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4 December 2017 Hefty Tax Cuts at Full Employment Make no Sense, but they're Coming (Publication Centre)

It's not our job to pontificate on the merits, or otherwise, of the tax cut bill from a political perspective.

7 March 2017 Why has Spending not Faltered After Tax Refunds were Delayed? (Publication Centre)

The delay in the processing of personal income tax refunds this year appears not to have had any adverse impact on retail sales, so far. Indeed, the Redbook chainstore sales survey suggests that sales have accelerated over the past few weeks.

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

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

20 November 2017 Terrible Timing for Tax Cuts -- if they Pass, the Fed Will Hike More Quickly (Publication Centre)

The passage of the House tax cut bill does not guarantee that the Senate will follow suit with its own bill, still less that both chambers will then be able to agree on a single bill which can then b e signed into law. As

23 Nov. 2015 If the Chancellor Wants A Budget Surplus, Taxes Will Have to Rise (Publication Centre)

The Chancellor claims he can eliminate public borrowing without raising taxes. But the latest borrowing overshoot and the continual optimistic bias of the OBR's forecasts cast doubt on whether his approach will be sufficient to meet his self-imposed surplus target.

23 January 2017 Threats to Make Britain a Corporate Tax Haven Lack Credibility (Publication Centre)

Both the Prime Minister and Chancellor last week threatened to cut business taxes aggressively to persuade multinationals to remain in Britain in the event of hard Brexit. But these threats lack credibility, given the likely lingering weakness of the public finances by the time of the U.K.'s departure from the EU and the scale of demographic pressures set to weigh on public spending over the next decade.

12 January 2017 How Can Trump Deliver Quickly on his Tax Cut Pledges? (Publication Centre)

As far as we can tell, most forecasters expect the impact of fiscal stimulus this year to be gradual, with perhaps most of the boost to growth coming next year. At this point, with no concrete proposals either from the new administration or Congress, anything can happen, and we can't rule out the idea of a slow roll-out of tax cuts and spending increases.

25 January 2017 Will a Border Adjustment Tax Drive Up Inflation? (Publication Centre)

We've seen some alarming estimates of the potential impact on inflation of the House Republicans' plans for corporate tax reform, with some forecasts suggesting the CPI would be pushed up as much as 5%. We think the impact will be much smaller, more like 1-to-11⁄2% at most, and it could be much less, depending on what happens to the dollar. But the timing would be terrible, given the Fed's fears over the inflation risk posed by the tightness of the labor market.

1 July 2019 Fresh Evidence of Pre-Tax Front- Loading in Japan... All for Naught? (Publication Centre)

Japan's industrial production data for May carried more evidence that the economy is getting a lift--at least temporarily--from the front-loading of activity ahead of the scheduled sales tax increase in October.

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.

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.

20 March 2017 If Fundamental Tax Reform Fails, What Happens to Fiscal Policy? (Publication Centre)

The White House Budget for fiscal 2018, released last week, has no chance of becoming law in anything like its current form, so we don't propose to spend much time dissecting it. But we do need to set out our view on what might actually happen to fiscal policy over the next few months, because it potentially could make a material difference to the pace, and ultimate extent, of Fed tightening.

10 May 2017 The Budget Deficit is Rising, even Before any Unfunded Tax Cuts (Publication Centre)

The CBO reckons that the April budget surplus jumped to about $179B, some $72B more than in the same month last year. This looks great, but alas all the apparent improvement reflects calendar distortions on the spending side of the accounts.

21 May 2019 Japan's Q1 GDP Rose for the Wrong Reasons Tax Hike Still Questionable (Publication Centre)

On the face of it, Japanese GDP came thumping home in Q1, rising 0.5% quarter-on-quarter, after the 0.4% increase in Q4.

16 January 2019 China's Tax Cuts will Help, but the Recovery will Remain Illusive (Publication Centre)

The Chinese authorities have been out in force in the last few days, aiming to reassure markets and the populace that they are ready and able to support the economy, after abysmal trade data on Monday.

18 September 2018 Chainstore Sales Growth has Jumped Thank the Tax Cuts (Publication Centre)

The first estimate of retail sales growth in August was weaker than implied by the Redbook chainstore sales survey, but our first chart shows that the difference between the numbers was well within the usual margin of error.

24 May 2017 Weak Tax Receipts Cast Doubt on Business Surveys' Optimism (Publication Centre)

April's public finances indicate that the economy has remained weak in Q2, casting doubt on the suggestion from recent business surveys that the slowdown in Q1 was just a blip.

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 June 2019 More Modest Pre-tax Front-Loading for Japan this Time Around? (Publication Centre)

Japan's May retail sales rebound was underwhelming at a mere 0.3% month-on-month, after a 0.1% fall in April.

30 July 2019 Japan's LDP Sails Through Election Consumers Wary of Tax Hike (Publication Centre)

Japan returned the ruling LDP coalition to power in an upper house election over the weekend.

6 June 2019 Japanese Tax Hike Delay now More Likely, Even with a Q1 GDP Upgrade (Publication Centre)

We are sticking to our call for a weak first half in Japan, despite likely upgrades to Q1 GDP on Monday.

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.

28 February 2019 China is Relying on Tax Cuts and Local Government for Stimulus (Publication Centre)

China's government overshot its deficit target last year, and probably will overshoot it by at least as much this year

28 February 2017 What Will the President say About Taxes and Spending? (Publication Centre)

It seems pretty clear from press reports that the White House budget, which reportedly will be released March 14, will propose substantial increases in defense spending, deep cuts to discretionary non- defense spending, and no substantive changes to entitlement programs. None of this will come as a surprise.

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.

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.

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

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

27 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.

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.

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 Sept. 2015 Brazil's Austerity Measures Sound Good, But Probably Won't All Happen (Publication Centre)

Brazil's government announced on Monday spending cuts and new tax increases, aiming to generate a 0.7% of GDP primary surplus, and so restore market confidence and avoid further credit rating downgrades. The plan is to reduce expenditure by BRL26B next year--or 0.4% of GDP--mainly through freezing public sector salaries and slashing social projects. These measures, especially the latter, will likely meet strong resistance in Congress. The salary freeze has more of a chance of passing, but reducing or closing some Ministries is a cost-cutting exercise with an extremely high political price.

ASIAN DATA WRAP 19 August 2019 (Publication Centre)

China's new Loan Prime Rate amounts to a rate cut, but supply-side banking strains limit its efficacy. Chinese slowdown and pre-tax front-loading keeps Japan's trade balance in deficit.

ASIAN DATA WRAP 12 June 2019 (Publication Centre)

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

21 February 2017 Fiscal Policy Won't Be Eased, Even If January's Surplus is Huge (Publication Centre)

January's public finance data, released today, take on particular importance because they are the last to be published before the Chancellor delivers his first Budget on March 8. The public finances nearly always swing into surplus in January, primarily because the deadline for individuals to submit self-assessment--SA--tax returns for the previous fiscal year is at the end of the month. Firms also pay their third of four payments of corporation tax for their profits in the current fiscal year.

18 December 2018 A Conservative Budget Plan Eases Fears About AMLO's Credentials (Publication Centre)

AMLO unveiled on Saturday Mexico's budget plan for 2019, calling for a moderate increase in spending, focused mainly on social programs, without raising taxes or the country's debt.

ASIAN DATA WRAP 29 July 2019 (Publication Centre)

Minimal front-loading ahead of Japan's October tax hike so far.

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.

22 April 2019 So Much for the Q1 Rollover: GDP Appears to have Breached 2% (Publication Centre)

The U.S. consumer is back on track, almost. We have argued in recent months that the sharp slowdown in the rate of growth of consumption is mostly a story about a transition from last year's surge, when spending was boosted by the tax cuts and, later, by falling gas prices, to a sustainable pace roughly in line with real after-tax income growth.

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.

22 Mar. Housing Market Revival Reflects More than Stamp Duty Increase (Publication Centre)

The recent revival in housing market activity reflects more than just a temporary boost provided by imminent tax changes. The current momentum in market activity and lending likely will fade later this year, but we think this will have more to do with looming interest rate rises than a lull in activity caused by a shift in the timing of home purchases.

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.

1 April 2019 Recent Retail Sales Data Make Little Sense, Noise is Swamping the Signal (Publication Centre)

The underlying U.S. consumer story, hidden behind a good deal of recent noise, is that the rate of growth of spending is reverting to the trend in place before last year's tax cuts temporarily boosted people's cashflow.

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.

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

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

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.

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.

6 March 2019 China's Fiscal Arithmetic Looks Stretched Deficit Yawning Wide (Publication Centre)

The main story to emerge from China's Economic Work Report is the extent of tax cuts, which on our calculations will leave a large funding hole.

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.

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

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

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.

ABC News - Trump administration reveals plans for massive tax cuts (Media Centre)

Chief U.S. Economist Ian Shepherdson speaking about Donald Trump's plans for sweeping tax cuts

Bloomberg - Macron Suspends Planned Fuel-Tax Hike as Protests Rage (Media Centre)

Ian Shepherdson, chief economist at Pantheon Macroeconomics, examines the French government's move to suspend a planned fuel-tax hike that sparked three weeks of protests.

Guardian - Weak UK growth and tax revenues put the squeeze on Hammond (Media Centre)

Chief U.K. Economist Samuel Tombs on UK Government Borrowing

SKY NEWS - Weakening tax receipts hurt public finances in September (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Public Finances

New York Times - Fed Predicts Modest Economic Growth From Tax Cut (Media Centre)

Chief U.S. Economist Ian Shepherdson on the Fed's growth forecast

Telegraph - Tax hikes add to inflation pressure (Media Centre)

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

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.

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.

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

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

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

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

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

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

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

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

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

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

27 June 2019 Orders, Trade and Inventory Data Suggest Q2 Growth Headed for 21⁄4% (Publication Centre)

Yesterday's raft of data had no net impact on our forecast for second quarter GDP growth, which we still think will be about 21⁄4%.

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

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

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

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

27 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.

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

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

26 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.

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 July 2018 More Signs Today that Housing Market Activity is Peaking (Publication Centre)

New home sales surprised to the upside in May, rising 6.7% to 689K, a six-month high.

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 January 2017 The Fiscal Plans Won't Be Softened, Despite December's Better Figures (Publication Centre)

December's public finance figures suggest that borrowing is on track to come in a bit below the forecasts set out in the Autumn Statement in November. But we caution against expecting the Chancellor to unveil a material reduction in the scale of the fiscal consolidation set to hit the economy in his Budget on 8th March.

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

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

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

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

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

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

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

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

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

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

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

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

27 March 2018 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.

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 May 2019 Japan's CPI Inflation Uptrend Lacks Legs, Holiday Distortions Prevalent (Publication Centre)

CPI inflation last Friday gave Japanese policymakers a break from the run of bad data, jumping to 0.9% in April, from 0.5% in March.

28 November. 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.

29 January 2019 No Trade Data Today, but You Can Assume the Trend is Deteriorating (Publication Centre)

The advance international trade data for December were due for publication today, but the report probably won't appear.

28 September 2018 Mixed Signals on Industry Peak or Plateau (Publication Centre)

It seems reasonable to think that manufacturing should be doing better in the U.S. than other major economies.

28 May 2019 Brazil's Inflation Remains Benign, Mexico's GDP Brings Bad News (Publication Centre)

Brazil's economic prospects continue to deteriorate rapidly, due to a combination of rising political uncertainty, the failure of the new government to advance on reforms, and ongoing external threats.

28 March 2019 Growth is Slowing, but Q1 Unlikely to be as Bad as Feared (Publication Centre)

Fourth quarter GDP growth is likely to be revised down today.

25 February 2019 Is Banxico Ready to Consider Rate Cuts in the Near Term? (Publication Centre)

The minutes of the Banxico's monetary policy meeting on February 7, when the board unanimously voted to keep the reference rate on hold at 8.25%, were consistent with the post-meeting statement.

29 July 2019 China's GDP Headlines Overstate Growth but Q2 Wasn't all Bad News (Publication Centre)

China's Q2 real GDP growth officially slowed to 6.2% year-over-year, from 6.4% in Q1, which already matched the trough in the financial crisis.

28 March 2019 Further Signs that Negative Rates are Here to Stay in the EZ (Publication Centre)

Bond yields in the Eurozone took another leg lower yesterday.

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

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

29 April 2019 BoJ Wakes up to China's Slowdown, Goes into Lockdown (Publication Centre)

The BoJ until last week had been in wait-and-see mode over China's slowdown, but they finally folded with Thursday's decision.

29 April 2019 Growth Will be Slower in Q2, but not Slow, What Will the Fed Say? (Publication Centre)

The definition of "yesbutism": Noun, meaning the practice of dismissing or seeking to diminish the importance of data on the grounds that the next iteration will tell the opposite story.

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.

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 2018 Fed Confirms December Rate Hike (Publication Centre)

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

28 February 2019 Expect Underwhelming Q4 GDP Growth Data Today Q1 Likely Worse (Publication Centre)

We expect to learn today that the economy expanded at a 2.1% annualized rate in the fourth quarter, slowing from 3.4% in the third.

28 January 2019 Has the Link Between Labour Costs and Inflation Broken? (Publication Centre)

At first glance, the U.K. consumer price data show a perplexing absence of domestically generated inflation.

28 March 2018 Is Wage Growth About to Reach a Turning Point? (Publication Centre)

Wage growth will be crucial in determining how quickly the MPC raises interest rates this year. So far, it hasn't recovered meaningfully.

28 March 2018 February Foreign Trade Data Could Move the Needle on Q1 GDP Growth (Publication Centre)

Markets often greet the monthly international trade numbers with a shrug.

28 June 2018 Second Quarter Growth is on Track to be a Blockbuster (Publication Centre)

The decline in headline durable goods orders in May, reported yesterday, doesn't matter.

28 January 2019 Policy and Markets Will Slow the Economy, but not Much (Publication Centre)

The end of the government shutdown--for three weeks, at least-- means that the data backlog will start to clear this week.

28 March 2019 China Profits will Bounce Back in March Proper Recovery is Coming (Publication Centre)

China's industrial profits tanked in January/ February, falling 14.0% year-to-date year-over-year, after a 1.9% drop year-over-year in December.

22 October 2018 Budget to Ensure Fiscal Policy Doesn't Slow the Economy in 2019 (Publication Centre)

The Chancellor probably can't believe his luck. Public borrowing has continued to fall this year at a much faster rate than anticipated by the OBR, despite the sluggish economy.

22 March 2019 The Phlegmatic MPC Still Envisages a 2019 Rate Hike (Publication Centre)

Unlike other central banks, the MPC has stuck to its message that "an ongoing tightening of monetary policy over the forecast period" likely will be required to keep inflation close to the 2% target, provided a no-deal Brexit is avoided.

22 November 2017 Core Capital Goods Orders Rising Strongly, Further Gains Ahead? (Publication Centre)

Today brings a wave of data, some brought forward because of Thanksgiving. We are most interested in the durable goods orders report for October, which we expect will show the upward trend in core capital goods orders continues.

22 March 2019 Existing Home Sales have Bottomed, but Price Gains Still Slowing (Publication Centre)

Existing home sales peaked last February, and the news since then has been almost unremittingly gloomy.

22 March 2019 China's 2018 19 Stimulus is Smaller than in the 2015 16 Round (Publication Centre)

China's growth can be decomposed into the structural story and the mini-cycle, which is policy- driven.

22 March 2017 Improving Fiscal Picture in the South, but Politics Are Key (Publication Centre)

Growth in South America disappointed last year, but prospects are gradually improving on the back of rising commodity prices and the global manufacturing rebound. These factors will help to ease the region's external and fiscal vulnerabilities, particularly over the second half of the year. On the domestic front, though, the first quarter has proved challenging for some countries, hit by temporary supply factors such as a mine strikes, floods, and wildfires.

22 November 2018 Next Year's Fiscal Stimulus Is Secure, Despite the Poorer Borrowing Data (Publication Centre)

October's surprise jump in public borrowing is not a material setback for the Chancellor, who will stick to his new Budget plans for modest fiscal stimulus next year.

22 November. 2016 Sweeteners for the 'JAMs' Will Be Spread Thinly on Wednesday (Publication Centre)

In recent public appearances, the Chancellor has made a concerted effort to downplay expectations of fiscal loosening in Wednesday's Autumn statement. On Sunday, he labelled the deficit "eye-wateringly" large and he warned that he was "highly constrained".

23 February 2017 Fiscal Easing Could Boost Growth Substantially, but not for Long (Publication Centre)

The White House budget proposals, which Roll Call says will be released in limited form on March 14, will include forecasts of sustained real GDP growth in a 3-to-3.5% range, according to an array of recent press reports.

23 August 2017 Fiscal Restraint, not a Surging Economy, Drove July's Surplus (Publication Centre)

Yesterday's public finance figures showed that the public sector, excluding public sector banks, ran a surplus of £0.2B in July, a modest improvement on borrowing of £0.4B a year ago.

22 September 2016 Poor Borrowing Trend Reduces Scope for Stimulus in November (Publication Centre)

Public borrowing continues to falling at a very slow pace, despite the major fiscal consolidation implemented this year. Public sector net borrowing excluding public sector banks--PSNB ex.--was £10.5B in August, only 8.1% less than the £11.5B borrowed a year ago.

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

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

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

The renewed slide in oil prices in recent weeks will crimp capital spending, at the margin, but it is not a macroeconomic threat on the scale of the 2014-to-16 hit.

22 July 2019 Still Ample Scope for Fiscal Stimulus, Despite Higher Borrowing in June (Publication Centre)

On the face of it, the latest public finance data suggest that the economy has lost momentum.

22 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 August 2018 Sharp Fall in Borrowing Removes Need for Fiscal Tightening in 2019 (Publication Centre)

The latest public finance figures continue to imply that the Chancellor will be able to change course later this year in the Autumn Budget so that fiscal policy doesn't drag on GDP growth next year.

22 August 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 Apr. Progress Towards a Budget Surplus Will Remain Slow (Publication Centre)

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

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

Brazil's economic performance has improved marginally in recent months, with inflation falling and economic activity and sentiment data stabilizing, or even increasing modestly. The latest regional economic activity report, for instance, showed that although overall output declined again on a sequential basis in March-to-May, three of the five regions expanded.

22 December 2017 The Public Finances are on Track This Year, but New Challenges Loom (Publication Centre)

The Chancellor can go on his Christmas vacation content that the public finances have weathered the economy's slowdown relatively well this year.

22 January 2019 Chinese GDP Growth was Much Weaker than the Headlines Suggest (Publication Centre)

Chinese GDP numbers always require a great deal of detective work, and yesterday's needed more than the norm; multiple rounds of revisions needed decoding.

22 January 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 2019 Scope for Further Fiscal Stimulus Remains Intact (Publication Centre)

After a disappointing run of monthly data, the huge surplus on the main "PSNB ex ." measure of borrowing in January must have been greeted with relief at the Treasury.

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.

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

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

23 July 2018 A Welcome Pause to the Fiscal Squeeze is In Sight (Publication Centre)

The public finances continue to heal rapidly, suggesting that the Chancellor should have scope to soften his fiscal plans substantially in the Autumn Budget.

24 June 2019 Japan's CPI Inflation has Peaked but the BoJ isn't Bothered (Publication Centre)

Japan's national CPI inflation has peaked, falling to 0.7% in May from 0.9% in April.

24 June 2019 Capex and Stock Market Fears Explain the Fed's Itchy Trigger-Finger (Publication Centre)

The apparent softness of business capex is worrying the Fed.

24 July 2019 Why are Cash Buyers Abandoning the Existing Homes Market (Publication Centre)

The sluggishness of existing home sales in recent months, as exemplified by yesterday's report of a small dip in June, is due entirely to a sharp drop in the number of cash buyers.

24 July 2019 If a Downturn Materialises, Households Will Feel its Full Force (Publication Centre)

Our base case remains that the slowdown in quarter-on-quarter GDP growth to about zero in Q2 is just a blip, and that the economy will regain momentum in Q3 and sustain it well into 2020.

24 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 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.

25 April 2018 Low Public Borrowing is Not a Sign the Economy is Reviving (Publication Centre)

Public borrowing has continued to fall more rapidly than anticipated in the latest official plans.

25 April 2018 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 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.

24 October. 2016 Why are Households Running Such Large Bank Balances? (Publication Centre)

The U.S. household sector carries substantial gross debts, even after the sustained deleveraging since the crash of 2008. The gross debt-to-income ratio stood at 105.3% in the second quarter of this year, down from the 135% peak in late 2007 but still well above the 88% average recorded in the 1990s, which was not a decade of restraint on the part of consumers.

24 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 2019 Future Fiscal Stimulus Is Still Secure, Despite Worse Borrowing Data (Publication Centre)

On the face of it, the trend in public borrowing deteriorated sharply late last year. In the three months to December, borrowing on the main "PSNB ex ." measure, which excludes banks owned by the public sector, was a trivial £0.3B, or 1.6%, lower than in the same months of 2017.

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

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

23 March 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 July 2019 Shock News Politicians Choose not to Cut Spending in Election Year (Publication Centre)

As we reach our deadline--4pm eastern time--media reports indicate that a debt ceiling agreement is close.

23 July 2018 Brace for Very Strong Q2 GDP Growth, but a Q3 Payback is Coming (Publication Centre)

Back on May 14, we argued--see here--that the stars were aligned to generate very strong second quarter GDP growth, perhaps even reaching 5%.

23 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 2019 Japanese Trade is Struggling, even Without Tariff Rises (Publication Centre)

Japanese policymakers will have been scouring yesterday's data for signs that the trade situation is improving.

24 January 2018 Low Public Borrowing Reflects One-Offs, not a Reviving Economy (Publication Centre)

The main measure of public borrowing--PSNB excluding public sector banks--came in at £2.6B in December, well below the £5.1B in December 2016 and lower than in any other December since 2000.

24 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.

23 October 2017 The Fiscal Squeeze won't be Eased, Despite this Year's Low Borrowing (Publication Centre)

At the halfway mark of the fiscal year, public borrowing has been significantly lower than the OBR forecast in the March Budget.

23 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.

25 April 2019 Still Scope for Neutral Fiscal Policy in 2020, Despite March Hiccup (Publication Centre)

The run of better-than-expected public borrowing figures ended abruptly with the publication of March data yesterday.

31 July 2019 The Bank of Japan Snubs the Doves, with its Options Knowingly Limited (Publication Centre)

Yesterday's BoJ statement, outlook and press conference raised our conviction on two key aspects of the policy outlook.

7 February 2017 Don't Be Fooled by Jump in German Factory Orders (Publication Centre)

German manufacturing is in good shape, but probably is not as strong as implied by yesterday's surge in new orders. Factory orders jumped 5.2% month-to-month in December, rebounding strongly after a downwardly revised 3.6% fall in November. December's jump was the biggest monthly increase in two years, but it was flattered by a leap in bulk investment goods orders, mainly in the domestic market and other EZ economies.

7 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 December 2018 Expect Solid November Jobs (Publication Centre)

We're sticking to our 220K forecast for today's official payroll number, despite the slightly smaller-than- expected 179K increase in the ADP measure of private employment.

7 August 2017 While we were Out... (Publication Centre)

...The Fed did nothing, surprising no-one; the labor market tightened further; the housing market tracked sideways; survey data mostly slipped a bit; and oil prices jumped nearly $4, briefly nudging above $50 for the first time since May.

7 Aug 2019 We're Still Not Buying Healthy Data in Japan Wage Growth is Distorted (Publication Centre)

Always expect the unexpected in a bonus month for Japanese wages.

7 February 2018 The EZ Economy Should be Resilient to Rising Market Volatility (Publication Centre)

As we go to press, equities in the Eurozone are having a bad day following the collapse in U.S. and Asian equities earlier.

7 February 2019 Korea's December was Good, not Great Expect Revisions to Q4 GDP (Publication Centre)

Following the publication of Korea's preliminary Q4 GDP report last month--see here--we said the consensus-beating print would be susceptible to downgrades, unless the economy had a miraculous end to 2018

7 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 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 June 2017 A Tory Victory Wouldn't Necessarily Boost Sterling this Time (Publication Centre)

Predicting which way markets would move in response to potential general election outcomes has been relatively straightforward in the past. But the usual rules of thumb will not apply when the election results filter through after polling stations close on Thursday evening.

7 January 2019 Eurozone Headline Inflation will Fall Further in Coming Months (Publication Centre)

Inflation in the Eurozone fell significantly last month, and probably will ease further in Q1.

7 Apr. 2016 Peruvian Presidential Race Faces Rising Last-Minute Uncertainty (Publication Centre)

Ms Keiko Fujimori, the candidate of Peru's conservative Fuerza Popular party, seems on course to win the first round of the presidential election this Sunday, April 10. According to the latest Ipsos poll, the daughter of former President Alberto Fujimori continues to lead the race, with the support or about 34% of voters.

6 September 2018 ADP Will Report Another Solid Gain in Private Payrolls for August (Publication Centre)

Labor demand appears to have remained strong through August, so we expect to see a robust ADP report today.

6 Aug 2019 How Credible are China's Threats in Response to Trade War Escalation? (Publication Centre)

We've always said that China's first weapon, should the trade war escalate, is to do nothing and allow the RMB to depreciate.

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

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

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 June 2019 Even GOP Senators have Limits Tariffs on Mexico Cross the Line (Publication Centre)

The pushback from within the President's own party against the proposed tariffs on Mexican imports has been strong; perhaps strong enough either to prevent the tariffs via Congressional action, or by persuading Mr. Trump that the idea is a losing proposition.

6 November 2018 Expect Little Change in Economic Policy After the Midterms (Publication Centre)

We read the same polls, newspapers, and political websites as everyone else, and we're not claiming any special insight into the outcome of the midterm elections today.

6 November 2018 Colombia's Inflation Pressures are Tame, but Upside Risks are Looming (Publication Centre)

Inflation in Colombia right now is under control but risks are increasing rapidly, and the outlook for next year has deteriorated significantly.

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 March 2018 The Eurozone has a lot to lose from a trade war (Publication Centre)

We are surprised by the EU's reaction to Mr. Trump's announcement that the U.S. will impose tariffs on steel and aluminium.

7 March 2019 Only a Fool Would Believe the Official Public Borrowing Forecasts (Publication Centre)

The Chancellor will struggle to make his Spring Statement heard on March 13 over the noise of next week's key Brexit votes in parliament, likely spanning from March 12 to 14.

9 April 2019 Small Business Sentiment Ought to be Rebounding Capex Plans too (Publication Centre)

The recovery in small business sentiment since the fourth quarter rollover has been extremely modest, so far.

8 September 2017 Jobless Claims will be Elevated for Some Time, Payroll hit Uncertain (Publication Centre)

The 62K jump in jobless claims for the week ended September 2 is a hint of what's to come. Claims usually don't surge until the second week after major hurricanes, because people have better things to do in the immediate aftermath, so we are braced for a further big increase next week.

8 November. 2016 Rate Cuts are Coming in the Andes, Uncertainty Will Ease Soon (Publication Centre)

Inflation pressures are easing rapidly in Colombia, according to October's CPI report, released on Saturday. Inflation fell to 6.5% year-over-year in October, down from 7.3% in September; the consensus expectation was 6.7%.

8 November. 2016 If Clinton Loses, Most U.S. Forecasting Models Will be Wrong (Publication Centre)

We are not political analysts or psephologists, but we note that each of the nine separate election forecasting models tracked by the New York Times suggests that Hillary Clinton will be president, with odds ranging from 67% to greater than 99%.

9 February 2018 Congress Set to Spray Yet More Fuel on the Fire, Over to You, Mr. Powell (Publication Centre)

The budget sequestration process, which cut discretionary government spending by a total of $114B in fiscal 2013 and fiscal 2014, was one of the dumbest things Congress has done in recent years.

9 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 October 2017 Did German Manufacturing Pick up the Pace in Q3? (Publication Centre)

Friday's German new orders data were sizzling. Factory orders jumped 3.6% month-to-month in August, pushing the year-over-year rate up to a nine-month high of 7.8%, from an upwardly-revised 5.4% in July.

9 May 2017 Chainstore Sales Rebound Points to Robust Q2 Consumption (Publication Centre)

If the Redbook chain store sales survey moved consistently in line with the official core retail sales numbers, it would attract a good deal more attention in the markets. We appreciate that brick-and-mortar retailers are losing market share to online sellers, but the rate at which sales are moving to the web is quite steady and easy to accommodate when comparing the Redbook with the official data.

9 March 2017 The Chancellor Sticks to Plans for an Intense Fiscal Tightening (Publication Centre)

The Chancellor lived up to his reputation for fiscal conservatism yesterday and is pressing ahead with a tough fiscal tightening. He hopes that this will create scope to loosen policy if the economy struggles after the U.K. leaves the EU in 2019, but we remain concerned his "fiscal headroom" will be much smaller than he currently anticipates.

9 July 2019 Andean Inflation Prospects Remain Benign No Rush to Move Rates (Publication Centre)

Andean inflation remains under control, due to subpar growth, modest pressures on prices for nontradeables, and broadly stable currencies.

8 May 2019 Financial Services have Depressed the Core PCE Expect a Rebound (Publication Centre)

A steep drop in prices for financial services in January was a key factor behind the sharp slowdown in the rate of increase of the core PCE deflator in the first quarter, relative to the core CPI.

8 May 2017 Fed Hawks Will Focus More on Unemployment than Wage Gains (Publication Centre)

At their March meeting FOMC members' range of forecasts for the unemployment rate in the fourth quarter of this year ranged from 4.4% to 4.7%, with a median of 4.5%. But Friday's report showed that the unemployment rate hit the bottom of the forecast range in April.

7 September 2017 Scrappage Schemes Will Only Postpone the Slump in Car Sales (Publication Centre)

Car manufacturers have been at the sharp end o f the slowdown in consumers' spending this year. In response, several brands have launched generous scrappage schemes, giving buyers a big discount when they trade in their old vehicle.

7 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 No Sign of Slowing Labor Demand it's Rising Faster than Supply (Publication Centre)

The flow of data pointing to strength in the labor market has continued this week, on the heels of last week's report of a 250K jump in October payrolls.

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.

8 April 2019 Andean Economies Hoping for a U.S.-China Trade Deal Soon (Publication Centre)

Fears of a Chinese hard landing have roiled financial and commodity markets this past year and have constrained the economic recovery of major raw material exporters in LatAm.

8 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 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.

8 January 2019 Expect to See a Real but Lukewarm Q4 GDP Recovery in Japan (Publication Centre)

Yesterday's Nikkei services PMI report completed Japan's set of surveys for the fourth quarter of 2018.

8 January 2019 Bifurcation Intensifying Services Outperforming as Industry Suffers (Publication Centre)

If you need more evidence that the U.S. economy is bifurcating, look at the spread between the ISM non- manufacturing and manufacturing indexes, which has risen to 3.5 points, the widest gap since September 2016.

5 March 2019 BoJ Balance Sheet Should Send a Sharp Warning Against Yield Targets (Publication Centre)

Japan's monetary base growth slowed to just 4.6% year-over-year in February, from 4.7% in January, well below the 17% rate needed to keep the base expanding at a pace consistent with the BoJ's JGB quantity target.

5 June 2019 The Fed will Ease if Trade Makes the Sky Fall in Otherwise, Patience (Publication Centre)

Fed Chair Powell yesterday said about as little as he could without appearing to ignore the turmoil in markets since the President announced his intention to apply tariffs to imports from Mexico: "We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective."

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

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

30 January 2017 Mexico's Trade Gap is Shrinking, but Medium-Term Outlook is Cloudy (Publication Centre)

Mexico's trade balance shrank slightly last year, to USD13B, from USD14.6B in 2015. An improvement in the non-energy deficit was the main driver, while the energy gap worsened.

30 April 2019 Q1 Data have Spooked Japanese Policymakers is it Temporary (Publication Centre)

Japan's Q1 is coming more sharply into focus.

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

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

3 May 2017 Fed on Hold Today After Mixed Data, but a June Hike Still Looks Likely (Publication Centre)

The Fed likely will do nothing today, both in terms of interest rates and substantive changes to the statement. We'd be very surprised to hear anything new on the Fed's plans for its balance sheet.

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 June. 2016 Will the New Government Sweeten the Fiscal Pill? (Publication Centre)

Fiscal policy is in limbo until a new leader of the Conservative party has been elected on September 9. Shortly after, however, a new Budget--or a Budget disguised as an Autumn Statement--will be held.

30 May 2019 The German Labour Market Finally Realises that Growth has Slowed (Publication Centre)

Reporting on the German labour market has been like watching paint dry in this expansion, but yesterday's data were a stark exception to this rule.

30 May 2019 More Pain Before the Gain Will Markets Force Trump to the Table (Publication Centre)

The trade war with China is not big enough or bad enough alone to push the U.S. economy into recession.

30 May 2019 China's Manufacturing PMIs will Give the First Hint of Trade War Hit (Publication Centre)

China's official manufacturing PMI for May, out tomorrow, will give the first indication of the coming hit from the resumption of its tariff war with the U.S.

30 May 2019 Are Markets Underpricing the Risk of a Corbyn Government? (Publication Centre)

The risk of a snap general election has jumped following Theresa May's resignation and the widespread opposition within the Conservative party to the compromises she proposed last week, which might have paved the way to a soft Brexit.

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

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

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

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

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

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

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

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

29 May 2019 Real M1 in is Now Telling a More Positive Story on EZ GDP Growth (Publication Centre)

Headline money supply growth in the Eurozone accelerated further at the start of Q2.

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

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

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

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

29 October 2018 The 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 July 2019 Japan's Tankan Highlights Underlying Economic Weakness (Publication Centre)

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

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

The Manufacturing Upswing Continues; no Sign of Weakening

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.

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.

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.

31 January 2019 A Two-Week Delay is All the Prime Minister has Achieved (Publication Centre)

The Prime Minister achieved a rare victory yesterday, when the Commons passed the government-backed Brady amendment.

5 February 2019 Economic and Inflation Conditions Remain Benign in the Andes (Publication Centre)

Colombia's BanRep stuck to the script on Thursday by leaving the policy rate on hold at 4.25%.

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 2017 ISM Non-manufacturing Set for Clear Correction. Don't Worry (Publication Centre)

Last week's strong ISM manufacturing survey for November likely will be followed by robust data for the non-manufacturing sector today, but the headline index, like its industrial counterpart, likely will dip a bit.

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.

5 February 2019 Six Days Later, We're Still Struggling to Make Sense of the Fed's Thinking (Publication Centre)

We very much doubt that Fed Chair Powell dramatically changed his position last week because President Trump repeatedly, and publicly, berated him and the idea of further increases in interest rates.

5 February 2019 Where is the Evidence of a Pick-up in China's Household Sector (Publication Centre)

The Caixin services PMI ticked down to 53.6 in January, from 53.9 in December.

5 June 2018. Chile's Recovery Continues, GDP Soared in the First Half of the Year (Publication Centre)

Data released last week confirmed the strength of the economic recovery in Chile, and we expect further good news in the next three-to-six months.

5 June 2017 May Payrolls Hit by the Calendar, Expect a Rebound, and a Fed Hike (Publication Centre)

We don't believe that payrolls rose only 138K in May. History strongly suggests that when the May payroll survey is conducted relatively early in the month, payroll growth falls short of the prior trend.

5 July 2019 Payrolls Set to Rebound, but not Boom, Wage Gains Back on Track? (Publication Centre)

We expect to see a 160K increase in June payrolls today, though uncertainty over the extent of the rebound after June's modest 75K increase means that all payroll forecasts should be viewed with even more skepticism than usual.

5 July 2017 BoJ to Jettison Quantity Target as Voters Express Discontent (Publication Centre)

Mr Abe's Liberal Democratic Party took a drubbing at the polls in Tokyo's Assembly election over the weekend. The consequences for fiscal spending probably are minimal but the vote strengthens the case for increased emphasis on the structural reform "arrow" and less focus on monetary policy.

4 Nov. 2015 Why Has the Supply of Homes For Sale Fallen so Much? (Publication Centre)

The current momentum in house prices partly reflects a dearth of homes offered for sale by existing homeowners. This scarcity reflects a series of constraints, which we think will ease only gradually. Further punchy gains in house prices therefore look sustainable and we expect average prices to rise by about 8% next year.

4 March 2019 The EZ Core CPI Rate Remains Motionless at About 1% (Publication Centre)

Last week's final barrage of data showed that EZ headline inflation rose slightly last month, by 0.1 percentage points to 1.5%, driven mainly by increases in the unprocessed food energy components.

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.

21 September 2018 Housing Activity is Faltering, but the Modestly (Publication Centre)

The New York Fed tweeted yesterday that "Housing market fundamentals appear strong.

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 July 2017 How Tight Can Japan's Labour Market go? (Publication Centre)

The jobless rate fell back to 2.8% in June after the surprise rise to 3.1% in May. This drop takes us back to where we were in April before voluntary unemployment jumped in May.

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

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

31 May 2019 The Rebound in the Core PCE Deflator Likely Started in April (Publication Centre)

The biggest surprise in the revisions to first quarter GDP growth, released yesterday, was in the core PCE deflator.

4 June 2018 All the Bogeymen are Back in the Eurozone Economy (Publication Centre)

At the start of the year, #euroboom was the moniker used in financial media to describe the EZ economy.

4 July 2017 Will Firms Run Down Their Huge Cash Stockpiles Soon? (Publication Centre)

British firms have adopted a cautious mindset since the Brexit vote and are saving a huge share of their earnings, even though high profit margins make a strong case for investing more. Firms likely will run down their cash stockpiles when they become more confident about the medium-term economic outlook, potentially boosting GDP growth powerfully.

4 January 2019 Mexican Economic Growth Will Continue, but at a Very Modest Pace (Publication Centre)

The economic calendar in Mexico was relatively quiet over Christmas, and broadly conformed to our expectations of resilient economic activity in Q4.

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.

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

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

20 June 2019 All Eyes on Osaka, if the Trade Talks Succeed, the Fed Won't Ease in July (Publication Centre)

The tone of Fed Chair Powell's opening comments at the press conference yesterday was much more dovish than the statement, which did little more than most analysts expected.

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 Higher EZ Inflation and Bond Yields: Story Changing? (Publication Centre)

Friday's detailed October CPI report in Germany confirmed that inflation pressures are steadily rising. Inflation rose to 0.8% year-over-year in October, from 0.7% in September, lifted mostly by a continuing increase in energy prices.

14 March 2019 Headroom Still Looks Big Enough to Abandon the 2020 Fiscal Squeeze (Publication Centre)

As expected, the Chancellor kept his powder dry in the Spring Statement, preferring instead to wait for the Budget in the autumn to deploy the funds technically available to him to support the economy.

14 March 2018 What does China's Party - State Restructuring mean? (Publication Centre)

The National People's Congress yesterday announced a sweeping restructuring of Party/State architecture.

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 2018 Germany Carried the Day for the Eurozone Economy in Q2 (Publication Centre)

Yesterday's second EZ Q2 GDP report was slightly more upbeat than the advance estimate.

15 February 2019 Japan's Q4 GDP Growth Looks Poor, but the Details are Better (Publication Centre)

Japan's 0.3% quarter-on quarter increase in Q4 GDP was disappointing, on the face of it, after a downwardly-revised 0.7% fall in Q3.

15 February 2017 Yellen Says no "Active" Balance Sheet Management from the Fed (Publication Centre)

Fed Chair Yellen delivered no great surprises in her semi-annual Monetary Policy Testimony, though she certainly was clear on her attitude to the balance sheet. The Fed does not want to "...use the balance sheet as an active tool of monetary policy."

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 August 2018 Soft July Headline Retail Sales Numbers will Hide a Solid Core (Publication Centre)

The first wave of domestic third quarter data crashes ashore this morning.

14 June 2019 Retail Sales and IP Both Likely Rebounded in May (Publication Centre)

The wave of May data due for release today likely will go some way to countering the market narrative of a seriously slowing economy, a story which gained further momentum last week after the release of the May employment report.

14 December 2017 The Fed Expects Endless Growth and no Inflation, Maybe They're Right (Publication Centre)

The Fed surprised no-one by raising rates 25bp yesterday and leaving in place the median forecast for three hikes next year and two next year.

13 June 2019 Fiscal Pledges of PM Contenders Highlight Upside Risks to the Outlook (Publication Centre)

We often hear that the large gap between the slowing rising path for interest rates anticipated by the MPC and the flat profile expected by markets is justified because markets have to price-in all of the downside risks to the economic outlook posed by Brexit.

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 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".

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 October 2017 Eurozone GDP Growth Likely Slowed in Q3, but Only Sligh tly (Publication Centre)

The manufacturing sector likely was the primary driver of Q3 GDP growth in the Eurozone. Data yesterday showed that industrial production rose 1.4% month-to-month in August, pushing the year-over-year rate up to 3.8%, from a revised 3.6% in July.

13 September 2017 Labour Market Report to Show no Easing of the Real Wage Squeeze (Publication Centre)

Today's labour market report likely will show that employment continued to grow briskly over the summer, but that wage gains still are lagging well behind inflation.

14 August 2018 Turkey's Meltdown is no Threat to the U.S. Economy, or Banks (Publication Centre)

Turkey has all the problems you don't want to see in an emerging market when the U.S. is raising interest rates.

14 August 2018 Did the PBoC Effectively Cut Rates in August (Publication Centre)

China's M2 growth surprised on the upside in July, rising to 8.5% year-over-year, from 8.0% in June.

14 Aug 2019 Japanese Policymakers Shouldn't take Domestic Demand For Granted (Publication Centre)

Japan's Q2 GDP was driven by the twin pillars of private consumption and capex.

15 February 2019 Seasonal Problems and Sampling Error Explain December's Sales Drop (Publication Centre)

We can't remember the last time a single economic report was as surprising as the December retail sales numbers, released yesterday.

15 January 2019 CPI Inflation Likely Fell in December to Within a Whisker of the 2% Target (Publication Centre)

Economists are evenly split on December's consumer prices report, due on Wednesday, with half expecting CPI inflation to fall to 2.1%, from 2.3% in November, and the other half expecting a 2.2% print.

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.

16 August 2018 Mixed Signals from Italy on the 2019 Budget Prepare for Volatility (Publication Centre)

Italy's political leadership faces its first biggest test in autumn, when it has to deliver its first budget.

16 August 2018 Domestic Demand Strength from Q2 Spilled Over into Early Q3 (Publication Centre)

Yesterday's wave of data suggested that a good part of the strength in final demand in the second quarter was sustained into the first month of this quarter, and perhaps the second too.

16 Aug 2019 Eurozone Governments Have Fiscal Room, Will they use it (Publication Centre)

"Is EZ fiscal stimulus on the way?" is a question that we receive a lot these days.

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 January 2019 Falling Core Inflation in France is a Headache for the ECB (Publication Centre)

Inflation pressures in France eased across the board at the end of last year.

16 March 2017 The Fed Won't be Able to Dodge the Fiscal Policy Question in June (Publication Centre)

It might seem odd to describe a meeting at which the Fed raised rates for only the third time since 2006 as a holding operation, but that just about sums up yesterday's actions. The 25bp rate hike was fully anticipated; the forecasts for growth, inflation and interest rates were barely changed from December; and the Fed still expects a total of three hikes this year.

16 July 2019 No End in Sight Yet to the Industrial Consumer Bifurcation (Publication Centre)

Today's brings the June retail sales and industrial production reports, after which we'll update our second quarter GDP forecast.

16 July 2018 No Hard Evidence that Tariffs are Hurting Business Investment... Yet (Publication Centre)

We can see no hard evidence, yet, that the expanding trade war with China and other U.S. trading partners is hitting business investment.

16 January 2019 If December's Retail Sales Report Could Speak, it Would be Excited (Publication Centre)

The most important retail sales report of the year, for December, won't be published today, unless some overnight miracle means that the government has re-opened.

21 October. 2016 Government Spending Higher Next Year? (Publication Centre)

It has become pretty clear over the past couple of weeks that Hillary Clinton will be the next president, so it's now worth thinking about how fiscal policy will evolve over the next couple of years.

15 October 2018 The Stock Market Wobble isn't Enough to Deter the Fed (Publication Centre)

A 45bp rise in long-term interest rates--the increase between mid-August and last week's peak--ought to depress stock prices, other things equal.

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.

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 July 2019 Early Resolution to the Debt Ceiling would Raise Growth Forecasts (Publication Centre)

Treasury Secretary Mnuchin's five-line letter to House Speaker Pelosi on last Friday--copied to other Congressional leaders--which said that "there is a scenario in which we run out of cash in early September, before Congress reconvenes", introduces a new element of uncertainty to the debt ceiling story.

15 January 2019 The Trade War is not the Only Factor Hurting Stocks, but it's the Biggest (Publication Centre)

In our Monitor of January 10, we argued that the market turmoil in Q4 was largely driven by the U.S.- China trade war, and that a resolution--which we expect by the spring, at the latest--would trigger a substantial easing of financial conditions.

15 Mar. Will gilts treat higher borrowing forecasts nonchalantly again? (Publication Centre)

The Chancellor has prepared the public and the markets for a ratcheting-up of the already severe austerity plans in the Budget on Wednesday. George Osborne warned on Sunday that he would announce "...additional savings, equivalent to 50p in every £100 the government spends by the end of the decade", raising an extra £4B a year.

15 March 2017 Rates Will Rise by 25bp Today, but Extra Dots More Likely in June (Publication Centre)

The Fed will hike by 25 basis points today, citing the tightening labor market as the key reason to press ahead with the process of policy normalization. We think the case for adding an extra dot to the plot for both this year and next is powerful.

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 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 2019 Manufacturing Output Likely Rose in February, but the Outlook is Grim (Publication Centre)

Manufacturing is not in recession, yet, despite the reams of gloomy analysis of the sector, including our own.

13 February 2017 What Would it Take to Persuade the Fed to Hike in March? (Publication Centre)

Our argument that rates could rise as soon as March has always been contingent on two factors, namely, robust labor market data and a degree of clarity on the extent of fiscal easing likely to emerge from Congress. On the first of these issues, the latest evidence is mixed.

13 December 2018 The Rise in Jobless Claims is Convincing Evidence of... Not Much (Publication Centre)

On the face of it, the upturn in initial jobless claims since late September appears to signal a softening in the economy.

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

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

10 July 2019 Time for a Serious Debate about More QE in the Eurozone? (Publication Centre)

Our base case remains a 10bp cut in the deposit rate, to -0.5%, in September.

10 July 2019 The BoJ Faces a Slew of Very Nasty Data, it Still won't Ease (Publication Centre)

We think Japanese monetary policy easing essentially is tapped out, both theoretically and by political constraints.

10 January 2019 We have Seen this Movie Before in French Consumer Confidence (Publication Centre)

History is repeating itself in France. When the Republican Nicolas Sarkozy defeated the Socialist candidate Ségolène Royal in April 2007, consumer sentiment briefly soared to a six-year high, before plunging to an all-time low a year later.

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 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 February 2019 CPI Inflation Likely Fell Slightly Below The 2% Target in January (Publication Centre)

Analysts' forecasts for January's consumer prices report, released on Wednesday, are unusually dispersed.

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.

11 December 2017 200K-plus Payroll Gains Set to Continue, Wage Gains Will Rise (Publication Centre)

First things first: Payroll growth likely will be sustained at or close to November's pace.

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.

10 January 2019 Fed Doves Sound, Well, Dovish... but don't Ignore the Warning from Evans (Publication Centre)

The latest batch of FOMC speakers yesterday, together with the December minutes--participants said "the committee could afford to be patient about further policy firming"--offered nothing to challenge the idea, now firmly embedded in markets, that the next rate hike will come no sooner than June, if it comes at all.

10 Feb. 2016 Surging Inflation in the Andes Poses Policy Dilemmas (Publication Centre)

Colombia's January inflation rate easily exceeded BanRep's 2-to-4% target range yet again, jumping to 7.5% from 6.8% in October, the fastest increase since December 2008. This is putting pressure on BanRep to continue tightening, following 150bp rate hikes, to 6.0%, since September.

1 November 2017 BoJ Signals Intransigence as Global Central Banks Tighten (Publication Centre)

The BoJ kept monetary policy unchanged yesterday, as expected, with the signal coming through loud and clear: Japan's central bank will continue its aggressive easing policy until the inflation cows come home...

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 March 2019 Q4 Growth Rescued by Business Spending on IP, but Q1 Set to Soften (Publication Centre)

A quick rebound in growth, after the slowdown to a reported 2.6% in the fourth quarter, is unlikely.

1 March 2017 The Chancellor will Bank Most of the £20B Borrowing Windfall (Publication Centre)

At next Wednesday's Budget, the Chancellor will have the rare pleasure of announcing lower-than- anticipated near-term borrowing forecasts. But hopes that he will prevent the fiscal tightening from intensifying when the new financial year begins in April look set to be dashed, just as they were at the Autumn Statement in November.

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.

1 November 2018 More Trick and Less Treat as the BoJ Leaves Market Hanging (Publication Centre)

The BoJ kept policy unchanged, as expected, at its meeting yesterday.

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.

10 April 2019 Retail Sales Likely Dipped in March, but Remain Firmly on a Rising Path (Publication Centre)

Our view that households will continue to spend more in the first half of this year, preventing the economy from slipping into a capex-led recession, was not seriously challenged yesterday by the BRC's Retail Sales Monitor.

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%.

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

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

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

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

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.

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 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.

12 March 2019 Strong January Retail Sales Can't Alone Rescue Q1 Consumption (Publication Centre)

The reported rebound in January retail sales was welcome, but the overshoot to consensus was matched, more or less, by the unexpected downward revisions to the December numbers.

13 Aug 2019 New Elections in Italy Probably are Not as Scary as Markets Fear (Publication Centre)

Political uncertainty is never far away in the Eurozone, though the most recent outbreak could easily swing in favour of markets.

13 Aug 2019 Risks to the Consensus for July CPI Inflation are Skewed to the Downside (Publication Centre)

We expect July's consumer prices report, due on Wednesday, to reveal that CPI inflation dropped to 1.8% in July, from 2.0% in June.

13 December 2017 Surging Energy Prices Won't Derail the Imminent Drop in CPI Inflation (Publication Centre)

The pick-up in CPI inflation to 3.1% in November--its highest rate since March 2012-- from 3.0% in October, shouldn't alarm the MPC at this week's meeting.

13 December 2017 Will the Fed Forecast Sub-4% Unemployment Next Year? (Publication Centre)

Today's rate hike will be accompanied by a new round of Fed forecasts, which will have to reflect the faster growth and lower unemployment than expected back in September.

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 Aug 2019 The Pillars of Japanese Domestic Demand are Built on Shaky Ground (Publication Centre)

GDP growth in Japan surprised to the upside in the second quarter, although the preliminary headline arguably flattered the economy's actual performance.

12 June 2019 Markets Having Cake and Eating it will be Caught out by the BoJ (Publication Centre)

Central bankers globally are full of market- appeasing but conditional statements.

12 February 2019 The Details Matter Much More than the NFIB Survey's Headline Index (Publication Centre)

We're very interested in the detail of today's January NFIB survey; the headline index, not so much.

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

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

11 June 2019 A Sino-U.S. Deal would Curb China's Trade Surplus...But Only Temporarily (Publication Centre)

China's trade surplus bounced back strongly in May, rising to $40.1B on our adjustment, from $35.7B previously.

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 July 2019 Manufacturing in France did Much Better than we had Feared in Q2 (Publication Centre)

France is solidifying its position as one of the Eurozone's best-performing economies.

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 April 2018 Base Effects Kick-in to Core Inflation, Much More to Come (Publication Centre)

The month-to-month core CPI numbers in March were consistent, in aggregate, with the underlying trend.

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

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

12 December 2018 Mr. Macron Signals a Policy Shift in France, and for the EZ too? (Publication Centre)

The outlook for the French economy is changing on a daily basis these days.

12 Aug 2019 Q2's GDP Drop is an Inventory-Driven Blip, Growth will Spring Back in Q3 (Publication Centre)

Q2's GDP figures create a terrible first impression, but a closer look suggests that the risk of a recession remains very low.

16 May 2017 Eurozone Reforms Likely are Coming, but Patience is Needed (Publication Centre)

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

16 Aug 2019 Consumption Started Q3 Strongly Industry Still in the Doldrums (Publication Centre)

The surge in July core retail sales was flattered by the impact of the Amazon Prime Event, which helped drive a 2.8% leap in sales at nonstore retailers.

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.

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 November 2018 Will the October Stock Market Swoon Hurt the EZ Economy (Publication Centre)

Last month was sobering month for equity investors in the Eurozone, and indeed in the global economy as a whole.

16 May 2019 Chinese Activity Comes Back Down to Earth--and Then Some--in April (Publication Centre)

Official industrial production growth in China plunged to 5.4% year-over-year in April, from 8.5% in March.

20 Aug 2019 Third Quarter Growth Looks OK on the Surface Details Less Good (Publication Centre)

Halfway through the third quarter, we have no objection to the idea that GDP growth likely will exceed 2% for the third straight quarter.

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 February 2019 China's Current Account Surplus is Stabilising, but at a Very Low Level (Publication Centre)

China's current account surplus grew further in the final quarter of 2018, more than doubling to $54.6B, from $23.3B in Q3.

20 December 2018 A Rate Cut Would Enhance Efficacy of the PBoC's new Lending Facility (Publication Centre)

The PBoC late on Wednesday announced measures to provide medium-term funding for smaller businesses.

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

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

2 May 2019 Households' Spending will Tick Over Just Fine Without a Credit Impulse (Publication Centre)

GDP growth currently is subdued by historical standards, but at least it is not debt-fuelled.

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.

19 October 2018 A Closer Look at Italy's Budget Plan for 2019 the EU Won't Like It (Publication Centre)

Italian bond yields have remained elevated this week, following the release of the government's detailed draft budget for 2019.

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.

19 June 2019 The Fed Will Commit to Ease if "Appropriate" it isn't, Yet (Publication Centre)

The Fed will leave rates unchanged today.

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

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

2 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 April 2019 Brace for a Pull-Back in Manufacturing Output in Q2 (Publication Centre)

On the face of it, British manufacturers are weathering the global slowdown well. The Markit/CIPS PMI jumped to 55.1 in March, from 52.1 in February, and now comfortably exceeds those for the Eurozone, U.S. and Japan.

20 June 2019 A Slowdown in Construction Will Weigh on EZ GDP Growth in Q2 (Publication Centre)

Yesterday's economic data added further evidence that GDP growth in the EZ will slow in Q2.

20 June 2019 Japan's Trade Balance has Troughed, Downside Risks Remain (Publication Centre)

Japan's trade balance deteriorated sharply in May, flipping to a ¥967B deficit from the modest ¥57B surplus in April.

21 Jan. 2016 Could the Chancellor Still Reduce Borrowing This Year as Planned? (Publication Centre)

By any yardstick, progress in reducing public sector borrowing so far this fiscal year has been poor. While the borrowing trend should improve in the final four months of this year--including December's figures, published Friday--the Chancellor has only a slim chance of meeting the forecasts set out in the Autumn Statement.

21 February 2018 The ECB is in the Headlines, But Not Because of its Monetary Policy (Publication Centre)

Politics are once again encroaching on the economic story in the Eurozone. At the ECB, this week has so far been a tumultuous one.

21 February 2018 Labour Data Won't be Hot Enough to Compel the MPC to Hike in May (Publication Centre)

December's labour market report, released today, won't be a game-changer for the near-term outlook for interest rates; January data will be released before the MPC meets in March, and February data will be available at its key meeting in May.

21 February 2017 Wages Don't Necessarily Lead Inflation, but Unit Labor Costs do (Publication Centre)

Fed Chair Yellen said something which sounded odd, at first, in her Q&A at the Senate Banking Committee last Tuesday. It is "not clear" she argued, that the rate of growth of wages has a "direct impact on inflation".

21 June 2019 Dealing with the "Delay Suits Both" Theories of China Trade (Publication Centre)

We've had pushback from readers over our take on the likelihood of a trade deal with China in the near future.

21 March 2017 The Debt Ceiling is Back, but no Crisis Likely Until the Fall (Publication Centre)

The federal debt ceiling was re-imposed last week, with no fanfare, and no reaction in the markets. All eyes were focussed instead on the Fed's rate hike and Chair Yellen's press conference.

21 November 2018 The Curious Case of the Crash in the French Housing Market (Publication Centre)

The French economy has suffered from weakness in manufacturing this year, alongside the other major EZ economies.

21 May 2019 The Money Supply is a Poor Guide to U.S. Growth it's Different in Europe (Publication Centre)

We have been asked recently why we rarely talk about the signal from the U.S. money supply numbers, in contrast to the emphasis we give to real M1 growth in our forecasts for economic growth in both the Eurozone and China.

21 March 2018 Lower CPI Inflation in February Should Give the MPC Doubts (Publication Centre)

February's consumer price figures give the MPC reason to doubt the case for raising interest rates again as soon as May.

21 March 2018 China's Fiscal Reforms: Economies of Scale won't Reduce the Deficit yet (Publication Centre)

Premier Li Keqiang rounded out the National People's Congress with his press conference yesterday.

21 December 2018 What Happened in the French Economy in the Fourth Quarter (Publication Centre)

This is the final report before we dial down for our Christmas break, and we are happy to report that the economic calendar will be almost empty in our absence.

21 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 March 2019 Why Japan's February CPI Could Surprise to the Downside (Publication Centre)

The national February inflation data are due this Friday, a couple of weeks after the Tokyo report, as usual.

20 March 2019 More Noise than Signal in the Monthly EZ Construction Data (Publication Centre)

Construction in the EZ stumbled at the start of the year.

20 March 2019 Losing One Dot is a Good Bet Two Would Box-in the Fed Unnecessarily (Publication Centre)

We expect the Fed today to shift its dotplot to forecast one rate hike this year, down from two in December and three in September.

20 March 2018 FOMC to Stick to Three Hikes this Year, but an Extra Dot for 2019? (Publication Centre)

We would be astonished if the FOMC meeting starting today does not end with a 25bp rate hike.

20 May 2019 Soaring Sales at Discounters Explain the Strong Redbook, Mostly (Publication Centre)

We have been puzzled in recent months by the sudden and substantial divergence between the Redbook chainstore sales numbers and the official data.

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.

21 Aug 2019 Existing Home Sales are Reviving Lower Rates Signal a Better H2 (Publication Centre)

We're expecting to learn today that existing home sales rose quite sharply in July, perhaps reaching the highest level since early 2018.

21 Apr. 2016 Argentina Returns to the Bond Market After 15 Years of Isolation (Publication Centre)

After a 15 year hiatus, Argentina returned to the global credit markets yesterday with the sale of a USD16.5B sovereign bonds, the largest ever dollar offering by a developing country. Argentina boosted the size of its offering to USD16.5B from USD15B after attracting orders worth USD70B. The country sold four tranches: 10-year debt at 7.5%, three- and five year yielding 6.25% and 6.875%, respectively, and 30-year paper at 8.0%.

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 July 2019 Politics is the Name of the Game in Mexico and Argentina (Publication Centre)

Mexico's economic and financial outlook is deteriorating rapidly and hopes of a gradual recovery over the next three-to-six months are fading away after AMLO's missteps in recent months.

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.

17 May 2017 CPI Inflation Still has Further to Climb this Year (Publication Centre)

The jump in CPI inflation to 2.7% in April, from 2.3% in March, was only partly to a temporary boost from the later timing of Easter this year. Indeed, inflation likely will rise further over the coming months as food, energy and core goods prices all continue to pick up in response to last year's depreciation of sterling.

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

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

17 June 2019 Peak Trade War Might Already be Past, but Strong Nerves Needed (Publication Centre)

When economic historians look back at the bizarre trade war of 2018-to-19, we think they will see Tuesday June 4 as the turning point, after which the threats of fire and brimstone were taken much less seriously, and markets began to ponder life after tariffs.

17 June 2019 China's Economy Faltered in May the New Tariff Hit is yet to Come (Publication Centre)

China's activity data for May were a mixed bag, but they broadly paint a consistent picture of a slowdown in economic growth from the first quarter.

17 May 2019 Japan's Q1 GDP will Disappoint, as the Sheen of Local Demand Fades (Publication Centre)

Japan's economic data have been very volatile in the last 18 months.

17 May 2019 The China-led Industrial Downturn is Ending, Trade War Permitting (Publication Centre)

Evidence in support of our view that the U.S. industrial slowdown is ending continues to mount, though nothing is yet definitive and the re-escalation of the trade war is a threat of uncertain magnitude to the incipient upturn.

18 April 2019 China can only Disappoint in Q2, after March and Q1 Data (Publication Centre)

China's real GDP growth was unchanged at 6.4% year-over-year in Q1, above the consensus for a slowdown to 6.3%.

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

17 October 2018 Did FOMC Members Discuss Rising R-star at the September Meeting (Publication Centre)

The median of FOMC members' estimates of longer run nominal r-star--the rate which would maintain full employment and 2% inflation--nudged up by a tenth in September to 3.0%, implying real r-star of 1%.

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.

19 July 2019 Consumers are Showing No Signs of Brexit Blues (Publication Centre)

June's retail sales figures provided a timely reminder that consumers aren't being haunted by the warnings of the damage that a no -deal Brexit would entail.

17 July 2018 Will Price Changes Spare the Blushes of EZ Net Trade in 2018 (Publication Centre)

The euro area's trade surplus slipped further mid- way through the second quarter; falling to a 15-month low of €16.9B in May, from a downwardly-revised €18.0B in April, and extending its descent from last year's peak of nearly €24.0B.

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.

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 May 2019 The Industrial Sector is Bottoming April's IP Data are Misleading (Publication Centre)

We are not worried about the reported drop in April manufacturing output, which probably will reverse in May.

16 May 2019 Headline EZ GDP and Real M1 Point to a Robust Economy (Publication Centre)

Yesterday's data in the EZ provided a little more evidence on what happened in Q1.

16 October 2018 Will Fiscal Stimulus Boost Eurozone GDP growth in 2019 (Publication Centre)

The sovereign debt crisis in the euro area was a macroeconomic horror story

16 September. 2016 Mexican Peso in the Firing Line, Volatility will Remain High (Publication Centre)

The Mexican peso and the Mexican stock market were hit this week after a poll showed that the Republican presidential candidate, Mr. Donald Trump, is leading in Ohio, a bellwether state in US presidential elections. After the poll's release, the MXN, which has been trading at about 18.9 to the USD, shot up to around 19.2.

17 January 2018 Severe Weather Likely Depressed Homebuilders' Sentiment (Publication Centre)

At the end of last year, U.S. homebuilders were more optimistic than at any time in the previous 18 years, according to the monthly NAHB survey.

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

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

17 Feb. 2016 Will the ECB be Forced to Rethink its Negative Interest Rate Policy? (Publication Centre)

The ECB's negative interest rate policy--NIRP--has come under the spotlight following the violent selloff in Eurozone bank equities. Mr. Draghi reassured markets and the EU parliament earlier this week that new regulation, stronger capital buffers, and common recognition of non-performing loans have made Eurozone banks stronger.

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.

17 July 2019 Consumers Leading the Way, but is Manufacturing Close to a Floor (Publication Centre)

We have revised up our second quarter consumption forecast to a startling 4.0% in the wake of yesterday's strong June retail sales numbers, which were accompanied by upward revisions to prior data.

18 October 2017 Weak Underlying Price Pressures Give the MPC Scope to Wait (Publication Centre)

A November interest rate rise is far from the done deal that markets still anticipate, even though CPI inflation rose to 3.0% in September from 2.9% in August.

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

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

18 May 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 March 2019 BoJ Plays Hedgehog, but Groundwork is Being Laid for an Exit (Publication Centre)

Japan's inflation target came under heavy fire yesterday, as Finance Minister Taro Aso suggested that "things will go wrong if you focus too much on 2%."

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.

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.

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 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.

19 Aug 2019 The Intensification of the Trade War Forces Rate Cuts in LatAm (Publication Centre)

While we were away, EM growth prospects and risk appetite deteriorated significantly, due mainly to rising geopolitical risks, weaker economic prospects for DM, and, in particular, the most recent chapter of the global trade war.

18 March 2019 Beware the Easter Effect in EZ Core Inflation in March and April (Publication Centre)

Data on Friday confirmed that headline inflation in the Eurozone rose a bit last month, to 1.5% from 1.4% in January, but also that the core rate dipped by 0.1 percentage points, to 1.0%.

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

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

18 December 2018 The Plunge in Oil Prices Injects Uncertainty into Q4 GDP Growth (Publication Centre)

In the wake of last week's strong core retail sales numbers for November, the Atlanta Fed's GDPNow model for fourth quarter GDP growth shot up to 3.0% from 2.4%.

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

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

18 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 February 2019 A Solid End to 2018 for Colombia's Economy, no Threats, for Now (Publication Centre)

Colombia's December activity reports confirmed that quite strong retail sales last year were less accompanied by local production, which became only a minor driver of the economic recovery, as shown in our first chart.

18 February 2019 Steady Growth in Consumers' Spending will Keep GDP Edging Up (Publication Centre)

We became more confident last week in our call that GDP growth will hold up better than widely feared in the first half of 2019, following signs that consumers have maintained their happy-go-lucky mentality, despite the ongoing political crisis.

18 June 2019 Chainstore Sales Growth is Set to Slow Sharply Don't Worry (Publication Centre)

The chainstore sales numbers have been hard to read over the past year.

18 January 2019 India will Shrug Off the INR Shock, but the Ghost of 2016 is Hovering (Publication Centre)

Data over the past week give a near-complete picture of how India's economy fared in the fourth quarter.

18 January 2019 December's Retail Sales Report Will Be a Clanger (Publication Centre)

The consensus forecast for retail sales in December has been consistently too upbeat in recent years and we think most analysts are too sanguine yet again.

19 February 2019 Expect to See a Further Softening in Asian Price Data this Friday (Publication Centre)

A slew of Asian price numbers are due this Friday, and they will all likely show that price gains softened further in January.

20 February 2018 Tax Cuts and Rising Government Spending to Lift Growth, at a Price (Publication Centre)

In the absence of new economic data today, we want to take the opportunity to expand on the key themes in our latest Chartbook, which was distributed Friday.

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.

18 January 2017 The MXN Will Struggle in the Near-Term as Markets Assess Trump (Publication Centre)

Donald Trump's inauguration on Friday might mark the beginning of a new era for both the U.S. and the global economy. For commodity-producing Latam countries, such as Chile, Peru and Colombia, attention will shift to Trump's proposed tax reforms, pro-business agenda and planning infrastructure spending. Mexico, on the other hand, will be grappling with Mr. Trump's trade and immigration policies.

18 November. 2016 Yellen Still Thinks Inflation Will Hit the Target in Two Years. Hmm. (Publication Centre)

Fed Chair Yellen's Testimony yesterday pretended the election hadn't happened, and ignored the incoming administration's plans for a huge fiscal stimulus. She did address the issue under questioning, though, pointing out that fiscal stimulus could have inflationary consequences and that the Fed will have to factor-in to its decisions whatever Congress decides to do to taxes and spending.

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?

Question of the Week, WC 11th June (Media Centre)

Are there any signs that the U.S. tax cuts and/or regulatory relaxation are stimulating increased non-residential fixed investment?

*November 2018 - U.S. Economic Chartbook* (Publication Centre)

Growth Has Peaked as the Tax Cut Boost Fades...But the Labor Market is Keeping the Fed on Track

11 Mar. 2016 Don't Hold Your Breath for a Budget Surplus (Publication Centre)

Chancellor George Osborne has invested considerable personal capital in attaining a budget surplus by the end of this parliament, and he has passed a 'law' to ensure he and his successors achieve this goal. But the current fiscal plans, which will be reviewed in the Budget on March 16, make a series of optimistic assumptions on future tax revenues and spending savings.

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.

22 March 2017 Greece, the EU and the IMF are Sleepwalking into Crisis... Again (Publication Centre)

Another deadline has come and gone in the negotiations between Greece and its creditors. This week's meeting between EU finance ministers revealed that the creditors have not seen enough commitments unlock the €7B Greece needs to repay in July. Mr. Tsipras has agreed to energy sector privatizations, and to increase the threshold for income tax exemption.

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.

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%.

ASIAN DATA WRAP 20 May 2019 (Publication Centre)

Japan's Q1 GDP number leaves sales tax delay on the table

ASIAN DATA WRAP 30 July 2019 (Publication Centre)

BoJ snubs the doves. Japan's unemployment rate downtick was minimal. The weak external backdrop dominates Japan's pre-tax front-loading industrial activity.

ASIAN DATA WRAP 28 June 2019 (Publication Centre)

Japan's stable unemployment rate belies underlying weakness. Tokyo energy inflation turns the corner. Sales tax preparations breathe life into Japanese production in May... if only temporarily. Korea's IP plunge in May shows why Japan can't rest on its laurels.

ASIAN DATA WRAP 11 June 2019 (Publication Centre)

Japan's machine tool orders remain nasty. Japan's M2 growth shows first signs of looming tax hike.

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.

U.K. Datanote: U.K. Public Finances, April (Publication Centre)

In one line: Too soon to take fright from the slowdown in tax receipts.

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.

30 May 2017 How Durable is the Euro's Rally Against the Dollar? (Publication Centre)

Fiscal stimulus, partly financed by a border adjustment tax, and Fed rate hikes, were supposed to be a powerful cocktail driving a stronger dollar in 2017. But so far only the Fed has delivered--we expect another rate hike next month--while Mr. Trump has disappointed in the White House.

U.S. Key Issues (Publication Centre)

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