (Publication Centre)

The theory of spontaneous combustion of the U.S. economy appears to be making something of a comeback, if our inbox and market chat is to be believed. The core idea here is that expansions die of old age, and can be helped on their way to oblivion by factors like falling corporate earnings and rising inventory. The current recovery, which began in June 2009 and is now 63 months old, already looks a bit long-in-the-tooth.

30 August 2017 Six Reasons why a Soft Brexit now is more Likely than Ever (Publication Centre)

Six developments over the summer have increased the likelihood that the government will make concessions required to preserve unfettered access to the single market after formally leaving the EU in March 2019.

1 March 2017 The Soaring Trade Deficit is set to Constrain First Quarter Growth (Publication Centre)

Yesterday's wall of data told us a bit about where the economy likely is going, and a bit about how it started the first quarter. The January trade and inventory data were disappointing, but the February Chicago PMI and consumer confidence reports were positive.

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

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.

2 July. 2015 Strong Jobs Numbers a Decent Bet, but Reasons for Caution too (Publication Centre)

Most of the indicators we follow point to another very strong payroll report today; we look for a 260K gain, matching May's performance. The best single leading indicator, the NFIB small business hiring intentions number, points to a massive 320K leap in private payrolls, as our first chart shows.

11 October. 2016 Conditions Are Set for the BCB to Start Easing Next Week (Publication Centre)

The latest CPI data in Brazil confirm that inflationary pressures eased considerably last month. Inflation fell to 8.5% year-over-year in September, from 9.0% in August, as a result of both lower market- set and regulated inflation.

15 June. 2015 A Dangerous Impasse in Debt Negotiations with Greece (Publication Centre)

The danse macabre between Greece and its creditors continued last week, increasing the risk of default and capital controls. Greek citizens don't want to leave the euro and Germany does not want a Grexit, two positions which should eventually form the basis for an agreement.

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

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

13 January 2017 Will Consumers' Spending Rise in Line with the Sentiment Surveys? (Publication Centre)

December's retail sales numbers are the most important of the year for retailers, but they don't necessarily tell us anything about the future prospects for consumers' spending or the broad economy. The December 2016 numbers, however, might be different, because they capture consumers' behavior in the first full month after the election.

3 July 2017 Three Jobs Reports in Nine Weeks set to Shift Market Rate Expectations (Publication Centre)

The next nine weeks bring three jobs reports, which will determine whether the Fed hikes again in September, as we expect, and will also help shape market expectations for December and beyond.

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

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

9 Oct. 2015 FOMC Members Sticking to Previous Positions, Mostly (Publication Centre)

The FOMC minutes showed both sides of the hike debate are digging in their heels. As the doves are a majority--rates haven't been hiked--the tone of the minutes is, well, a bit do vish. But don't let that detract from the key point that, "Most participants continued to anticipate that, based on their assessment of current economic conditions and their outlook for economic activity, the labor market, and inflation, the conditions for policy firming had been met or would likely be met by the end of the year." Confidence in this view has diminished among "some" participants, however, worried about the impact of the strong dollar, falling stock prices and weaker growth in China on U.S. net exports and inflation.

01 Mar. 2016 Rising Consumer Debt Puts Pressure on the Bank to Act (Publication Centre)

British households are back to their old ways and are piling on debt again. With borrowing costs still falling, consumer confidence high and banks willing to lend, indebtedness will only increase unless the Bank of England acts.

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

Ian Shepherdson comments on strong construction data

9 May 2017 Two Answers and Many Questions, as President Macron Settles in (Publication Centre)

Mr. Macron's victory in France answers two questions for markets, at least in the short run. Firstly, France will stay in the Eurozone, and Mr. Macron will not call a referendum on EU membership. Mr. Macron has come to power with a mandate to strengthen economic integration and co-operation between Eurozone economies.

11 August. 2015 Q2 Productivity Likely Constrained by a Surge in Self-Employment (Publication Centre)

The rebound in GDP growth in the second quarter seems not to have been enough to prevent year-over-year productivity growth slowing to about zero. The consensus forecast for the first estimate of Q2 productivity growth, due today, is a 1.6% annualized increase, pushing the year-over-year rate down to 0.3% from 0.6% in the first quarter, but we think this is too optimistic.

15 November 2018 Consumption Seems to have Started Q4 with Surprising Strength (Publication Centre)

Consumption accounts for almost 70% of GDP, and retail sales account for about 45% of consumption.

17 June. 2015 Brazilian Retailers Face Tough Times As Consumers Tighten Belts (Publication Centre)

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.

14 February 2018 Gas Prices Will Lift the January CPI: Core has Risks in Both Directions (Publication Centre)

We have no real argument with the consensus forecasts for the January CPI, with the headline likely to rise by 0.3%, with the core up 0.2%.

13 July. 2016 Will Higher Prices for Imports Change Inflation Perceptions? (Publication Centre)

In recent years we have argued consistently that investors and the commentariat overstate the importance of the dollar as a driver of U.S. inflation. Only about 15% of the core CPI is meaningfully affected by shifts in the value of the dollar, because the index is dominated by domestic non-tradable services.

24 June. 2016 Brexit Implications for the U.S: No Immediate Fed Easing (Publication Centre)

The U.K.'s unexpected vote for Brexit means a stronger dollar for the foreseeable future, a sharp though likely containable drop in U.S. stock prices, and a further delay before the Fed next raises rates. The vote does not necessarily mean the U.K. actually will leave the EU, because the policy choices now facing leaders of Union have changed dramatically. An offer of substantial concessions on the migration issue--the single biggest driver of the Leave vote-- might be enough to trigger a second referendum, but this is a consideration for another day.

21 December 2016 Consumption Likely Remained Firm in Mexico in Q4, But it Will Slow (Publication Centre)

Yesterday's report on October private spending in Mexico was positive, suggesting that consumption remained relatively strong at the start of Q4. Retail sales jumped 1.6% month-to-month, following a modest 0.2% drop in September. October's rebound was the biggest gain since March this year, but note that wild swings are not unusual in these data. The headline year-over-year rate rose to 9.3%, from 8.1% in September, but survey data signal to a gradual slowdown in coming months to around 5%.

27 May. 2016 June, July, or September: Evaluating the Fed's Options (Publication Centre)

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".

9 May 2017 Chainstore Sales Rebound Points to Robust Q2 Consumption (Publication Centre)

If the Redbook chain store sales survey moved consistently in line with the official core retail sales numbers, it would attract a good deal more attention in the markets. We appreciate that brick-and-mortar retailers are losing market share to online sellers, but the rate at which sales are moving to the web is quite steady and easy to accommodate when comparing the Redbook with the official data.

4 July 2017 Mr Abe Trounced in Tokyo Elections just as Recovery Gains Traction (Publication Centre)

The Tankan survey powered ahead in Q2, pulling away from Q1 and mostly beating consensus. This confirms our impression of the strength of the recovery ,just as Prime Minister Abe's Liberal Democratic Party is trounced at the polls in Tokyo. The drubbing is understandable as the main benefits of Abenomics have gone to the business sector, at the expense of the household sector.

13 April 2017 Slowing Labour Income Growth Highlights Consumers' Woes (Publication Centre)

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.

10 July 2017 Q2 GDP Growth is Set to Fall Short of the MPC's Expectations (Publication Centre)

Last week's industrial production and construction output figures for May were surprisingly weak. They have compelled us to revise down our expectation for the preliminary estimate of Q2 GDP to 0.2% quarter-on-quarter, from 0.3% previously.

16 May 2018 Downside Risks to April Housing Construction, IP Looks Strong (Publication Centre)

We see downside risk to the housing starts numbers for April, due today. Our core view on housing market activity, both sales and construction activity, is that the next few months, through the summer, will be broadly flat-to-down.

DAILY TELEGRAPH - Stock markets rocked by US consumer fears (Media Centre)

Chief US Economist Ian Shepherdson on Consumer Confidence figures for April

19 October. 2016 EZ Construction Fell in August, but Q3 as a Whole Was Solid (Publication Centre)

We think the EZ construction industry stuttered in August, following a strong start to Q3. Advance data from Germany, France and Spain suggest that output fell 1.4% month-to-month, pushing the year-over- year rate down to 1.8%, from a revised 3.1% in July.

16 May 2017 Sterling and Elections: Evidence from the Past Five Decades (Publication Centre)

It's now four weeks since the Prime Minister called a snap general election, and the Conservatives still are riding high in the opinion polls. The average of the last 10 polls suggests that the Tories are on track to take 47% of the vote, well above Labour's 30%.

19 October. 2016 Housing Construction has Faltered - Outlook is Cloudy (Publication Centre)

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.

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

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

22 Apr. 2015 Sustained job gains are key to Eurozone consumers sentiment (Publication Centre)

Advance April consumer survey data will likely confirm that households remain the standout driver of the cyclical recovery in the euro area. We think the headline EC consumer sentiment index rose to -1.0 in April from -3.7 in March.

5 January 2017 Will a Borrowing Binge Prevent a Consumer Spending Slowdown? (Publication Centre)

November's money and credit figures showed that households increasingly turned to unsecured debt last year in order to maintain rapid growth in consumption. Unsecured borrowing, excluding student loans, rose by £1.7B in November alone, the most since March 2005. This pushed up the year- over-year growth rate of unsecured borrowing to 10.8%--again, the highest rate since 2005--from 10.6% in October.

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

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

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

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

19 Apr. Are the Treasury's Brexit Calculations Plausible? (Publication Centre)

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.

CITY A.M. - Cheap energy and low interest rates lift Eurozone consumers (Media Centre)

Chief Eurozone Economist Claus Vistesen comments on Eurozone Consumer Confidence

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

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.

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

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

City AM - Rising confidence from consumers and businesses point to faster growth in second quarter (Media Centre)

Chief U.K. Economist Samuel Tombs discussing U.K. Consumer Confidence

07 May. 2015 Inflation Expectations, not Greece, are Pushing EZ Yields Higher (Publication Centre)

Even though Greece managed to avert default yesterday by paying €200M in interest to the IMF, our assumption is that the country remains on the brink of running out of money. Our view is supported by the government's decision to expropriate local authority funds, and reports that the government's domestic liabilities, excluding wages and pensions, are not being met.

5 August. 2016 The MPC Exceeds Expectations, but Inflation Will Constrain it Next Year (Publication Centre)

The MPC's package of stimulus measures, which exceeded markets' expectations, demonstrates that it is currently placing little weight on the inflation outlook. Even so, if inflation matches our expectations and overshoots the 2% target by a bigger margin next year than the MPC currently thinks is acceptable, it will have to consider its zeal for more stimulus.

20 October 2017 September's Retail Sales Slump Highlights Consumers' Caution (Publication Centre)

Retail sales fell sharply in September, highlighting that consumers still are spending only cautiously amid high economic uncertainty and falling real wages.

BUSINESS INSIDER - Consumer confidence spikes in June (Media Centre)

Chief US economist Ian Shepherdson on June Consumer Confidence data

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

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

23 Mar. 2016 Mortgage Lending Conditions Improving - Where are the Sales? (Publication Centre)

Further evidence emerged yesterday in support of our view that mortgage lending conditions are easing. The monthly mortgage origination report from Ellie Mae, Inc., a private mortgage processing firm, shows average credit scores for both successful and unsuccessful loan applications continue to trend downwards--though the latter rose marginally in February--while loans are closing much more quickly than in the recent past.

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

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

BBC NEWS - UK construction sector slows down in January (Media Centre)

Chief U.K.. economist Samuel Tombs comments on U.K. Construction

10 August. 2016 Trade Data Show Depreciations Take Time to Boost Growth (Publication Centre)

June's trade figures yesterday highlighted that it takes more than just a few months for exchange rate depreciations to boost GDP growth. The trade-weighted sterling index dropped by 9% between November and June as the risk of Brexit loomed large and the prospect of imminent increases in interest rates receded.

30 March 2018 Japanese Consumers Struggle with Faster Non-Core Inflation (Publication Centre)

The retail sales data, released yesterday, underline the struggle that Japanese consumers are facing against rising inflation.

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

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

4 Dec. 2015 A Bad Day for ECB Doves - New Policies Fall Short of Expectations (Publication Centre)

On all accounts, the ECB announced a significant addition to its stimulus program yesterday. The central bank cut the deposit rate by 0.1%, to -0.3%, and extended the duration of QE until March 2017. The ECB also increased the scope of eligible assets to include regional and local government debt; decided to re-invest principal bond payments; and affirmed its commitment to long-term refinancing operations in the financial sector for as long as necessary. The measures were not agreed upon unanimously, but the majority was, according to Mr. Draghi, "very large".

9 December 2016 Mexico's Consumers Will Face a Tough 2017 (Publication Centre)

Mexico's economic outlook has dimmed recently, a point driven home by sentiment data released last week. Still, we think GDP growth will slow only marginally in Q4, to about 11⁄2% year-over-year. Consumers' spending likely will remain strong in the near term, thanks mainly to rising remittances from the U.S., driven by fear of policy changes under the Trump administration.

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

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

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Chief Eurozone Economist Claus Vistesen discussing the latest Eurozone Construction data (Media Centre)

Chief Eurozone Economist Claus Vistesen discussing the latest Eurozone Construction data

FINANCIAL TIMES - French consumers turn pessimistic in June (Media Centre)

Chief Eurozone Economist Claus Vistesen on French Consumer Spending.

BUSINESS INSIDER - New home sales crush expectations (Media Centre)

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

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

Chief Eurozone Economist Claus Vistesen on the Eurozone Inflation

Guardian - UK consumers face sharpest price rise in services for nearly a decade (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Price Increases

Business Insider - We just got another sign that Brexit is ending the consumer boom (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Retail Sales

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

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

24 August 2017 Second Estimate of Q2 GDP to Show U.K. Missing out on G7 Boom (Publication Centre)

We expect today's second estimate of Q2 GDP to confirm that the U.K. has been the slowest growing G7 economy this year.

2 July 2018 Eurozone Inflation to Rise Further, Above 2%, Over the Summer? (Publication Centre)

Inflation in the Eurozone increased slightly last month, and probably will rise a bit more in coming months.

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

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.

2 March 2017 How Will the Fed Decide Whether to Hike in March, or Wait? (Publication Centre)

The odds of a hike this month have increased in recent days, though the chance probably is not as high as the 82% implied by the fed funds future. The arguments against a March hike are that GDP growth seems likely to be very sluggish in Q1, following a sub-2% Q4, and that a hike this month would be seen as a political act.

2 January 2018 BoJ: Chinese Profit Story Deteriorates Amid Surprisingly Robust PMIs (Publication Centre)

China's official PMIs paint a picture of robust momentum going into 2018 but we find this difficult to reconcile with the other data.

2 February 2018 January Job Gains Likely Solid, Calendar Effects to Subdue AHE? (Publication Centre)

The case for expecting a robust January jobs number is strong, but it is not without risks.

23 November 2018 Economic Growth in France Should Maintain Momentum in Q4 (Publication Centre)

Yesterday's barrage of survey data in France, tentatively suggest that business sentiment is stabilising following a string of declines since the start of the year.

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

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.

24 August 2017 New Auto Sales Appear to have hit Bottom, Modest Gains in Q4? (Publication Centre)

Industry estimates for August light vehicle sales suggest that the downshift in sales which began at the turn of the year is over, at least for now.

23 November. 2016 Brazil's Current Account De cit is Stabilizing, Improvement Ahead (Publication Centre)

Brazil's external deficit fell marginally in October, but most of the improvement is now likely behind us. The unadjusted current account deficit dipped to USD3.3B, from USD4.3B in October 2015. The trend is stabilizing, with the 12-month total rolling deficit easing to USD22B--that's 1.2% of GDP--from USD23B in September.

2 September. 2016 The Manufacturing PMI Overstates the Sector's Recuperation (Publication Centre)

On the face of it, the rebound in the manufacturing PMI, to 53.3 in August from 48.3 in July, directly challenges our view that the economy is set to slow sharply over the coming quarters. A close look at the survey, however, suggests that the manufacturing PMI exaggerates the extent of the sector's recovery in August.

2 January 2018 The Economy Won't Spring Back to Life in 2018 (Publication Centre)

The economy slowed less than we expected in 2017.

2 November 2018 Copom on Hold for a While the BRL Allows some Room for Manoeuvre (Publication Centre)

Brazil's central bank kept the Selic policy rate at 6.50% this week, as markets broadly expected.

2 July 2018 Activity Data Still don't Give the MPC the Green Light to Hike (Publication Centre)

In the wake of last week's national accounts release, markets judge that the probability of a Bank Rate hike at the August 2 MPC meeting has increased to about 65%, from 60% beforehand.

2 October 2017 Japanese CPI Inflation Still led by Food and Energy, for now (Publication Centre)

Japanese CPI inflation jumped to 0.7% in August from 0.4% in July. The ris e in prices over the last year, however, was mainly driven by food and energy.

24 August 2018 What Probability are Markets Attaching to a No-Deal Brexit? (Publication Centre)

Speculation that the U.K. will end up leaving the E.U. in March without a deal has dominated the headlines over the last month. Politicians on both sides of the Channel have warned that the probability of a no-deal Brexit is at least as high as 50%, even though more than 80% of the withdrawal deal already has been agreed.

2 May 2018 The Credit Impulse is now Negative, Clouding the Near-Term GDP Outlook (Publication Centre)

The March money and credit figures provide more evidence that the economy's weak start to the year won't be just a blip.

23 October 2018 The Eurozone Auto Sector is on Sale Should Investors Bite (Publication Centre)

The automotive sector accounts for 6.1% of total employment, and 4% of GDP, in the Eurozone.

2 November. 2016 No Action From the Fed Today (Publication Centre)

The Fed won't raise rates today, or substantively change the wording of the post-meeting statement. In September, the FOMC said that "The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives."

2 May 2018 The BoK is on a Mission, and will Hike in May, it's not About Inflation (Publication Centre)

We expect the BoK to hike this month, believing that it's necessary to curtail household debt growth now, in order to prevent a sharper economic slowdown as the Fed hiking cycle continues, China slows, and trade risks unfold.

2 May 2018 Fed to Acknowledge Higher In ation, but no Policy Shi Signal is Likely (Publication Centre)

The Fed will do nothing and say little that's new after its meeting today. The data on economic activity have been mixed since the March meeting, when rates were hiked and the economic forecasts were upgraded, largely as a result of the fiscal stimulus.

2 October 2017 Will the Real Eurozone Core CPI Measure Please Stand Up? (Publication Centre)

Friday's inflation data in the Eurozone added a dovish twist to the story ahead of the key ECB meeting later this month.

2 May 2018 Have Markets Priced in Today's Poor Q1 GDP Report in the EZ? (Publication Centre)

We previewed today's advance EZ Q1 GDP number in our Monitor on April 30--see here--and the data since have not changed our outlook.

2 May 2017 Can Sterling's Recovery Gather More Momentum? (Publication Centre)

Sterling continued to recover last week, hitting its highest level against the dollar since October, despite a series of data releases indicating that the economy is losing momentum. Indeed, sterling was unscathed by the news on Friday that quarter-on-quarter GDP growth slowed to just 0.3% in Q1, from 0.7% in Q4.

2 March 2018 January Money Data Suggest the Economy remains Listless (Publication Centre)

January's money and credit data broadly support our view that the economy still lacks momentum.

2 October 2018 How Bad Was the Hit to EZ Auto Production in Q3? (Publication Centre)

The industrial sector in the EZ slowed further at the end of Q3.

2 October 2018 Good News for Mexico's Prospects, the USMCA will Boost Sentiment (Publication Centre)

The U.S. reached a trade agreement with Canada on Sunday, adding its northern neighbour to the pact sealed a month ago with Mexico.

2 May 2017 Don't get too Excited by the April Jump in EZ Core Inflation (Publication Centre)

Eurozone inflation pressures snapped back in April. Friday's advance report showed that headline inflation rose to 1.9% year-over-year, from 1.5% in March, lifted by a jump in the cor e rate to 1.2% from 0.7% the month before.

2 October 2018 U.S. Manufacturing Outperforms as the Global Cycle Peaks (Publication Centre)

The inevitable--more or less--correction from August's 14-year high is no big deal.

2 October 2018 PMIs Show China is Slowing Risks of a Government Overreaction (Publication Centre)

China's September PMIs, most of which were released over the weekend, mark out a clear downtrend in activity since late last year.

23 January 2018 Eurozone Households Enter 2018 With Robust Tailwinds (Publication Centre)

Today's data likely will show that EZ households' sentiment remained close to a record high at the start of the year.

21 February 2018 The ECB is in the Headlines, But Not Because of its Monetary Policy (Publication Centre)

Politics are once again encroaching on the economic story in the Eurozone. At the ECB, this week has so far been a tumultuous one.

21 February 2018 Downside Risk for January Home Sales, but Expect a Decent Spring (Publication Centre)

Today's housing market data likely will look soft, but will probably not be representative of the underlying story, which remains quite positive.

21 February 2018 Argentina's Inflation Remains Too High,but it Will Start to Fall in Q2 (Publication Centre)

Argentina's latest hard data suggest that activity is softening, but we don't see the start of a renewed downtrend.

21 December 2017 Q3 Accounts to Reveal Temporary Supports to Households' Spending (Publication Centre)

The national accounts, released on Friday, likely will restate that quarter-on-quarter GDP growth picked up to 0.4% in Q3, from 0.3% in Q2.

21 Jan. 2015 - Spending Not Yet Surging in the Wake of Cheaper Gas, But it Will (Publication Centre)

So far, the surge in retail spending promised by the plunge in gasoline prices has not materialized. The latest Redbook chain store sales numbers dipped below the gently rising trend last week, perhaps because of severe weather, but the point is that the holiday season burst of spending has not been maintained.

21 Jan. 2015 Colombia Will Lose Momentum in 2015, But Don't Panic Just Yet (Publication Centre)

Colombia is one of the few larger economies in Latin America to have enjoyed solid, positive economic growth over the past two years. But lower commodity prices and last year's central bank tightening, to curb high inflation generated by strong growth, have started to become visible in the main economic data.

22 May 2018 Chainstore Sales Growth has Surged, Thank Warmer Weather? (Publication Centre)

We have been pleasantly surprised by the recent Redbook chainstore sales numbers.

21 Mar. 2016 The Fed Either Hopes for a Miracle or Wants Inflation to Overshoot (Publication Centre)

Fed Chair Yellen made it clear in last week's press conference that she is not convinced the increase in core inflation will persist: "I want to warn that there may be some transitory factors that are influencing [the rise in core inflation]... I see some of that is having to do with unusually high inflation readings in categories that tend to be quite volatile without very much significance for inflation over time.

21 July. 2016 The ECB Will Stand Pat Today, But Extend QE in September (Publication Centre)

Political uncertainty has surged since the ECB last met, but the central bank likely will refrain from action today. We think the ECB will keep its refi and deposit rates unchanged at 0.05% and -0.4%, respectively, and leave the monthly pace of QE unchanged at €80B.

21 December 2017 Fourth Quarter GDP Heading for 3%. Trade, Inventories will be Drags (Publication Centre)

We see no compelling reason to expect a significant revision to the third quarter GDP numbers today, so our base case is that the second estimate, 3.3%, will still stand.

21 December 2017 China's Government Bond Issuance to Rise. Japan's is Slated to Fall (Publication Centre)

The details of next year's Japanese budget are not yet official and the Chinese budget remains unknown. But the main figures of the Japanese budget are available, while China's Economic Work Conference, which concluded yesterday, has set out the colour of the paint for the budget, if not the actual brush strokes.

20 September 2018 Business Surveys Wobbling in the Face of Higher Rates (Publication Centre)

In the wake of the unexpectedly weak September Empire State survey, released Monday, we are now very keen to see what today's Philadelphia Fed survey has to say.

20 September 2017 Expect a December Hike (Publication Centre)

The FOMC won't raise rates today, but we expect that the announcement of the start of balance sheet reduction will not be interrupted by Harvey and Irma.

20 September 2016 The Recycling of the EZ's Current Account Surplus Continues (Publication Centre)

The external surplus in the EZ economy slipped in July. The seasonally-adjusted current account surplus dropped to €21.0B, from a revised €29.5B in June, hit by an increase in the current transfers deficit, and a falling trade surplus. The recent increase in the transfers deficit partly is due to the migrant deal with Turkey, and we expect it to remain elevated.

20 October. 2016 Are Jobless Claims Really at a 43-Year Low?  (Publication Centre)

The recent jobless claims numbers have been spectacularly good, with the absolute level dropping unexpectedly in the past two weeks to a 43-year low. The four-week moving average has dropped by a hefty 14K since late August.

20 September 2018 The EU Won't be Tariffed, at Least Not This Year (Publication Centre)

Mr. Trump fired the shot everyone was expecting this week with a 10% tariff on $200B-worth of Chinese goods, and a pledge to lift the rate to 25% on January 1.

21 August 2017 Chile's Economy is Improving, but Expect Only Modest Growth in H2 (Publication Centre)

Chile's Q2 GDP report, released on Friday, confirmed that the economy gathered momentum in recent months, following an alarmingly weak start to the year.

22 May 2018 Retail Sales Likely Recovered in April, but the Trend Remains Weak (Publication Centre)

April's retail sales figures, due Thursday, likely will show that spending recovered from snow-induced weakness in March.

22 May 2018 The Quiet and Good life in Spain (Publication Centre)

The Spanish economy has been living a quiet life recently, amid markets' focus on political risks in Italy and manufacturing slowdowns in Germany and France.

22 November 2017 "Spreadsheet Phil" Unlikely to Alter Austerity Formula (Publication Centre)

Public sector borrowing still is on course to greatly undershoot the March Budget forecasts this year, despite October's poor figures.

21 March 2017 Real Wage Growth in the Eurozone is Being Hit by Higher Inflation (Publication Centre)

One of the key characteristics of this euro area business cycle has been near-zero inflation due to structurally weak domestic demand and depressed prices for globally traded goods and commodities. This has supported real incomes, despite sluggish nominal wage growth.

22 March 2018 China's State Capital to Nourish Tech but Neglect Households (Publication Centre)

So much has changed in China over the last six months that we are taking the opportunity in this Monitor to step back and gain an overview of where the economy is going in the long term.

22 Feb. 2016 Colombian Policymakers Borrow Banxico's Bazooka Strategy (Publication Centre)

Colombia's central bank, BanRep, increased the monetary policy rate by 25bp to 6.25% on Friday, as expected, and also announced budget cuts and a new FX strategy to try to protect the COP. These measures are similar to those taken by Banxico on Wednesday. The press release, and the tone of the conference after the decision, suggest that more hikes are coming.

22 December 2017 A Tough end to Q4 for Mexico the H1 Outlook Remains (Publication Centre)

Mexican retail sales jumped 1.0% month-to-month in October, the biggest gain since February, following a poor performance in Q3.

22 Dec. 2014 Rising Risks in Greece, but Sovereign QE Can Save the Day (Publication Centre)

The political drama in Greece will continue to attract attention this week despite the advent of the holiday season. Prime Minister Samaras will try again tomorrow to secure a majority for his candidate for president, requiring a super majority of 200 votes. If it fails, the last attempt will be on December 29th, where the hurdle for the Prime Minister drops to 180 votes.

22 August 2018 Will the French Economy Re-Assert Itself in the Second Half (Publication Centre)

Economic growth in France has been the key downside surprise in the Eurozone this year.

22 February 2018 Jobless Claims Still Under Downward Pressure, Labor is Scarce (Publication Centre)

We have learned over the years not to become too excited in the face of swings in the jobless claims numbers, even when the movement appears to persist for a month or two.

22 June 2018 Survey Data Suggest that French Manufacturing will Rebound in Q2 (Publication Centre)

Yesterday's barrage of French business sentiment data suggest that confidence in the industrial sector was a little stronger than expected in Q2.

22 January 2018 China Growth Met Target Before Q4, Environmental Targets hit in Q4 (Publication Centre)

The China Daily ran an article entitled "Beijing, nation get breath of fresh air" on the day Chinese GDP figures were published last week, underlining where the authorities' priorities now lie.

22 January 2018 December's Dive in Retail Sales Points to Poor Q4 GDP Prospects (Publication Centre)

The intensity of the pressure on households' finances was highlighted last week by December's retail sales report, which showed that volumes fell by 1.5% month-to-month, the most since June 2016.

22 February 2018 Hold The Press: We Have a Downbeat Eurozone PMI Report (Publication Centre)

Yesterday's data presented Eurozone investors with an unfamiliar sight; a big downside surprise in the survey data.

22 August 2018 Sharp Fall in Borrowing Removes Need for Fiscal Tightening in 2019 (Publication Centre)

The latest public finance figures continue to imply that the Chancellor will be able to change course later this year in the Autumn Budget so that fiscal policy doesn't drag on GDP growth next year.

21 September. 2016 Sluggish Start to Q3 in Brazil, But Trend is Still Improving (Publication Centre)

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 November 2017 Chile's Economy Rebounded in Q3, but Politics Will Dominate the News (Publication Centre)

Incoming data confirm our view that the Chilean economy to rebound steadily in the second half of the year, with real GDP increasing 1.5% quarter-on-quarter in Q3, after a relatively modest 0.9% increase in Q2 and a meagre 0.1% in Q1.

22 March 2017 Why Are Pending Sales Lagging Existing Sales? (Publication Centre)

The remarkably strong existing home sales numbers in recent months, relative to the pending home sales index, are hard to explain. In January, total sales reached 5.69M, some 6% higher than the 5.35M implied by December's pending sales index. The gap between the series has widened in recent months, as our first chart shows, and we think the odds now favor a correction in today's February report.

21 May 2018 Higher Oil Prices won't Kill the Economy, A Boost is a Better Bet (Publication Centre)

Oil prices have risen by about $20 per barrel since last fall.

21 May 2018 Banxico on Hold as Inflation Falls, but the MXN is a Risk (Publication Centre)

Mexico's central bank last week left its policy rate at 7.0%, the highest level since early 2009.

21 November 2018 The Curious Case of the Crash in the French Housing Market (Publication Centre)

The French economy has suffered from weakness in manufacturing this year, alongside the other major EZ economies.

21 September 2017 August's Jump in Retail Sales Just Looks Like a Flash in the Pan (Publication Centre)

Retail sales increased by 1.0% month-to-month in August, exceeding our no-change forecast and spurring markets to price-in a 65% chance that the MPC will raise interest rates at its next meeting on November 2, up from 60% beforehand.

21 September 2018 Housing Activity is Faltering, but the Modestly (Publication Centre)

The New York Fed tweeted yesterday that "Housing market fundamentals appear strong.

22 June. Fiscal and Monetary Policy Won't Come to the Rescue After a Brexit (Publication Centre)

The Chancellor warned last week that he would hold an Emergency Budget shortly after a vote to leave the E.U. to address a £30B black hole in the public finances. The £30B--some 1.6% of GDP-- is the mid-point of the Institute for Fiscal Studies' estimates of the impact of Brexit on public borrowing in 2019/20, which were based on the GDP forecasts of a range of reports.

21 September 2017 German PPI Inflation Set to Edge Lower into Year-End (Publication Centre)

German producer price inflation rebounded last month. The headline PPI index rose 2.6% year-over-year in August, up from a 2.3% increase in July, driven almost exclusively by a jump in energy inflation.

22 September 2017 How far will the Hurricanes Depress September Payrolls? (Publication Centre)

The trend rate of increase in private payrolls in the months before Hurricane Katrina in 2005 was about 240K per month.

20 October 2017 September Existing Home Sales Likely Fell, but the Outlook is Bright (Publication Centre)

Usually, we forecast existing home sales from the pending sales index, which captures sales at the point contracts are signed.

23 Mar. 2015 Brazil's Inflation Target is Wishful Thinking for 2015 - Maybe in 2016 (Publication Centre)

The bad news just keeps coming for Brazil's economy. The mid-month CPI, the IPCA-15 index, rose 1.2% month-to-month in March. Soaring energy prices remain the key contributor to the inflation story in Brazil, pushing up the housing component by 2.8% in March, after a 2.2% increase in February.

23 Mar. 2015 Manufacturing remains the key driver of the EZ business cycle (Publication Centre)

The Eurozone economy is becoming increasingly service-oriented. The private services sector has contributed just over 50% of gross value added-- GVA -- in the past three years, up from 44% in the seven years before the crash of 2008.

20 December 2017 Don't Lose Sleep Over the Possibility of a Corbyn Government (Publication Centre)

The possibility of a Corbyn-led Labour Government has been highlighted by some analysts as a major economic risk. Mr. Corbyn, however, has little practical chance of being elected soon.

23 March 2018 Don't Over-Interpret the Latest Soft Survey Data in the Eurozone (Publication Centre)

Yesterday's barrage of economic data in the Eurozone added to the evidence that economic momentum is slowing.

23 June 2017 Will French Domestic Demand in Rebound in Q2? (Publication Centre)

The June batch of the French statistical office's business surveys continues to signal a firming cyclical recovery. The aggregate business index rose to cyclical high of 106 in June from a revised 105 in May, continuing an uptrend that began in the middle of 2016.

23 June 2017 Brazil and Argentina Under Renewed But Temporary Pressure (Publication Centre)

Financial markets in Brazil and Argentina have been under pressure this week, following negative news, both domestic and external. In Brazil, the Ibovespa index tumbled nearly 1.8% on Tuesday after a Senate Committee rejected the Government's labour reform bill.

22 June 2017 Asian Exports Remain Sturdy in Q2, but the Outlook is Cloudy (Publication Centre)

Korea's preliminary export numbers rebounded quite spectacularly in June, with growth at 24.4% year-on-year, compared with just 3.4% in May. This reading is important as it comes early in the monthly data cycle. Korea's position close to the beginning of the global supply chain, moreover, means its exports often lead shifts in global trade.

23 July 2018 The Eurozone's Current Account Surplus likely Plunged in Q2 (Publication Centre)

The Eurozone's current account surplus extended its decline in May, falling to a nine-month low of €22.4B, from €29.6B in April.

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

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

23 May 2017 Has the Outlook for Business Investment Brightened? (Publication Centre)

The recent deceleration in households' real spending means that either business investment or net exports will have to pickup if the economy is to avoid a severe slowdown this year.

23 May 2017 How to Lift French GDP Growth to Above 1.5% Year-over-year (Publication Centre)

The recovery in the French economy since the sovereign debt crisis has been lukewarm. Growth in domestic demand, excluding inventories, has averaged 0.4% quarter-on-quarter since 2012. This comp ares with 0.8%-to-1.1% in the two major business cycle upturns in the 1990s and from 2000s before the crisis.

23 May 2018 The Mexican Economy is Getting Better, Despite Rising Political Risks (Publication Centre)

Yesterday's March retail sales report for Mexico is in line with other recently released hard and survey data, painting an upbeat picture of the economy.

20 April 2018 Argentina's Fiscal Accounts on the Mend, but Inflation is a Key Concern (Publication Centre)

Argentina's government continues to show signs of reining in fiscal policy, with the primary budget balance improving steadily over the last year.

20 Apr. 2016 Capex Growth Will Mean-Revert As the Drop in Oil Spending Ends (Publication Centre)

As we're writing, the price of U.S. crude oil is only about 50 cents per barrel lower than on Thursday, when markets began to anticipate an OPEC deal to cut production over the weekend. The failure of the Doha talks generated an initial sharp drop in oil prices, but the damage now is very limited, as our first chart shows.

23 May 2018 Through the Looking Glass With Eurozone R&D Investment Data (Publication Centre)

The EZ national accounts were updated and rebased in 2015--from ESA 1995 to ESA 2010--in the name of timeliness and precision.

20 April 2018 Weak Retail Sales in Q1 Can't be Attributed Solely to Bad Weather (Publication Centre)

The 1.2% month-to-month fall in retail sales volumes in March undoubtedly was due mostly to the bad weather.

20 August 2018 Don't Believe the Scare Stories About Rising No-Deal Brexit Risk (Publication Centre)

Investors have become more concerned about a no-deal Brexit.

23 May 2018 New Home Sales Appear to have Peaked - Downside Risk for April? (Publication Centre)

The monthly new home sales numbers are so volatile that just about anything can happen in any given month.

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

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

20 August 2018 LatAm Markets Were Under Stress This Month, Will Sentiment Improve? (Publication Centre)

While we were away, EM growth prospects and risk appetite deteriorated, due mainly to rising geopolitical risks and Turkey's currency crisis.

20 Jan. 2016 Falling Gas Prices Can't Hide Upward Pressure on Core Inflation (Publication Centre)

Gasoline prices dropped sharply last month, but the 4½% seasonally adjusted fall we expect to see in the December CPI report today was rather smaller than the 9% collapse in December 2014, so the year-over-year rate of change of gas prices will rise, to -20% from -24% in November. This means headline inflation will rise too, though the extent of the increase also depends on what happens to the core rate.

23 February 2018 PBoC Fights Back Against RMB Strength but BoJ Le to Jawbone (Publication Centre)

The PBoC managed to keep interest rates well- anchored around the Chinese New Year holiday, when volatility is often elevated.

20 November 2018 The Eurozone Economy's Global Liquidity Pump is Sputtering (Publication Centre)

The EZ's current account surplus was stung at the end of Q3, falling to a three-year low of €16.9B in September, from a revised €23.9B in August.

20 November 2018 Chile's Economy Shifted into Lower Gear in Q3, is the Outlook Brighter (Publication Centre)

Chile's Q3 GDP report, released yesterday, confirmed that the economy lost momentum in the last quarter.

20 November 2017 Will Argentina Succeed in Tackling High Inflation and Fiscal Deficits? (Publication Centre)

Argentina's economy is firing on all cylinders, thanks to improving fundamentals and a positive external backdrop.

20 November 2017 Low Core Inflation Continues to Provide Cover for Mr. Draghi (Publication Centre)

Mr. Draghi's speech to the European Banking Congress on Friday--see here--was a timely reminder to markets that the ECB is in no hurry to make any changes to its policy setting.

23 April 2018 Inflation Started Q2 Below the BCB's Target, but the Trend will Rise in Q3 (Publication Centre)

Inflation in Brazil remained subdued at the start of the second quarter, strengthening the odds for an additional interest rate cut next month, and opening the door for further stimulus in June.

23 April 2018 Japan's Inflation Faces Near-Term Headwinds, but Core Will Trend up (Publication Centre)

Japan's headline CPI inflation is set to edge down in coming months, thanks to non-core prices.

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

The preliminary April PMIs due today will provide the first economic sentiment data for Q2, and likely will point to a continuation of the cyclical recovery. We think the composite PMI was unchanged at 54.0 in April, driven by a small gain in manufacturing offset by a slight decline in services.

23 April 2018 German Producer Price Inflation is Turning Up, Slowly (Publication Centre)

Friday's economic data suggest that the downtrend in German PPI inflation is reversing.

20 November 2018 The Housing Downturn won't Kill the Rest of the Economy, this is not 2008 (Publication Centre)

The media and markets are waking up to the idea that the housing market has peaked in the face of higher mortgage rates and slightly--so far--tighter lending standards.

20 Nov. 2015 EZ Current Account Surplus Goes from Strength to Strength (Publication Centre)

The current account surplus in the Eurozone is well on its way to stabilising above 3% of GDP this year. The seasonally adjusted surplus rose to €29.4B in September from a revised €18.7B in August, lifted by a higher trade surplus, thanks to rebounding German exports. The services balance was unchanged at €4.5B in September, while the primary income balance edged higher to €4.8B from €4.0B. The improving external balance has been driven mostly by a surging trade surplus with the U.S. and the U.K., as our first chart shows.

20 May. 2016 Chile's GDP Growth is Not Accelerating, Despite Strong Q1 (Publication Centre)

The Chilean economy improved in the first quarter, growing 2.0% year-over-year, up from 1.3% in the fourth quarter. Net trade led the improvement, with exports rising 2.1% quarter-on-quarter, thanks to the modest rise in metal prices and an increase in exports of services, especially tourism.

23 August 2017 New Home Sales set for Cycle Highs, but Only Temporarily (Publication Centre)

The level of new home sales is likely to hit new cycle highs over the next few months, with a decent chance that today's July report will show sales at their highest level since late 2007.

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

Punished by the global economic slowdown depressing commodity prices, the Mexican economy is now making a gradual comeback, thanks to the continuing strength of its main trading partner, increasing public expenditure on key infrastructure projects, and accommodative monetary policy.

20 July 2018 Retail Sales Have Not Reached a Turning Point Yet (Publication Centre)

June's 0.5% month-to-month fall in retail sales volumes does little to change the picture of recent strength.

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

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.

20 June 2018 Recent MXN Performance Suggests that Banxico Won't Hike this Week (Publication Centre)

We now think that Banxico will keep interest rates on hold at 7.50% at its Thursday meeting, as the MXN has stabilized in recent days, despite rising geopolitical risks.

20 May. 2015 Slowly Does it For Q2 Upturn In Eurozone Inflation (Publication Centre)

Final inflation in the Eurozone was confirmed at 0.0% year-over-year in April, up slightly from -0.1% in March. The recovery since the trough in January has been driven mostly by a reduced drag from lower energy prices, a trend which should continue in the second quarter.

23 August 2017 All Systems Go for Italy's Economy, but Don't ask About the Long Run (Publication Centre)

The performance of Italy's economy in the first half of 2017 proves that the strengthening euro area recovery is a tide lifting all the r egion's boats.

20 March 2018 Up or down for the EZ current account surplus in 2018? (Publication Centre)

The euro area's trade advantage with the rest of the world slipped at the start of the year.

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

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

18 June 2018 Colombia and Argentina, Facing Different Near-Term Prospects (Publication Centre)

Polls suggest that Ivan Duque has comfortably beat Gustavo Petro to become Colombia's president.

14 July. 2016 EZ GDP Growth all but Stalled in Q2, as Domestic Demand Slowed (Publication Centre)

Data yesterday showed that industrial production in the Eurozone stumbled in May. Production fell 1.2% month-to-month, driven by weakness in all major economies and falling output in all sub-industries. The poor headline follows an upwardly revised 1.4% jump in April, which means that production rose marginally in the first two months of the second quarter.

14 June. 2016 Eurozone Investment is Improving, But Growth will Slow in Q2 (Publication Centre)

Data today likely will show that manufacturing in the Eurozone was off to a strong start to the second quarter. Advance country data suggest that industrial production jumped 1.1% month-to-month in April, pushing the year-over-year rate up to 1.9% from 0.1% in March. The rise in output was driven mainly by Germany and France, but decent month-to-month gains in Ireland, Portugal and Greece also helped.

14 July 2017 The Unwinding of QE Remains a Long Way Off (Publication Centre)

In an interview with The Times yesterday, MPC member Ian McCafferty--who voted to raise interest rates in June--suggested he also might favour starting to run down the Bank's £435B s tock of gilt purchases soon.

14 February 2018 Look for a Disappointing Q4 German GDP Report Today (Publication Centre)

Today's Eurozone data will provide further details on what happened in Q4. Advance data suggest that industrial production rose a modest 0.1% month- to-month, lifting the year-over-year rate to 4.3% in December, from 3.9% in November.

13 September. 2016 Manufacturing is Improving in Mexico, Other Sectors Weaker (Publication Centre)

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.

14 June. 2016 May Sales Will Be Less Impressive than April's but Good Enough (Publication Centre)

April's impressive-looking retail sales numbers--the headline jumped 1.3%, with non-auto sales up 0.8%--were boosted by two entirely separate factors, one of which will play no p art in May and one which will offer very modest support. The key lift in April came from the very early Easter, which confounded the seasonal adjustments, as it usually does.

14 March 2017 The ECB can Raise its Deposit Rate Before QE Ends (Publication Centre)

Markets are becoming more sensitive to rumours about changes in ECB policy. The euro and yields jumped on Friday after a Bloomberg report that the central bank has discussed raising rates before QE ends.

14 November 2017 Mexico's Manufacturing Remains Resilient, but NAFTA Risk is High (Publication Centre)

LatAm's economies are starting to expand at a relatively healthy pace, inflation is more or less under control and near-term growth prospects are positive.

14 November 2017 Poor EZ Production Data Won't Dent Second Q3 GDP Estimate (Publication Centre)

Soft September data in Germany and Italy suggest that today's industrial production report in the Eurozone will be poor. Our first chart shows that data from the major EZ economies point to a 0.8% month-to- month fall in September.

14 May 2018 Could Foreign Trade Propel Second Quarter GDP Growth to 5%? (Publication Centre)

To answer the question: Yes, growth could hit 5% in the second quarter.

14 March 2018 Mean Reversion in the CPI Confirms January's Core Jump was a Fluke (Publication Centre)

A significant minority of investors were betting on a repeat of January's outsized 0.349% increase in the core, judging from the immediate market reaction to the release of the February CPI report.

14 March 2018 The Chancellor Remains Boxed-in by Deficit Pledges and a Downbeat OBR (Publication Centre)

The Chancellor kept his word and made only trivial policy changes in the Spring Statement, but he hinted at higher spending plans in the Autumn Budget.

13 September 2017 Korean Borrowing Begins to Recover, but the Fed isn't Done yet (Publication Centre)

Korean credit markets have begun tentatively to recover after the rise in global interest rates at the end of last year.

13 October 2017 Did the Hurricanes Lift September's Core CPI, as well as the Headline? (Publication Centre)

Three separate stories will come together to generate today's September core CPI number. First, we wonder if the hurricanes will lift the core CPI.

13 March 2018 February's Core CPI Likely to Mean-Revert (Publication Centre)

Today's February CPI report is very unlikely to repeat January's surprise, when the core index was reported up 0.3%, a tenth more than expected.

13 March 2018 Taking the Pulse on EZ Investment Can the Upturn be Sustained? (Publication Centre)

Last week's detailed GDP data in the Eurozone confirmed that the economy is benefiting from an investment cycle for the first time since before the financial crisis.

13 March 2017 Will the Labor Data Push the Fed to Hike Again in June? (Publication Centre)

With rates now certain to rise this week, the real importance of the employment picture is what it says about the timing of the next hike. To be clear, we think the Fed will raise rates again in June, and will at that meeting add another dot to the plot, making four hikes this year.

13 March 2017 Signs of a Slowdown in Q1 Ease Pressure on the MPC to Hike Rates (Publication Centre)

The MPC's meeting on Thursday looks set to be a perfunctory affair. Signs that the economy has lost momentum this year, alongside downward surprises from CPI inflation in January and wage growth in December, mean the Committee won't give the idea of hiking rates a moment's thought.

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

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.

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

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

13 Nov. 2015 Soft Q3 GDP Data to Pave the Way for More Monetary Easing (Publication Centre)

Industrial production data yesterday confirmed downside risks to today's GDP data in the Eurozone. Output fell 0.3% month-to-month in September, pushing the year-over-year rate down to 1.7% from a revised 2.2% in August. Weakness in Germany was the main culprit, amid stronger data in the other major economies. A GDP estimate based on available data for industrial production and retail sales point to a quarterly growth rate of 0.4% quarter-on-quarter, but we think growth was rather lower, just 0.2%, due to a drag from net trade.

13 November 2018 Will Poor Sentiment and Political Uncertainty Knock EZ Investment (Publication Centre)

The outlook for private investment in the Eurozone has deteriorated this year, especially in manufacturing.

13 October 2017 A Lending Slowdown Will Keep GDP Weak Even as Inflation Fades (Publication Centre)

The worst phase of the squeeze on real wages is nearly over; CPI inflation looks set to peak at slightly above 3% in October, before falling back steadily to about 2% by the end of 2018.

13 November 2018 Argentina's Cyclical Stabilization Continues 2019 Likely Will be Better (Publication Centre)

The sharp currency sell-off in Q2 and Q3, the financial crisis and tighter monetary and fiscal policies have pushed the Argentinian economy under stress since Q2.

13 November 2017 German GDP Growth Likely Slowed in Q3, but Trend is Robust (Publication Centre)

Macroeconomic data in the euro area were mixed in our absence.

13 November 2017 Banxico Will Monitor Market Dynamics as Risks Rise (Publication Centre)

Banxico decided unanimously to hold its benchmark interest rate at 7.0% at last Thursday's policy meeting.

14 November 2018 Banxico Likely Will Hike Tomorrow Interventionist Threats are Growing (Publication Centre)

After recent interventionist moves and plans in Mexico from AMLO's incoming administration and his political party, uncertainty and soured sentiment are the name of the game.

14 November 2018 China's Potential H1 Recovery Just Fizzled out... Before it Started (Publication Centre)

Credit to the Chinese authorities for sticking it out with the marginal approach to easing for so long... at least two quarters.

15 May 2018 Mexico's Manufacturing Ended Q1 Strongly, Will the Trend Continue? (Publication Centre)

Mexican industrial production is slowly improving, and further good numbers are likely in coming months.

15 November 2017 Increasing Political Volatility Outshines Strong Brazil Sales Data (Publication Centre)

Politics remain centre-stage in Brazil, despite positive news on the economic front. President Michel Temer's government continues to advance pension reform, despite the tight calendar and concerns about his political capital. But volatility is on the rise.

15 May 2018 Are Markets Complacent about Italy? (Publication Centre)

Italy is edging closer to a coalition government with the Five-Star Movement, the Northern League, and Forza Italia at the helm.

15 March 2018 Old-Guard Industry gets a Q1 Reprieve, but it's Temporary (Publication Centre)

Industrial production bounced back in February. These data point to a reprieve for old-guard dirty industry, after stringent anti-pollution curbs were put in place in Q4.

15 June. 2016 Good Start to Q2 for Brazil's Retail Sales, but Details Are Less Upbeat (Publication Centre)

Brazil's retail sales improved at the start of the second quarter, increasing 0.5% month-to-month in April, partially reversing the 0.9% contraction in March. But the details were less upbeat than the headline.

15 November 2018 From #Euroboom to #Eurogloom What Next for the EZ Economy (Publication Centre)

Yesterday's second estimate of GDP confirmed that Eurozone growth slowed significantly in Q3.

15 November 2018 Japan's Q3 GDP Drops Q4 will be Better but Trends are Deteriorating (Publication Centre)

Japanese leading indicators point to a slowdown, and the trend over this volatile year is emerging as firmly downward.

15 October 2018 Mexico's Industrial Output will Improve Fundamentals are Strong (Publication Centre)

The industrial production trajectory in Mexico looked strong going into Q3, but Friday's report for August threatens to change that picture.

15 September 2016 A Critical 12 Months Ahead for the EU (Publication Centre)

Yesterday's State of the Union address by EC president Jean-Claude Juncker commanded more attention than usual, but contained little news on the key talking points for investors.

15 October 2018 It's not Fun to Own EZ Equities this Year, but the ECB won't Blink (Publication Centre)

A bad year is threatening to become a catastrophic one for Eurozone equity investors.

15 November. 2016 Mexico's Benign Industrial Outlook Clouded by the U.S. Policy Agenda (Publication Centre)

Mexico's latest industrial production data were worse than we expected. Output rose just 0.1% month-to-month in September, pushing the year- over-year rate down to -1.3%, from a downwardly revised +0.2% in August.

15 November. 2016 EZ GDP Growth Likely was Stable in Q3, in Line With First Estimate (Publication Centre)

Investors face a busy EZ calendar today, but the second estimate of Q3 GDP, and the advance GDP data in Germany, likely will receive most attention. Yesterday's industrial production report in the Eurozone was soft, but it won't force a downward GDP revision, as we had feared.

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

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 June 2018 May's Surge in Retail Sales is Just a Weather-Related Blip (Publication Centre)

The trend in retail sales no longer looks quite so flat, following yesterday's May report. The level of sales volumes in April was revised up by 0.3%.

14 September 2016 Labour Market Report Likely to be Soft all Round (Publication Centre)

Today's figures likely will bring the first real signs that the Brexit vote has had an adverse impact on the labour market. The employment balances of the key private-sector surveys weakened sharply in July, and recovered only partially in August. In addition, the three-month average level of job vacancies fell by 7K between April and July.

14 September 2017 Robust Manufacturing and Rising Employment in the Eurozone (Publication Centre)

Manufacturing in the Eurozone had a slow start to the third quarter. Industrial production rose only 0.1% month-to-month in July, though the year-over-year rate was pushed up to 3.2% from a revised 2.8% in June.

14 Sept. 2015 Italy's Structural Problems Persist, but Cyclical Upturn is Firming (Publication Centre)

Italy's long-term challenges--chiefly, structurally high government debt and deteriorating demographics--remain daunting, but the cyclical picture is improving steadily. Final GDP data last week revealed that growth in the first half of the year was 0.2% better than initially estimated, taking the annualised growth rate to 1.4%, the highest in five years. This is the first sign of a durable business cycle upturn since the sovereign debt crisis crashed the economy in 2012.

14 November 2018 Still Enough Slack to Prevent Wage Growth From Rising Further (Publication Centre)

September's labour market report suggests that wage growth won't continue to rise for much longer.

14 November 2018 German GDP Growth Crashed in Q3, but Inflation is Firming (Publication Centre)

We remain confident--see here--that today's Q3 GDP report in Germany will be a shocker, but this already is priced-in by markets.

15 August 2017 Time for a Rebound in Core Retail Sales A er Unexpected So ness (Publication Centre)

No matter how you choose to slice-and-dice the recent retail sales numbers, the core data for the past couple of months have been disappointing. Our favorite measure--total sales less autos, gasoline, food and building materials--rose by just 0.1% month-to- month in May but then reversed this minimal gain in June.

15 August 2017 Weak Q2 for Mexico's Industrial Activity, but What Happens in Q3? (Publication Centre)

Last week's industrial report confirmed that the Mexican economy softened at the end of the second quarter. Industrial production was unchanged year- over-year in June, calendar-and seasonally adjusted, down marginally from +0.1% in May.

15 June 2017 Core Inflation Pressures in Germany are Rising, Slowly (Publication Centre)

German inflation eased in May, but the underlying upward pressure on the core is increasing. Yesterday's data showed that inflation fell to 1.5% year-over-year in May, from 2.0% in April, as the boost from the late Easter reversed. Inflation in leisure and entertainment services was driven down to +0.8%, from +3.3% in April, as a result of sharply lower inflation in package holidays and airfares.

15 June 2017 China's Q2 Growth to Remain Sturdy but Expect a Slower H2 (Publication Centre)

China's industrial production grew at an annualised 7.2% rate by volume in Q1, according to our estimates, up from an average 5.9% rate in the six quar ters through mid-2016.

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

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.

15 December 2017 The Hawks Will Squawk Again Soon, but the Next Rate Hike is Still Distant (Publication Centre)

The MPC chose not to rock the boat yesterday, deferring any reappraisal of the economic outlook until its next meeting in early February.

15 December 2017 The ECB's forecasts are wishful thinking (Publication Centre)

The ECB did its utmost not to say or do anything remotely novel today. The central bank kept its main refinancing and deposit rates unchanged at 0.00% and -0.40%, respectively, and reiterated its plan for QE next year.

13 June 2018 Mexico's Manufacturing Activity in April was Weak, but it Will Improve (Publication Centre)

Mexico's industrial recovery, which began in late Q4, lost momentum at the start of the second quarter.

13 June 2017 Solid Mexican Manufacturing Eclipsed By Other Key Sectors (Publication Centre)

Activity in the Mexican industrial sector cooled marginally at the start of the second quarter, but the drop was not as dramatic as the headlines suggested. Output fell 4.4% year-over-year in April, after a 3.4% increase in March.

12 June 2018 Core Inflation to Trend Gently Higher - Many Risks in Both Direction (Publication Centre)

We continue to expect core CPI inflation to drift up further over the course of this year, partly because of adverse base effects running through November, but it's hard to expect a serious acceleration in the monthly run rate when the rate of increase of unit labor costs is so low.

12 June 2018 Don't Jump on China's PPI Inflation Pick-up - Inflation will Slow in Q3 (Publication Centre)

China's PPI inflation has been trending down since early 2017.

12 July 2018 The Latest Proposed Tariffs Would Significantly Boost Core Inflation (Publication Centre)

The announcement, late Tuesday, that the administration plans to impose 10% tariffs on some $200B-worth of imports from China raises the prospect of a substantial hit to the CPI.

12 February 2018 German Labour Costs Are Set to Soar, Does it Matter for the ECB? (Publication Centre)

Apart from a slew of economic data--see here and here--two important things happened in Germany last week.

12 February 2018 Banxico Tightens, Hawkish Bias Stays as Risks to Inflation Remain (Publication Centre)

Mexico's central bank continues to diverge from its regional peers, tightening monetary policy further.

12 March 2018 Expect Rate "Adjustments" from the BoJ, a 2019 "Exit" Looks Unlikely (Publication Centre)

One critical point emerged from last week's otherwise uneventful BoJ meeting: Governor Kuroda said that the BoJ might "adjust" rates before hitting the 2% inflation target.

12 March 2018 January Data Point to Slower GDP Growth in Q1 (Publication Centre)

Last week's official data supported our forecast that GDP growth likely will slow further in Q1, suggesting that a May rate hike is not the sure bet that markets assume.

12 November 2018 Mexico's Industrial Sector did Well in Q3, but Politics are a Threat for 2019 (Publication Centre)

The Mexican economy gathered strength in Q3, due mainly to the strength of the services sector, and the rebound in manufacturing, following a long period of sluggishness, helped by the solid U.S. economy and improving domestic confidence.

12 November 2018 September's Sombre GDP Report Sets the Tone for the Rest of the Year (Publication Centre)

September's GDP report laid bare the economy's sluggishness.

12 November 2018 Further Downgrades to 2018 EZ GDP Growth are on their Way (Publication Centre)

The economic data were mixed while we were away. The final PMI data showed that the composite PMI in the euro area fell to 53.1 in October, from 54.1 in September, somewhat better than the initial estimate, 52.7.

12 May 2017 Will Mr. Macron Unleash Animal Spirits in Eurozone Equities? (Publication Centre)

Emmanuel Macron's victory in France has lifted investors' hopes that the good times in the Eurozone economy and equity markets are here to stay. On the face of it, we share markets' optimism. Mr. Macron and his opposite number in Germany--our base case is that Ms. Merkel will remain Chancellor--will form a strong pro-EU axis in the core of the Eurozone.

12 May 2017 Rates Hikes Still Distant, Even if Brexit Transition Occurs Smoothly (Publication Centre)

The absence of a hawkish slant to the MPC's Inflation Report or the minutes of its meeting suggest that an increase in interest rates remains a long way off.

12 Feb. 2016 Mexico's Industrial Economy Struggled in Q4 - Better Ahead? (Publication Centre)

Yesterday's Mexican industrial data painted a downbeat picture of the sector at the end of last year, and highlighted the downside risks facing the economy in the first half of this year. Industrial output fell 0.1% month-to-month and was flat year over-year in December, with weakness in all sectors except manufacturing. Overall, industrial activity expanded by only 0.2% year-over-year in the fourth quarter, the slowest pace since late 2013.

12 Feb. 2015 Downside Risk to January Retail Sales, Due to Gas and the Core (Publication Centre)

You might remember that the December retail sales report surprised significantly to the downside, thanks to the impact of falling gasoline prices. The data are reported in nominal dollars, not volumes, so falling prices depress the numbers.

11 September 2017 China's Trade Surplus Edges Lower with net Trade Contributing Little (Publication Centre)

Chinese exports grew by just 5.5% in dollar terms year-over-year in August, down from 7.2% in July. Export growth continues to trend down, with a rise of just 0.2% in RMB terms in the three months to August compared to the previous three months, significantly slower than the 4.8% jump at the p eak in January.

11 September 2017 Inflation in Mexico Looks Scary but Soon will Start to Fall Rapidly (Publication Centre)

Mexico's inflation nudged up to a fresh 16-year high in August, but the details of the report confirmed that underlying pressures are easing, in line with our core view.

11 October. 2016 Unemployment has Stopped Falling, For Now (Publication Centre)

The single most startling development in the labor market data in recent months is acceleration in labor force growth. The participation rate has risen only marginally, because employment has continued to climb too, but the absolute size of the labor force is now expanding at its fastest pace in nine years, up 1.9% in the year to September.

11 October 2018 Italy's Government is Picking a Fight with Both Markets and the EU (Publication Centre)

Base effects were the key driver of yesterday's upbeat industrial production headline in Italy.

11 October 2017 Weak GDP Growth in Q3 Suggests a November Hike isn't a Done Deal (Publication Centre)

The Office for National Statistics yesterday released the last major batch of output data before the preliminary estimate of Q3 GDP is published on October 25, just one week before the MPC's key meeting.

11 September 2018 Business Owners Bullish, but Where's the Capex (Publication Centre)

If you had only the NFIB survey of small businesses as your guide to the state of the business sector, you'd be blissfully unaware that the economic commentariat right now is obsessed with the potential hit from the trade tariffs, actual and threatened.

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

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

12 December 2016 German wage growth is accelerating (Publication Centre)

Data on Friday showed that German wage growth is firming. Nominal labour costs rose 2.5% year-overyear in Q3, accelerating from a revised 1.9% increase in Q2. The main driver was a strong rebound in gross earnings growth, which rebounded to 2.4% year-over-year from an oddly weak 1.2% in Q2.

12 December 2017 Will the ECB Live to Regret Buying Corporate Bonds as Part of QE?EZ 12 December 2017 (Publication Centre)

Investors in euro-denominated corporate debt will be listening closely to Mr. Draghi this week for hints on how the ECB intends to balance QE between public and private debt next year.

12 December 2016 Brazilian Inflation Dropped in November (Publication Centre)

Friday's inflation report for Brazil confirmed that inflation is rapidly falling towards the BCB's target range, helping to make the case for stepping up the pace of monetary easing to 50bp at the Copom's January meeting.

12 April 2018 A Much-Needed Reality Check on the Eurozone Economy (Publication Centre)

Today's industrial production data in the Eurozone will extend the run of soft headlines at the start of the year.

12 April 2017 Mexico's Industrial Sector Resilient in Q1, Despite External Threats (Publication Centre)

Yesterday's industrial production report in Mexico added weight to the idea that the sector improved marginally in the first quarter, despite many external threats. Industrial output rose 0.1% month-to-month in February, following a similar gain in January. The calendar-adjusted year-over-year rate rose to -0.1%, after a modest 0.3% contraction in January.

12 Oct. 2015 French Manufacturing Output Likely Fell in Q3 - Q4 will b e Better (Publication Centre)

French industrial production data offered a bit of relief last week following a string of woeful German data, and news of monthly falls in Italian and Spanish manufacturing output. Industrial production jumped 1.6% month-to-month in August, but the headline was flattered by a 0.3% downward revision of the July data. The monthly jump pushed the year-over-year rate higher to 1.6%, from a revised 0.9% fall in July. All sectors performed strongly in August, but the key story was a hefty increase in transport equipment manufacturing, due to a 11.9% surge in vehicle production.

12 October 2017 China's Real GDP Growth Should Continue to Trend Down in Q3 (Publication Centre)

Next week is a big one for China. The five yearly Party Congress opens on Wednesday, and on Thursday, the monthly raft of activity data is published, along with Q3 GDP.

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

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.

13 Feb. 2015 Cyclical outlook is improving in the euro area (Publication Centre)

GDP data today will probably show that the Eurozone economy accelerated to 0.3% quarter-on-quarter in Q4, up from 0.2% a quarter earlier. Industrial production came in disappointingly at 0.0% month-to-month in December, but this is not enough to change our forecast in the light of solid data on household spending.

13 December 2017 Mexico's Manufacturing Starts Q4 Badly, but it Will Gradually Improve (Publication Centre)

Mexican industrial activity started the fourth quarter badly. Industrial production fell 0.1% month- to-month in October, pushing the year-over-year rate slightly up to -1.1% from -1.2% in September and -0.7% in Q3.

13 December 2017 Japan's PPI Inflation Will Soon Fall, but Second-Round Effects to Come (Publication Centre)

Japan's PPI inflation edged up further in November to 3.5%, from October's 3.4%. Energy was the main driver, with petroleum and coal contributing 0.8 percentage points to the year-over-year rate, up from a 0.7pp contribution in October.

13 December 2016 Mexico's Industrial Sector Started Q4 Slowly, 2017 will be Poor (Publication Centre)

Industrial production in Mexico remained under pressure at the start of Q4. Output rose just 0.1% month-to-month in October, leaving the year-over-year rate unchanged at -1.4%, down from an average of -0.8% in Q3.

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

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

13 February 2018 Are the Good Times over For EZ Bond and Equity Investors? (Publication Centre)

Storm clouds gathered over Eurozone financial markets last week. The sell-off in equities accelerated, pushing the MSCI EU ex-UK to an 11-month low.

13 July 2018 Did Sluggish Manufacturing Hold Back the EZ Economy in Q2 (Publication Centre)

Manufacturing in the Eurozone rebounded midway through the second quarter.

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

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.

13 July 2017 Yellen Expects the Labor Market to Tighten Further, and Rates to Rise (Publication Centre)

Chair Yellen broke no new ground in her Testimony yesterday, repeating her long-standing view that the tightening labor market requires the Fed to continue normalizing policy at a gradual pace.

13 Jan. 2016 Mexico's Industrial Sector Still Slowing - Services to the Rescue? (Publication Centre)

November production data in Mexico, released Monday, showed that the industrial economy remained quite soft in the last part of last year. The collapse in capital spending in the oil sector, slowing public spending, and weaker growth in EM and the U.S. manufacturing sector have combined to hit Mexican industrial output quite hard. Total production rose just 0.1% year-over-year in November, down from an already weak 0.5% in October, and below the 1.3% average increase in Q3. Output fell 0.5% month-to-month, the biggest drop since May, reflecting broad-based weakness.

13 February 2018 Unit Labor Costs are Key to Inflation Outlook (Publication Centre)

Jim Bullard, the St. Louis Fed president, said last week that Phillips Curve effects in the U.S. are "weak", and that nominal wage growth is not a good predictor of future inflation.

13 April 2018 French Inflation is Shooting Higher (Publication Centre)

Inflation pressures in France increased significantly at the start of the year.

13 April 2018 The MPC Hasn't Been Afraid to Shock Markets in the Past (Publication Centre)

Many analysts argue that the MPC inevitably will raise interest rates at its May 10 meeting because markets have fully priced-in a 25bp uplift.

12 October. 2016 Monetary Policy Divergence Will Push EURUSD to 1.05 Soon (Publication Centre)

The euro's spectacular rise against the pound has been the key story in European FX markets recently. But the trade-weighted euro, however, is up "only" 6% year-to-date, as a result of the relatively stable EURUSD.

12 September 2016 Will the MPC Stand By its Rate Cut Guidance this Week? (Publication Centre)

The Monetary Policy Committee likely will not follow up August's stimulus measures with another rate cut at its meeting on Thursday. The partial revival in surveys of activity and confidence have weakened the case for immediate action.

12 October 2018 What Happens Under Maximum China Tariffs Clue It's not Good (Publication Centre)

The imposition of 10% tariffs on $200B-worth of Chinese imports is not a serious threat either to U.S. economic growth--the tariffs amount to 0.1% of GDP--or inflation.

12 October 2018 Brazilian Households are in Good Shape, Despite Rising Political Risk (Publication Centre)

Data released yesterday support our view that the Brazilian retail sector has gathered strength in recent months, following a weak Q2, when activity was hit by the truckers' strike.

12 October 2017 Core PPI at Risk from Hurricanes. Trend is Rising too, Slowly (Publication Centre)

Our forecast for a 0.3% increase in the September core PPI, slightly above the underlying trend, is even more tentative than usual.

12 September 2017 Stronger Mexican Manufacturing Overshadowed by Weak Mining (Publication Centre)

Industrial activity in Mexico had a very poor start to the third quarter. Output plunged 1.0% month-to- month in July, the biggest drop since May 2015, pushing the year-over-year rate down to -1.5%, from -0.2% in June.

12 September 2018 How Much is the Spanish Economy Slowing This Year (Publication Centre)

The Spanish economy remains the stand-out performer in the Eurozone, but recent data suggest that growth is slowing.

13 Apr. Higher Inflation Reflects More Than Just an Easter Boost (Publication Centre)

CPI inflation picked up to 0.5% in March, from 0.3% in February. The jump was entirely attributable to core inflation, which leapt to 1.5%--its highest rate since October 2014--from 1.2%. With core inflation on track to rise further over the next year, we continue to think that markets will be caught out by interest rate rises later this year.

13 April 2018 The BoK's Pending Rate Hikes are About Debt, not Inflation (Publication Centre)

The Bank kept interest rates unchanged at 1.50% yesterday, but downgraded its inflation forecast for 2018 to 1.6% from 1.7%

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

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

12 September 2018 Wage Growth Won't Remain Above 3% this Year, Despite July's Leap (Publication Centre)

It's tempting to conclude that the pick-up in year over-year growth in average weekly wages, excluding bonuses, to a three-year high of 3.1% in July, from 2.8% in June, signals that employees' bargaining power has strengthened and that a sustained wage recovery now is under way.

12 September 2018 The MXN Remains Resilient, but Can it Withstand Broad EM Pressure (Publication Centre)

Mexico has been one of LatAm's highlights in terms of financial markets and currency performance in recent months.

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

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.

15 September The MPC Signals Higher Rates Soon, but it is Racked With Doubts (Publication Centre)

The MPC surprised markets, and ourselves, yesterday with the escalation of its hawkish rhetoric in the minutes of its policy meeting.

18 May 2018 Second Quarter Growth Started Strongly, but a Long Way to go (Publication Centre)

The half-way point of the quarter is not, alas, the half-way point of the data flow for the quarter.

18 May. 2016 Colombia's Domestic Demand Fell in Q1 - Better News Ahead? (Publication Centre)

Activity in Colombia cooled at the end of the first quarter, in the face of many domestic and external headwinds. Retail sales, for example, plunged 2.9% in March after a 4.6% leap in February. The headline likely was depressed by the early Easter, as March had one fewer trading day than February.

18 May 2018 Challenging Times for the BCB, Weak Growth and EM Risks Rising (Publication Centre)

Brazil's monetary authority adopted a neutral tone and kept its main rate on hold at 6.5% at its monetary policy meeting on Wednesday, surprising investors.

18 May 2017 Will Strong Employment Growth Be Sustained? (Publication Centre)

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 May 2017 Political Uncertainty is set to Plague Markets for Many Months (Publication Centre)

The turmoil in Washington has begun to hit markets. We don't know how this will end, but we do know that it isn't going away quickly.

18 Nov. 2015 Weak Producer Price Inflation Won't Prevent CPI Rebound (Publication Centre)

CPI inflation held steady at -0.1% in October, matching its lowest rate since March 1960. We had expected the rate to tick down to -0.2%, but the rebound in clothing inflation in October, following a period of discounting in September, was larger than we had anticipated. Looking ahead, we can be fairly confident that CPI inflation will pic k up sharply over the coming months.

18 October 2017 China Won't Solve its Leverage Problem Until Rates Rise (Publication Centre)

Money and credit data released last weekend suggest that China's demand for credit remains insatiable.

18 September 2018 All Aboard for Lower Headline Inflation in the Eurozone (Publication Centre)

Yesterday's final CPI report confirmed that inflation in the EZ fell marginally in August, by 0.1 percentage points to 2.0%.

19 April 2017 Another Political Hand Grenade is Thrown in European Politics (Publication Centre)

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.

18 September 2017 How it Could all go Wrong for U.S. Markets, and Quickly (Publication Centre)

For the record, we think the Fed should raise rates in December, given the long lags in monetary policy and the clear strength in the economy, especially the labor market, evident in the pre-hurricane data.

18 October 2018 Headline Inflation in the Eurozone will Stay Close to 2% in Q4 (Publication Centre)

Headline inflation in the EZ remained elevated in September, rising by 0.1 percentage point to 2.1%, while the core rate was unchanged at 0.9% in August; both numbers are in line with the initial estimates.

18 October 2018 FOMC Members won't be Easily Deflected from Raising Rates (Publication Centre)

You'd be hard-pressed to read the minutes of the September FOMC meeting and draw a conclusion other than that most policymakers are very comfortable with their forecasts of one more rate hike this year, and three next year.

18 Mar. 2016 Medical Costs are Accelerating, but Goods Will Lift Core PCE Too (Publication Centre)

In the excitement over the FOMC meeting--all things are relative--we ran out of space to cover some of this week's other data, notably the PPI, industrial production and housing starts. They are worth a recap, given that only the Michigan sentiment report will be released today.

18 June 2018 When is a BoJ Dove not a Dove? When the Experiment has Failed (Publication Centre)

Governor Kuroda has sounded increasingly dovish recently.

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

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.

18 Feb. 2016 How to Read the Jobless Claims Numbers, Wherever They Go (Publication Centre)

The question of what's really happening to the pace of layoffs is still unanswered, despite the apparent upturn over the past couple of months. The weekly jobless claims numbers are only just emerging from the fog of the usual holiday season chaos. The pattern of pre-holiday hiring and post-holiday layoffs is broadly the same each year, but Christmas and New Year's Day fall on a different day each year, making seasonal adjustment difficult.

18 December 2017 Tankan Shows this is no Ordinary Japan, Are Animal Spirits Back? (Publication Centre)

The incidence of the phrase "since the early nineties" has increased sharply in our Japan reports this year.

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

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 April 2018 Colombia's Softer Activity Data is Temporary, Expect an Acceleration (Publication Centre)

The February activity report in Colombia showed a modest pick-up in manufacturing activity and strength in the retail sales numbers.

18 January 2018 Housing Starts Likely Dipped Last Month, but the Trend is Rising (Publication Centre)

Hot on the heels of yesterday's news that the NAHB index of homebuilders' sentiment and activity dropped by two points this month -- albeit from December's 18-year high -- we expect to learn today that housing starts fell last month.

18 July 2017 The Conundrum of Germany's Huge Current Account Surplus (Publication Centre)

No subject in the EZ economy is a source of more dispute than Germany's ballooning current account surplus. The Economist recently identified he German surplus as a problem for the world economy.

18 June 2018 Hope Springs Eternal for Higher Core Goods Inflation in the EZ (Publication Centre)

Friday's data in the Eurozone confirmed that inflation rose sharply last month. Headline inflation increased to 1.9%, from 1.2% in April, and core inflation also rose, by 0.4 percentage points to 1.1%.

18 June 2018 Weak Data to Stop the MPC Talking- Up Rate Hike Chances This Week (Publication Centre)

Markets currently see a 50/50 chance that the MPC will raise Bank Rate in August and will be looking for a strong signal on Thursday that the next meeting is "in play".

24 August. 2015 The U.S. Will be A Net Gainer from EM Turmoil, Thanks to Cheap Oil (Publication Centre)

If the plunge in the stock market last week, and especially Friday, was a entirely a reaction to the slowdown in China and its perceived impact on other emerging economies, then it was an over-reaction. Exports to China account for just 0.7% of U.S. GDP; exports to all emerging markets account for 2.1%. So, even a 25% plunge in exports to these economies-- comparable to the meltdown seen as global trade collapsed after the financial crisis--would subtract only 0.5% from U.S. growth over a full year, gross.

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

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.

18 July 2018 Why are Chinese Property Prices Staging a Comeback (Publication Centre)

Chinese residential property prices appear to be staging a comeback, with new home prices rising 1.1% month-on-month in June, faster than the 0.8% increase in May.

19 April 2017 Markets Overlook the Downside Risks from June's Snap Election (Publication Centre)

Prime Minister Theresa May's announcement that Parliament will vote today on holding a general election on June 8 shocked markets and even her own party's MPs. Betting markets were pricing in only a 20% chance of a 2017 election before yesterday's news.

19 August. 2015 Services, Autos Will Push Core Inflation to 2%-plus by Year-End (Publication Centre)

If the rate of increase of the core CPI in the second half of the year matches the 0.19% average gains in the first half, the year-over-year rate will rise to 2.3% by December. In December last year, core inflation stood at just 1.6%, following a run of soft second half numbers. We can't rule out a slowdown in the monthly increases in the second half of this year too, given the evidence suggesting a small bias in the seasonal adjustments.

19 September 2016 Surging Narrow Money Growth is Not a Good Sign (Publication Centre)

Our view that the economy is slowing sharply appears, superficially, to be challenged by the surge in the money supply. Year-over-year growth in the value of banknotes and coins in circulation has shot up this year, to 8.3% in August, from 5.5% in December 2015.

19 September 2017 China's Property Market Cools, Downtrend now Established (Publication Centre)

China's property market continued to slow in August, with prices rising by just 0.2% month-on- month seasonally adjusted, half the July pace.

19 October 2018 How will Markets and the Economy React to Mr. Bolsonaro's Win (Publication Centre)

Sunday 28th will bring closure to an extraordinary presidential election campaign in Brazil.

19 October 2017 Leading Indicators Will be Hit by Storms, but not on the Katrina Scale (Publication Centre)

We don't use the index of leading economic indicators as a forecasting tool. If it leads the pace of growth at all, it's not by much, and in recent years it has proved deeply unreliable.

19 November 2018 The Drop in Oil Prices will Hurt, but not too Badly, Retailers will Benefit (Publication Centre)

The plunge in oil prices in recent weeks is not a threat to the overall U.S. economic growth story in the near term--we have always expected growth to slow, but remain decent, once the boost from the tax cuts fades--but it will make a difference, at the margin.

19 September 2017 Colombia's Economy Finally Hits Bottom, but Recovery will be Slow (Publication Centre)

Colombian activity data released this last week were upbeat, better than we expected, showing a significant pickup in manufacturing output and improving retail sales. Retail sales rose 3.1% year- over-year, after a modest 1.0% increase in June.

19 September 2017 Housing Takes a Modest Hurricane Hit, so far, More to Come? (Publication Centre)

The September NAHB survey, released yesterday, shows, that the housing market took a knock from the hurricanes but the damage, so far at least, appears to be contained.

2 Dec. 2015 Brazil's Q3 Data Confirm The Worst Recession On Record (Publication Centre)

Brazil's recession is getting uglier. Real GDP in Brazil fell 1.7% quarter-on-quarter in Q3, much worse than expected, though marginally less terrible than the downwardly revised 2.1% contraction in Q2. Year-over-year, the economy plunged by 4.5% in the third quarter, down from -3.0% in Q2, and -2.5% in the first half. The disappointment was widespread in Q3; though rising mining output was a positive, the underlying trend in mining is still falling. The key story here, though, is that the economy has sunk into its worst slump since the Great Depression.

2 February 2017 Greece is another EZ risk to contend with this year (Publication Centre)

The Greek economy escaped recession in the second half of last year. Real GDP rose a cumulative 1.2% in Q2 and Q3, following a 0.6% fall in Q1. And industrial production and retail sales data suggest that the advance GDP report released later this month will show that the momentum was sustained in Q4. Headline survey data, however, indicate that downside risks to the economy remain.

2 August 2018 No Change in the Message from the FOMC Expect Sep. Dec. Hikes (Publication Centre)

The FOMC did nothing yesterday and said nothing significantly different from its June statement, as was universally expected.

19 September 2018 Tariffs Could have been Worse Have we Reached Peak Pain for this Year (Publication Centre)

Mr. Trump laid out plans yesterday to impose a new 10% tariff on a further $200B-worth of imports from China, to be levied from next week.

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

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

19 May 2017 Brazil's Economy Doing Well, But Severe Political Risk is Back (Publication Centre)

Political risk in Brazil has increased substantially, following reports that President Temer was taped in an alleged cover-up scheme involving the jailed former Speaker of the House. If the tapes are verified, calls for Mr. Temer to face impeachment will mount.

19 March 2018 Argentina's Recovery Continues, but the Rebound is Facing Setbacks (Publication Centre)

Argentina's Recovery Continues, but the Rebound is Facing Setbacks

19 Jan. 2015 Volatility Returns to the Eurozone, but Stabilisation is Likely Soon (Publication Centre)

Investors have been used to central bank policy as a source of low volatility in recent years, but the last six months' events have changed that. Uncertainty over the timing of Fed policy changes this year, an ECB facing political obstacles to fight deflation, and last week's dramatic decision by the SNB to scrap the euro peg have significantly contributed to rising discomfort for markets since the middle of last year.

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

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

19 February 2018 Growth in Households' Spending Won't Recover This Year (Publication Centre)

Slower growth in households' spending was the main reason why the economy lost momentum last year.

19 December 2017 House Prices Look Set Merely to Flatline in 2018 (Publication Centre)

House prices are on course to rise only by around 2% this year, the smallest increase for five years.

19 December 2017 Andean Economies Closely Related by Copper, but Divided by Politics (Publication Centre)

Sebastián Piñera returns to the Presidential Palacio de la Moneda, succeeding Michelle Bachelet as president of Chile, as in 2010.

19 January 2017 Core Inflation Pressure Building Slowly, Headline to Jump Further (Publication Centre)

The solid numbers for December mean that core inflation remains on track to breach 2?-?% this year, though probably not until the summer. Over the next few months, base effects will help to hold the core rate close to the December pace.

19 January 2018 December Retail Sales Likely Reversed Most of November's Gain (Publication Centre)

December's retail sales figures, released today, likely will show that the surge in spending in November was driven merely by people undertaking Christmas shopping earlier than in past years, due to Black Friday.

19 June 2018 Rental Inflation is Set to Rise as Vacancies fall and Demand Increases (Publication Centre)

Housing rents account for some 41% of the core CPI and 18% of the core PCE, making them hugely important determinants of the core inflation rate.

19 Mar. 2015 A Weak Euro and Low Oil Prices are Boosting the EZ Trade Surplus (Publication Centre)

Due to a technical quirk, Eurostat was not able to publish seasonally adjusted January trade numbers yesterday, so the report is of limited use. The unadjusted trade surplus in the Eurozone plunged to €7.9B in January, from €24.3B in December, driven in part by a collapse in Italy's surplus.

19 July 2018 China's Domestic Activity Likely Recovered in Q2 (Publication Centre)

China's official GDP data, published on Monday, showed year-over-year growth edging down to 6.7% in Q2, from 6.8% in Q1.

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

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 January 2018 The COP and MXN are Rising, but Domestic Politics are a Big Hurdle (Publication Centre)

NAFTA-related news has been mixed over the last few weeks.

17 September 2018 Hurricane Florence will Distort the Data, but not on Harvey's Scale (Publication Centre)

As we reach our deadline on Sunday afternoon, eastern time, Tropical Storm Florence continues to dump vast quantities of rain on the Carolinas, and is forecast to head through Kentucky and Tennessee, before heading north.

17 October. 2016 Banxico Minutes Confirm that FX Speculation is the Key Rate Threat (Publication Centre)

Banxico is one of the few central banks in LatAm to have hiked rates in 2016, and we expect it to remain relatively hawkish in the face of external risks.

16 March 2018 Weak Data Suggest the MPC Won't Clearly Signal a May Hike Next Week (Publication Centre)

In order to support current market pricing, the MPC will have to be more specific about the timing of the next rate hike in the minutes of next Thursday's meeting.

16 May 2017 Manufacturing is Recovering, Despite the Hard and Soft Data Gap (Publication Centre)

The over-hyped mystery of the gap between the hard and soft data in the industrial economy has largely resolved itself in recent months.

16 March 2018 Kuroda Prepares Parliament to Foot the BoJ's Exit Bill (Publication Centre)

Governor Kuroda dropped further hints in speeches earlier this week that interest rates will be going up. He discussed methods of exit, in loose terms.

16 March 2017 Structural Goods Deflation in France is a Challenge for the ECB (Publication Centre)

Inflation pressures in France eased in February, in contrast to the story in the rest of the EZ. Yesterday's report confirmed the initial estimate that inflation fell to 1.2% year-over-year in February, from 1.3% in January. The headline was hit by a crash in the core rate to a two-year low of 0.2%, from 0.7% in January.

16 Mar. 2015 Temporary Reversal - Bad Numbers for Mexico, Good for Brazil (Publication Centre)

Two key points can be extracted from the minutes of the last BCB meeting, when policymakers increased the Selic interest rate by 50bp to 12.75%. First, the bank recognized that the balance of risks to inflation has deteriorated, due to the huge adjustment of regulated prices and the BRL's depreciation, but it specifically referred only to "this year" in the communiqué.

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

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.

16 May 2018 Better Fundamentals and Fading Political Risk to Support Colombia (Publication Centre)

Colombia's Q1 GDP report confirms that the economy is improving. Leading indicators and survey data suggest that the recovery will continue over the second half of the year.

16 November 2018 The Boost to Retail Sales from Tax Cuts is Fading, as Holidays Approach (Publication Centre)

The headline retail sales numbers for October looked good, but the details were less comforting.

16 November 2018 When Parliament Votes Down the Withdrawal Deal, What Next? (Publication Centre)

Even if the Prime Minister fends off an emerging leadership challenge--as we write, the rebels still are short of the 48 signatures required to trigger a confidence vote--her chances of getting parliament to back the Withdrawal Agreement in its current form are slim.

16 November 2018 Don't Count on Chinese Industry Turning the Corner, Just Yet (Publication Centre)

Industrial production growth in China appears to be stabilising, following the slowdown in Q2.

16 November 2017 Japanese Domestic Demand Disappoints, but will Rebound (Publication Centre)

Japanese GDP growth in the third quarter corrected the imbalances of the second. Domestic demand took a breather after unsustainable growth in Q2, while net exports rebounded.

16 November 2017 Core CPI Mean-Reverts, but Base Effects Mean Sub-2% Until March (Publication Centre)

The average month-to-month increase in the core CPI in the past three months is a solid 0.20, much firmer than the 0.05% average over the previous five months, stretching back to the first of the run of downside surprises, in March.

16 June. 2015 Manufacturing is Struggling, but it Won't Get the Fed off the Hook (Publication Centre)

Another month, another sluggish performance in the manufacturing sector. Even a third straight big jump in auto output was unable to rescue the May numbers, and aggregate output fell by 0.2%. The trend in output has been broadly flat over the past six months or so, and we see little prospect of any sustained near-term recovery.

16 June 2017 LatAm Markets will Continue to Cope Well with Fed Tightening (Publication Centre)

LatAm markets reacted well to the U.S. Fed's decision to increase the funds rate by 25bp, to 1-to-1¼%, on Wednesday. Currencies moved only slightly after the decision and asset markets were relatively stable. Yesterday, some currencies retreated marginally as investors digested the relatively hawkish message from the Fed and Chair Yellen's press conference.

16 August 2018 China's Phoenix Property Market Heats... Will it Help GDP Growth (Publication Centre)

It has been clear for some months now that China's housing market is refusing to quit, and July's data showed the phoenix rising strongly from the ashes.

16 August 2018 CPI Inflation is on Track for 2% by December, Despite July's Rise (Publication Centre)

CPI inflation is on track to fall back to 2.0% in the winter and below the MPC's target thereafter, despite rising to 2.5% in July, from 2.4% in June.

16 August 2017 Better Q2 Data in Colombia Ease Pressure on BanRep, for now (Publication Centre)

Colombian activity data released this week were weak, but mostly better than we expected. Real GDP rose 0.7% quarter- on-quarter in Q2, in contrast to the 0.3% fall in Q1, when the economy was hit by the lagged effect of last year's monetary tightening and the one-off VAT increase.

16 August 2017 As Good as it Gets for German GDP Growth in 2017? (Publication Centre)

Yesterday's Q2 GDP report in Germany was solid, but the headline disappointed slightly. GDP growth slowed to 0.6% quarter-on-quarter from an upwardly- revised 0.7% rise in Q1. The year-over-year rate, however, rose to 2.1% from a revised 2.0% in Q1.

16 April 2018 Banxico and BCRP to Keep Rates Cautiously on Hold this Year (Publication Centre)

Last week, the Bank of Mexico unanimously voted to leave the main rate on hold, at 7.50%, its highest level since early 2009.

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

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.

16 August. 2016 Core CPI Inflation is Set for New Cycle Highs, but Not Just Yet (Publication Centre)

Core CPI inflation plunged in the aftermath of the crash, reaching a low of 0.6% in October 2010. It then rebounded to a peak of 2.3% in the spring of 2012, before subsiding to a range from 1.6-to-1.9%, held down by slow wage gains and the strengthening dollar, until late last year. Faster increases in services prices and rents lifted core inflation to 2.3% in February, matching the 2012 high, but it has since been unchanged, net.

16 January 2018 The Eurozone's Trade Surplus Will Fall in the First Half of 2018 (Publication Centre)

The euro area's external surplus remained resilient toward the end of 2017, in the face of a stronger currency. The seasonally adjusted trade surplus rose to €22.5B in November, from €19.0B in October, lifted primarily by a jump in German exports.

16 January 2018 Will the BoJ's Stealth Taper Damage Japan's Economic Growth? (Publication Centre)

Japanese M2 growth slowed sharply in December, to 3.6% year-over-year, from 4.0% in November, with M3 growth weakening similarly. It is tempting to ask if the BoJ's stealth taper finally is damaging broad money growth.

16 February 2018 French Unemployment Plunged in Q4, and will Fall Further this (Publication Centre)

The French labour market improved much more than we expected in Q4. The headline unemployment rate plunged to 8.9%, from a downwardly-revised 9.6% in Q3.

16 Feb. 2015 Solid GDP data, but investment needs to pick up to sustain the momentum (Publication Centre)

Normal service was resumed in the euro area with Friday's GDP reports pointing to solid growth in Germany amid weakness in Italy and France. Real GDP in the Eurozone grew 0.3% quarter-on-quarter in the final three months of last year, up from 0.2% in Q3.

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

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

16 November. 2016 The Sell-off in LAtAm is Starting to Ease, but Risks Remain (Publication Centre)

Selling pressure in LatAm markets after Donald Trump's election victory eased when the dollar rally paused earlier this week. Yesterday, the yield on 10- year Mexican bonds slipped from its cycle high, and rates in other major LatAm economies also dipped slightly.

16 November. 2016 Strong Growth Outside Germany Saved the Day for the EZ In Q3 (Publication Centre)

Yesterday's GDP reports confirmed that growth was stable at 0.3% quarter-on-quarter in the Eurozone, leaving the year-over-year rate unchanged at 1.5%. Rebounding growth outside Germany, which has been a main driver of EZ GDP growth in this cycle, was the key story.

17 Mar. 2015 Plunging Temperatures Boost Utilities, Depress Manufacturing (Publication Centre)

The February industrial production numbers were flattered by an enormous 7.3% jump in the output of electricity and gas utility companies, thanks to a surge in demand in the face of the extraordinarily cold weather. February this year was the coldest since at least 1997, when comparable data on population weighted heating degree days begin.

17 May. 2016 Core Inflation is Still Trending Higher - Expect Rebound Today (Publication Centre)

The year-over-year rate of core CPI inflation rose steadily from a low of 1.6% in January 2015 to 2.3% in February this year. At that point, the three-month annualized rate had reached a startling 3.0%. You could be forgiven, therefore, for thinking that the dip in core inflation back to 2.2% in March was an inevitable correction after a period of unsustainably rapid gains, and that the underlying trend in core inflation isn't really heading towards 3%.

17 July 2018 Is the Prime Minister "A Dead Woman Walking"? (Publication Centre)

Former Chancellor George Osborne famously quipped after last year's general election that Theresa May was "a dead woman walking and the only question is how long she remains on death row".

17 January 2018 Domestically-Generated Inflation Is Still Weak, Giving the MPC Time (Publication Centre)

The fall in CPI inflation to 3.0% in December, from 3.1% in November, likely marks the first step in its journey back to the 2% target.

17 January 2018 Japan's Goods Price Inflation Slows, but Services In ation to Pick up (Publication Centre)

Japan's PPI inflation likely has peaked, with commodities still in the driving seat. Manufactured goods price inflation will soon start to slow, following the downshift in China's numbers.

17 May. Wage Growth to Continue to Rise, Despite Jobs Slowdown (Publication Centre)

The 21K rise in the headline, three-month average, unemployment rate between November and February confirmed last month that the U.K.'s period of fantastically strong growth in employment has ended. Timelier indicators, however, suggest unemployment is stabilising, not on the cusp of a major increase.

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

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

17 October 2018 Brazil's Presidential Second Round is Approaching is it a Done Deal (Publication Centre)

The Brazilian presidential election has remained in the spotlight in recent days and is the main driver of asset price volatility.

17 October 2018 The Eurozone's Trade Surplus is Headed Down a Notch this Year (Publication Centre)

The Eurozone's trade surplus rebounded slightly over the summer, rising to €16.6B in August from €12.6B in July, helped mainly by a 2.0% month-to- month jump in exports.

17 October 2017 Will Argentina's Domestic Demand Rebound in Coming Quarters? (Publication Centre)

Recent data in Argentina confirm the resilience of cyclical upturn.

17 November. 2016 Will Europe Have to Increase Spending on Defence Soon? (Publication Centre)

The winds of global politics are changing, and the major Eurozone countries could be forced to take heed. Donald Trump's foreign policy position remains highly uncertain. Our Chief Economist, Ian Shepherdson, expects the U.S. to increase defence spending next year; see the U.S. Monitor of October 20.

17 November 2017 Manufacturing Output Rebounds, but no Boom Coming (Publication Centre)

The spectacular 1.3% rebound in manufacturing output last month -- the biggest jump in seven years, apart from an Easter-distorted April gain -- does not change our core view that activity in the sector is no longer accelerating.

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

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 August 2018 Pessimism Towards Retailers Looks Warranted, Despite July's Sales Rise (Publication Centre)

Equity prices for U.K. retailers have performed woefully since the E.U. referendum. The FTSE All-Share Index for general retailers has underperformed the overall All-Share Index by nearly 30% since the Brexit vote.

16 September 2016 The MPC Remains Poised to Cut Rates in November (Publication Centre)

Without tying its hands, the MPC--which voted unanimously to keep interest rates at 0.25% and to continue with the £60B of gilt purchases and £10B of corporate bond purchases authorised last month--gave a strong indication yesterday that it still expects to cut Bank Rate in November.

16 September. 2016 Something Bad Happened to Industry in August, Will it Last? (Publication Centre)

We have not been expecting the Fed to raise rates next week, and yesterday's data made a hike even less likely. The September Philly Fed and Empire State surveys were alarmingly weak everywhere except the headline level, and the official August production data were grim.

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

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

16 October 2018 China's GDP Growth Likely Weaker than Friday's Numbers will Show (Publication Centre)

China's official real GDP growth is absurdly stable, but the risks in Q3 are tilted to the downside.

16 October 2017 Don't Rule Out a Hurricane-Induced Jump in the Core CPI (Publication Centre)

The September core CPI was held down by prescription drug prices, which fell by 0.6%, and vehicle prices, which fell by 0.4%.

17 Apr. 2015 Greece and its Eurozone creditors are teetering on the brink (Publication Centre)

The Eurosystem's position on Greece, echoed by Mr. Draghi earlier this week, is that progress on a deal is up to the Syriza-led government. But recent comments by German officials have added to the speculation that a Grexit is getting closer.

17 April 2018 Brazil's Economy will Improve in Q2, but it Faces Rising Political Risk (Publication Centre)

Leading indicators and survey data in Brazil still suggest a rebound from the relatively soft GDP growth late last year and in Q1.

17 August 2017 The Manufacturing Recovery Continues, but no Boom in Sight (Publication Centre)

The elevated readings from the ISM manufacturing survey this year have not been followed by rapid growth in output. The headline ISM averaged 55.8 in the second quarter, a solid if unspectacular reading. But output rose by only 1.2% year-over-year, and by 1.4% on a quarterly annualized basis.

17 August 2017 Strong and Broad-based Growth in the Eurozone (Publication Centre)

The cyclical upturn in the euro area's economy is going from strength to strength. Yesterday's second Q2 GDP estimate confirmed growth at 0.6% quarter- on-quarter, marginally stronger than the 0.5% rise in the first quarter.

17 April 2018 The March Drop in Retail Sales will Overshadow Slowly Reviving Wages (Publication Centre)

This week's labour market, inflation and retail sales data--the last before the MPC meets on May 10--will have a major bearing on the Committee's decision.

17 April 2018 The Manufacturing Rebound Continues, but Expect a Soft March (Publication Centre)

Over the past 18 months, the year-over-year rate of growth of manufacturing output has swung from minus 2.1% to plus 2.5%.

2 February 2017 March is Alive as the FOMC's Tone Becomes More Direct (Publication Centre)

The FOMC statement did enough to keep alive the idea that rates could rise in March, but the ball is now mostly in Congress' court. If a clear plan for substantial fiscal easing has emerged by the time of the meeting on March 15, policymakers can incorporate its potential impact on growth, unemployment and inflation into their forecasts, then a rate hike will be much more likely.

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

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

5 Jan. 2015 Political Risks Return, but M1 Signals Faster Growth Ahead (Publication Centre)

The prospect of a Greek parliamentary election on January 25th, following Prime Minister Samaras' failure to secure support for his presidential candidate, weighed on Eurozone assets over the holidays. The looming political chaos in Greece will increase market volatility in the first quarter, but it is too early to panic.

5 July 2018 ADP Likely to Report Another Solid Gain in Payrolls (Publication Centre)

Payroll growth rebounded to 223K in May, after two sub-200K readings, and we're expecting today's June ADP report to signal that labor demand remains strong.

5 December 2018 Mr. Macron Blinks in the Face of Violence and Chaos in Paris (Publication Centre)

The violent protests in France claimed their first victims over the weekend, providing sombre evidence of the severity of the situation for the government.

5 December 2018 China and U.S. Agree a Truce Exports Still Face Headwinds (Publication Centre)

Data last Friday showed Japan's labour market trends deteriorating.

5 December 2018 Brazil's Industrial Output Started Q4 Softly, but the Trend is Rising (Publication Centre)

Brazil's key data flow started Q4 on a soft note, but we still believe that the economic recovery will gather strength over the next three-to-six months.

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

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

5 July. 2016 Argentina's Economy is Still Shrinking, But Growth will Come (Publication Centre)

Argentina's overdue policy tightening, aimed at dealing with the country's severe inflation and fiscal problems, is underway. Printing of ARS at the central bank, the BCRA, to finance the budget, deficit has slowed and will be curbed further. Welfare spending, which accounts for nearly half of government spending, has been put on the chopping block.

5 May 2017 Brazil's Industrial Output Dropped in March, but the Trend is Rising (Publication Centre)

Wednesday's Brazilian industrial production data were worse than we expected but the details were less alarming than the headline. Output slipped 1.8% month-to-month in March, the biggest fall since August 2015, setting a low starting point for Q2.

5 June 2018 Eurozone Investors Haven't Been this Gloomy Since 2012 (Publication Centre)

If you were looking just at investor sentiment in the Eurozone, you would conclude that the economy is in recession.

5 June 2018 Is the BoJ's Stealth Taper to Blame for Recently Softer GDP Growth? (Publication Centre)

Japan's monetary base growth showed further signs of stabilisation in May, at 8.1% year-over-year, edging up trivially from 7.8% in April.

5 June 2017 Politics at Centre-Stage in Mexico, Volatility Likely Will Ease, for now (Publication Centre)

Investors in Mexico likely will focus early this week on yesterday's gubernatorial election results in Nayarit, Coahuila and the State of Mexico. The latter is especially important, because it is viewed as a possible guide to the 2018 presidential election.

5 December 2018 "Tariff Man" Doesn't Understand Tariffs that's Unfortunate (Publication Centre)

The key data originally scheduled for today--ADP employment and the ISM non-manufacturing survey, and the revised Q3 productivity and unit labor costs-- have been pushed to Thursday because the federal government will be closed for the National Day of Mourning for president George H. W. Bush.

5 December 2018 How's the Maths in Parliament Looking for a People's Vote? (Publication Centre)

With less than a week to go until MPs' meaningful vote on Brexit legislation, on December 11, the Prime Minister still looks set to lose.

4 September 2018 Asian PMIs Signal Trade Spat Damage, Korean Uptick is Transitory (Publication Centre)

China's Caixin manufacturing PMI edged down to 50.6 in August, from July's 50.8. This clashed with the increase in the official PMI, though the moves in both indexes were modest.

4 September 2017 Recovery will Continue in H2, but Fiscal Reforms are Key (Publication Centre)

Brazil's economy likely will bounce back during the second half of this year and into 2018, after the second quarter was marred by political risk.

4 October 2018 Japan Looks Set for a Weak Q3 Unsurprising After the Q2 Leap (Publication Centre)

Japan's real GDP seems unlikely to have risen in Q3, and could even have edge down quarter-on- quarter, after the 0.7% leap in Q2.

4 October 2017 Survey Data Suggest Recoveries in Brazil and Mexico are on Track (Publication Centre)

The Brazilian economy has been recovering at a decent pace in recent months. The labor market is on the mend, with the unemploymen t rate falling rapidly to 12.5% in August from 14% at the end of Q1.

4 September 2018 Colombia's Recovery Continues, and the Fundamentals are Sound (Publication Centre)

Activity data from Colombia over the past quarter have been strong. Real GDP expanded by a relatively robust 2.8% year-over-year in Q2, and is on track to post a 3.2% increase in Q3.

5 Apr. Has Corporate Profitability Peaked? (Publication Centre)

Companies' profit margins have fared relatively well during this recovery, and on many measures, they are back to pre-crisis levels. But looking ahead, corporate profitability is set to be squeezed as labour takes a larger share of national income and the Government gets to grips with the budget deficit by increasing corporate taxation.

5 December 2017 Andean Economies Are Surprising Positively, but Politics is a Risk (Publication Centre)

Peru's inflation continues to surprise to the downside, paving the way for an additional rate cut next week.

5 April 2018 Dip in EZ goods inflation is temporary...we hope (Publication Centre)

Inflation pressures in the Eurozone edged higher last month, reversing weakness at the start of the year.

5 April 2018 China No Longer Idly Waiting for Trade War (Publication Centre)

China hit back against the Trump-administration tariffs yesterday, targeting Mr. Trump's electorate.

5 April 2017 The Brazilian Economy is Improving: Expect a Modest Q1 GDP Recovery (Publication Centre)

Brazilian February industrial production data, released yesterday, were relatively positive. Output rose 0.1% month-to-month, pushing the yearover- year rate down to -0.8% from 1.4% in January. Statistical quirks were behind February's year-over-year fall, though.

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

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.

5 Nov. 2015 Yellen Signals December Action, Data Permitting (Publication Centre)

Fed Chair Yellen yesterday reinforced the impression that the bar to Fed action in December, in terms of the next couple of employment reports, is now quite low: "If we were to move, say in December, it would be based on an expectation, which I believe is justified, [our italics] that with an improving labor market and transitory factors fading, that inflation will move up to 2%." The economy is now "performing well... Domestic spending has been growing at a solid pace" making a December hike a "live possibility." New York Fed president Bill Dudley, speaking later, said he "fully" agrees with Dr. Yellen's position, but "let's see what the data show."

6 December 2018 No Real Signs of the Slowdown Story in the Labor Market Data (Publication Centre)

Behind all the talk of slowdowns and Fed pauses, we see no sign that the labor market is loosening beyond a very modest uptick in jobless claims, and even that looks suspicious.

6 December 2017 Manufacturing Productivity Rises in China at the Expense of Services (Publication Centre)

China's Caixin services PMI picked up further in November to 51.9 from October's 51.2, but the rebound is merely a correction to the overshoot in September, when the headline dropped sharply.

6 December 2017 Low Rates Will Continue to Spur the Industrial Recovery in Brazil (Publication Centre)

Brazilian data strengthened early in Q4, supporting the case for the COPOM to slow the pace of rate cuts. We expect the SELIC policy rate to be lowered by 50bp today, to 7.0%.

6 December 2017 ADP to Report Strong November Jobs, but will Overstate Official Data (Publication Centre)

The ADP measure of private employment hugely overstated the official measure of payrolls in September, in the wake of Hurricane Irma, but then slightly understated the October number.

6 February 2017 Mexico's Sentiment Depressed by Trump Fears and "Gasolinazo" (Publication Centre)

Mexico's latest hard data suggest things might not be as bad as we feared. Retail sales and manufacturing output were relatively strong at the end of last year, the Q4 preliminary GDP report was mostly upbeat, and the labor market was firing on all cylinders.

6 February 2018 Welcome to the Chair, Mr. Powell - How was Your First Day? (Publication Centre)

The record 1,178-point drop in the Dow will garner all the headlines today, but a sense of perspetive is in order, despite the chaos. The 113-point, or 4.1%, fall in the S&P 500 was very startling, but it merely returned the index to its early December level; it has given up the gains only of the past nine weeks.

6 July 2017 Monte dei Paschi Finally is Restructured. Will it Work? (Publication Centre)

It's probably happening a decade too late, but the EU is now moving in leaps and bounds to restructure the continent's weakest banks. Yesterday, the Monte dei Paschi saga reached an interim conclusion when the Commission agreed to allow the Italian government to take a 70% stake in the ailing lender.

6 February 2018 The PMIs Show Brexit Risks are Continuing to Dampen Growth (Publication Centre)

The latest PMIs suggest that investors have jumped the gun in pricing-in a 50% chance of the MPC raising interest rates again as soon as May.

6 February 2018 China's Services PMI Overstates Growth in Q1 February to Correct (Publication Centre)

The jump in the Caixin services PMI in the past two months looks erratic, with holiday effects playing a role, though there could be more going on here.

6 February 2018 Argentina Ended 2017 Strongly but Challenges are Mounting (Publication Centre)

Argentina's economy was improving late last year, albeit slowing at the margin, according to the latest published indicators. GDP data confirmed that the revival continued during most of Q4, with the economy growing 0.4% month-to-month in November.

6 August 2018 July Surveys Point to Below-Trend GDP Growth in Q3 (Publication Centre)

The MPC's view that the economy likely will grow at an above-trend rate over the coming quarters was challenged immediately last week by the PMIs.

6 August 2018 Don't Worry About July's Payroll Numbers, Trend is Still 200K-plus (Publication Centre)

We are not worried, at all, by the slowdown in headline payroll growth to 157K in July from an upwardly-revised 248K in June.

5 October 2017 ADP Confirms that Hurricanes hit Payrolls (Publication Centre)

The ADP employment report for September showed private payrolls rose by 135K, trivially better than we expected.

5 Oct. 2015 Bravery will be Rewarded on Eurozone Equities in Q4 (Publication Centre)

Headwinds from global growth fears have weighed on Eurozone equities in recent months, leaving the benchmark MSCI EU ex-UK index with a paltry year-to-date return ex-dividends of 1.7%. We think bravery will be rewarded, though, and see strong performance in the next six months. Equities in Europe do best when excess liquidity --M1 growth in excess of inflation and nominal GDP growth--is high.

5 November 2018 The Labour Market in the Andes is Struggling, Can it Improve in Q4 (Publication Centre)

Chile's unadjusted unemployment rate fell to 7.1% in July-to-September, from 7.3% in June-to-August, but it was up from 6.7% in September last year.

5 November 2018 China's Role in Global Rates over the Next 10 Years (Publication Centre)

In recent months we've been thinking more deeply about the themes for the next economic cycle for China, and its impact on the world.

5 October 2018 BoJ Flexibility was Partly Designed to Accommodate the Fed Path (Publication Centre)

When the BoJ tweaked policy back in July, we think the increase in flexibility in part was to lay groundwork for the BoJ to respond to the Fed's ongoing hiking cycle.

5 October 2018 Should Surveys Pointing to Higher Core Goods Inflation be Trusted? (Publication Centre)

The CPI inflation rate for non-energy industrial goods--core goods, for short--has tracked past movements in trade-weighted sterling closely over the last ten years, because virtually all goods in this sector are imported.

6 April 2018 Expect a Correction in Payrolls, but the Trend is Still Very Strong (Publication Centre)

Your correspondent is on the slopes this week, but the employment report deserves a preview nonetheless.

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

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.

5 September 2018 The Surge in August's ISM is Welcome but won't be Repeated (Publication Centre)

August's 14-year high in the ISM manufacturing index, reported yesterday, clearly is a noteworthy event from a numerology perspective, but we doubt it marks the start of a renewed upward trend.

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

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 May 2018 Weak PMIs Mean Even a "Hawkish Hold" is Off the MPC's Table (Publication Centre)

The failure of the Markit/CIPS services PMI to rebound fully in April, following its fall in March, provides more evidence that the economy is in the midst of an underlying slowdown.

4 June 2018 The Economy Should be Less Lethargic in 2019 (Publication Centre)

We're relatively optimistic--yes, you read that correctly--on the outlook for the U.K. economy in 2019.

30 October 2017 Is China's Profits Surge Driving up Developers' Short-term Borrowing? (Publication Centre)

Chinese industrial profits continue to surge, rising 27.7% year-over-year in September, up from 24.0% in August.

30 October 2018 Are Chinese Pro ts Normalising But the Headwinds Remain (Publication Centre)

Chinese headline industrial profits data show that growth slowed to just 4.1% year-over-year in September, from 9.2% in August.

30 Oct. 2015 Brazil's Central Bank Minutes Underline Policymakers' Problems (Publication Centre)

The key message of the minutes of the Copom meeting, released yesterday, is that policymakers remain worried about the inflation outlook and, in particular, about uncertainties surrounding fiscal tightening. But the Committee reinforced the signal that the Selic rate is likely to remain at the current level, 14.25%, for a "sufficiently prolonged period". The economy is in a severe recession and the rebalancing process has been longer and more painful than the Central Bank anticipated.

30 November. 2016 ADP Likely to Signal Decent Payroll Growth (Publication Centre)

The November ADP employment report today likely will show private payrolls rose by about 180K. We have no reason to think that the trend in payroll growth has changed much in recent months, though the official data do appear to be biased to the upside in the fourth quarter, probably as a result of seasonal adjustment problems triggered by the crash of 2008. We can't detect any clear seasonal fourth quarter bias in the ADP numbers.

30 November 2018 Fraying Confidence and Slowing Money Growth Point to a Weak Q4 (Publication Centre)

Further political wrangling yesterday distracted from data showing that the risk of no -deal Brexit is placing increasing strain on the economy.

30 October 2018 Fiscal Loosening Creates Space for Two MPC Rate Hikes Next Year (Publication Centre)

This Budget will be remembered as the moment when the Government finally threw in the towel on plans to run sustainable public finances.

30 October 2018 Policymakers in Chile and Colombia Opting for Divergent Paths, For Now (Publication Centre)

Inflation pressures remain under control in most LatAm economies, allowing central banks to keep interest rates on hold, despite the challenging external environment.

31 July 2018 Japanese Q2 GDP Growth Should Rebound Strongly (Publication Centre)

Japan's June retail sales data add to the run of numbers suggesting a strong rebound in real GDP growth in Q2, after the 0.2% contraction in activity in Q1.

31 January 2018 Japan's Labour Market Squeeze is set to Intensify Further (Publication Centre)

Japan's headline jobless rate edged up to 2.8% in December, from 2.7% in November, but the increase was negligible, with the rate moving to 2.76% from 2.74%.

31 August 2018 Did Eurozone Core Inflation Decline Slightly in August (Publication Centre)

Yesterday's advance CPI data in Germany suggest that inflation fell slightly in August.

31 August 2018 Andean Economies Remain Strong, but External Threats are Significant (Publication Centre)

Data released yesterday show that the Chilean economy had a weak start to the second half of the year.

30 November 2017 Japanese Retail Sales Disappoint but Confidence Rebounds (Publication Centre)

Japanese retail sales were unchanged in October month-on-month, after a 0.8% rise in September.

30 November 2017 Headline and Core Inflation in the Eurozone Rebounded in November (Publication Centre)

Today's data likely will show that inflation in the Eurozone rebounded in November.

30 June 2017 EZ Inflation Data are Complicating Life for the ECB and Markets (Publication Centre)

Advance country data indicate that headline EZ inflation fell slightly in June; we think the rate dipped to 1.3% year-over-year, from 1.4% in May.

30 June 2017 Core PCE Inflation set to Fall Again, but it won't Sway the Fed (Publication Centre)

We have argued recently that the year-over-year rates of core CPI and core PCE inflation could cross over the next year, with core PCE rising more quickly for the first time since 2010.

30 July 2018 Growth is Strong, but 4%-plus Cannot be Sustained (Publication Centre)

The biggest single surprise in the second quarter GDP report was the unexpected $28B real-terms drop in inventories.

30 January 2018 Mexico's Trade Gap Shrank in 2017, Helped by NAFTA-Related Fears (Publication Centre)

Mexico's trade balance shrank slightly last year, to USD11B, from USD13B in 2016. The main driver was a big swing in the non- energy balance, to a record USD8.0B surplus, following a USD0.4B deficit in 2016.

30 June 2017 Q1 National Accounts Won't Meet the Governor's Rate Hike Criteria (Publication Centre)

Markets will be extremely sensitive to economic data in the run-up to the MPC's next meeting on August 3, following signals from several Committee members that they think the cas e for a rate rise has strengthened.

30 Mar. 2015 Output Gap Uncertainty Paralysis Keeps the Fed's Focus on Wages (Publication Centre)

Perhaps the biggest single reason for the Fed's reluctance, so far, to move away from monetary policy designed to cope with catastrophe is that no-one knows for sure how much of the damage has been repaired, and how close the economy is to normalizing.

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

Bullish money supply data last week added to the evidence that the Eurozone's business cycle is strengthening. Broad money growth--M3--rose to 5.3% year-over-year in October from 4.9% in September. Most of the increase came from a surge in short-term debt issuance, rising 8.4% year-over-year, following an inexplicable 1.4% fall in September.

30 May 2018 Argentina's Economy had a Solid Q1, but the Pain is Starting to Show (Publication Centre)

Hard data released in Argentina over recent weeks showed that the economy was resilient in Q1 and early Q2.

30 May 2017 Why Don't Markets Take the Fed's Interest Rate Forecasts Seriously? (Publication Centre)

Markets expect the Fed will fail to follow through on its current intention to raise rates twice more this year and three times next year. Part of this skepticism reflects recent experience.

30 March 2017 Can Unemployment Fall to 4% or Less? What Would the Fed do? (Publication Centre)

The unemployment rate hit its post-1970 low in April 2000, at the peak of the first internet boom, when it nudged down to just 3.8%. The low in the next cycle, first reached in October 2006, was rather higher, at 4.4%.

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

The outlook for Argentina is improving. We expect economic growth to remain quite strong over the next year, despite a relatively soft start to 2017 and increasing external threats in recent weeks. The INDEC index of economic activity--a monthly proxy for GDP--is volatile, rising 1.9% month-to-month in March after a 2.6% drop in February, but the underlying trend is improving.

31 May 2018 Eurozone Headline Inflation is About to Zoom Past 2% (Publication Centre)

Many investors probably glossed over yesterday's barrage of data in the Eurozone, for fear of being caught out by another swoon in Italian bond yields. Don't worry, we are here to help.

4 December 2018 Eurozone Markets Want to Believe in the U.S.-China Trade Truce (Publication Centre)

The 90-day truce in the trade wars between the U.S. and China, brokered on Saturday at the G20 meeting in Argentina, is a big deal for financial markets in the euro area, at least in the near term.

4 December 2018 China and U.S. Agree a Truce Exports Still Face Headwinds (Publication Centre)

Following the much-anticipated meeting between Presidents Xi and Trump over the weekend, the U.S. will now leave existing tariffs on $200B of Chinese goods at 10%, rather than increasing the rate to 25% in January, as previously slated.

4 December 2017 Japan's Labour Market is Already Tight, and Getting Tighter (Publication Centre)

Japan's labour market is already tight, but last week's data suggest it is set to tighten further.

4 Dec. 2014 The ECB Doves are In Control - Can They Make Their Influence Count? (Publication Centre)

The dovish message from the ECB going into today's final meeting of the year has intensified. Mr. Draghi's comments last month, at the European Banking Congress in Frankfurt, point to an increased worry on low core inflation.

4 December 2018 The China-U.S Trade Truce Eases Downside Risks for Chile and Peru (Publication Centre)

LatAm assets and currencies enjoyed a good start to the week, following the agreement between the U.S. and China to pause the trade war.

4 December 2018 The Manufacturing Cycle has Peaked, but No Rollover Yet (Publication Centre)

The rebound in the ISM manufacturing index was a relief, after the sharp drop in October, though the strength in last week's Chicago PMI meant that it wasn't a complete surprise.

4 July 2018 Rising Household Saving Likely will Keep Spending Growth Subdued (Publication Centre)

The economy would have ground to a halt last year had households not reduced their saving rate sharply.

4 July 2018 Household Balance Sheets in the Eurozone are in Good Shape (Publication Centre)

Data yesterday showed that Momentum in the EZ retail sector stumbled through middle of Q2.

4 July 2017 Why Hasn't EZ Industrial Output Responded to the PMIs? (Publication Centre)

Yesterday's PMI data confirmed that the EZ manufacturing sector is in rude health. The manufacturing PMI in the euro area rose to a cyclical high of 57.4 in June, from 57.0 in May, slightly above the first estimate. New orders and output growth are robust, pushing work backlogs higher and helping to sustain employment growth.

4 Feb. 2015 Divergent Manufacturing Stories in LatAm's Biggest Economies (Publication Centre)

The manufacturing indexes for January showed a small improvement for the biggest economies in LatAm: Brazil and Mexico. In Brazil, the PMI manufacturing index increased marginally to 50.7 in December from 50.2 in November, thanks to stronger output and new orders components, which rose together for the first time in ten months.

4 Dec. 2014 - November Data Might Hide Underlying Labor Market Strength (Publication Centre)

The ADP report yesterday has not changed our view that tomorrow's payroll number will be about 180K, well below our estimate of the underlying trend, which is about 250K. ADP's numbers are heavily influenced by the BLS data for the prior month, and tell us little or nothing about the next official report.

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

LatAm, particularly Mexico, has dealt with Donald Trump's presidency better than expected thus far. Indeed, the MXN rose 10.7% against the USD in Q1, the stock market has recovered after its initial post-Trump plunge, and risk metrics have eased significantly.

31 October 2017 The Mexican Economy Remained Resilient in Q3, Despite Headwinds (Publication Centre)

Today's advance Q3 GDP report for Mexico will show that the economy performed relatively well at the start of the second half, despite external and domestic shocks.

31 October 2017 EZ GDP Growth Slowed in Q3, but Trend is Steady at About 2% (Publication Centre)

Yesterday's data kicked off the release of Eurozone Q3 growth numbers with a robust Spanish headline. Real GDP in Spain rose 0.8% quarter-on-quarter, slowing slightly from 0.9% in Q2, and le aving the year-over-year rate unchanged at 3.1%.

31 October 2017 China's Developers Increase Risky Debt Issuance as Property Cools (Publication Centre)

In yesterday's Monitor we suggested that China's profits surge has been party dependent on developers' risky debt issuance practices.

31 May. 2016 Can we Still be Confident that the Saving Rate Will Fall? (Publication Centre)

Europeans, who usually save more of their income than Americans, have spent all the windfall from falling gas prices. Americans have not. It is tempting, therefore, to argue that perhaps Americans have come to see the error of their low-saving ways, and are now seeking to emulate the behavior of high-saving Europeans. Undeniably, the plunge in gas prices has given Americans the opportunity to save more without making hard choices.

31 October 2017 The Slowdown in Bank Lending will Gather Momentum Soon (Publication Centre)

Growth in the broad money supply slowed further in September, providing more evidence that the economy is losing momentum.

31 October 2018 Eurozone GDP Growth hit a Speed Bump in the Third Quarter (Publication Centre)

Yesterday's barrage of economic data in the Eurozone offered a good snapshot of the grand narrative.

4 Apr. 2016 While We Were Out... (Publication Centre)

The March employment report didn't tell us what we really want to know. The underlying trend in wage growth remains obscured by the calendar quirk which depresses reported hourly earnings when the 15th of the month--pay day for people paid semi-monthly -- falls after the payroll survey week.

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

While we were out, the economic news in LatAm was mostly positive. The main upside surprise came from Mexico, with the IGAE activity index--a monthly proxy for GDP--rising 2.9% year-over-year in August, up from 1.2% in July, and an average of 2.4% in Q2. A modest rebound was anticipated, but the headline was much better than we and the markets expected.

31 October. 2016 Q3 Growth Likely Wasn't 2.9%, Headwinds in Q4 (Publication Centre)

We are struggling to make sense of the third quarter GDP numbers. The reality is that the massive surge in soybean exports--which we estimate contributed 0.9 percentage points, gross, to GDP growth--mostly came from falling inventory, because the soybean harvest mostly takes place in Q4.

31 October 2018 Japan's Unemployment Rate is Likely to Tick up Again in Q4 (Publication Centre)

The Japanese unemployment rate fell again in September, to 2.3% from 2.4%. In the same vein, the job-to-applicant ratio rose to 1.64, from 1.63.

6 July 2018 Finally, a Bit of Good News in German Manufacturing (Publication Centre)

Demand in German manufacturing rebounded strongly midway through the second quarter.

6 July. 2015 Greece Votes No, and Takes a Step Closer to Exiting the Euro (Publication Centre)

The Greek polls released Sunday evening indicate a comfortable victory for "no," rejecting the latest EU proposal. This is not a good outcome for the market, and volatility will likely increase substantially today. The result--not confirmed as we go to press but very clearly indicated by the count so far--gives an air of legitimacy to Syriza's brinkmanship, but the creditors' reaction to a "no" vote, which they likely did not expect, is uncertain.

8 September 2017 The ECB is worried about a strong euro (Publication Centre)

The ECB made no changes to its policy stance yesterday. The central bank left its refinancing and deposit rates at 0.00% and -0.4%, respectively, and maintained the pace of QE at €60B per month. The program will run until December "or beyond, if necessary."

8 September. 2016 Claims, JOLTS, and Sales Don't Support the Grim ISM Message (Publication Centre)

We argued yesterday that the steep declines in the ISM surveys in August, both manufacturing and services, likely were one-time events, triggered by a combination of weather events, seasonal adjustment issues and sampling error. These declines don't chime with most other data.

8 October 2018 German Manufacturing Export Orders Probably Bottomed in Q3 (Publication Centre)

Friday's factory orders report in Germany provided a bit of relief amid the gloom in manufacturing.

8 October 2018 Bright Spots, and Some Warning Signs, in Japan's Wage Data (Publication Centre)

Japan's average monthly labour earnings growth tumbled to 0.9% year-over-year in August, from 1.6% in July. This is not a disaster.

8 November 2018 Fed on Hold Today, but Zero Real Rates won't Slow the Labor Market (Publication Centre)

The Fed today will do nothing to rates and won't materially change the language of the post-meeting statement.

8 September. 2016 Evidence of the Inefficacy of Monetary Stimulus Mounts (Publication Centre)

Evidence that households are not benefiting much from the Monetary Policy Committee's easing measures mounted yesterday, after the release of August data on advertised borrowing rates. Our first chart shows the drop in swap rates and average quoted mortgage rates since the end of last year.

9 April 2018 Brazil set for Stronger Growth in Q2, but the Election Brings Uncertainty (Publication Centre)

Brazil's recent data show that inflation is still falling, allowing the central bank to ease further next month, while economic activity is improving, though the rate of growth has slowed.

9 February 2017 Is the Jump in Wholesale Inventories Sustainable? (Publication Centre)

Total real inventories rose at a $48.7B annualized rate in the fourth quarter, contributing 1.0 percentage points to headline GDP growth. Wholesale durable goods accounted for $34B of the aggregate increase, following startling 1.0% month-to-month nominal increases in both November and December. The November jump was lead by a 3.2% leap in the auto sector, but inventories rose sharply across a broad and diverse range of other durables, including lumber, professional equipment, electricals and miscellaneous.

9 Feb. 2015 Only Brazil Will Have to Hike, Other LatAm Central Banks On Hold (Publication Centre)

Last week's data supported our view that monetary policy across LatAm will continue to diverge in the short term. Brazil will have to prolong its monetary tightening cycle, while economies such as Colombia and Chile will remain on hold despite the recent slowdowns in their economic cycle.

9 August 2018 Core PPI Inflation is Still Rising, but Most of the Pressure is Due to Oil (Publication Centre)

Core PPI inflation has risen steadily this year, with month-to-month increases of 0.3% or more in five of the past six months.

9 April 2018 Hard Data Suggest that the German Economy Stalled in Q1 (Publication Centre)

Friday's industrial production report in Germany capped a miserable week for economic data in the Eurozone's largest economy.

8 May 2018 Small Firms' Sentiment Likely has Weakened Further, but no Disaster (Publication Centre)

We're looking forward to today's April NFIB survey of activity and sentiment in the small business sector with some trepidation.

8 May 2018 Brazil's Q1 Looks Poor - we Expect a Rebound Soon, but Risks Remain (Publication Centre)

Brazil's March industrial production report, released on Thursday last week, was weaker than we and the markets were expecting, while the recent deterioration in sentiment surveys highlights the downside risks to the rather fragile economic recovery.

8 June 2018 Did German Manufacturers Take a Long Break in Q1 and Q2? (Publication Centre)

New orders data increasingly suggest that German manufacturers all but shut their production lines at the start of the year.

8 June 2018 China is Ill-equipped to Keep up with Fed Hikes in the Next 18 Months (Publication Centre)

China's FX reserves data pointed to an about-turn in net capital flows in May, with capital leaving the country again after two months of net inflows, and a current account deficit in Q1.

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

German GDP growth jumped in the first quarter, but monthly economic data suggest the economy all but stalled in Q2. Yesterday's industrial production data are a case in point. Output slid 1.3% month-tomonth in May, pushing the year-over-year rate down to -0.4% from a revised 0.8% gain in April. Adding insult to injury, the month-to-month number for April was revised down by 0.3 percentage points

8 January 2018 Japan's Services Sector will Pick Up in Q1, Wage Pressure Mounts (Publication Centre)

Japan's services sector PMI last week was disappointing.

8 June 2018 The FX Sell-off has Put Central Banks Under Stress, will they Act? (Publication Centre)

EM risk sentiment remains grim as the Trump administration dispenses protectionist trade measures. LatAm's biggest economies, Brazil and Mexico, have been hit the hardest, with their currencies falling 3.3% and 2.2% respectively in the last week, the most in the EM world.

8 June. 2016 EZ Domestic Demand Rose Solidly in Q1, but Will Slow in Q2 (Publication Centre)

The third estimate of euro area growth in the first quarter provides clear evidence that measuring GDP is not an exact science. Real GDP rose 0.6% quarter-on-quarter in Q1, accelerating from 0.4% in Q4. This latest estimate is higher than the previous estimate, 0.5%, but in line with the first calculation. Eurostat and all the large Eurozone economies now provide early estimates of GDP, before data for the full quarter is available.

8 May 2018 China's Diminished Current Account Surplus is Hugely Significant (Publication Centre)

China's current account dropped sharply in Q1, to a deficit of $28.2B, from a surplus of $62.3B in Q4.

8 May 2017 Mr. Macron Easily Defeats Ms. Le Pen: Now the Hard Work Begins (Publication Centre)

Early results suggest that Mr. Macron has comfortably beat Marine Le Pen to become French president, defying a leak of emails and other documents from his En Marche campaign over the weekend. The final results won't be published until Monday morning, but the initial estimate indicates that Mr. Macron will edge Ms. Le Pen by 65.1% to 34.9%.

8 March 2018 Will President Xi's Power Grab Scare Capital out of China? (Publication Centre)

China's FX reserves fell to $3,134B in February, from $3,161B in January, after a year of gains.

8 March 2017 Brazil's Economy Struggled Late Last Year, Will it Grow in Q1? (Publication Centre)

Markets have been positively surprised by Brazil's rapid disinflation, the efforts at fiscal reform, and the prospect of growth in the economy this year. The Ibovespa index is now above its pre-crisis high and the real has approached the key level of three per USD in recent months. But the latest GDP report, released yesterday, showed that the economy struggled in Q4. Real GDP fell 0.9% quarter-on-quarter, worse than the revised 0.7% drop in Q3.

9 February 2018 Hard Data Point to a Slowdown in Q4 German GDP Growth (Publication Centre)

In contrast to the strong December trade numbers in France--see here--yesterday's German data were soft. The seasonally adjusted trade surplus dipped to €21.5B in December, from €22.3B in November.

9 January 2017 Will Sterling Take a Further Pounding in 2017? (Publication Centre)

Sterling was the worst performing G10 currency in 2016 and most analysts anticipate further weakness in 2017. The cost of purchasing downside protection for sterling over the next year also continues to exceed upside protection, as our first chart shows.

9 November 2018 Stockbuilding Won't Temper the Near-Term Slowdown (Publication Centre)

A flawed theory still is circulating that the economy might outperform over the next two quarters because firms will stockpile goods due to the risk of a no-deal Brexit.

9 November 2017 Higher Oil Prices: Another Headwind for the Economy (Publication Centre)

The recent surge in the oil price has added to the headwinds set to batter the economy over the next year. The price of Brent crude has jumped by $10 since September to $64, its highest level since June 2015.

9 November 2017 Claims Data Look Great, but Payrolls are Driven More by Shifts in Hiring (Publication Centre)

We were pretty sure that the underlying trend in jobless claims had bottomed, in the high 230s, before the hurricanes began to distort the data in early September.

9 Nov. 2015 Investors Should Brace for a Poor German Q3 GDP Report (Publication Centre)

Friday's industrial production data capped another dreadful week for German manufacturing. Output fell 1.1% month-to-month in September, pushing the year-over-year rate lower to 0.2%, from a revised 2.9% in August. The 0.6% upward revision of the previous month's data makes the data slightly less awful than the headline, but the details showed weakness across all core sectors. The underlying trend in production is stable at about 1.2% year-over-year, but downbeat new orders suggest it will weaken in the fourth quarter.

9 November 2018 The Fed is Still on Course to Hike in December no Mention of Stocks (Publication Centre)

Convention dictates that we lead with yesterday's Fed meeting, but it's hard to argue that it really deserves top billing.

9 November. 2016 Trump Stuns LatAm... Banxico Likely Will Have to Act (Publication Centre)

As it became clear that Donald Trump would beat Hillary Clinton to win the U.S. presidency, EM currencies came under severe pressure, fearing his economic and immigration policies. Some of the initial pressure is easing as markets digest the news and following Mr. Trump's conciliatory tone in his victory speech. But the proposals have been made and the MXN and other key LatAm assets likely will remain very stressed in the near term.

US 15 September 2017 Core CPI Mean-Reverts, Hefty Storm-Induced Increases Ahead? (Publication Centre)

The run of soft core CPI numbers is over. The average 0.18% increase over the past two months probably is a good indication of the underlying trend -- the prints would have been close to this pace in both months had it not been for wild swings in the lodging component -- and the other one-time oddities of recent months' have faded.

9 October 2018 PBoC RRR cut: The Lady Doth Protest too Much, Methinks (Publication Centre)

Over the weekend, the PBoC cut the RRR for the vast majority of banks. FX reserves data released shortly after suggested that the Bank already is propping up the currency.

9 October 2017 Did German Manufacturing Pick up the Pace in Q3? (Publication Centre)

Friday's German new orders data were sizzling. Factory orders jumped 3.6% month-to-month in August, pushing the year-over-year rate up to a nine-month high of 7.8%, from an upwardly-revised 5.4% in July.

9 November. 2016 With Trump the Likely winner, what next for policy and Markets? (Publication Centre)

The verdict is not yet definitive, but prudence dictates we must now assume victory for Donald Trump. The immediate implication of President Trump is global risk-off, with stocks everywhere falling hard, government bonds rallying, alongside gold and the Swiss franc. The dollar is the outlier; usually the beneficiary when fear is the story in global markets, it has fallen overnight because the risk is a U.S. story.

9 May 2018 Is Down Now the Only Way for U.K. House Prices? (Publication Centre)

Britain's housing market appears to be going from bad to worse.

9 May 2018 The German Economy Finished Q1 on a Strong Note (Publication Centre)

Yesterday's economic reports showed that the German economy firmed at the end of Q1, but this doesn't change the story for a poor quarter overall.

9 July 2018 May GDP Data will have the Final Word on an August Rate Hike (Publication Centre)

Mark Carney revealed last week that recent data had given him "greater confidence" that the weakness of Q1 GDP was almost entirely due to severe weather.

9 July 2018 Evidence is Mounting that German Manufacturing did Well in Q2 (Publication Centre)

Friday's industrial production data in Germany added to the manufacturing optimism following the sharp rise in new orders--see here--reported earlier in the week.

9 January 2018 Small Business Owners are Happy, so Why are Capex Plans Soft? (Publication Centre)

We already know that the month-to-month movements in the key labor market components of the December NFIB small business survey were mixed; the data were released last week, ahead the official employment report, as usual.

9 January 2018 Now is Not the Time to Turn Upbeat on Productivity Growth (Publication Centre)

Last week's news that output per hour jumped by 0.9% quarter-on-quarter in Q3--the biggest rise since Q2 2011--has fanned hopes that the underlying trend finally is improving.

9 July. 2015 Steep Wall of Worry in EZ Equities, But Macro Indicators Say "Buy" (Publication Centre)

Bond market volatility and political turmoil in Greece have been the key drivers of an abysmal second quarter for Eurozone equities. Recent panic in Chinese markets has further increased the pressure, adding to the wall of worry for investors. A correction in stocks is not alarming, though, following the surge in Q1 from the lows in October. The total return-- year-to-date in euros--for the benchmark MSCI EU ex-UK index remains a respectable 11.4%.

9 June 2017 Inflation in Mexico will Stabilize Soon, Despite May's Ugly Headline (Publication Centre)

The Mexican inflation rate soared at the start of 2017, but this is yesterday's story; the headline will stabilize soon and will decline slowly towards the year-end. May data yesterday showed that inflation rose to 6.2%, from 5.8% in April. Prices fell 0.1% month-to-month unadjusted in May, driven mainly by lower non-core prices, which dropped by 1.3%, as a result of lower seasonal electricity tariffs.

9 May 2018 Improving Economies in the Andes, Inflation is Well Under Control (Publication Centre)

March economic activity in Chile expanded by a solid 4.6% year-over-year, pointing to Q1 real GDP growth of 4.0%, the fastest pace since Q3 2013, up from 3.3% in Q4.

9 May 2017 Colombian Inflation is Heading Lower, Despite the Pause in April (Publication Centre)

Colombia's disinflation since mid-2016 has been driven by easing pressures on food prices, weak demand, and the better performance of the COP. But higher regulated prices at the start of the second quarter have triggered a pause in the downward trend.

9 March 2018 MXN Breathes Sigh of Relief as U.S. Exempts Mexico, but Risks Remain (Publication Centre)

It is still premature to make fundamental changes to our core views for the global or LatAm economy, following President Trump's plan to slap hefty tariffs on steel and aluminium imports, potentially escalating into a global trade war.

9 March 2018 January's Production Rebound will Conceal a Manufacturing Slowdown (Publication Centre)

The industrial sector went from strength to strength in 2017. Year-over-year growth in production picked up to 2.1%--its highest rate since 2010--from 1.3% in 2016.

8 January 2018 Core Inflation in the Eurozone Remains Pleasantly Low (Publication Centre)

Friday's final EZ inflation report of 2017 sent a dovish signal to bond markets.

8 February 2018 Japanese Wage Cost Pressures are Building, but the Yen is Competitive (Publication Centre)

Japanese firms hand out a significant portion of labour compensation through bonuses, with the largest lump awarded in December.

6 September 2018 Eurozone Retail Sales Details Look Better than the Headline (Publication Centre)

The EZ retail sector slowed at the start of Q3, though only slightly.

6 September. 2016 German Services PMI Taints an Otherwise Strong Day for EZ Data (Publication Centre)

Yesterday's EZ PMI data surprised to the downside. The composite PMI in the euro area dipped to 52.9 in August, from 53.2 in July, below the initial estimate 53.3. The headline was marred by weakness in the German services PMI, which crashed to a 40-month low of 51.7, from 54.4 in July.

6 September 2018 Does the Caixin Services PMI Pick up Activity Missing from GDP (Publication Centre)

The Caixin services PMI fell to 51.5 in August, from 52.8 in July.

6 September 2017 Will the Brazilian Industrial Sector Continue to Perform Strongly? (Publication Centre)

Brazil's industrial sector came roaring back at the start of Q3, following a poor end to Q2. Industrial production jumped 0.8% month-to-month in July, driving the year-over-year rate higher to 2.5%, from 0.5% in June and just 0.1% on average in Q2.

6 September 2017 August's PMIs Show the Economy is too Brittle to Handle a Rate Hike (Publication Centre)

Our conviction that the economy continues to grow at a snail's pace increased yesterday following the release of August's Markit/CIPS services survey.

7 April 2017 Brace for Disappointing Industrial Production Data Today (Publication Centre)

Manufacturing orders in Germany recovered some ground in the middle of Q1, following the plunge at the beginning of the year. Factory orders rose 3.4% in February, pushing the year-over-year rate up to +4.6% from a revised 0.0% in January.

7 April 2017 Mixed Signals for March Payrolls, but 200K Seems a Fair Bet (Publication Centre)

Everything but the weather points to a strong headline payroll number for March. Our composite leading payroll indicator has signalled robust job growth since last fall, and the message for March is very clear.

7 December 2017 Tory Eurosceptics Are Not an Invincible Barrier to a Soft Brexit (Publication Centre)

Brexit talks have hit an impasse over the Irish border. The Republic of Ireland will veto any deal that creates a hard border with Northern Ireland. This means that Northern Ireland must remain in the EU's customs union.

7 December 2017 Job Gains Easily Strong Enough to Push Unemployment Down Further (Publication Centre)

We were a bit disappointed by the November ADP employment report, though a 190K reading in the 102nd month of a cyclical expansion is hardly a disaster.

7 Dec. 2015 Mexico's Leading Indicators Point to a Solid Fourth Quarter (Publication Centre)

Mexico's economy is not accelerating, but it is holding up well in extremely difficult circumstances for EM. Growth is reasonably healthy, inflation is under control and the labor market is resilient. In short, Mexico is a success story, given the backdrop of plunging oil prices. The contrast with the disaster in Brazil is stark. Last week's survey and hard data continued to tell an upbeat story on Mexico's economy. The IMEF manufacturing index, Mexico's PMI, rose to 52.1 in November up from 51.6 in October, lifted mainly by gains in the employment and deliveries indexes.

7 Dec. 2015 After the First Hike, Next Week, Wage Gains Will Set the Pace (Publication Centre)

We're guessing Fed Chair Yellen would have preferred to have another acceleration in hourly earnings and a dip in the unemployment rate along side the hefty 211K leap in November payrolls, but no matter. At its October meeting, the Fed wanted to see "some further improvement in the labor market", and by any reasonable standard a 509K total increase in payrolls in two months fits the bill.

6 Oct. 2015 Will the Industrial Slowdown Drag Down the Rest of the Economy? (Publication Centre)

The elevated September ISM non-manufacturing index reported yesterday--it dipped to 56.9 but remains very high by historical standards--again served to underscore the depth of the bifurcation in the economy. The services sector, boosted by the collapse in gasoline prices and the strong dollar, is massively outperforming the woebegone manufacturing sector.

6 November 2018 Should the PMIs' Gloomy Prognosis be Trusted This Time? (Publication Centre)

October's Markit/CIPS services survey added to evidence that the economy has started Q4 on a very weak footing.

6 March 2017 PMIs Signal Stronger EZ Growth, but Will the Hard Data Follow? (Publication Centre)

Survey data continue to suggest that GDP growth will accelerate in Q1. The final PMI reports on Friday showed that the headline EZ composite index rose to 56.0 in February, from 54.4 in January, in line with the first estimate.

6 June 2017 May Services PMI Dents Second Quarter Rebound Hopes (Publication Centre)

The fall in the services PMI to 53.8 in May, from 55.8 in April, is a setback for hopes that the slowdown in GDP growth in Q1 will be fleeting. Both business activity and orders rose at their slowest rates since February.

6 July. 2016 ISM Non-manufacturing Jobs Should Rebound, but How Far? (Publication Centre)

The shock of the weak May payroll report means that the June numbers this week will come under even greater scrutiny than usual. We are not optimistic that a substantial rebound is coming immediately. The headline number will be better than in May, because the 35K May drag from the Verizon strike will reverse.

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

Economic activity is slowing in Colombia. The ISE activity index--a monthly proxy for GDP--rose only 0.6% year-over-year in April, down from 2.3% in March, and we expect it to rise at this pace over the coming months. During the first quarter, the index rose at an average year-over-year rate of 3.0%.

6 March 2017 Fed Fears Hit LatAm FX Last Week - is a Renewed Sell-off Coming? (Publication Centre)

LatAm assets have struggled in recent days as it has become clear that the Fed will hike next week. But we don't expect currencies to collapse, as domestic fundamentals are improving and the broader external outlook is relatively benign.

6 March 2018 Andean Economies are Improving, but Protectionist Threats Are a Risk (Publication Centre)

Chile's IMACEC economic activity index rose 3.9% year-over-year in January, up from 2.6% in December, and 2.9% on average in Q4, thanks to strong mining output growth and solid commercial, manufacturing and services activity.

6 November 2018 Chinese PMIs Show the Economy o to a Weak Start in Q4 (Publication Centre)

Yesterday's Caixin services PMI data complete the set for October.

6 Nov. 2015 Brazil's Industrial Recession Deepens - Chile's Recovery in Place (Publication Centre)

Brazil's industrial sector continues to suffer, despite September's report surprising marginally on the upside. Output contracted 1.3% month-to-month in September, after a 0.9% fall in August, pushing the year over-year rate down to -10.9% down from -8.8% in August. This is the biggest drop since April 2009. Output has fallen an eye-popping -7.4% year-to-date, and in the third quarter alone activity contracted by 3.2% quarter-on-quarter, in line with our vie w for a 1.2% contraction in real GDP for the third quarter.

6 March 2018 Why China will Miss its GDP Growth, Fiscal Deficit and RMB targets (Publication Centre)

China's National People's Congress yesterday laid out its main goals for this year, on the first day of its annual meeting.

6 March 2018 Easing Services Price Pressures Undermine the Rate Hike Case (Publication Centre)

The case for the MPC to hold back from raising interest rates in May remains strong, despite the improvement in the Markit/CIPS services survey in February.

7 December 2018 German Manufacturing is Recovering, but Watch Out for Base Effects in Q4 (Publication Centre)

The tepid recovery in German manufacturing continued in at the start of Q4. Factory orders edged higher by 0.3% month-to-month in October, boosted by a 2.9% month-to-month increase in export orders, primarily for capital and intermediate goods in other EZ economies.

7 December 2018 GDP to Stagnate Again in October, but Markets are Braced for the Worst (Publication Centre)

October's GDP report, released on Monday, might just manage to break through the wall of noise coming from parliament ahead of the key Brexit vote on Tuesday.

7 September. 2016 Q2 GDP Data Add to the Evidence of a Peak in the EZ Business Cycle (Publication Centre)

A plunge in imports saved the EZ economy from a contraction in second quarter GDP. Yesterday's final data showed that real GDP growth rose 0.3% quarter- on-quarter, slowing from a 0.5% jump in Q1. A 0.4 percentage points boost from net exports was the key driving force.

7 September. 2016 Copom Minutes Suggest that October Easing is Very Much Alive (Publication Centre)

The recent less-bad growth and inflation data in Brazil are encouraging news and are setting the stage for easing in October. The minutes of the Copom's August 31 monetary policy meeting, released yesterday, were less hawkish than in previous months, indicating that policymakers are gauging the possibility of cutting rates.

7 September. 2016 Capex Rebounding in Q3, Except in the Housing Component (Publication Centre)

If you had asked us in the spring where the action would be in capital spending over the summer, we would have said that the housing component was the best bet. Right now, though, the opposite seems more likely, with housing likely to be the weakest component of capex.

7 September 2018 First Signs of EM Weakness in the Eurozone Hard Data (Publication Centre)

Yesterday's manufacturing data in German threw off a nasty surprise.

8 Apr. The Trade Deficit Will Remain Bloated, Despite the Weaker Pound (Publication Centre)

Net trade has been a major drag on the economy's growth rate in recent quarters, and February's trade figures, released today, are likely to signal another dismal performance in the first quarter.

8 August 2017 Will Mexico's Economy Resilience Continue in the Second Half? (Publication Centre)

The Mexican economy maintained its relatively strong momentum in Q2. The first estimate of Q2 GDP, released last week, confirmed that growth was resilient during the first half of this year, despite the confidence hit caused by domestic and external headwinds.

8 February 2017 German Manufacturing Data Threw a Tantrum in December (Publication Centre)

German manufacturing data are all over the place at the moment. Earlier this week, data showed that new orders jumped toward the end of 2016, but yesterday's industrial production report was a shocker. Output plunged 3.0% month-to-month in December, pushing the year-over-year rate down to -0.7% from a revised +2.3% in November.

8 December 2017 Robust Jobs Data Will Emphasize the Labor Market's Tightness (Publication Centre)

We expect to see a 180K increase in November payrolls

8 December 2017 Investment is Now the Key Driver of GDP Growth. Will it Continue? (Publication Centre)

Yesterday's detailed Q3 GDP data in the Eurozone confirmed that the economy has gone from strength to strength this year.

8 Dec. 2014 The Hunt for Yield is Still On, But it Comes With Higher Risk Next Year (Publication Centre)

Divergence between central banks and the reach for yield will remain dominant themes for Eurozone fixed income markets next year, but a lot has already been priced in.

7 September 2017 Japanese Regular Wages Breaking out of a 20-year Stagnation? (Publication Centre)

Japanese labour cash earnings data threw analysts another curveball in July, falling 0.3% year-over-year. At the same time, June earnings are now said to have risen by 0.4%, compared with a fall of 0.4% in the initial print.

7 November. 2016 Is Sterling Now Back on a Sustained Recovery Path? (Publication Centre)

Upbeat PMIs, the MPC's abandonment of its easing bias and the High Court ruling that only a parliamentary vote--and not the Prime Minister--can trigger Article 50, all helped sterling to make up some lost ground last week.

7 March 2017 Can Italy's Economy Overcome Weak Real Wage Growth in 2017? (Publication Centre)

The Italian economy slowed at the end 2017, and it continues to underperform other major EZ economies. Real GDP rose 0.2% quarter-on-quarter in Q4, a bit slower than the 0.3% gain in Q3, pushing full-year growth up to a modest 1.0%. This compares poorly, though, with growth of 1.6% in the euro area as a whole.

7 June 2018 Car Sales Aren't Recovering Yet, Recent Data are Misleading (Publication Centre)

At first glance, car sales appear to be staging a strong recovery, mirroring the better news on high street spending in Q2.

7 February 2018 Fed Officials Likely to Signal that the Plan is to Stick to the Plan (Publication Centre)

No fewer than four FOMC members will speak today, ranging from the very dovish to the pretty hawkish.

7 December. 2016 Durable Goods Orders Plunged Last Month, but the Core is Stabilizing (Publication Centre)

Unless Boeing received a huge aircraft order on November 30, we can now be pretty sure that most of October's 4.6% leap in headline durable goods orders reversed last month. Through November 29, Boeing booked orders for 34 aircraft, compared to 85 in October. Moreover, the bulk of the orders were for relatively low value 737s, whereas the October numbers were boosted by a surge in orders for 787s, whose list price is about three times higher.

7 March 2017 The Chancellor Isn't Bluffing, This Will Be a Thrifty Budget (Publication Centre)

If the Chancellor is true to his word, Wednesday's Budget will be a pedestrian affair with few major policy changes designed to prevent the economy from slowing this year. In an article in The Sunday Times, Philip Hammond asserted that "we cannot take our foot off the pedal" in the mission to eliminate the budget deficit by the end of the next parliament.

7 March 2018 ADP Set to Report Strong Payrolls in February, 200K Seems a Good Bet (Publication Centre)

All the signs are that ADP will today report a solid increase in February private payrolls; our forecast is 200K, but if you twist our arms we'd probably say the mild weather last month across most of the country points to a bit of upside risk.

7 November 2018 Should a 2019 General Election be the Base Case? (Publication Centre)

Speculation that another general election is imminent is rarely out of the news. At present, betting markets see about a 35% chance of another election in 2019, broadly the same chance as one in 2022, when it is currently scheduled to be held.

7 November 2018 Sentiment Surveys are Deteriorating in Mexico Texcoco Airport Effect (Publication Centre)

Recently released data in Mexico are sending weak signals for the business outlook, and the Texcoco airport saga won't help.

7 March 2018 Will Snow Disruption Freeze the MPC in its Tracks? (Publication Centre)

Last week's heavy snowfall, which blighted the entire country, will depress GDP growth in Q1, making it harder for the MPC to read the economy.

7 March 2018 The Eurozone has a lot to lose from a trade war (Publication Centre)

We are surprised by the EU's reaction to Mr. Trump's announcement that the U.S. will impose tariffs on steel and aluminium.

30 January 2018 Core PCE Inflation has Bottomed, and Will Rise Sharply in March (Publication Centre)

The 0.18% increase in the core PCE deflator in December was at the lower end of the range implied by the core CPI. It left the year-over-year rate at just 1.5%.

30 January 2017 Real M1 Indicates a Solid Start to 2017, but What Happens Next? (Publication Centre)

The business cycle upturn in the Eurozone likely will remain resilient in the first half of 2017. Friday's money supply data showed that headline M3 growth increased to 5.0% in December, from 4.9% in November.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

26 July 2017 National Surveys are Not Bogged Down by Disappointing PMIs (Publication Centre)

Yesterday's national business surveys provided an optimistic counterbalance to the underwhelming PMIs on Monday, although they all suggest that the euro area economy is in good form.

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

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

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

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

26 March 2018 Smoot and Hawley are Still Dead, Trump is not Resurrecting them... Yet (Publication Centre)

Everyone needs to take a deep breath: This is not 1930, and Smoot-Hawley all over again.

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

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

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

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

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

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

27 April 2018 The Likely Q1 GDP Growth Slowdown Probably Didn't Happen (Publication Centre)

The first point to make about today's Q1 GDP growth number is that whatever the BEA publishes, you probably should add 0.9 percentage points.

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

Yesterday's ECB meeting was comfortably uneventful for markets.

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

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

27 June 2018 May's Rise in Mortgage Approvals Isn't the Start of an Upward Trend (Publication Centre)

A tentative revival in mortgage lending is underway, following the lull in the four months after the MPC hiked interest rates in November.

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

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

27 June 2017 The Italian Job on Two Small Venetian Banks is a Good Start (Publication Centre)

The strengthening recovery in the euro area is proving to be a poisoned chalice for some of the region's most vulnerable banks. Earlier this month-- see our Monitor of June 8--Spain's Banco Populare was acquired by Banco Santander, and the bank's equity and junior credit holders were bailed-in as part of the deal.

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

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

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

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

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

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

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

President Temer seems to be advancing on his reform agenda.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

27 Jan. 2016 Remortgaging Won't Be So Supportive of Growth This Year (Publication Centre)

The fall in the cost of new secured credit has played a key role in reinvigorating the economy over the last couple of years. Mortgage interest payments were 3.7% lower in Q3 than in the same quarter a year previously, even though the stock of secured debt was 2% larger. As a result, the percentage of household disposable incomes taken up by mortgage interest payments fell to 4.8% in the third quarter of 2015--the lowest proportion since records began in 1987--from 5.2% a year before.

26 January 2018 The Euro and EZ Bond Yields are not for Turning, Even by Mr Draghi (Publication Centre)

As expected, the ECB made no changes to its policy stance today. The refi and deposit rates were left at 0.00% and -0.4%, respectively, and the pace of purchases under QE was maintained at €30B per month.

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

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

24 October 2018 The Double-Digit Fall in Equity Prices Bolsters Case for MPC Inertia (Publication Centre)

The FTSE 100 has dropped by 7% since the end of September--leaving it on course for its worst month since May 2012--and now is 12% below its May peak.

24 September 2018 Good News on Brazil Inflation, but all Eyes are on the Presidential Race (Publication Centre)

Broad-based inflation pressures in Brazil remain tame despite the sharp BRL depreciation this year, totalling about 7% in the last three months alone.

24 October 2018 Korea's Stronger Q3 Growth Likely due to Falling Imports, Ominously (Publication Centre)

Korea's preliminary GDP report for Q3 will be released tomorrow.

24 November 2017 Slowdown in German Domestic Demand Will Reverse in Q4 (Publication Centre)

Yesterday's detailed GDP report in Germany showed net exports propelled GDP growth to a cyclical high last quarter.

24 November 2017 GDP Growth Remains too Reliant on Households Saving Less (Publication Centre)

Yesterday's second estimate of Q3 GDP confirmed that the U.K. economy has underperformed this year.

24 September 2018 The Prime Minister has Doubled Down on a Weak Hand (Publication Centre)

Theresa May doubled down on her Brexit stance last week, despite European Council President Donald Tusk stating clearly that her proposed framework for economic cooperation "will not work" because it risks undermining the single market.

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

Economic activity in Mexico during the past few months has been stronger than most observers expected. Growth has certainly moderated from the relatively strong pace recorded during the second half of last year, but data for January and February show that it is still quite strong.

25 August. 2016 The Collapse in Core Capex Orders is Over, Where's the Rebound? (Publication Centre)

The alarming-looking decline in core capital goods orders since late 2014 has been substantially due, in our view, to the rollover in investment in the mining sector. But the 29% jump in the number of oil rigs in operation, since the mid-May low, makes it clear that the collapse is over.

25 August. 2016 Surging Net Exports Prevented a Q2 GDP Contraction in Germany (Publication Centre)

Yesterday's final Q2 GDP report in Germany confirmed the initial data showing that the economy slowed less than we expected last quarter. Real GDP rose 0.4% quarter-on-quarter in Q2, after a 0.7% jump in Q1. The working-day adjusted year-over-year rate fell marginally to 1.8%, from 1.9% in Q1.

25 August 2017 Sizzling Business Sentiment in France Signals Firm Q3 GDP (Publication Centre)

Yesterday's barrage of French business surveys contains hundreds of indicators, but its central story is comfortably simple.

25 April 2018 A Warning From the IFO (Publication Centre)

The April IFO business sentiment survey increased the degree of uncertainty over the German economy, following stabilisation in the PMIs earlier this week.

24 Nov. 2015 Bullish PMI Survey Won't Prevent Further ECB Stimulus (Publication Centre)

Yesterday's PMI reports repeated the message of a firm cyclical Eurozone recovery, despite investors' angst over deflation and the underwhelming Q3 GDP data earlier this month. The composite index in the zone rose to a 54-month high of 54.4 in November from 53.9 in October, lifted by strong output and solid new business growth. Our first chart shows the rise in the PMI points to slight upside risks in Q4 to the four quarter trend in real GDP growth of 0.4% per quarter.

24 May 2018 No Relief to Markets from the Eurozone PMIs in May (Publication Centre)

Yesterday's data in the Eurozone did little to calm investors' nerves amid rising political uncertainty in Italy and tremors in emerging markets.

24 January 2018 Existing Home Sales Likely Dropped in December, but the Trend is Rising (Publication Centre)

In November, existing home sales substantially overshot the pace implied by the pending home sales index.

24 January 2017 The Boost to Disposable Incomes from Mortgage Refinancing is Fading (Publication Centre)

The steady decline in mortgage rates since the financial crisis has helped to underpin strong growth in household spending. Existing borrowers have been able to refinance loans at ever-lower interest rates, while the proportion of first-time buyers' incomes absorbed by interest and capital payments has declined to a record low. As a result, the proportion of annual household incomes taken up by interest payments has fallen to 4.6%, from a peak of 10% in 2008.

24 January 2017 LatAm Currencies Enjoying a Moment of Calm, but Risks Remain (Publication Centre)

Most LatAm currencies traded higher against the USD yesterday, adding to the gains achieved after Donald Trump's inauguration last Friday. The MXN, which was the best performer during yesterday's session, was up about 0.8%; it was followed by the CLP, and the BRL. The positive performance of most LatAm currencies, especially the MXN, is related to positioning and technical factors.

24 February 2017 Is Sterling's Depreciation a Blessing or a Curse for Profits? (Publication Centre)

This week's GDP figures showed that firms invested only sparingly in 2016, but their financial fortunes have been bolstered by a recovery in profits. The gross operating surplus of all firms rose by 4.5% quarter-on-quarter in Q4, the biggest increase for 11 quarters. This pushed the share of GDP absorbed by profits up to 21.3%, just above its 60-year average of 21.2%.

24 July 2018 GDP Growth in Korea Likely Slipped in Q2, on Cooler Domestic Demand (Publication Centre)

GDP data for Q2 are due July 26; we expect the report to show a marginal dip in growth, to a seasonally adjusted 0.8% quarter-on-quarter, from 1.0% in Q1.

24 July 2018 Sterling has Plenty of Scope to Rise in a Soft Brexit Scenario (Publication Centre)

Sterling depreciated further last week as the Prime Minister's Brexit plans were tweaked by Brexiteers and given a lukewarm reception by the European Commission.

24 May 2018 If the BoK Lacks the Stamina to Hike this Week, 2018 Could be Barren (Publication Centre)

Korea's 20-day export growth came in weaker than we anticipated earlier this week. Granted, year-over- year growth rebounded to 14.8% in May, from 8.3% in April.

24 May 2018 April Existing Home Sales Likely to Signal that Activity has Peaked (Publication Centre)

The recovery in existing home sales appears to have stalled, at best.

24 Mar. 2016 Mexico's Domestic Sector Still Resilient - a Good Start to the Year (Publication Centre)

Mexico's CPI rose just 0.1% in the first half of March, due to higher core prices. The increase was broadbased within this component, with goods prices increasing by 0.2% and core services 0.4%. Core services prices were driven by temporary factors, including vacation packages and higher airfare tickets. Non-core prices, meanwhile, fell 0.5%, due mainly to falling fresh food prices.

24 July. 2015 More Bad News From Brazil, But Mexico Strength Remains Good (Publication Centre)

Brazil's inflation data continue to disappoint, but they are showing some signs of improvement, at the margin. The mid-month CPI, the IPCA-15 index, jumped to 9.3% year-over-year in July, up from 8.8% in June, soaring well above the upper bound of the inflation target and reaching the highest level since December 2003, as shown in our first chart.

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

The bad economic news in Brazil is unstoppable. The mid-month CPI index rose 1.3% month-to-month in February, as education, housing, and transport prices increased. School tuition fees jumped 6% month-to-month in February, reflecting their annual adjustment, and transport costs rose by 2% due to an increase in regulated gasoline prices.

25 January 2018 Rising Oil Prices Will Reduce Q4 Real Inventories, but by How Much? (Publication Centre)

Today's advance inventory and international trade data for December could change our Q4 GDP forecast significantly.

26 August. 2016 Early GDP Estimates Often Fail to Register Turning Points (Publication Centre)

Today's second estimate of Q2 GDP likely will restate the preliminary estimate that quarter-onquarter growth picked up to 0.6%, from 0.4% in Q1. Over the last two decades, the second estimate of GDP has differed from the preliminary estimate just 38% of the time.

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

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

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

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

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

Argentina's economy continues to recover steadily.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

25 June. 2015 When Will Small Firms Run Out of Labor Market Insiders to Hire? (Publication Centre)

The high and rising proportion of small businesses reporting difficulty in filling job openings is perhaps the biggest reason to worry that the pace of wage increases could accelerate quickly. If they pick up too far, the Fed's intention to raise rates at a "gradual" pace will be upended. The NFIB survey of small businesses--mostly very small--shows employers are having as much trouble recruiting staff as at the peak of the boom in 2006.

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

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

25 July. 2016 Should We Believe the Downbeat PMI? (Publication Centre)

Last week's news that the composite PMI collapsed to 47.7 in July--its lowest level since April 2009--from 52.4 in June is the first clear indication that the U.K. is heading for a recession.

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

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

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

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

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

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

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

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

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

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

25 May 2018 Germany Slowed in Q1, but what Happened to Private Demand? (Publication Centre)

The headline in yesterday's detailed Q1 German GDP data was old news, confirming that growth in the euro area's largest economy slowed at the start of the year.

27 November 2017 Is it a Bird? Is it a Plane? No, It's the German IFO Survey (Publication Centre)

We are happy to report that the laws of gravity have been temporarily suspended in the German survey data.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

29 September 2016 What to Look Out for During Friday's Data Deluge (Publication Centre)

The estimate of services output for the first month of the current quarter usually gets lost among the deluge of national accounts and balance of payments data released for the previous quarter.

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

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

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

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

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

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

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

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

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

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

29 July. 2015 Is EM Weakness Threatening Investment Recovery in the EZ? (Publication Centre)

Volatility in commodities and emerging markets has intensified since the beginning of July, with the stock market drama in China taking centre stage. The bubble in Chinese equities inflated without much ado elsewhere, and can probably deflate in isolation too. But the accelerating economic slowdown in EM is becoming an issue for policy makers in the Eurozone.

29 January 2018 Strong Q4 GDP Requires us to Tweak, not Overhaul, Our Rate Call (Publication Centre)

The preliminary estimate of Q4 GDP was unambiguously strong and has forced us to modify our view of the likely timing of the next interest rate increase.

29 January 2018 The Investor's Guide to the Business Cycle in the Eurozone (Publication Centre)

Money supply data in the EZ continue to suggest that headline GDP growth will slow soon.

29 Jan. 2016 EZ Core Inflation is Rising, but Weak Oil Prices are Still a Wildcard (Publication Centre)

German data yesterday indicate that inflation pressures have, so far, been resilient in the face of the recent collapse in oil prices. Inflation rose to 0.5% year-over-year in January from 0.3% in December, partly due to base effects pushing up the year-over-year rate in energy prices, but core inflation rose too. The detailed state data indicate that almost all key components of the core index contributed positively, lead by leisure and recreation and healthcare.

29 July. 2016 Brace for Downside Surprise in Today's Advance Q2 EZ GDP Data (Publication Centre)

Today's Eurozone data schedule is very hectic, but attention likely will focus on advance Q2 GDP data. France, Austria and Spain will report advance data separately ahead of the EZ aggregate estimate, which is released 11.00 CET. This report will include a confidential number from Germany.

29 June 2017 The EZ Economy is in Great Shape, but Probably not Getting Better (Publication Centre)

Money supply dynamics in the Eurozone were broadly stable last month. M3 rose 5.0% year-over-year in May, accelerating slightly from a 4.9% increase in April, in line with the trend since the middle of 2015.

29 June 2018 Surveys Continue to Weaken the Case for a Rate Hike (Publication Centre)

Surveys released yesterday failed to support the MPC's view that the economy has bounced back in Q2.

29 June 2018 Mexico's Presidential Race Nears the Finish AMLO has a Strong Lead (Publication Centre)

We are going to print two days before the July 1 presidential election in Mexico.

29 June 2018 EZ Inflation is Back to Normal, but that's not Enough for the ECB (Publication Centre)

Yesterday's inflation data in the major euro area economies force us to mark down slightly our prediction for today's headline EZ number.

29 June 2018 Core PCE Inflation is Nudging Towards the Target (Publication Centre)

Our base-case forecast for the May core PCE deflator, due today, is a 0.17% increase, lifting the year-over-year rate by a tenth to 1.9%.

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

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

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

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

3 October 2018 Investment is Dropping, but Don't Rule out a Rebound Next Year (Publication Centre)

One of the more disheartening aspects of the Q2 national accounts, released last week, was the downward revision to business investment. Quarteron-quarter growth was revised to -0.7%, from +0.5% previously.

3 October 2018 Are Higher Wages Squeezing EZ Manufacturing Margins? (Publication Centre)

Producer price inflation in the euro area almost surely peaked over the summer.

3 October 2017 Auto Sales Rebounded in September, but by How Much? (Publication Centre)

Auto industry watchers at WardsAuto and JD Power are in agreement that today's September sales numbers will be little changed from a year ago, at around 17.5M.

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

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

30 April 2018 Q1 Slowdown Confirmed in the EZ, but Don't Push the Panic Button (Publication Centre)

Friday's advance GDP data provided the first solid evidence of a Q1 slowdown in the euro area economy.

30 April 2018 The Q1 Slowdown Wasn't Just Weather-related (Publication Centre)

Last week's preliminary estimate of Q1 GDP has extinguished any lingering chance that the MPC might raise interest rates at its next meeting on May 10.

30 August. 2016 Real GDP Growth in the Eurozone is About to Come Down a Notch (Publication Centre)

Money supply data in the euro point to a cyclical peak in GDP growth this year. Headline M3 growth fell to 4.8% year-over-year in July, from 5.0% in June, chiefly due to a slowdown in narrow money. M1 growth declined to 8.4%, from 8.7%, as a result of weaker momentum in overnight deposits and currency in circulation.

30 August 2017 The Eurozone's Cyclical Recovery is Stable, Not Accelerating (Publication Centre)

While we were enjoying a rare sunny bank holiday in the U.K., data showed that Eurozone money supply growth slowed at the start of Q3. Broad money growth--M3--fell to a 10-month low of 4.5% year-over- year in July, from 5.0% in August.

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

Recently data from Argentina continue to signal a firming cyclical recovery. According to INDEC's EMAE economic activity index, a monthly proxy for GDP, the economy grew 4.0% year-over-year in June, up from an already-solid 3.4% in May.

30 August 2017 ADP Looks set to Report Another Solid Gain in Payrolls (Publication Centre)

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.

3 July 2017 Will the Argentinian Economy be Oblivious to Political Risks? (Publication Centre)

Argentina's economic data released last week confirm that the economy is improving. Our core view, for now, is that the economy will continue to defy rising political uncertainty, both domestic and external.

3 July 2017 Is the Jump in Eurozone Core Inflation Really Temporary? (Publication Centre)

Friday's euro area inflation reported capped a difficult week for EZ bondholders, although most of the damage was done beforehand by the advance German data.

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

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

3 August 2018 Does the BoJ Believe in Targeting 2% Inflation Anymore? (Publication Centre)

Why should Japan, the U.S., the Euro Area, the U.K. and Japan all have the same inflation target?

3 April 2018 Japan's Labour Market Tightness will Surprise the BoJ (Publication Centre)

Japan's unemployment rate edged back up to 2.5% in February after the drop in January to 2.4%.

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

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

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

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

3 December 2018 Soft Economic Data in the EZ are Priced-in by Rates Markets (Publication Centre)

Friday's inflation and labour market data in the Eurozone were dovish.

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

The Manufacturing Upswing Continues; no Sign of Weakening

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

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

3 January 2017 The Eurozone in 2017: Higher Inflation and Slower M1 Growth? (Publication Centre)

A bullish EZ money supply report was the key highlight while we were away over the holidays. M3 growth in the euro area accelerated to 4.8% year-over-year in November from 4.4% in October.

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

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

29 Jan. 2016 Data and Copom Minutes Point to no Change in Brazilian Rates (Publication Centre)

Another month, another bleak Brazilian labor market report. The seasonally adjusted unemployment rate increased marginally to 8.3% in December, up from 8.2% in November, much worse than the 5.1% recorded in December 2014.

29 Jan. 2015 Inflation data will be kind to bondholders, for now (Publication Centre)

Last week's QE announcement has made Eurozone inflation prints less important for investors, but the market will still be watching for signs of a turning point in benchmark bond yields. The data are unlikely to challenge bond holders in the short run, however, as the Eurozone probably slipped deeper into deflation in January.

28 April 2017 The Economy Appears to have Stalled in Q1, but Q2 Will be Better (Publication Centre)

Whatever number the BEA publishes this morning for first quarter GDP growth -- we expect zero -- you probably should add about one percentage point to correct for the persistent seasonal adjustment problem which has plagued the data for many years. Reported first quarter growth has been weaker than the average for the preceding three quarters in 21 of the 31 years since 1985 -- and in eight of the past 10 years.

28 August 2018 Germany's Economy is Resilient in the Face of External Risks (Publication Centre)

Friday's detailed GDP data in Germany confirm that the euro area's largest economy performed strongly in the second quarter.

28 April 2017 The ECB is Happier about the Economy, But not Inflation (Publication Centre)

Yesterday's ECB meeting painted a picture of a central bank in wait-and-see mode. The main refinancing and deposit rates were kept at 0.00% and -0.4% respectively, and the marginal lending facility rate also was unchanged at 0.25%.

28 April 2017 Current Account in Brazil Still Improving, But not for Long (Publication Centre)

Brazil's recovery has been steady in recent months, and Q1 likely will mark the end of the recession. The gradual recovery of the industrial and agricultural sectors has been the highlight, thanks to improving external demand, the lagged effect of the more competitive BRL, and the more stable political situation, which has boosted sentiment.

28 Apr. Don't Pin Your Hopes on a Post-Referendum Rebound (Publication Centre)

The slowdown in GDP growth in Q1 reflects more than just Brexit risk. The intensifying fiscal squeeze, the uncompetitiveness of U.K. exports, and the lack of spare labour suggest that the U.K.'s recovery now is stuck in a lower gear.

28 August 2018 Mexico Struggled at the End of the First Half Will it Rebound (Publication Centre)

The Mexican economy shrank by 0.2% quarter- on-quarter in Q2, according to the final GDP report, a tenth worse than the preliminary reading.

28 August. 2015 Another Month, Another Bullish Money Supply Report in the EZ (Publication Centre)

Yesterday's money supply report provided further relief for investors doubtful over the cyclical recovery following the market turmoil. Broad money growth, M3, accelerated to 5.3% year-over-year in July, up from 4.9% in June, and within touching distance of a new post-crisis high. Narrow money continued to surge too, rising 12.1% year-over-year, up from 11.1% in June, sending a bullish message on the Eurozone economy.

28 Jan. 2015 Economic Momentum Means no Easing in Mexico this Year (Publication Centre)

Mexico's central bank, Banxico, will hold its first monetary policy meeting of this year tomorrow. It will break with tradition, holding the meeting on Thursday at 1:00 p.m, local time, instead of the previous 9:00 a.m slot.

28 February 2018 Retail Sales in Mexico Ended 2017 Badly, but Spending Will Rebound (Publication Centre)

Retail sales in Mexico plunged at the end of Q4, but we think households' spending will continue to contribute to GDP growth in the first quarter.

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

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.

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

The Colombian economy was relatively resilient at the end of last year, but economic reports released during the last few weeks indicate that growth is still fragile, and that downside risks have increased. Real GDP rose 1.0% quarter-on-quarter in Q4, pushing the year-over-year rate up to 1.6% from 1.2% in Q3.

28 Apr. 2016 Eurozone Real Narrow Money Growth Continues to Slow (Publication Centre)

Monetary dynamics in the Eurozone were virtually unchanged last month. M3 growth rose trivially to 5.0% year-over-year in March from a revised 4.9% in February. It was lifted by stronger growth in medium-term deposits and issuance of short-term debt.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

27 September 2017 Yellen is Following the Tightening Labor Market, it's Telling her to Hike (Publication Centre)

Fed Chair Yellen's speech in Cleveland yesterday elaborated on the key themes from last week's FOMC meeting.

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

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

28 Jan. 2016 Italy Gets its "Bad Bank," but Implementation Looks Difficult (Publication Centre)

Reports yesterday indicated that a deal has finally been struck between the European Commission and the Italian government to start dealing with bad loans in the banking system. The initial details suggest the government will be allowed to guarantee senior tranches on non-performing loans, supposedly making them easier to sell to private investors. In order to avoid burdening government finances as part of the sales--not allowed under the new banking union rules--the idea is to price the guarantees based on the credit risk of similar loans.

28 July 2017 The Eurozone is in fine form, as we start our summer break (Publication Centre)

This is the final report before your scribe disappears into the Scottish Highlands for a few weeks, and we are leaving you with a Eurozone economy in fine form. The calendar will be relatively light in our absence and will tell us what we already know; namely that the euro area economy maintained its strong momentum in Q2.

28 September 2018 Confidence is Starting to Fray as the Brexit Deadline Nears (Publication Centre)

The persistence of no-deal Brexit risk has taken a toll on confidence across the economy over the last month.

28 September 2017 All Systems Go for Solid Eurozone GDP Growth in Q3 and Q4 (Publication Centre)

Money supply growth in the Eurozone firmed last month. Broad money--M3--rose 5.0% year-overyear in August, after a tepid 4.5% rise in July.

28 September 2016 Strong EZ Money Supply Data, but Lending Details Mixed (Publication Centre)

Yesterday's money supply data in the Eurozone were solid across the board. Growth in headline M3 rose to 5.1% year-over-year in August, up from a 4.9% increase in July. A rebound in narrow money growth was the key driver of the gain, with seasonally- and calendar-adjusted M1 rising 8.9% year-over-year, up from July's 8.4%.

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

Former Treasury Secretary and thwarted would-be Fed Chair Larry Summers has been arguing for some time that the Fed should not raise rates "...until it sees the whites of inflation's eyes". As part of his campaign to persuade actual Fed Chair Yellen of the error of her intended ways, he argued at the World Economic Forum in September that the strong dollar has played no role in depressing inflation. Never one to miss an opportunity to diss the competition, he wrote that Stanley Fischer's view that the dollar has indeed restrained inflation is "substantially weakened" by the hard evidence. Dr. Summers' view is that inflation is being held down by other, longer-lasting factors, principally the slack in the lab or market, rather than the "transitory" influences favored by the Fed.

28 September 2018 The New IMF Agreement Diminishes the Default Risk at Least until 2020 (Publication Centre)

The Argentinian government and the IMF have finally reached a new agreement to "strengthen the 36-month Stand-By Program approved on June 20".

28 September 2018 Trend in EZ Real M1 Indicates that Markets are Too Optimistic on Growth in 2019 (Publication Centre)

As we go to press, it appears that politicians in Italy have agreed on a 2019 budget deficit of 2.4% of GDP.

29 August 2018 Focus on Slowing Real M1, not the Upbeat Loan Data, in the Eurozone (Publication Centre)

In recent Monitors--see here and here--we have made a case for decent growth in the EZ's largest economies in the second half of the year, though we remain confident that full-year growth will be a good deal slower, about 2.0%, than the 2.5% in 2017.

29 August 2017 No Hints on the Future of QE from Mr. Draghi in Jackson Hole (Publication Centre)

Mr. Draghi snubbed investors looking for hints on policy and the euro in his Jackson Hole address--see here--on Friday.

29 August 2017 Hurricane Harvey will Depress September Output and Payrolls (Publication Centre)

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

28 September. 2016 Narrow Money in the EZ points to Slower GDP Growth Next Year (Publication Centre)

Momentum in EZ money supply slipped marginally in September. Headline M3 growth slowed to 5.0%, from 5.1%, mainly due to a slowdown in narrow money. Overnight deposit growth slowed to 9.4%, from 9.9% in August, offsetting a slight rise in growth of currency in circulation.

28 October. 2016 Markets Are Complacent About the Chances of Another Rate Cut (Publication Centre)

The preliminary estimate of Q3 GDP, showing quarter-on-quarter growth slowing only to 0.5% from 0.7% in Q2, has kiboshed the chance that the MPC cuts Bank Rate next Thursday.

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

The Mexican economy is recovering gradually, despite many external headwinds. This week, the IGAE economic activity index--a monthly proxy for GDP--rose a solid 2.6% year-over-year in August, up from 2.0% in July. In the first half the economy grew on average 2.4%. The report showed increases in all three sectors, most notably agriculture, up 8.2% year-over-year, followed by services, 3.3%, and industrial activities, with a 1.0% gain.

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

Difficult though it is to tear ourselves away from Britain's political and economic train-wreck, morbid fascination is no substitute for economic analysis. The key point here is that our case for stronger growth in the U.S. over the next year is not much changed by events in Europe.

28 June 2018 Services Data to Highlight Downside Risk to the MPC's GDP Forecast (Publication Centre)

The MPC will be looking for the Q1 national accounts and April's index of services data, both released on Friday, to support its view that the economy hasn't lost momentum this year.

28 June 2018 Real M1 Still Points to Slower GDP Growth, Despite a Rebound in May (Publication Centre)

Money supply growth in the Eurozone rebounded slightly last month, reversing some of the weakness at the start of the year.

28 June 2017 ISM Survey Suggests May Trade Deficit to Drop Sharply (Publication Centre)

The April international trade numbers were startlingly, and surprisingly, horrible. The deficit in trade in goods leaped by $6.2B -- the biggest one-month jump in two years -- to $67.1B, though the headline damage was limited by a sharp narrowing in the oil deficit, thanks to lower prices, and a rebound in the aircraft surplus.

28 March 2017 Full-Scale Tax Reform Likely is Dead (Publication Centre)

The failure of House Republicans to support Speaker Ryan's healthcare bill has laid bare the splits within the Republican party. The fissures weren't hard to see even before last week's debacle but the equity market has appeared determined since November to believe that all the earnings-friendly elements of Mr. Trump's and Mr. Ryan's agendas would be implemented with the minimum of fuss.

28 March 2018 Is Wage Growth About to Reach a Turning Point? (Publication Centre)

Wage growth will be crucial in determining how quickly the MPC raises interest rates this year. So far, it hasn't recovered meaningfully.

28 November 2018 The Fed is Nearer Neutral, but That's not News Where is Neutral (Publication Centre)

Today brings a ton of data, as well as an appearance by Fed Chair Powell at the Economic Club of New York, in which we assume he will address the current state of the economy and the Fed's approach to policy.

28 November 2017 Political Uncertainty to Continue in Mexico Despite a Brief Pause (Publication Centre)

Mexico's political panorama seems to be becoming clearer, at least temporarily. This should dispel some of the uncertainty that has been hanging over the economy in recent months.

28 May. 2015 Italy Finally Exits Recession, But Will Remain an Underperformer (Publication Centre)

We will be paying special attention today to the EC sentiment survey for Italy, where the headline index has climbed steadily so far this year. It was unchanged at an eight-year high of 106.1 in April, and even if it fell slightly in May--we expect a dip to 105.0--it still points to an upturn in economic growth.

28 March 2018 Japan's Labour Market to Continue Tightening this Year (Publication Centre)

Data to be released this Friday should show that Japan's labour market remains tight, though the unemployment rate likely ticked back up in February, to 2.6%, after the erratic drop to 2.4% in January.

24 Feb. 2016 Mexico's GDP Slowed in Q4, but Services are Still Resilient (Publication Centre)

Mexico's economy slowed marginally in Q4, due mainly to the challenging external environment, but the domestic economy remains relatively healthy. Real GDP rose 0.5% quarter-on-quarter in Q4, following a 0.8% solid expansion in Q3. Year-over-year growth dipped to 2.5% from 2.8%.

03 Feb. 2016 Would a Renminbi Depreciation Derail the Pick-up in U.K. Inflation? (Publication Centre)

Investors are increasingly anxious that an intentional sharp devaluation of the renminbi, aiming to combat China's slowdown, might lead to prolonged deflation in the West, particularly in an economy as open as the U.K.

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

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.

1 February 2018 Firmer Fed Language on Growth, Inflation, Tees-up the March hike (Publication Centre)

Yesterday's FOMC statement was a bit more upbeat on growth than we expected, with Janet Yellen's final missive describing everything -- economic growth, employment, household spending, and business investment -- as "solid".

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

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 Upside Risks to Core Inflation Remain, Despite Dip in June (Publication Centre)

Eurozone inflation eased slightly to 0.2% year-over- year in June, down from 0.3% in May, according to the advance data but we continue to think that the trend has turned up. A 5.1% fall in energy prices, accelerating from a 4.8% in May, was partly to blame for the fall in June. But the key driver was the sharp drop in services inflation to 1.0% from 1.3% in May, likely due to volatility in package holiday prices.

1 February 2017 Mexico's Economy Was Strong in Q4, but the Outlook has Darkened (Publication Centre)

Yesterday's first estimate of full-year 2016 GDP in Mexico indicates that growth gathered momentum over the second half of last year. But risks are now tilted to the downside, following the U.S. election. GDP rose 0.6% quarter-on-quarter in Q4, after a 1.0% increase in Q3. Growth was much slower in the firs t half, as shown in our char t below.

1 December. 2016 ISM Set to Show that Manufacturing is Recovering, Albeit Slowly (Publication Centre)

We have lost count of the number of times the drop in the ISM manufacturing survey, in the wake of the plunge in oil prices, was a harbinger o f recession across the whole economy. It wasn't, because the havoc wreaked in the industrial economy by the collapse in capital spending in the oil sector was contained.

1 December 2017 Relapse in Confidence Signals the Economy is Only Muddling Through (Publication Centre)

Economy-wide confidence deteriorated in November, highlighting that Britain continues to struggle to shake off its malaise.

1 December 2017 The BoK Jumps on the Global Tightening Wave. Rocky Ride Ahead (Publication Centre)

President Moon was elected earlier this year on a promise to rebalance the economy toward domestic demand and reduce export dependency. It's not the first time politicians have received such a mandate.

1 December 2017 The ISM Manufacturing Index is set to Drop, but the Trend Remains Firm (Publication Centre)

All the regional PMI and Fed business surveys we follow suggest that today's national ISM manufacturing report for November will be weaker than in October

1 December. 2016 Banks are in Better Health, But Debt Levels Still Pose Risks (Publication Centre)

The Bank of England's stress tests highlighted that banks have made further progress in strengthening their balance sheets over the last year. But while banks have retreated from taking risk onto their balance sheets, others have stepped in to fill the void.

1 July. 2016 EZ Inflation Will Edge Higher, Regardless of Political Uncertainty (Publication Centre)

The Eurozone escaped deflation last month, and we doubt it will return in this business cycle. Inflation rose to 0.1% year-over-year in June, up from -0.1% in May; it was lifted chiefly by the gradual recovery in oil and other global commodity prices. Energy prices fell 6.5% in June, up from a 8.4% fall in May, and we think the recovery will accelerate in coming months.

1 July. 2016 Manufacturing Activity Has Levelled-Off - Better News Ahead (Publication Centre)

The manufacturing sector is much more exposed to external forces--the dollar, and global growth--than the rest of the economy. But much of the slowdown in the sector over the past year-and-a-half, we think, can be traced back to the impact of plunging oil prices on capital spending in the sector.

1 May 2018 China's Manufacturing PMI Points to Reflation Revival Temporarily (Publication Centre)

China's official manufacturing PMI implies a modest gain in momentum in Q2, at 51.4, compared with 51.0 on average in Q1.

1 May 2018 Is the EZ Economy Slowing Faster Than Markets Expect? (Publication Centre)

Yesterday's money supply data in the Eurozone were alarmingly poor.

1 May 2018 ISM Manufacturing has Peaked, but don't Expect a Sudden Rollover (Publication Centre)

We're expecting the April ISM report today to bring yet more evidence that the manufacturing cycle is peaking, though we remain of the view that the next cyclical downturn is still some way off.

1 May 2018 Mexico's Economy Rebounded in Q1, Services Fired on all Cylinders (Publication Centre)

Yesterday's first estimate of Q1 GDP in Mexico confirmed that growth was resilient at the start of the year, despite the lingering hit to confidence from domestic and external threats.

1 May 2017 Ignore the Weak Q1 GDP Numbers -- they Cannot be Trusted (Publication Centre)

If you apply a seasonal adjustment to a seasonally adjusted series, it shouldn't change. When you apply a seasonal adjustment to the U.S. GDP numbers, they do change. First quarter growth, reported Friday at just 0.7%, goes up to 1.7%, on our estimate.

1 March 2018 Eurozone inflation has bottomed for the year (Publication Centre)

House purchase mortgage approvals by the main street banks jumped to 40.1K in January, from 36.1K in December, fully reversing the 4K fall of the previous two months, according to trade body U.K. Finance.

1 June 2017 Money Data Suggest Q1's Slowdown Won't be Short-lived (Publication Centre)

April's money and credit figures suggest that GDP growth has remained sluggish in Q2. Households' broad money holdings increased by just 0.3% month-to-month in April.

1 June 2018 China's PMIs Signal Another Rise in PPI In ation in May (Publication Centre)

The return of Chinese PPI inflation in 2016 helped to stabilise equities after the boom-bust of the previous year.

1 June. How to Read the Tea Leaves Before and On Referendum Night (Publication Centre)

Sterling's fall yesterday to $1.45 from $1.46 after the release of online and phone opinion polls from ICM both showing a three percentage point lead for "Leave" over "Remain" underlines that it not a formality that the U.K. will be a full member of the E.U. this time next month.

1 December 2017 Blame Italy for November's Undershoot in EZ Core Inflation (Publication Centre)

Inflation in the euro area edged higher in November, but our prediction of a rebound in the core proved to be wrong. Headline inflation increased to 1.5% in November, from 1.4% in October.

1 Dec. 2015 Bund Buyers Beware Higher German inflation Next Year (Publication Centre)

Advance data indicate German inflation rose to 0.4% year-over-year in November, up from 0.3% in October, lifted by higher food and energy price inflation. The upward trend in food prices won't last, but base effects in energy prices will persist, boosting headline inflation significantly in coming months. The details show that services inflation was stable at 1.2% last month, despite state data indicating a fall in volatile leisure and entertainment inflation, while net rent inflation was also stable, at 1.1%.

02 Feb. 2016 EZ Public Spending will Support GDP Growth in 2016 (Publication Centre)

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.

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

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.

03 Mar. 2016 ISM Non-manufacturing Set to Rebound, Lagging Core Sales (Publication Centre)

The headline ISM non-manufacturing index is not, in our view, a leading indicator of anything much. The survey covers a broad array of non manufacturing activity, including mining, healthcare, and financial services, but most of the time it tends to follow the track of real core retail sales, as our first chart shows.

03 October. 2016 Deutsche's Woes Persist but it's not a European Lehman Moment (Publication Centre)

The European financial sector was in the news again on Friday, propelled by further weakness in Deutsche Bank's share price. In our Monitor of September 27, we said that worries of a European "Lehman Moment" were overblown.

01 May. 2015 Upturn in Eurozone Inflation is moderate and slow....For now (Publication Centre)

Data this week clearly hint at a cyclical trough in Eurozone inflation in the first quarter. The advance estimate for April shows year-over-year inflation rising slightly to zero, up from -0.1% in March.

01 May. 2015 Fed doves on the defensive as wages break to the upside (Publication Centre)

The 0.7% first quarter increase in the ECI measure of private sector wages and salaries raised the year-over-year rate to 2.8%, the highest since late 2008 and significantly stronger than the 2.1% increase in hourly earnings in the year to March.

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.

11 November. 2016 French Industrial Output Weak in Q3, Likely Better in Q4 (Publication Centre)

Yesterday's French industrial production data were worse than we expected. Output slipped 1.1% month-to-month in September, pushing the year-over-year rate down to -1.1% from a revised +0.4% in August. Mean-reversion was a big driver of the poor headline, given the upwardly-revised 2.4% jump in August.

01 Mar. 2016 The EZ's Return to Deflation is Misleading, but the ECB Will React (Publication Centre)

The Eurozone is back in headline deflation, increasing the pressure on the ECB to deliver further easing when it meets next week. Inflation fell to -0.2% in February, from +0.3% in January, depressed by energy and food prices.

01 Mar. 2016 Worst is Over for Manufacturers, but no Real Rebound Yet (Publication Centre)

The worst is over for manufacturers, we think. The three major forces depressing activity in the sector last year--namely, the strong dollar, the slowdown in China, and the collapse in capital spending in the oil sector--will be much less powerful this year.

03 October. 2016 ISM Unlikely to Rebound Much, but Manufacturing is Not Shrinking (Publication Centre)

Today's September ISM manufacturing survey is one of the most keenly-awaited for some time. Was the unexpected plunge in August a one-time fluke--perhaps due to sampling error, or a temporary reaction to the Gulf Coast floods, or Brexit--or was it evidence of a more sustained downshift, possibly triggered by political uncertainty?

04 Jan. 2016 Narrow Money is Growing Solidly, but Likely Peaked in Q4 (Publication Centre)

Data released over the holidays suggest that money supply dynamics in the Eurozone remain solid, but also that growth is no longer accelerating. M3 growth slipped to 5.1% year-over-year in November from 5.3% in October, partly due to a sharp monthly fall in the stock of repurchase agreements. Momentum in narrow money, however, also dipped. M1 growth slowed to 11.2% year-over-year from 11.8% in October, mainly due to a modest fall in overnight deposit growth.

06 October. 2016 Markets' Sensitivity to Shifts in ECB Policy Will Increase Further (Publication Centre)

EZ bond markets were stung earlier this week by a Bloomberg story suggesting that the ECB, in principle, has agreed on a QE exit strategy which involves "tapering" purchases by €10B per month. The story also specified, though, that the central bank has not discussed when tapering will begin.

09 Mar. 2016 Surge in German Industrial Output Will Partly Reverse Next Month (Publication Centre)

German industrial output rebounded strongly at the beginning of the Q1. Production surged 3.3% month-to-month in January, pushing the year-over-year rate up to 2.2%, from a revised -1.2% in December

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

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 2018 Mexico's Q2 GDP Dips, Due to Weakness in the Industrial Sector (Publication Centre)

Yesterday's first estimate of Q2 GDP in Mexico confirmed that the economy lost momentum in recent months.

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

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

05 May. 2015 Eurozone Q1 GDP beat the U.S. and the U.K., But It Won't Last (Publication Centre)

Advance data indicate that Q1 annualized GDP growth in the U.S. was a trivial 0.2%. And in the U.K., annualized growth is estimated to have slowed to 1.2%, from 2.4% in Q4.

04 October. 2016 Manufacturing Revival Bolsters Case for the MPC to Hold Fire (Publication Centre)

The odds of the MPC cutting interest rates again in November took another knock yesterday after further signs that the manufacturing sector is getting back on its feet quickly.

05 Feb. 2016 The Strong Dollar is Supporting Mexico's Domestic Economy (Publication Centre)

Mexico's structural reforms, robust fundamentals, and its close ties to the U.S. should have conferred a degree of protection from the turmoil in EMs over the past year. But its markets have been hit as hard as other LatAm countries by the sell-off in global markets in recent weeks. The MXN fell about 5% against the USD in January alone, and has dropped by 20% over the last year.

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

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

1 November 2017 Rising Industrial Output Will Lift Chile's IMACEC, Jobs Wil Follow (Publication Centre)

Industrial output in Chile struggled late in the third quarter, falling 1.3% month-to-month in September. The year-over-year rate, calendar and seasonally adjusted, rose 2.4% in September, down from a revised 5.3% in August.

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

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.

11 December 2018 Lacklustre October GDP is the Final Straw for February Rate Hike Bets (Publication Centre)

The combination of sluggish GDP growth in October and news that the Prime Minister will attempt to renegotiate the terms of the Brexit backstop, most likely pushing back the key vote in parliament until January, has extinguished any lingering chance that the MPC might be in a position to raise Bank Rate at its February meeting.

11 January 2018 November Data Point to a Slight Slowdown in GDP Growth in Q4 (Publication Centre)

Yesterday's deluge of output and trade data broadly supported our call that quarter-on-quarter GDP growth likely slowed to 0.3% in Q4, from 0.4% in Q3.

11 July 2017 Political Risk Return this Week in Brazil, but a Catastrophe is Unlikely (Publication Centre)

Political risks in Brazil recently have simmered alongside the modest cyclical recovery, but they are now increasing. President Michel Temer's future remains hard to predict as circumstances change by the day.

11 July 2017 Small Businesses are Still Optimistic, but a Correction is Due (Publication Centre)

Before last November's election, movements in the headline NFIB index of activity and sentiment among small businesses could be predicted quite reliably from shifts in the key labor market components, which are released in advance of the main survey.

11 August 2017 Brazil's Inflation Rate is Falling, Mexico's Will Soon Follow (Publication Centre)

Inflation pressures in Brazil are now well- contained, with the headline rate falling to a decade low in July. We think inflation is now close to bottoming out, but the current benign rate strengthens our base case forecast for a 100bp rate cut at the next policy meeting, in September.

11 April 2018 President Xi Jinping Says the Grand Bargain is There for the Taking (Publication Centre)

President Xi Jinping yesterday reiterated China's commitment to reform and the opening of its economy at a highly-anticipated speech at the Boao forum.

10 October 2017 Inflation is Finally Abating in Mexico But no Banxico Easing Until Q2 (Publication Centre)

Inflation in Mexico fell significantly in September. Data yesterday showed that the CPI rose just 0.3% month-to-month, pushing the year-over-year rate down to 6.4% from 6.7% in August, its highest level in 16 years.

10 September 2018 No Need for the MPC to Rock the Boat This Week (Publication Centre)

Lacklustre economic data and persistent no deal Brexit risk mean that the MPC won't rock the boat at this week's meeting.

10 September 2018 The Payroll Blip is Over, Expect Further Labor Market Tightening (Publication Centre)

Normal service appears to have resumed in August, with payrolls rising by 201K, very close to the 196K average over the previous year.

11 Apr. 2016 Stronger Growth and Accelerating Wages Will Shift Rate Sentiment (Publication Centre)

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

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

11 Mar. 2015 Fed Rate Hike Fears Now the Key Worry For LatAm Central Banks (Publication Centre)

Inflation appears no longer to be an issue for Mexican policymakers. The annual headline rate slowed to 3.0% year-over-year in February from 3.1% in January, in the middle of the central bank's target range, for the first time since May 2006.

11 May 2018 Mexico's Economy on the Mend, but Politics is Now the Biggest Risk (Publication Centre)

This week's data confirmed Mexico's strong economic performance over the first few months of this year.

11 May. 2015 Net Trade Signals Slight Downside Risk for German Q1 GDP (Publication Centre)

March data for retail sales and manufacturing have tempered our optimism for the advance Q1 GDP estimate in Germany next week. Industrial production fell 0.5% month-to-month in March, equivalent to a mere 0.1% increase year-over-year, mainly as a result of weakness in core manufacturing activities.

1 November 2017 2017 Eurozone Macroeconomic Data Don't get Much Better than this (Publication Centre)

Yesterday was a nearly perfect day for investors in the Eurozone. The Q3 GDP data were robust, unemployment fell, and core inflation dipped slightly, vindicating markets' dovish outlook for the ECB.

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

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

11 May 2018 Core Inflation is Still Set To Rise, April's Softness won't be Repeated (Publication Centre)

The undershoot in the April core CPI wasn't a huge surprise to us; the downside risk we set out in yesterday's Monitor duly materialized, with used car prices dropping by a hefty 1.6% month-to-month, subtracting 0.05% from the core index.

11 May 2018 Use the Euro to Predict Eurozone Core Inflation at Your Peril (Publication Centre)

The Easter effect depressed services inflation more than markets expected in April, but the main downside surprise was the tepid rebound in non-energy goods inflation.

11 Mar. 2016 Inflation in Brazil Starts to Slow - Better Odds for Rate Cuts in H2 (Publication Centre)

Brazil's headline CPI has been well above the upper limit of the BCB's target zone since January 2015. We expect this situation will continue for some time, due to the lagged effect of last year's sharp increases in regulated prices, El Niño, the BRL's sell-off in 2015, and, especially, widespread price indexation.

11 May 2017 A Poor Q1 for French Industrial Production, but Q2 will be Better (Publication Centre)

French manufacturing came roaring back at the end of Q1. Industrial production jumped 2.0% month-to- month in March, driving the year-over-year rate higher to +2.0%, from a revised -0.7% in February.

11 May 2018 Base Effects Push up China's PPI Inflation, but Disin ation will Resume (Publication Centre)

The re-emergence of Chinese PPI inflation in 2016 was instrumental in stabilising equities after the 2015 bubble burst.

10 October 2017 German Manufacturing Continued to Boost the Economy in Q3 (Publication Centre)

German manufacturing snapped back at the end of summer. Industrial production jumped 2.6% month-to-month in August, pushing the year-over- year rate up to 4.7% from a revised 4.2% in July.

11 July 2018 Monthly GDP Data Tip the Balance Towards an August Rate Hike (Publication Centre)

The upturn in the new monthly measure of GDP in May, released yesterday, was strong enough--just--to suggest that the MPC likely will raise Bank Rate at its next meeting on August 2.

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

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.

1 September 2017 Interest Rate Changes Act Faster than the MPC's Hawks Argue (Publication Centre)

MPC member Michael Saunders, who has voted to raise interest rates at the last two MPC meetings, argued in a speech yesterday that tighter monetary policy is required now partly because it affects the economy with a long lag.

10 April 2018 Banxico Likely Will Hold Fire on Thursday, Inflation is Falling Rapidly (Publication Centre)

We expect Banxico to keep interest rates on hold at 7.50% at Thursday's meeting. But policymakers likely will adopt a slightly dovish tone, as inflation has fallen faster than they were expecting in their recent forecast.

10 August 2018 Near-Term Core Inflation Risk is Modest the Fed Fears the Future (Publication Centre)

The continued modest rate of increase in unit labor costs makes it hard to worry much about the near-term outlook for core inflation.

1 Sept. 2015 Manufacturing Woes Changing as Oil Hit Eases but Dollar Gains Bite (Publication Centre)

The pressures on U.S. manufacturers are changing. For most of this year to date, the problem has been the collapse in capital spending in the oil business, which has depressed overall investment spending, manufacturing output and employment. Oil exploration is extremely capital-intensive, so the only way for companies in the sector to save themselves when the oil prices collapsed was to slash capex very quickly.

1 Sept. 2015 Core Inflation is Slowly Climbing Despite the Collapse in Oil Prices (Publication Centre)

Collapsing oil prices continue to weigh on inflation pressures in Eurozone. Inflation was unchanged at a minimal 0.2% year-over-year in August, largely due to an accelerated fall in energy prices, which plunged 7.1%, down from a 5.6% drop in July. Base effects will offer support for year-over-year changes in energy prices starting in Q4, but our fir st chart show downside risks loom in the short run.

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

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 October 2018 Italy's 2019 Budget Plans are Not as Bad as the Market Thinks (Publication Centre)

Bond investors in Italy voted with their feet on Friday with news that the government has agreed a 2019 budget deficit of 2.4%.

10 May 2018 A Horrible Q1 for Manufacturers in France, but Q2 Will be Better (Publication Centre)

The French manufacturing sector slowed more than we expected in Q1.

1 October 2018 The 14-year High in the ISM Likely Can't Hold, Expect a Correction (Publication Centre)

The case for believing that August's unexpected 14-year high in the ISM manufacturing index was a fluke is pretty straightforward, and it has both short and medium-term elements.

10 December 2018 Fires, Noise and Hurricanes Hit November Payrolls, not Tariffs (Publication Centre)

The softening in payroll growth in November appears mostly to be a story about short-term noise, rather than a sign that tariffs are hurting or that the broader economy is slowing.

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

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.

10 March 2017 A Guide to ECB Speak: Getting Better, but We're not Done Yet (Publication Centre)

The ECB made no major policy changes yesterday. The central bank kept its refinancing and deposit rates unchanged at 0.00% and -0.4% respectively, and the scheduled reduction in the pace of QE to €60B per month was confirmed. The core part of the central bank's language retained its dovish bias.

10 May 2017 April's Surge in Retail Sales Isn't a Turning Point (Publication Centre)

April's Retail Sales Monitor from the British Chambers of Commerce, released yesterday, provided a powerful signal that households' spending rebounded in April, following a terrible Q1.

10 May 2017 German GDP Growth Likely Accelerated in the First Quarter (Publication Centre)

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 May 2017 Mexico's Confidence Indicators are Improving, but Headwinds Remain (Publication Centre)

Market participants and analysts have gradually softened their cautious stance towards Mexico, as concerns about the new U.S. administration's trade and immigration policies have eased, and risks of a credit rating downgrade have lessened.

10 July 2018 Modest Inflation Pressures will Help Central Banks in Q3 and Most of Q4 (Publication Centre)

Inflation in Mexico edged higher in the second half, but we expect both the headline and core rates to continue falling, allowing Banxico to keep interest rates on hold.

10 March 2017 Evidence of a Brazilian Business Cycle Recovery this Year is Building (Publication Centre)

Brazil's industrial sector had a relatively good start to the year. Data on Wednesday showed that production fell 0.1% month-to-month in January, less than markets expected, and the year-over-year rate rose to 1.4%, after a 0.1% drop in December.

10 December 2018 Parliamentary Maths Points to Only One Plan B for the Prime Minister (Publication Centre)

Unless it blinks and delays, the government is on course for a hefty defeat on Tuesday, when it asks parliament to vote to approve the Withdrawal Agreement--WA--and Political Declaration.

10 January 2018 Price-Level Targeting isn't Coming Soon, it's Likely not Coming at all (Publication Centre)

Judging from our inbox, the idea that the Fed might switch to some form of price level targeting, replacing its current 2% inflation target, is the big new idea for 2018.

10 July 2017 Robust Q2 GDP Growth in the Eurozone Likely are in the Bag (Publication Centre)

Friday's industrial production reports in the Eurozone were sizzling. In Germany, headline output rose 1.2% month-to-month in May--after a downwardly-revised 0.7% rise in April--which pushed the year-over-year rate up to a six-year high of 4.9%.

20 July 2018 Improving Political, External Conditions in Mexico How Long Will it Last (Publication Centre)

Mexican president-elect Andrés Manuel López Obrador, known as AMLO, has set out the first points of his austerity plan, two weeks after his overwhelming victory at the polls.

19 May 2017 Expect a Hike on June 14 Unless Financial Conditions Tighten, a Lot (Publication Centre)

The probability of a rate hike on June 14, as implied by the fed funds future, has dropped to 90%, from a peak of 99% on May 5.

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

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.

19 March 2018 Change in China and the Economic Implications (Publication Centre)

China's National People's Congress this year was the most significant in years and followed 12 months of lightning-speed change in the country.

21 June 2018 As Trade Tensions Mount, will the PBoC Stabilise the RMB Basket (Publication Centre)

As promised, Mr. Trump retaliated earlier this week against China's weekend retaliation, after his refusal to back down on the initial tariffs on $50B-worth of imports of Chinese goods, on top of the steel and aluminium tariffs first announced back in March.

22 July. 2016 Emerging Divisions on the MPC Signal Only Modest August Easing (Publication Centre)

Soon after last week's vote to keep Bank Rate at 0.50%, the MPC's doves were quick to assert that monetary easing is still imminent. A speech by Andy Haldane, published on July 15, called for "... a package of mutually complementary monetary policy easing measures" that should be "delivered promptly and muscularly". Meanwhile, Gertjan Vlieghe, who was alone in voting for a rate cut in July, wrote in The Financial Times last week that he also favours "a package of additional measures" in August.

19 Feb. 2015 QE and the booming external surplus create conditions for EUR carry trades (Publication Centre)

Data later today will likely show that the Eurozone's external balance remained firm last quarter at a record 2.5% of GDP. We think the seasonally adjusted current account surplus rose to €20.0B in December from €18.1B in November, with positive momentum in the key components continuing.

19 December 2016 Banxico Defies Expectations with a Bold Pre-emptive Rate Increase (Publication Centre)

Banxico delivered its fifth 50bp rise of 2016 last Thursday, taking Mexico's main interest rate to 5.75%, its highest level since early 2009. Markets expected a 25bp increase, not least because the MXN has been relatively stable since Banxico's previous meeting in November.

22 May 2018 Sino-U.S. Negotiations Present a Risk to Japan's Trade Surplus (Publication Centre)

Japan's trade surplus rebounded to ¥522B in April, on our adjustment, from ¥390B in March, around the same level as the official version, though from a higher base.

18 Mar. 2016 Politics in Focus in South America, But for Different Reasons (Publication Centre)

Colombia and Peru have been among the top performers in LatAm currency markets in recent weeks, both rising above 4% against the dollar. Higher commodity prices seem to be driving the rally as domestic factors haven't changed dramatically.

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

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.

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

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

19 January 2018 China's GDP is in Revisions Limbo. Q4 Growth Likely Slowed (Publication Centre)

Officially, Chinese real GDP growth was a sturdy 6.8% year-over-year in Q4, matching the Q3 rate, with full year growth at 6.9%.

24 January 2018 BoJ Changes Inflation Language, Faced with Dynamic Inconsistency (Publication Centre)

The BoJ voted by an 8-to-1 majority yesterday to keep the policy balance rate unchanged at -0.1%, with the 10-year yield curve target also unchanged at around zero.

25 Apr. 2016 Growth Will Rebound in Q2, But Brexit Fears Will Constrain the Fed (Publication Centre)

We are revising our forecast for Fed action this year, taking out two of the four hikes we had previously expected. We now look for the Fed to hike by 25bp in September and December, so the funds rate ends the year at 0.875%. The Fed's current forecast is also 0.875%, but the fed funds future shows 0.6%.

24 April 2017 Take None of Last Week's Data at Face Value -- Distortions Abound (Publication Centre)

The gap between the hard and soft data from the industrial economy appeared to widen still further last week. But we are disinclined to take the data--the official industrial production report for March, and the first survey evidence for April--at face value.

25 August 2017 Trade and Investment are Failing to Offset the Consumption Slowdown (Publication Centre)

The second estimate of GDP left the estimate of quarter-on-quarter growth unrevised at 0.3%, a trivial improvement on Q1's 0.2% gain.

17 October 2017 Markets' Expectations for RPI Inflation Still Look Too High (Publication Centre)

Swap rates imply that markets expect RPI inflation to settle within a 3.3% to 3.5% range over the next five years, once the boost from sterling's depreciation has faded.

25 August. 2015 Market Panic Puts Pressure on ECB, but Fed's Response is Key (Publication Centre)

Weakness in risk assets turned into panic yesterday with the Eurostoxx falling over 6%, taking the accumulated decline to 19% since the beginning of August, and volatility hitting a three-year high. Market crashes of this kind are usually followed by a period of violent ups and downs, and we expect volatile trading in coming weeks. Following an extended bull market in risk assets, the key question investors will be asking is whether the economic cycle is turning.

23 May 2017 Consumers' Spending on Goods Appears to be Rebounding (Publication Centre)

The latest iteration of the Atlanta Fed's GDPNow model puts second quarter GDP growth at 4.1%. Assuming a modest upward revision to growth in the first quarter -- the data will be released Friday -- that would mean average growth of 2.5% in the first half, in line with our forecast for the year as a whole, and rather better than the 1.6% growth recorded in 2016.

23 March 2017 February Retail Sales Likely to Confirm Consumer Slowdown (Publication Centre)

Under normal circumstances, we would expect today's retail sales figures to reveal that volumes rebounded in February, following the 2.7% fall over the previous three months. But the continued weakness of spending surveys suggests that we should brace for another soft report.

23 April 2018 Behind the Base-Case Forecast, Risks Abound, in Both Directions (Publication Centre)

For now, we're happy with our base-case forecast that growth will be nearer 3% than 2% this year, and that most of the rise in core inflation this year will come as a result of unfavorable base effects, rather than a serious increase in the month-to-month trend.

23 February 2018 Earnings Set to Beat Consensus this Year (Publication Centre)

The knee-jerk reaction of the stock market to the unexpectedly high hourly earnings growth number for January was predicated on two connected ideas.

23 January 2018 Why Have Rate Expectations Stopped Driving EURUSD? (Publication Centre)

In April last year, something odd happened in the FX market.

23 June 2017 PBoC is to the Chinese Yield Curve as Dr Frankenstein is to the Monster (Publication Centre)

China has undoubtedly been through a credit tightening, commonly explained as the PBoC attempting to engineer a squeeze, to spur on corporate deleveraging.

22 November 2018 Will the EU Impose Sanctions on Italy over its Budget Deficit Plans (Publication Centre)

The EU Commission and Italy's government remain at loggerheads over the country's fiscal plans next year.

10 Mar. 2016 Calendar Distortions Plague the Hours Data, Not Just Wages (Publication Centre)

We've had some correspondence questioning our view on the "weakness" of February hourly earnings, which we firmly believe were depressed by a persistent calendar quirk. Almost nine times in 10 over the past decade, when the 15th of the month has fallen after the week of the 12th--the payroll survey week--the monthly gain in wages has undershot the prior trend.

12 July 2017 Financial Conditions in the Eurozone are Tightening, Slowly (Publication Centre)

The debate about the ECB's policy trajectory is bifurcated at the moment. Markets are increasingly convinced that a rapidly strengthening economy will force the central bank to make a hawkish adjustment in its stance.

12 July 2017 Andean Policymakers Will Meet Market Expectations Tomorrow (Publication Centre)

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 July 2017 Yellen Will Re-affirm Fed Policy. Expect no Revelations, or Dates (Publication Centre)

Chair Yellen has become quite good at not giving much away at her semi-annual Monetary Policy Testimony.

12 October 2017 The Catalan Government is on the Brink. Early Regional Elections? (Publication Centre)

We struggle to see how the pro-separatist movement in Catalonia can move forward from here.

13 July 2018 Why are House Sale Instructions Starting to Rise? (Publication Centre)

A dearth of properties for sale has helped to ensure that house prices have continued to rise since the Brexit vote, despite weaker demand. But now, signs are emerging that demand and supply are coming closer to balance

12 January 2018 Expectations Management in Germany After a Great 2017 (Publication Centre)

Economic data in the German economy have been record-breaking in the past 12 months, and yesterday's preliminary full-year GDP report for 2017 was no exception.

10 October 2017 China's Services Sector Losing Momentum as Consumers Flag (Publication Centre)

We wrote last month about how the Caixin services PMI appeared to be missing the deterioration in several key services subsectors.

07 Jan. 2016 Uncertainty Over China's Currency Intentions Set to Persist (Publication Centre)

The 2.4% depreciation of the yuan over the past month has not been quite as big as the 3.0% move on August 11, and it's not a big enough shift to make a material difference to aggregate U.S. export performance. Market nerves, then, seem to us to be largely a reflection of fear of what might come next. China's real effective exchange rate--the trade-weighted index adjusted for relative inflation rates--has risen relentlessly over the past decade, and to restore competitiveness to, say, its 2011 level, would require a 20%-plus devaluation.

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

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

08 May. 2015 French GDP Next Week Should Comfortably Beat Expectations (Publication Centre)

The headline 0.9% month-to-month increase in German factory orders--a 1.9% increase year-over-year-- is not enough to change the picture of an overall sluggish first quarter.

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

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

1 November 2018 Does the MPC Need to Talk Up Rate Hike Expectations Today (Publication Centre)

The MPC's new inflation forecasts usually take centre stage on "Super Thursday" and provide a numerical indication of how close the Committee is to raising interest rates again.

13 September 2018 China's Money Headlines Tell an Old Story Conditions are Loosening (Publication Centre)

China's M2 growth slowed to 8.2% year-over-year in August, from 8.5% in July

14 Mar. 2016 Three Big Questions are the Key to the Fed's Actions this Year (Publication Centre)

A huge wave of data will break over markets this week, along with the FOMC meeting, new dot plots and Chair Yellen's press conference. But today is calm, with no significant data releases and no Fed speeches; policymakers are in purdah ahead of the meeting.

16 Dec. 2015 LatAm Central Banks Will Tighten in Response to the Fed? (Publication Centre)

We look for the Fed to increase rates today by 25bp to a range of 0.25%-to-0.50%. The FOMC will likely say that policy remains very accommodative and that rate hikes will be slow. Unfortunately, this will provide only temporary relief to LatAm. According to our Chief Economist, Ian Shepherdson, faster wage gains next year in the U.S. will disrupt the Fed's intention to move gradually. If wages accelerate as quickly as we expect, the Fed will need to raise rates more rapidly than it currently expects, which is also faster than markets anticipate. That, in turn, will put EM markets and currencies under further pressure.

16 August 2017 China's Credit Conditions Ease, but GDP Slowdown is set to Continue (Publication Centre)

Chinese M1 growth has slowed sharply in the past year from the 25% rates prevailing in the first half of last year. Growth appeared to rebound in July to 15.3% year-over-year, from 15.0% in June. But the rebound looks erratic. Instead, growth has probably slowed slightly less sharply in 2017 than the official data suggest, but the downtrend continues.

16 Jan. 2015 Currency Wars Turn Medieval As the SNB Abandons CHF Peg (Publication Centre)

CHF traders, and the rest of the market, were blindsided yesterday by the decision of the SNB to scrap the 1.20 EURCHF floor. The SNB has already boosted its balance sheet to about 85% of GDP to prevent the CHF from appreciating, and with the ECB on the brink of adding sovereign bonds to its QE program, the peg was simply indefensible.

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

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.

17 February 2017 Colombian Consumers are in Good Shape, but Spending will Slow (Publication Centre)

Colombia's retail sector surprised to the upside once again in December, despite a number of domestic headwinds. Sales jumped 6.2% year- over-year, up from 4.9% in November, marking an impressive end to the quarter. The underlying trend improved significantly in Q4, as shown in our first chart. A double-digit rise in auto sales was the main driver, offsetting weakness in other key components.

15 May 2018 Autos Likely Constrained April Retail Sales, Core Trend is Gently Upwards (Publication Centre)

The story of U.S. retail sales since last summer is mostly a story about the impact of the hurricanes, Harvey in particular.

15 June. Reasons to Remain Calm About Brexit Risk (Publication Centre)

Taken at face value, six of the eight opinion polls conducted over the seven days indicate that the U.K. will vote for Brexit on June 23. Our daily updated Chart of the Week, on page 3, shows the current state of play.

15 August 2018 Supply Constraints Still aren't Biting, Despite Low Unemployment (Publication Centre)

The stand-out development in yesterday's labour market report was the drop in the he adline, three-month average, unemployment rate to just 4.0% in June--its lowest rate since February 1975--from 4.2% in May.

15 February 2018 Japanese Consumption Bounced in Q4, but now Faces Headwinds (Publication Centre)

Japanese real GDP growth slowed in Q4, to 0.1% quarter-on-quarter, from an unsustainable 0.6% in Q3. The breakdowns were healthier than the headline suggests, and GDP growth should pick up in Q1.

15 June 2018 Strong Consumption set to Boost Second Quarter GDP Growth (Publication Centre)

The headline May retail sales numbers were flattered by a 2.4% leap in the wildly volatile building materials component and a price-driven 2.0% surge in gasoline sales.

15 June. 2015 Unwinding the Double Delusion - Brace for Rising Rate Expectations (Publication Centre)

Markets don't believe the Fed's interest rate forecasts. For the fourth quarter of this year, that's probably right; the FOMC's median projection back in March was 0.63%; that will likely be revised down this week. For the next two years, though, things are different.

17 November 2017 Environmental Targets are now the Binding Constraint for China (Publication Centre)

Chinese policymakers' calls to abandon the obsession with high GDP growth--GDPism--are multiplying.

1 June 2018 Payrolls Likely Constrained by Trade- War Talk, AHE Hit by the Calendar? (Publication Centre)

We're expecting a 180K increase in today's May headline payroll number, a bit below the underlying trend--200K or so--for the second straight month.

3 Dec. 2014 Decent Consumption, Dreadful Investment in Eurozone GDP (Publication Centre)

Retail sales data later today will give us the first hard data from the fourth quarter, and the story should be altogether more positive than the still downbeat message from the manufacturing sector.

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

Political developments are clouding the horizon in Mexico, at least temporarily. Mexico's Finance Minister Luis Videgaray, the mastermind behind President Enrique Peña Nieto's most important economic reforms, resigned on Wednesday. José Antonio Meade, a former finance chief, has been tapped to replace him.

BUSINESS INSIDER UK - BRITAIN BEATS -- GDP figures shrug off Brexit and smash expectations (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Q3 Preliminary GDP data

31 January 2017 Will the MPC Need to Raise Rates to Cool Consumer Credit Growth? (Publication Centre)

December's money data likely will bring further signs that the U.K. economy's growth spurt late last year was paid for with unsecured borrowing. Retail sales fell by 1.9% month-to-month in December, so we doubt that unsecured borrowing will match November's £1.7B increase, which was the biggest since March 2005.

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

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

9 May. 2016 Banxico Will Wait for the Fed to Hike - No Reasons to Move Soon (Publication Centre)

Banxico left Mexico's benchmark interest rate at 3.75% on Thursday, maintaining its neutral tone and indicating that the balance of risks is unchanged for both inflation and growth. Policymakers remain confident that inflation will remain under control over the coming months, below 3%, but noted that they expect a brief increase above the target during Q4.

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

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

5 September 2017 Geopolitical Tensions Hold Sway, the Yen is Only a Partial Safe Haven (Publication Centre)

he frequency of North Korean missile tests and attention-grabbing moves has increased markedly in recent months. Media reports now suggest that North Korea is preparing to follow its weekend nuclear test with another intercontinental ballistic missile test, in an unprecedented show of technological advancement.

BUSINESS INSIDER - US trade deficit balloons (Media Centre)

The US trade deficit unexpectedly widened by 17% to $46.6 billion in December from $39.8 billion in November.

8 August 2017 Chinese Capital Outflows Well -Managed while Conditions Benign (Publication Centre)

The external environment was relatively benign for China in July. The euro and yen appreciated as markets began to question how long policy can remain on their current emergency settings.

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

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

6 April 2018 The Game Theory of Sino-U.S. Relations, the Status quo is Out (Publication Centre)

The meta game between China and Mr. Trump started as soon as he had any possibility of winning the election in 2016.

5 March 2018 China's NPC Annual Session Expectations, Targets and Personnel (Publication Centre)

China's National People's Congress is set to convene its annual meeting next week.

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

Senior International Economist Andres Abadia on Chile GDP.

4 January 2017 Surging EZ Inflation will Comfortably Beat the Consensus Today (Publication Centre)

German inflation surged in December, pointing to an upside surprise in today's advance EZ report. The headline inflation rate rose to a three-year high of 1.7% year-over-year in December, from 0.8% in November. This was the biggest increase in the year- over-year rate since 1993.

4 Feb. 2015 ADP Should Beat Consensus, but it's not a Reliable Indicator (Publication Centre)

The least-bad way to forecast the ADP employment number is to look at the official private payroll number for the previous month. ADP's methodology generates employment numbers from a model incorporating lagged data from the Bureau of Labor Statistics as well as information from companies which use ADP for payroll processing.

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

Growth momentum in Mexico has improved marginally over the last few months after the soft patch during the first quarter, with business and households gaining confidence in the economic recovery. But the upswing has been rather modest, due to the volatility in global financial markets and the challenging external environment. The outlook for the global economy has deteriorated over recent months due to China's problems, and commodity prices remain under pressure. All these factors are now weighing on investors' confidence and hurting EM across asset classes.

7 July. 2016 June ADP Set to be Constrained by Weak May Payroll Data (Publication Centre)

We have argued frequently that the ADP employment report is not a reliable advance payroll indicator--see our Monitor of May 4, for example-- so for now we'll just note that it is generated by a regression model which includes a host of nonpayroll data and the official jobs numbers from the previous month. It is not based solely on reports from employers who use ADP for payroll processing, despite ADP's best efforts to insinuate that it is.

BLOOMBERG - Shepherdson: Lessons Learned on Fiscal Policy, Austerity (Media Centre)

Founder and chief U.S. Economist Ian Shepherdson on U.S. Fiscal Policy and the upcoming jobs report.

29 June 2017 A Single Rate Hike Would Risk a Harmful Rise in Rate Expectations (Publication Centre)

The MPC's hawks are framing the interest rate increase they want as a "withdrawal of part of the stimulus that the Committee had injected in August last year", arguing that monetary policy still would be "very supportive" if rates rose to 0.5%, from 0.25%.

9 Feb. 2015 The German economy is improving: Q4 GDP will beat consensus (Publication Centre)

German industrial production data were presented by Bloomberg News as signs that the recovery is "gathering momentum", but it is slightly premature to make that call. Narrow money growth is currently sending a strong signal of higher GDP growth this year in the euro area, but the message from the manufacturing sector is still one of stabilisation rather than acceleration.

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

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

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

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

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

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

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

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

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

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

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

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

9 October 2018 Risks to the Consensus for August GDP Lie to the Upside (Publication Centre)

We expect August's GDP figures, released on Wednesday, to show that month-to-month growth slowed to 0.1%, from 0.3% in July.

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

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

28 June 2017 Inflation Forecast Revisions in August won't Force the MPC's Hand (Publication Centre)

The minutes of the MPC's meeting in June indicated that several members' patience for tolerating for above-target inflation is wearing thin.

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

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

15 Jan. 2016 Downside Risk for December Retail Sales and Industrial Output (Publication Centre)

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.

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

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

15 December 2016 EZ Manufacturing will Recover Quickly from its Poor Start to Q4 (Publication Centre)

Eurozone manufacturers had an underwhelming start to Q4. Data yesterday showed that production fell 0.1% month-to-month in October, pushing the year-over-year rate down to 0.6%, from a revised 1.3% in September. Output was constrained mostly by weakness in France and a big month-to-month fall in Ireland, which offset marginal gains in Germany and Spain.

25 January 2017 The Fiscal Plans Won't Be Softened, Despite December's Better Figures (Publication Centre)

December's public finance figures suggest that borrowing is on track to come in a bit below the forecasts set out in the Autumn Statement in November. But we caution against expecting the Chancellor to unveil a material reduction in the scale of the fiscal consolidation set to hit the economy in his Budget on 8th March.

15 Dec. 2015 Solid Industrial Production in the Eurozone Given Global Weakness (Publication Centre)

Industrial production in Eurozone had a decent start to the fourth quarter. Output ex-construction rose 0.6% month-to-month in October, pushing the year-over-year rate up to 1.9% from a revised 1.3% in September. Production was lifted by gains in the major economies, and surging output in the Netherlands, Portugal and Lithuania. Across sectors, increases in production of capital and consumer goods were the main drivers, but energy output also helped, due to a cold spell lifting demand and production in France.

25 Feb. 2016 Is Brexit as Likely as the Markets Seem to Think? (Publication Centre)

Sterling weakened further yesterday in response to the perception that the odds of the U.K. leaving the E.U. in the June referendum are rising. Cable fell to $1.39, its lowest level since March 2009. It is now $0.12 below the level one would anticipate from markets' expectations for short rates, as our chart of the week on page three shows.

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

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

15 July. 2015 Q2 GDP Tracking Models are Too Pessimistic, Focus on Net Trade (Publication Centre)

Yesterday's industrial production report was grim reading, with volatility in Greece and the Netherlands, as well as revisions, throwing off our own, and the market's, forecasts. Output fell 0.4% month-to-month in May, well below the consensus and our expectation for a 0.2% rise, pushing the year-over-year rate higher to 1.6%, from a revised 0.9% in April.

25 Feb. 2015 Capex Needs to Pick up in Germany to Sustain GDP Growth (Publication Centre)

Real GDP in Germany grew 0.7% quarter-on-quarter in Q4, thanks mainly to a 0.4% contribution from private consumption, and a 0.2% boost from net trade. Household consumption grew 2.2% annualised in 2014, the best year for German consumers since 2006.

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

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.

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

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

25 Feb. 2016 Huge Upside Risk for Durable Orders as Aircraft Sales Rebound (Publication Centre)

Today's headline durable goods orders number for January is likely to blast through the consensus forecast, +2.7%. We expect a 6.5% jump, comfortably reversing December's 5.0% drop.

15 February 2018 One Outsized Core CPI Gain does not Make a Trend, it Looks Like Noise (Publication Centre)

The January core CPI numbers are consistent with our view that the U.S. faces bigger upside inflation risks than markets and the Fed believe.

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

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

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

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

25 May 2018 What Would Convince the BoK to Hike this Year? (Publication Centre)

The BoK kept rates unchanged at 1.50% yesterday. We thought a hike was open to consideration, as the authorities had professed to be on a mission to reduce dependency on exports and household debt. But we remain more bearish than the BoK on the outlook for the rest of the year.

15 August. 2016 Don't Fret Over the July Retail Sales and PPI Data (Publication Centre)

Let's be clear: The July retail sales numbers do not mean the consumer is rolling over, and the PPI numbers do not mean that disinflation pressure is intensifying. We argued in the Monitor last Friday, ahead of the sales data, that the 4.2% surge in second quarter consumption--likely to be revised up slightly--could not last, and the relative sluggishness of the July core retail sales numbers is part of the necessary correction. Headline sales were depressed by falling gasoline prices, which subtracted 0.2%.

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

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

15 Feb. 2016 Stronger CPI Figures to Dispel Fears of Ingrained Deflation (Publication Centre)

January's consumer price data, released tomorrow, look set to reveal a third consecutive rise in CPI inflation, dampening speculation that the U.K. is stuck in a deflationary funk. Indeed, we think CPI inflation picked up to 0.4%, from 0.2% in December, above the consensus, 0.3%.

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

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

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

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

15 Apr. Nothing in MPC Minutes to Support Rate Cut Speculation (Publication Centre)

The minutes of yesterday's MPC meeting indicate that it is not going to be panicked into cutting interest rates in the run-up to the E.U. referendum in June. The Committee voted unanimously again to keep Bank Rate at 0.5%, and dovish comments were conspicuously absent.

15 Apr. 2016 Once More Unto the Breach in the Troubled Italian Banking Sector (Publication Centre)

Negotiations between the Italian government and the EU on how to fix the problem of non-performing loans in the banking sector have been predictably slow. Earlier this year the government announced that it will provide a first-loss guarantee on securitised loans sold to private investors.

15 Dec. 2015 Dip in Wage Growth Hasn't Lessened the Pressure on the MPC (Publication Centre)

Investors kicked expectations for the first rise in official interest rates even further into the future when last month's labour market data, revealing a sharp fall in wage growth, were released. But a closer look at the official figures reveals that labour cost pressures have remained robust, cautioning against making a snap reaction if even weaker wage data are released on Wednesday.

15 August 2017 China's Boomlet Causes Volatility for Japan, Second Half to Weaken (Publication Centre)

Japanese real Q2 GDP growth surprised analysts, increasing sharply to a quarterly annualised rate of 4.0%, up from 1.0% in Q1 and much higher than the consensus, 2.5%. But its no coincidence that the jump in Japanese growth follows strong growth in China in Q1.

15 February 2017 Upward Inflation Trend Still Strong, Despite January's Modest Rise (Publication Centre)

January's CPI inflation of 1.8%, up from 1.6% in December, was one-tenth lower than anticipated by the consensus, the Bank of England and ourselves. The undershoot, however, was entirely due to a pull-back in clothing inflation which is unlikely to be sustained. Price pressures across the rest of the economy have continued to intensify, suggesting that CPI inflation still is on course greatly to exceed the 2% target later this year.

15 Dec. 2014 - U.S. Approaching the Monetary Policy Crossing Point (Publication Centre)

All policymaking is about trade-offs; very few government decisions confer only benefits. Someone, or more likely some group, loses. Monetary policy is no exception to the trade-off rule.

24 October. 2016 Tax Receipt Shortfall Casts Doubt on Economy's Resilience (Publication Centre)

Progress in reducing the budget deficit has ground to a virtual halt, despite the ongoing fiscal consolidation. Public sector net borrowing excluding public sector banks--PSNB ex.--was £10.6B in September, exceeding the £9.3B borrowed in the same month last year.

23 November. 2016 Three Very Different Scenarios for the Eurozone Economy in 2017 (Publication Centre)

Political uncertainty has been a key theme in our recent conversations with clients, with many readers asking if it is time to step away, temporarily, from Eurozone assets. Valuations provide some support for that position.

16 July 2018 Will Eurozone Investment Take a Hit from the Global Trade Conflict? (Publication Centre)

Last week's packed political agenda in Europe confirmed that political relations between the U.S. and the major Eurozone economies remain difficult.

16 July. 2015 The ECB Will be Put on the Spot for Its Role in the Greek Chaos (Publication Centre)

The ECB will keep its main interest rates and the pace of QE purchases unchanged today. Mr. Draghi will also reiterate the commitment to continuing QE until September next year, at least. But the press conference likely will focus on Greece, and the central bank's role in the chaos. Greek financial institutions are on the verge of collapse, partly because the ECB has been forced to cap emergency liquidity assistance--ELA--at €89B, and raise collateral haircut requirements following the announcement of the referendum.

23 Nov. 2015 The Challenge of Surging Migration Won't Go Away Soon (Publication Centre)

The flow of Middle-Eastern refugees taking the treacherous journey towards Europe continues unabated. UNHCR estimates of arrivals through the Western Balkan route--mainly originating from Greece and Serbia--suggest the average daily number of refugees has been stable so far between October and November at about 11,000. These data are very unreliable, but they indicate that the onset of winter on the European continent--and the added risk to migrants with no shelter--will not deter people from attempting the trip to Europe.

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

Brazil economic and political outlook is still opaque, but grim, after a vast array of negative news. Impeachment of President Rousseff remains a possibility; the process of fiscal consolidation is messy and politically bloody; rumors that Finance Minister Levy might leave his post next year have intensified; and the latest data showed that the recession worsened in Q3. As a consequence, the BRL and interest rates have been under pressure and we see no clear signs that the turmoil will ease soon.

23 Oct. 2015 Dovish Mr. Draghi All But Promises More QE in December (Publication Centre)

Mr. Draghi gave one of his most dovish performances to date yesterday. The central bank kept its main interest rates and the pace of QE unchanged, but reiterated that risks to growth and inflation are tilted to the downside. The president noted further that the existing policies will be "reexamined" in December in light of updated staff projections. It is difficult to see how the downbeat assessment on the economy will change materially from now until December, indicating that further stimulus is likely.

23 Sept. 2015 Slow Growth in China is a Risk, but Not the Whole Story in the EZ (Publication Centre)

Expectations that the ECB will respond to weakening growth in China with Additional stimulus mean that survey data will be under particular scrutiny this week. The consensus thinks the Chinese manufacturing PMI--released overnight--will remain weak, but advance PMIs in the Eurozone should confirm that the cyclical recovery remained firm in Q3. We think the composite PMI edged slightly lower to 54.0 in September from 54.3 in August, consistent with real GDP growth of about 0.4% quarter-on-quarter in Q3.

23 October 2018 Business Surveys have Flattened Richmond Fed due to Correct (Publication Centre)

All the regional PMIs and Fed business surveys are volatile in the short-term, so observations for single months need to be viewed with due skepticism.

16 January 2017 Inflation Will Soon Be Marching Upwards in Double Time (Publication Centre)

December's consumer price figures, released tomorrow, likely will reveal that CPI inflation rose to 1.4%--its highest rate since August 2014--from 1.2% in November. Inflation will take even bigger upward steps over the coming months as the anniversary of sharp falls in commodity prices is reached and retailers pass on hefty increases in import prices to consumers.

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

Should you be feeling in the mood to panic over inflation risks--or more positively, benefit from the markets' underpricing of inflation risks--consider the following scenario. First, assume that the uptick in wages reported in October really does mark the start of the long-awaited sustained acceleration promised by a 5% unemployment rate and employers' difficulty in finding people to hire. Second, assume that the rental property market remains extremely tight. Third, assume that the abrupt upturn in medical costs in the October CPI is a harbinger o f things to come. And finally, assume that the Fed hawks are right in their view that the initial increase in interest rates will--to quote the September FOMC minutes--"...spur, rather than restrain economic activity". Under these conditions, what happens to inflation?

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

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

23 Mar. Inflation Still Set to Rebound Soon, Despite Stability in February (Publication Centre)

CPI inflation remained at 0.3% in February, below the consensus, 0.4%, and our own expectation, 0.5%. All the unexpected weakness, however, was in food and core goods prices, and past movements in commodity and import prices suggest that this will be fleeting

16 Mar. 2016 Central Banks Will Set the Tone for Markets In Coming Days (Publication Centre)

This week's Monetary Policy Committee meetings in Chile, Mexico and Colombia look set to dominate market events in LatAm. On Friday, we expect Mexico's Banxico to keep rates on hold at 3.75%, after its unexpected 50bp increase in mid-February. At that time, the board cited growing concerns about financial markets, Mexico's weakened currency, and the country's fiscal situation, as reasons for its move.

23 June. 2016 Brexit Would Trigger a Dollar Surge, But it's an Unlikely Outcome (Publication Centre)

With most poll-of-poll measures showing a very narrow margin in the U.K. Brexit referendum, while betting markets show a huge majority for "Remain", today brings a live experiment in the idea that the wisdom of crowds is a better guide to elections than peoples' preferences.

23 June. 2015 More Waiting For Investors, But a Deal With Greece is Coming (Publication Centre)

We sympathize greatly with investors' frustration over endless postponements and new "deadlines" in the negotiations between Greece and its creditors. Syriza delivered a proposal for reforms to the EU and the IMF on Monday morning, welcome d as a "positive step in the right direction" by Eurogroup president Dijsselbloem and Economic and Financial Affairs commissioner Moscovici.

23 March 2018 Brazil and Colombia to Ease Further, but Chile's Rate Cuts are Over (Publication Centre)

The COPOM meeting was the centre of attention in Brazil this week. The committee cut the main rate by 25 basis points to a new historical low of 6.50%, in line with market expectations.

23 March 2018 PBoC Bides its Time on Rates, but Macroprudential Tightening is on (Publication Centre)

The PBoC hiked its 7-day reverse repo rate by 5bp yesterday, stating that the move was a response to the latest Fed hike.

23 May. Is it Premature to Relax About Brexit Risk? (Publication Centre)

Sterling rebounded last week and the probability of a Brexit, implied by betting markets, fell from 30% to 20%. The gap between cable and interest rate expectations, which opened up at the start of this year, appears to have closed completely, as our first chart shows. Sterling's rally in April quickly ran out of steam, but the evidence that support for "Bremain" has risen recently is persuasive.

16 Mar. 2015 Legacy of the Crisis Still Holding Back Loan Growth in the Periphery (Publication Centre)

Consumers' spending has staged an impressive recovery in the Eurozone, and remains the key driver of accelerating GDP growth. Outside Germany, however, households have struggled, and are still faced with tight credit conditions.

23 March 2018 Stock up on Chinese-Made T-Shirts, While They're Still Nearly Free (Publication Centre)

Yesterday's announcement that the administration plans to imposes tariffs worth about $60B per year -- thatìs 0.3% of GDP -- on an array of imports of consumer goods from China is a serious escalation.

16 February 2017 Core inflation isn't rocketing, but the upside risks are real (Publication Centre)

In yesterday's Monitor, we argued that if the upside risk in an array of core CPI components crystallised in January, the month-to-month gain would print at 0.3%, for the first time since August. That's exactly what happened, though we couldn't justify it as our base forecast. A combination of rebounding airline fares, apparel prices, new vehicle prices, and education costs conspired to generate a 0.31% gain, lifting the year-over-year rate back to the 2.3% cycle high, first reached in February last year.

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

Mexico's economy continues to withstand several headwinds, especially the sharp currency depreciation--shown in our first chart--falling commodity prices, and the tough external environment. The country is still one of the economic bright spots in the region, thanks to its resilient domestic demand. June retail sales rose 5.4% year-over-year, well above expectations, and up from 4.1% in May. The underlying trend is positive, averaging 4.8% in the second quarter, well above its 2014 pace.

24 October. 2016 Why are Households Running Such Large Bank Balances? (Publication Centre)

The U.S. household sector carries substantial gross debts, even after the sustained deleveraging since the crash of 2008. The gross debt-to-income ratio stood at 105.3% in the second quarter of this year, down from the 135% peak in late 2007 but still well above the 88% average recorded in the 1990s, which was not a decade of restraint on the part of consumers.

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

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

24 November. 2016 The Fiscal Fetters Remain in Place, Despite the Looming Slowdown (Publication Centre)

The Chancellor's Autumn Statement dashed hopes that the fiscal consolidation will be paused while the economy struggles to adjust to the implications of Brexit. Admittedly, Mr. Hammond has another opportunity in the Spring Budget to reduce next year's fiscal tightening.

24 November. 2016 EZ PMIs Rise Further in November- The Outlook is Good for Q4 GDP (Publication Centre)

The PMIs are telling an increasingly upbeat story for the EZ economy in Q4. The composite PMI in the euro area rose to an 11-month high of 54.1 in November, from 53.3 in October. The uptick was driven by strong new business growth across all private sectors, and employment also increased in response to higher work backlogs.

24 September 2018 How can the Fed Slow the Economy when the Private Sector is so Strong? (Publication Centre)

The big difference between economic cycles in developed and emerging markets is that recessions in the former tend to be driven by the unwinding of imbalances only in the private sector, usually in the wake of a tightening of monetary policy.

25 Apr. 2016 Brazil is Still Struggling, But Recent Data Are Encouraging (Publication Centre)

Financial market performance and economic survey data on the Brazilian economy have been better than many investors and commentators feared this year. The composite PMI has improved gradually since November last year, consumer sentiment has stabilized, and national business surveys have been less bleak.

15 July. 2016 The Mexican Economy is at the Mercy of Softening Spending (Publication Centre)

Industrial data released this week showed that the Mexican economy stumbled during the second quarter. Private consumption, however, continues to rise, albeit at a more modest pace than in recent months. The ANTAD same store sales survey rose 5.3% year-over-year in June, up from 2.8% in May, but this is misleading.

25 April 2017 Mr. Macron Hasn't Won Yet, Despite what Markets are Saying (Publication Centre)

Markets are trading like Emmanuel Macron has already moved into the Élysée Palace. Eurozone equities soared at the open yesterday, lead by the French banks, 10-year yields in France plunged, and the euro jumped. This makes sense given the signal from the polls. They were correct in their prediction of Mr. Macron's victory on Sunday, and they have been consistently forecasting that he will comfortably beat Mrs. Le Pen in the runoff.

15 June. 2016 Fed on Hold, and Unlikely Clearly to Signal a July Hike (Publication Centre)

We expect the Fed to leave rates on hold today, but the FOMC's new forecasts likely will continue to show policymakers expect two hikes this year, unchanged from the March projections. We remain of the view that September is the more likely date for the next hike, because we think sluggish June payrolls will prevent action in July.

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

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

15 May. 2015 QE Should Insulate Eurozone Credit Markets from Fed Rate Hike (Publication Centre)

Recent bond market volatility has left a significant mark on Eurozone credit markets. The recent slide in the Bloomberg composite index for Eurozone corporate bonds is the biggest since the U.S. taper tantrum in 2013. The prospect of a Fed hike later this year and rising inflation expectations in the Eurozone have changed the balance of risk for fixed income markets.

24 February 2017 The BCB Remains on Track to Deliver More Easing this Year (Publication Centre)

Brazil's central bank conformed to expectations on Wednesday, cutting the Selic rate by 75 basis points to 12.25%, without bias. Overall, the BCB recognises that the economic signals have been mixed in recent weeks, but the Copom echoed our view that the data are pointing to a gradual stabilisation and, ultimately, a recovery in GDP growth later this year.

16 April 2018 Chinese New Year Holiday Effects Spill over into the March Trade Data (Publication Centre)

The holiday effects are at it again. C hina's trade balance dropped to a deficit of $5.0B in March, from a surplus of $33.5B in February, confounding expectations for a surplus of $27.5B.

16 April 2018 CPI Inflation Likely Undershot the MPC's Forecast in March, Again (Publication Centre)

March's consumer prices figures, released on Wednesday, are even more important than usual, as they are the last to be published before the MPC's next meeting on May 10.

16 Feb. 2016 The ECB Remains on Track to Deliver More Easing in March (Publication Centre)

Mr. Draghi's introductory statement before yesterday's hearing at the European Parliament repeated that the ECB will "review and possibly reconsider its monetary policy stance in March." But it didn't provide any conclusive smoking gun that further easing is a done deal.

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

Now that the holidays are just a distant memory, the distortions they cause in an array of economic data are fading. The problems are particularly acute in the weekly data­ -- mortgage applications, chainstore sales and jobless claims -- because Christmas Day falls on a different day of the week each year.

24 July 2017 High Inflation Won't Last as Long as Markets Expect (Publication Centre)

After pricing-in the consequences of sterling's depreciation for inflation last year only slowly, markets are at risk of costly inertia again.

15 November 2017 Chinese October Activity Data Were Mixed but Will Weaken Over Winter (Publication Centre)

The Chinese activity data published yesterday were a mixed bag, with headline retail sales and production weakening, while FAI growth was stable. We compile our own indices for all three, to crosscheck the official versions.

24 July. 2015 While We're Out, What to Look for in the Data, and From the Fed (Publication Centre)

This is the last Monitor before we head to the beach, so we want to offer a few thoughts on the upcoming data and the FOMC meeting while we're out. First, a warning about the second quarter GDP number. We think that the data released so far are consistent with growth at about 3%.

15 November. 2016 Inflation Likely Stable in October, but Upward Trend Remains Strong (Publication Centre)

We expect today's consumer price figures to show that CPI inflation remained at 1.0% in October, after jumping in September from 0.6% in August.

15 July. 2015 Should We Worry About Slower Retail Sales Growth? (Publication Centre)

Whichever way you choose to slice the numbers, retail sales growth has slowed this year. Ex-gasoline, ex-autos, core, whatever, sales growth in year-over-year terms is notably weaker now than at the end of last year. It is equally, true, however, that after-tax incomes have risen at a robust pace--up 3.8% in the year to May, exactly the same pace as in the year to May 2014--so consumers in aggregate have plenty of cash to spend. So, what's holding people back at the mall? Why aren't they spending more?

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

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

28 November. 2016 Banxico's Balancing Act is Becoming Harder and More Risky (Publication Centre)

Banxico's decisions throughout the past year have been guided by external forces, dominated by the persistent decline of the MXN against the USD and its potential impact on inflation. The MXN has fallen by almost 17% year-to-date and has dropped by an eye-watering 37% since 2014.

13 September. 2016 Will the NFIB Survey Point to Stronger Non-mining Capex? (Publication Centre)

The key labor market numbers from today's August NFIB survey of small businesses have already been released--they appear a day or two before the employment report--but they will be reported as though they are news. The headline hiring intentions reading dipped to nine from 12, leaving it near the bottom of the range of the past couple of years.

14 August 2017 A Great First Half of 2017 for the EZ Economy, But it Won't Last (Publication Centre)

While we were away, the advance Q2 GDP report in the Eurozone confirmed our expectations of a strong first half of the year for the economy. Real GDP rose 0.6% quarter-on-quarter, the same pace as in Q1, lifting the year-over-year rate to a cyclical high of 2.1%.

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

The second estimate of Q3 GDP last week confirmed that the Brexit vote didn't immediately drain momentum from the economic recovery. But it is extremely difficult to see how growth will remain robust next year, when high inflation will cripple consumers and the impact of the decline in investment intentions will be felt.

13 September 2016 Sterling is Already Stoking Price Pressures, More to Come (Publication Centre)

August's consumer price figures, released today, likely will show that households' spending power is being increasingly eroded by rising inflation. We think CPI inflation picked up to 0.8%, from 0.6% in July, exceeding the consensus, 0.7%, for the third consecutive month.

13 October. 2016 The FOMC is Profoundly Split (Publication Centre)

It would not be fair to describe the FOMC as gridlocked, because that would imply no clear way out of the current position. Members' views of the risks to the economy, the state of the labor market, and the degree of inflation risk are all over the map, and the chance of a broad consensus emerging any time soon is slim.

28 Oct. 2015 A Clear Message from M1: The Cyclical Recovery Persists (Publication Centre)

Monetary conditions in the Eurozone continue to send a bullish message on GDP growth, and indicate an ongoing, but slow, improvement in credit growth. Broad money growth--M3--was unchanged at 4.9% year-over-year in September, after a trivial 0.1% upward revision of last month's data. The increase continues to be driven by surging narrow money rising 11.7% in September from 11.5% in August, boosted by overnight deposit growth offsetting a slight decline in currency in circulation.

14 August 2017 July's Soft-Looking Core CPI was Different from Previous Weak Data (Publication Centre)

July's fifth straight undershoot to consensus in the core CPI was very different the previous four. Only one component--lodging away from home--prevented the first 0.2% month-to-month print since February.

14 August 2017 Peru's Central Bank Holds Rates but Points to Further Stimulus (Publication Centre)

Peru's central bank left its policy interest rate unchanged at 3.75% last week, but signalled that further easing is on the way. According to the press release accompanying the decision, policymakers noted that inflation expectations are within their target range and still falling.

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

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 Dec. 2015 What Will Happen to the Dots After the Fed Raises Rates? (Publication Centre)

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."

27 September. 2016 Jobs Seen as Plentiful, but Payroll Gains Will Remain Low (Publication Centre)

In contrast to surveys of manufacturing activity and sentiment, the Conference Board's measure of consumer confidence rose sharply in August, hitting an 11-month high. People were more upbeat about both the current state of the economy and the outlook, with the improving job market key to their optimism. The proportion of respondent believing that jobs are "plentiful" rose to 26%, the highest level in nine years.

28 August. 2015 Fed Delay Until December Will Be Positive For LatAm Markets - Just (Publication Centre)

Multiple factors have shaken LatAm financial markets this week. China's market turmoil, commodity price oscillations, currency volatility, and political mayhem in every corner of the region, have all conspired against markets. But market chaos has also driven some central banks to rethink their monetary policy plans. For EM, in particular for LatAm, the stance of the Federal Reserve is key, given the region's close ties to the U.S., and the dollar.

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

The FOMC flagged recent market developments as a source of risk to the U.S. economy yesterday, unsurprisingly, but didn't go overboard: "The Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook."

28 July 2017 The Downturn in Housing Market Activity has Further to Run (Publication Centre)

Equity prices for companies dependent on the U.K.'s residential property market tumbled yesterday as several companies reported poor results for the first half of 2017. Most companies blamed a decline in housing transactions for falling profits.

14 Dec. 2015 Can Eurozone Equities Withstand Global Headwinds Next Year? (Publication Centre)

Barring a gigantic shock from the Fed this week--we expect a 25bp hike--Eurozone equities will end the year with a solid return for investors, who have been overweight. Total return of the MSCI EU ex-UK should come in around 10%, which compares to a likely flat return for the MSCI World, reflecting the boost from the ECB's QE driving out performance. Our first chart shows the index has been mainly lifted by consumer sector, healthcare and IT stocks, comfortably making up for weakness in materials and energy. The year has been a story of two halves, however, and global headwinds have intensified since the summer, partly offsetting the surge in the Q1 as markets celebrated the arrival of QE and negative interest rates.

13 October. 2016 EZ Industrial Production Rebounded Only Modestly in Q3 (Publication Centre)

Yesterday EZ industrial production report confirmed the message from advance country data that manufacturing rebounded towards the end of summer. Output, ex-construction, jumped 1.6% month-to-month in August, and the July data were revised up by 0.4 percentage points.

13 November 2018 CPI Inflation Likely Rose in October, but it Still Has Much Further to Fall (Publication Centre)

We agree with the consensus and the MPC that October's consumer prices report, released on Wednesday, will show that CPI inflation edged up to 2.5% in October, from 2.4% in September.

13 June 2017 The Eurozone and Asia's Big Economies are Joined at the Hip (Publication Centre)

In her inaugural Monitor, our Chief Asia Economist Freya Beamish plots three scenarios for the Chinese economy. The best-case scenario is that China makes a smooth transition to consumer-led growth.

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

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

13 June 2018 No Fourth Dot, and no Substantive Change in the Statement is Likely (Publication Centre)

We previewed the FOMC meeting in detail in the Monitor on Monday--see here--but, to reiterate, we expect rates to rise by 25bp but that the Fed will not add a fourth dot to the projections for this year.

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

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

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

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

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

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" .

13 July. 2015 A deal inches closer, but the EU is gambling dangerously with Grexit (Publication Centre)

The draft Eurogroup document circulated Sunday evening indicates that European leaders seemingly are willing to offer Greece a new bailout. But it is conditional on passing required legislation reforming pensions and taxes on Wednesday. A "time-out" from the Eurozone, was discussed as a bizarre alternative, but this would be the equivalent of Grexit and default.

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

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

13 June. 2016 Further Thoughts on May Jobs, and Why June Won't be Great (Publication Centre)

We are still annoyed, for want of a better word, by the May payroll numbers. Specifically, we're annoyed that we got it wrong, and we want to know why. Our initial thoughts centered on the idea that the plunge in the stock market in the first six weeks of the year hit business confidence and triggered a pause in hiring decisions, later reflected in the payroll numbers.

29 Apr. House Price Trend to Remain Firm, Despite Tax Hikes and Brexit Risk (Publication Centre)

Housing market data yesterday fostered the view that prices are vulnerable to a fall following April's increase in stamp duty--a transactions tax-- and before the E.U. referendum in June. Political uncertainty, however, has rarely had a pervasive or sustained impact on prices in the past.

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

Brazil's macroeconomic scenario is becoming easier to navigate for the central bank. Both actual inflation and expectations are slowing rapidly, as shown in our first chart. And since the March BCB monetary policy meeting, the BRL has appreciated about 10% against the USD, while commodity prices and EM sentiment have also improved markedly.

28 September 2018 Fed Hikes, PBoC Holds What Interest Rate Differential (Publication Centre)

The PBoC doesn't publicly schedule its meetings, but in recent years has tended to make moves after Fed decisions.

13 May. 2016 Brazil's Retail Sector Still Under Pressure - Stabilization in H2, Just? (Publication Centre)

The recession in Brazilian consumers' spending continues, but the severity of the pain is easing. Retail sales plunged 0.9% month-to-month in March, pushing the year-over-rate down to -5.7%, from a revised -4.2% in February. The March headline likely was depressed by the early Easter.

13 May. 2015 Core Sales Should Continue to Recover, but Easter is a Wild Card (Publication Centre)

We have argued for some time that market disappointment over the recent sluggishness of consumption has been misplaced. In our view, investors have placed too little weight on the impact of the severe winter, and have been too hasty in looking for the impact of the drop in gasoline sales.

13 Mar. 2015 What Next For Oil Prices? Saudi Arabia Holds the Key (Publication Centre)

Straight-line extrapolations are always risky--nothing lasts forever--but if you allow us the indulgence, our first chart suggests that domestic U.S. oil production will breach 10M barrels per day by the summer.

29 Jan. 2016 Will Inventories and Government Hold Q4 GDP Close to Zero? (Publication Centre)

We expect to learn today that the economy barely grew at all in the fourth quarter. At least, that's what we think the first estimate of growth, due today, will show. This number will then be revised twice over the next couple of months, then again when revisions for the past three years are released in July. Thereafter, the numbers are subject to further annual revisions indefinitely.

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

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

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

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

26 May. 2016 Favorable Post-Easter Seasonals Signal Upside Risk for April Orders (Publication Centre)

Another day, another couple of April reports likely to reverse March "weakness", triggered by the early Easter. We look for robust core durable goods and pending home sales reports, with the odds favoring consensus-beating numbers. In both cases, though, the noise-to-signal ratio is quite high, and we can't be certain the Easter seasonal unwind will be the dominant force in the April data.

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

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

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

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

16 Mar. Beware the Contradiction at the Heart of the Fiscal Forecasts (Publication Centre)

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.

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

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

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

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

14 May. 2015 Upbeat GDP Data in France Partly Offset Trade Hit in Germany (Publication Centre)

Real GDP in the Eurozone rose 0.4% quarter-on-quarter in Q1, in line with the consensus, but slightly below our expectation for a 0.5% increase. We don't get much detail from the country-specific advance estimates but all evidence indicates that the technical hit from net trade was much larger than we expected.

26 May 2017 First Quarter Growth Set to be Revised up, but Data are Very Flawed (Publication Centre)

We didn't believe the first estimate of Q1 GDP growth, 0.7%, and we won't believe today's second estimate, either. The data are riddled with distortions, most notably