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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.

24 September 2018 How can the Fed Slow the Economy when the Private Sector is so Strong? (Publication Centre)

The big difference between economic cycles in developed and emerging markets is that recessions in the former tend to be driven by the unwinding of imbalances only in the private sector, usually in the wake of a tightening of monetary policy.

23 Sept 2019 Recessions Usually Require Private Sector Imbalances, they're Absent (Publication Centre)

We think of recessions usually as processes; namely, the unwinding of private sector financial imbalances.

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

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

14 November. 2016 Brazil's Private Spending was Weak in Q3 (Publication Centre)

Volatility and risk will remain high in L atAm for the foreseeable future. President-elect Donald Trump's uncertain foreign policies could have a considerable impact on LatAm economies in the months and years ahead.

17 April 2018 Can the ECB exit private QE without a hiccup? (Publication Centre)

We are fairly sanguine that government bond markets in the Eurozone will take the end of QE in their stride.

1 Oct 2019 The Trouble with China's Private Sector Recovery (Publication Centre)

China's official and Caixin manufacturing PMIs have diverged in the last couple of months.

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.

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

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

14 June 2019 Brazil's Private Spending Still Hurt by High Political Uncertainty (Publication Centre)

In a busy week in Brazil, ongoing signals of feeble economic activity have strengthened our forecast for GDP growth of just 1.0% this year, below the 1.3% consensus forecast.

18 Sept 2019 Mexico's Manufacturing will Slow will Private Spending Step Up (Publication Centre)

The ongoing weakness in DM has been a feature of the global landscape over the last year.

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.

7 September 2018 Are Chinese Efforts to Stabilise Growth Starving Private Firms (Publication Centre)

China's authorities recognised, around the middle of this year, that activity was slowing and that monetary conditions had become overly tight.

31 January 2019 Japanese Retail Sales Demand a Q4 Private Consumption Upgrade (Publication Centre)

The value of Japanese retail sales bounced back strongly in December, rising 0.9% month-on-month, after a 1.1% drop in November.

4 Sept 2019 The Conservatives' Poll Lead Does Not Have Strong Foundations (Publication Centre)

A general election this year now looks inevitable, after the defection of Phillip Lee MP from the Tories to the Lib Dems, and the PM's threat to seek an election if MPs take control of the Order Paper on Tuesday evening.

25 May 2018 Germany Slowed in Q1, but what Happened to Private Demand? (Publication Centre)

The headline in yesterday's detailed Q1 German GDP data was old news, confirming that growth in the euro area's largest economy slowed at the start of the year.

30 Sept 2019 Ignore the Headline the Upturn in Private Profits in China is Reassuring (Publication Centre)

China's industrial profits data for August were a mixed bag.

28 May 2019 Raising the Alarm on German Private Investment in Q2 and Q3 (Publication Centre)

We covered the detailed German Q1 GDP report in Friday's Monitor--see here--but the investment data could do with closer inspection. The headline numbers looked great.

21 January 2019 Colombia's Private Spending Did Well in Q4, 2019 Will Be Solid (Publication Centre)

Data released on Friday confirmed that Colombian activity remained strong in Q4.

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.

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

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

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

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

30 August 2017 ADP Looks set to Report Another Solid Gain in Payrolls (Publication Centre)

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

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

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

30 May 2018 ADP Likely to Report Solid Gain in May Payrolls (Publication Centre)

The models which generate the ADP measure of private payrolls will benefit in May from the strength of the headline industrial production, business sales and jobless claims numbers.

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

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

3 Oct 2019 ADP Consistent with September Jobs up 150K the Trend is Slowing (Publication Centre)

ADP's report that September private payrolls rose by 135K was slightly better than we expected, but not by enough to change our 150K forecast for tomorrow's official report.

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

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

21 December 2016 Consumption Likely Remained Firm in Mexico in Q4, But it Will Slow (Publication Centre)

Yesterday's report on October private spending in Mexico was positive, suggesting that consumption remained relatively strong at the start of Q4. Retail sales jumped 1.6% month-to-month, following a modest 0.2% drop in September. October's rebound was the biggest gain since March this year, but note that wild swings are not unusual in these data. The headline year-over-year rate rose to 9.3%, from 8.1% in September, but survey data signal to a gradual slowdown in coming months to around 5%.

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

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

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

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

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

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

21 December 2018 Consumption Will Firm in Mexico in Q4, Despite October's Poor Data (Publication Centre)

Yesterday's report on October private spending in Mexico was downbeat, suggesting that consumption started the fourth quarter on a weak footing.

21 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.

24 November. 2016 EZ PMIs Rise Further in November- The Outlook is Good for Q4 GDP (Publication Centre)

The PMIs are telling an increasingly upbeat story for the EZ economy in Q4. The composite PMI in the euro area rose to an 11-month high of 54.1 in November, from 53.3 in October. The uptick was driven by strong new business growth across all private sectors, and employment also increased in response to higher work backlogs.

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

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

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

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

24 Sept 2019 Is the Tories' True Poll Lead Massive or Minute? (Publication Centre)

Support for the Conservatives has shown no sign of flagging in recent weeks, despite the setbacks in the Commons earlier this month and the government's failure so far to secure a revised Brexit deal.

6 December 2017 ADP to Report Strong November Jobs, but will Overstate Official Data (Publication Centre)

The ADP measure of private employment hugely overstated the official measure of payrolls in September, in the wake of Hurricane Irma, but then slightly understated the October number.

7 September 2018 Brace for Soft Looking August Payroll and Hourly Earnings Data (Publication Centre)

In the wake of yesterday's ADP report, which showed private payrolls rising by only 163K, we have pulled down our forecast for today's official number to 170K.

7 November 2017 Car Sales are Falling Rapidly, with no End in Sight (Publication Centre)

The downturn in car sales is showing no sign of abating. Data released yesterday by the Society of Motor Manufacturers and Traders showed that private registrations fell 10.1% year-over-year in October, much worse than the 6.6% average drop in the previous 12 months.

7 March 2018 ADP Set to Report Strong Payrolls in February, 200K Seems a Good Bet (Publication Centre)

All the signs are that ADP will today report a solid increase in February private payrolls; our forecast is 200K, but if you twist our arms we'd probably say the mild weather last month across most of the country points to a bit of upside risk.

7 June 2019 Job Gains Likely Slowed Sharply in May, but will Recover (Publication Centre)

In the wake of Wednesday's ADP report, showing a mere 27K increase in private payrolls, we cut our payroll forecast to 100K.

8 March 2018 Labor Demand Remains Strong, Can Supply Keep Up? (Publication Centre)

ADP's report of a 235K increase in private payrolls in February is not definitive evidence of anything, but it is consistent with the idea that labor demand remains very strong.

8 May 2019 Don't Extrapolate from April's Double-Digit Decline in Car Sales (Publication Centre)

The 10.3% year-over-year decline in private new car registrations in April likely is not a sign that the trend in either vehic le sales or consumers' overall spending is taking a turn f or the worse.

9 Sept 2019 The Trade War is Hurting Payroll Growth will Slow Further (Publication Centre)

Payroll growth in September and October probably won't be materially worse than August's meager 96K increase in private jobs.

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

The Prime Minister has argued repeatedly during the general election campaign that Britain will prosper under a "strong and stable" Conservative government with a large majority. "Division in Westminster," she argued when calling the election last month, "...will risk our ability to make a success of Brexit and it will cause damaging uncertainty and instability to the country."

9 June 2017 Markets Continue to Distrust Opinion Polls Indicating a Tight Race (Publication Centre)

The final flurry of opinion polls indicates that voting intentions have changed little over the last few days. The Conservatives have an average lead over Labour of 7.5% in the final p olls conducted by 10 different agencies, only slightly more than their 6.5% lead at the 2015 election.

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

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

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.

5 January 2018 Robust December Jobs, Strong AHE and a New Low for Unemployment? (Publication Centre)

In the wake of yesterday's ADP report, which showed private payrolls up 250K in December, we have revised our forecast for today's official headline number up to 240K from 210K.

5 Aug 2019 An Election Still Is Too Risky for the Tories, Despite the (Publication Centre)

The Conservatives are rallying in the opinion polls, as their uncompromising line on leaving the E.U. by October 31, come what may, resonates with Brexit party supporters.

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

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

4 April 2019 It's Hard to Find the Signal Behind the ADP Noise in March (Publication Centre)

We can think of at least three reasons for the apparent softness of ADP's March private sector employment reading.

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

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

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

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

6 May 2019 Payrolls Can't Sustain April's Pace, but Unemployment will Keep Falling (Publication Centre)

It would be astonishing if the May and June payroll numbers looked much like April's strong data, at least in the private sector.

6 July 2018 June Payroll Growth Likely Slowed, a Bit, Hourly Earnings are a Wild Card (Publication Centre)

The ADP private sector employment number was a bit weaker than we expected in May, and the undershoot relative to our forecast has pulled down our model's estimate for today's official number

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

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

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.

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

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

12 November 2018 How to Look Desperate in Trying to Stem China's Pledged Share Crisis (Publication Centre)

Last week, the Chinese authorities were out in force, talking up the economy and markets, and bearing measures to support private firms.

13 August 2018 Japan's Households Finally Stage a Come Back, Time for a BoJ Hike? (Publication Centre)

Japan's GDP growth came roaring back in Q2, thanks to a strong rebound in private consumption, and an acceleration in business capex.

14 November 2017 Are Investors Complacent to Expect a Smooth Brexit Transition in 2019? (Publication Centre)

Sterling weakened yesterday, to $1.31 from $1.32, following news that 40 Conservative MPs have agreed to sign a letter of no-confidence in the Prime Minister.

16 August 2017 Better Q2 Data in Colombia Ease Pressure on BanRep, for now (Publication Centre)

Colombian activity data released this week were weak, but mostly better than we expected. Real GDP rose 0.7% quarter- on-quarter in Q2, in contrast to the 0.3% fall in Q1, when the economy was hit by the lagged effect of last year's monetary tightening and the one-off VAT increase.

12 December 2017 Will the ECB Live to Regret Buying Corporate Bonds as Part of QE?EZ 12 December 2017 (Publication Centre)

Investors in euro-denominated corporate debt will be listening closely to Mr. Draghi this week for hints on how the ECB intends to balance QE between public and private debt next year.

17 September 2018 The EZ Output Gap Has Closed, But will Inflation Follow? (Publication Centre)

Last week's comments by Mr. Draghi--see here-- indicate that the ECB is increasingly confident that core inflation will continue to move slowly towards the target of "below, but close to 2%", despite elevated external risks, and marginally tighter monetary policy.

17 March 2017 Embattled Pro-EU Parties Secure Decisive Victory in the Netherlands (Publication Centre)

Centrist politicians and markets breathed a sigh of relief yesterday as the results of the Dutch parliamentary elections rolled in. The incumbent conservatives, led by PM Mark Rutte, lost ground but emerged as parliament's biggest party with 33 seats out of the total 150.

13 December 2018 Assuming the PM Wins, the Path to a Softer Brexit Will Become Clearer (Publication Centre)

After seemingly endless speculation, the confidence vote in Theresa May's leadership of the Conservative party finally has been triggered following the submission of at least 48 letters by disgruntled MPs to the Chairman of the 1922 Committee.

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

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

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.

13 September 2018 A Leadership Contest Might be Imminent, but Mrs. May Won't Lose (Publication Centre)

Sterling held on to its recent gains yesterday despite mounting speculation that Eurosceptic Conservative MPs are plotting a leadership challenge.

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

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

14 August 2017 China's Slowdown Surprised Japan, Inventories to Boost Q2 GDP (Publication Centre)

Japanese domestic demand probably strengthened in Q2, with both private consumption and fixed investment accelerating. Trade and inventories are the key swing components for GDP growth.

14 December 2016 Labour Data Set to Show a Clearer Deteriorating Trend (Publication Centre)

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

13 November 2018 Will Poor Sentiment and Political Uncertainty Knock EZ Investment (Publication Centre)

The outlook for private investment in the Eurozone has deteriorated this year, especially in manufacturing.

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.

18 Apr. 2016 Solid Colombian Manufacturing Sector Offsetting Soft Demand (Publication Centre)

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

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

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

19 June 2018 The Continuity of Colombia's Free- Market Model is Assured (Publication Centre)

Iván Duque, the conservative candidate for the Democratic Centre Party, won the presidential election held in Colombia on Sunday.

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

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

4 January 2018 ADP Likely Will Show a Solid Gain in December Private Employment (Publication Centre)

Today's ADP employment report for December ought to show private payrolls continue to rise at a very solid pace

18 June. 2015 Slow Upturn in Private Investment Amid Weak End-Demand (Publication Centre)

Speaking in Brussels earlier this week, Mr. Draghi noted that the ECB is encouraged by signs that private investment is finally turning up, to complement strong consumption. It is too early to make that assumption, we think, but we agree with the president that the trend is moving slowly in the right direction.

Question of the Week, WC 7th Oct (Media Centre)

Are there any signs of a Chinese recovery yet? Freya Beamish discusses

2 April 2019 China's March PMIs Rebounded, but are they a False Dawn (Publication Centre)

The bulk of China's PMIs were published over the weekend and yesterday, leaving only the Caixin services PMI on Wednesday.

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

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

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

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

25 Sept 2019 The Fiscal Rule Is Dead, Long Live the Fiscal Rule (Publication Centre)

The latest public finance figures make it virtually inevitable that the Chancellor will scrap the existing fiscal rules when he delivers his first Budget.

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

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

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

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

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

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

2 Aug 2019 Brazil's Copom Cuts Rates and Hints More Easing is in the Pipeline (Publication Centre)

The Brazilian Central Bank's policy board-- Copom--voted unanimously on Wednesday to cut the Selic rate by 50bp to 6.0%.

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.

26 July 2017 National Surveys are Not Bogged Down by Disappointing PMIs (Publication Centre)

Yesterday's national business surveys provided an optimistic counterbalance to the underwhelming PMIs on Monday, although they all suggest that the euro area economy is in good form.

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

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

28 June. 2016 Will Higher Inflation Keep Further Monetary Easing at Bay? (Publication Centre)

The Chancellor indicated yesterday that the current fiscal plans--which set out a 1% of GDP reduction in the structural budget deficit this year--will remain in place until a new Prime Minister is chosen by September 2. So for now, the burden of leaning against the imminent downturn is on the MPC's shoulders.

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.

2 April 2019 Recent Data Confirm Argentina's Turnaround, but Politics is a Threat (Publication Centre)

Data released last week confirm that the Argentinian economy finally is stabilizing.

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.

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.

29 July 2019 Solid External Accounts in Brazil, Mexico Flirting with Recession (Publication Centre)

Brazil's external accounts remain solid, despite the recent modest deterioration, making it easier for the country to withstand external and domestic risks.

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

The bad news on economic activity keeps coming for Brazil. The formal payroll employment report-- CAGED--for December was very weak, with 120K net jobs eliminated, compared to a 40K net destruction in December 2014, according to our seasonal adjustment. The severe downturn has translated into huge job losses. The economy eliminated 1.5 million jobs last year, compared to 152K gains in 2014. Last year's job destruction was the worst since the data series started in 1992. The payroll losses have been broad-based, but manufacturing has been hit very hard, with 606K jobs eliminated, followed by civil construction and services. Since the end of 2014, the crisis has hit one sector after another.

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

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

29 June 2018 Mexico's Presidential Race Nears the Finish AMLO has a Strong Lead (Publication Centre)

We are going to print two days before the July 1 presidential election in Mexico.

29 Aug 2019 How About Slightly Stronger EZ GDP Growth in Q3 and Q4 (Publication Centre)

Yesterday's money supply data in the Eurozone were solid across the board.

2 May 2017 Can Sterling's Recovery Gather More Momentum? (Publication Centre)

Sterling continued to recover last week, hitting its highest level against the dollar since October, despite a series of data releases indicating that the economy is losing momentum. Indeed, sterling was unscathed by the news on Friday that quarter-on-quarter GDP growth slowed to just 0.3% in Q1, from 0.7% in Q4.

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

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

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.

28 May 2019 The Trade War: What we Know, What we Believe, and What we Don't Know (Publication Centre)

The trade war with China is a macroeconomic event, whose implications for economic growth and inflation can be estimated and measured using straightforward standard macroeconomic tools and data.

28 September. 2016 Narrow Money in the EZ points to Slower GDP Growth Next Year (Publication Centre)

Momentum in EZ money supply slipped marginally in September. Headline M3 growth slowed to 5.0%, from 5.1%, mainly due to a slowdown in narrow money. Overnight deposit growth slowed to 9.4%, from 9.9% in August, offsetting a slight rise in growth of currency in circulation.

25 January 2018 The MPC Needn't Rush the Next Rate Hike to Keep Wages in Check (Publication Centre)

Yesterday's labour market data brought further signs that wage growth is recovering from its early 2017 dip.

25 July 2017 The July PMIs Provide a Dose of Reality on the Eurozone Economy (Publication Centre)

Yesterday's PMIs kicked off a busy week for Eurozone data on a downbeat note. The composite EZ PMI fell to a five-month low of 55.8 in July, from 56.3 in June; it was constrained by a 0.6 point dip in the manufacturing index to 56.8.

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

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

28 February 2019 A Dovish Money Supply Report Ahead of the March ECB Meeting (Publication Centre)

Yesterday's January EZ money supply data offered support for investors betting on a further dovish shift by the ECB at next month's meeting.

28 Aug 2019 Peru's Economy is Still Growing, but External Threats are Significant (Publication Centre)

Data last week confirmed that Peru's economic growth slowed sharply in the first half of the year, due to the damaging effects of the global trade war hitting exports.

28 January 2019 Inflation Remains Benign in Mexico, Despite Temporary Shocks (Publication Centre)

Mexican economic data was surprisingly benign last week.

28 Aug 2019 China's Talk of Austerity Faces H2 Hurdles but it isn't Merely Rhetoric (Publication Centre)

China's finance minister Liu Kun provided his report on China's current fiscal situation to the legislature last Friday.

28 Apr. 2016 Eurozone Real Narrow Money Growth Continues to Slow (Publication Centre)

Monetary dynamics in the Eurozone were virtually unchanged last month. M3 growth rose trivially to 5.0% year-over-year in March from a revised 4.9% in February. It was lifted by stronger growth in medium-term deposits and issuance of short-term debt.

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.

28 August 2018 Germany's Economy is Resilient in the Face of External Risks (Publication Centre)

Friday's detailed GDP data in Germany confirm that the euro area's largest economy performed strongly in the second quarter.

19 February 2019 A 2019 General Election No Longer is So Implausible (Publication Centre)

The decision by seven MPs to abandon Labour and set up a new centrist grouping--the Independent Group--will not have a significant impact on the outcome of parliamentary Brexit votes.

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.

19 April 2017 Markets Overlook the Downside Risks from June's Snap Election (Publication Centre)

Prime Minister Theresa May's announcement that Parliament will vote today on holding a general election on June 8 shocked markets and even her own party's MPs. Betting markets were pricing in only a 20% chance of a 2017 election before yesterday's news.

19 December 2018 New Thinking on PBoC Rates Balance Tipping Toward a Cut (Publication Centre)

A PBoC rate cut is looking increasingly likely. Policy is already on the loosest setting possible without cutting rates, but the Bank has little to show for its marginal approach to easing, with M1 growth still languishing.

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

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

28 August. 2015 Another Month, Another Bullish Money Supply Report in the EZ (Publication Centre)

Yesterday's money supply report provided further relief for investors doubtful over the cyclical recovery following the market turmoil. Broad money growth, M3, accelerated to 5.3% year-over-year in July, up from 4.9% in June, and within touching distance of a new post-crisis high. Narrow money continued to surge too, rising 12.1% year-over-year, up from 11.1% in June, sending a bullish message on the Eurozone economy.

28 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.

19 June 2019 Another One Bites the Dust Growth Cools Temporarily in Peru (Publication Centre)

Peru's April supply-side monthly GDP data confirm that the economic rebound lost momentum at the start of the second quarter.

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

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

19 May 2017 Expect a Hike on June 14 Unless Financial Conditions Tighten, a Lot (Publication Centre)

The probability of a rate hike on June 14, as implied by the fed funds future, has dropped to 90%, from a peak of 99% on May 5.

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

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

19 October 2017 Slower Depletion of Job Market Slack Eases Pressure to Raise Rates (Publication Centre)

The rate that labour market slack is being absorbed has slowed, potentially giving the MPC breathing space to postpone the first rate rise beyond next month.

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

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

19 March 2019 The MPC Won't Shift to a Dovish Stance this Week (Publication Centre)

We doubt that this week will see the MPC joining the list of other major central banks that have abandoned plans to raise interest rates this year.

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

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

19 March 2018 Argentina's Recovery Continues, but the Rebound is Facing Setbacks (Publication Centre)

Argentina's Recovery Continues, but the Rebound is Facing Setbacks

27 Sept 2019 Is the "Repo Crisis" a Sign to Batten Down the Hatches for GFC 2.0 (Publication Centre)

In the financial crisis, a squeeze in short-term dollar markets forced banks to sell assets, which were then exposed as soured.

19 March 2018 Will Rising Labor Participation Fix Everything this Year? (Publication Centre)

We need to take a closer look at the chance of a sustained rise in the labor participation rate, which is perhaps the single biggest risk to the idea that 2018 will be a good year for the stock market, with limited downside for Treasuries.

19 March 2019 Chile's Economy to Gather Speed Over the Second Half of the Year (Publication Centre)

Chile's Q4 GDP report, released yesterday, confirmed that the economy accelerated at the end of last year, supported by rising capex and solid consumption.

25 February 2019 China's Deflating Property Boomlet will Spur the Authorities to Action (Publication Centre)

China's 2018 property market boomlet let out more air last month.

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

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

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

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

24 September 2018 The Prime Minister has Doubled Down on a Weak Hand (Publication Centre)

Theresa May doubled down on her Brexit stance last week, despite European Council President Donald Tusk stating clearly that her proposed framework for economic cooperation "will not work" because it risks undermining the single market.

22 March 2018 Wage Growth Still Lacks Momentum, Giving the MPC Time (Publication Centre)

Slack in the labour market no longer is being absorbed and wage growth still is struggling for momentum, placing little pressure on the MPC to rush the next rate rise.

22 November 2017 "Spreadsheet Phil" Unlikely to Alter Austerity Formula (Publication Centre)

Public sector borrowing still is on course to greatly undershoot the March Budget forecasts this year, despite October's poor figures.

20 February 2019 The EZ's Current Account Surplus Should Increase, a Bit, in Q1 (Publication Centre)

The Eurozone's external accounts were extremely volatile at the end of Q4.

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

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

21 Aug 2019 Resilient Domestic Demand in the Andes, Despite Global Tensions (Publication Centre)

The Andean economies haven't been immune to the turmoil roiling the global economy in the past few weeks.

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 June. Fiscal and Monetary Policy Won't Come to the Rescue After a Brexit (Publication Centre)

The Chancellor warned last week that he would hold an Emergency Budget shortly after a vote to leave the E.U. to address a £30B black hole in the public finances. The £30B--some 1.6% of GDP-- is the mid-point of the Institute for Fiscal Studies' estimates of the impact of Brexit on public borrowing in 2019/20, which were based on the GDP forecasts of a range of reports.

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

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

22 November 2017 What's the Case for Increased Fiscal Stimulus in the Eurozone? (Publication Centre)

The euro area's record-high external surplus has prompted commentators to suggest that the zone has room to loosen fiscal policy to support growth, or at least relax the deficit reduction rules.

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.

23 January 2019 Ignore Korea's Consensus-Beating Q4 GDP Print it's not Sustainable (Publication Centre)

Korea's preliminary Q4 GDP report was stronger than nearly all forecasters, including ourselves, expected.

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

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

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

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

23 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.

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 August 2017 All Systems Go for Italy's Economy, but Don't ask About the Long Run (Publication Centre)

The performance of Italy's economy in the first half of 2017 proves that the strengthening euro area recovery is a tide lifting all the r egion's boats.

22 January 2019 Q1 GDP will Take a Hit, Despite Back Pay for Government Workers (Publication Centre)

The chance of a zero GDP print for the first quarter diminished--but did not die--last week when the president signed a bill granting full back pay to about 300K government workers currently furloughed.

22 January 2019 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.

21 November 2017 Chile's Economy Rebounded in Q3, but Politics Will Dominate the News (Publication Centre)

Incoming data confirm our view that the Chilean economy to rebound steadily in the second half of the year, with real GDP increasing 1.5% quarter-on-quarter in Q3, after a relatively modest 0.9% increase in Q2 and a meagre 0.1% in Q1.

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

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

22 Aug 2019 Brexit from the Perspective of the EU It's Complicated and Risky (Publication Centre)

The stakes in the Brexit saga have been raised significantly over the summer.

21 May 2019 The MPC Will Shun its Strategy of Waiting for Brexit Uncertainty to Fade (Publication Centre)

The chances of the first phase of the Brexit saga concluding soon declined sharply last week.

21 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.

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

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

21 May 2019 Chile's Economy Struggled in Q1, and the Near-Term Outlook is Poor (Publication Centre)

Chile's Q1 GDP report, released yesterday, confirmed that the economy weakened sharply at the beginning of the year, due mainly to temporary shocks, including adverse weather conditions.

21 January 2019 How Far Will Sterling Jump if a Soft Brexit Becomes Government Policy? (Publication Centre)

Signs that the government is softening its Brexit plans, in response to its substantial defeat in the Commons last week, has enabled sterling to recover most of the ground lost against the dollar and euro in the fourth quarter of last year.

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 December 2017 Optimism in the French Corporate Sector is High and Broad-Based (Publication Centre)

Sentiment in the French business sector ended this year on a high. The headline manufacturing index fell slightly to 112 in December, from an upwardly-revised 113 in November, but the aggregate sentiment gauge edged higher to a new cycle high of 112.

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

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

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

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

21 February 2019 How High Would Inflation Get After A No-deal Brexit? (Publication Centre)

With a no-deal Brexit still a potential outcome and just over five weeks to go until the U.K. is scheduled to leave, it's about time we put some numbers on how high inflation could get in this worst-case scenario.

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.

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

Yesterday's detailed Mexican GDP report confirmed that growth was resilient in Q1, despite external and domestic headwinds. GDP rose 0.7% quarter-on-quarter in Q1, in line with our expectation, but marginally above the first estimate, 0.6%.

23 May 2018 Chinese Capex Growth will Flounder this Year as PPI Inflation Slows (Publication Centre)

China's capex growth faces renewed challenges this year, as PPI inflation slows.

24 May 2019 Switching Our Brexit Base Case From Soft Departure to Paralysis (Publication Centre)

The chances of our Brexit base case--a soft departure just before the current October 31 deadline--playing out have declined sharply over the last two weeks.

24 November 2017 Risks to Mexico's Inflation Outlook are Increasing, but Q1 will be Better (Publication Centre)

The minutes of Banxico's November 9 policy meeting were released yesterday, in which the Bank left the reference rate unanimously unchanged at 7.0%.

2 Oct 2019 Manufacturing in Meltdown Fear the Cross-Contamination (Publication Centre)

The dreadful September ISM manufacturing survey reinforces our view that the sector will be in recession for the foreseeable future, and that both business capex and exports are on the verge of a serious downturn.

24 June 2019 The New PM Soon will be Asking for a Further Brexit Extension (Publication Centre)

British politics remains a complete mess, with many outcomes, ranging from no-deal Brexit to revoking Article 50, possible in the second half of this year.

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 January 2019 What's Brewing Under the Surface of the BoJ's Nonchalance (Publication Centre)

We suspect that under the calm surface of the BoJ, a major decision is being debated.

24 July 2019 The ECB's Q2 Lending Survey Provides Support for ECB Doves (Publication Centre)

The headline in yesterday's ECB Q2 bank lending survey seemed almost tailor-made for the central bank to deliver a dovish message to markets this week.

2 Oct 2019 Japanese Dualism Intensified in Q3 Capex Weak, Consumption Strong (Publication Centre)

Japan's Tankan survey continues to paint a picture of a contracting economy.

24 October 2018 Korea's Stronger Q3 Growth Likely due to Falling Imports, Ominously (Publication Centre)

Korea's preliminary GDP report for Q3 will be released tomorrow.

25 April 2017A Government Shutdown Would Say More About Politics Than Economics (Publication Centre)

A shutdown of the federal government, which could happen as early as this weekend, is a political event rather than a macroeconomic shock. But if it happens--if Congress cannot agree on even a shortterm stop-gap spending measure in order to keep the lights on after the 28th--it would demonstrate yet again that the splits in the House mean that the prospects of a substantial near-term loosening of fiscal policy are now very slim.

25 April 2018 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.

24 September 2018 Good News on Brazil Inflation, but all Eyes are on the Presidential Race (Publication Centre)

Broad-based inflation pressures in Brazil remain tame despite the sharp BRL depreciation this year, totalling about 7% in the last three months alone.

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.

24 Sept 2019 Ugly EZ PMIs in September, but Don't Hit the Panic Button Yet (Publication Centre)

Yesterday's PMI data were an open goal for those with a bearish outlook on the euro area economy.

2 November. 2016 Brazil Industrial Output Remains Sluggish, but Q4 will be Better (Publication Centre)

Brazil's September industrial production report, released yesterday, confirmed the message from survey data that the sector stabilized towards the end of summer. Output rose 0.5 month-to-month, and August output was revised up by 0.3 percentage points.

2 October 2017 Japanese CPI Inflation Still led by Food and Energy, for now (Publication Centre)

Japanese CPI inflation jumped to 0.7% in August from 0.4% in July. The ris e in prices over the last year, however, was mainly driven by food and energy.

2 Sept 2019 Argentina in Selective Default, and Things can get Even Worse, Soon (Publication Centre)

Argentina's economic and financial situation has deteriorated significantly in recent weeks and the outlook is becoming increasingly bleak.

23 October 2017 Remember Minsky Moments? And Please Give us Capital, says China (Publication Centre)

Two major themes emerged from the Chinese Party Congress last week, namely, further opening of the financial sector to foreigners, and the threat of a Minsky moment.

23 Sept 2019 PBoC Refrains from a Rate Cut a Third Time, it's Still Coming (Publication Centre)

The PBoC left its interest rate corridor, including the Medium-term Lending Facility rate, unchanged last Friday, but published the reformed Loan Prime Rate modestly lower, at 4.20% in September, down from 4.25% in August.

24 April 2018 Welcome Signs of Stabilisation in the Eurozone PMI Data (Publication Centre)

Eurozone investors will be drawing a sigh of relief after yesterday's PMI data. The alarming plunge in February and March made way for stabilisation, with the composite PMI in the euro area unchanged at 55.2 in April.

23 November 2018 Slowing Inflation won't Deter the BoJ from Further Adjustments (Publication Centre)

October likely was the peak in Japanese CPI inflation, at 1.4%, up from 1.2% in September. The uptick was driven by the non-core elements, primarily food.

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

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

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

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

23 November 2018 Economic Growth in France Should Maintain Momentum in Q4 (Publication Centre)

Yesterday's barrage of survey data in France, tentatively suggest that business sentiment is stabilising following a string of declines since the start of the year.

24 August 2018 The Glass is Half-Full in the Eurozone PMI Data for August (Publication Centre)

Yesterday's PMI data in the Eurozone economy were a mixed bag.

24 August 2018 What Probability are Markets Attaching to a No-Deal Brexit? (Publication Centre)

Speculation that the U.K. will end up leaving the E.U. in March without a deal has dominated the headlines over the last month. Politicians on both sides of the Channel have warned that the probability of a no-deal Brexit is at least as high as 50%, even though more than 80% of the withdrawal deal already has been agreed.

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

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

24 January 2018 Government Bonds Can Cope With an End to QE. Can C orporates? (Publication Centre)

Bond markets didn't panic when the ECB announced its intention further to reduce the pace of QE this year, to €30B per month from €60B in 2017.

20 Apr. Wage Growth is Picking Up, Pressuring the MPC to Act (Publication Centre)

Today's labour market figures likely will show that wage growth is bouncing back from a soft patch in late 2015. As a result, the MPC won't be able to sit on its hands much longer, especially in light of the continued dire news on productivity.

20 April 2018 Argentina's Fiscal Accounts on the Mend, but Inflation is a Key Concern (Publication Centre)

Argentina's government continues to show signs of reining in fiscal policy, with the primary budget balance improving steadily over the last year.

24 Feb. 2016 Mexico's GDP Slowed in Q4, but Services are Still Resilient (Publication Centre)

Mexico's economy slowed marginally in Q4, due mainly to the challenging external environment, but the domestic economy remains relatively healthy. Real GDP rose 0.5% quarter-on-quarter in Q4, following a 0.8% solid expansion in Q3. Year-over-year growth dipped to 2.5% from 2.8%.

20 August 2018 Don't Believe the Scare Stories About Rising No-Deal Brexit Risk (Publication Centre)

Investors have become more concerned about a no-deal Brexit.

2 May 2017 Don't get too Excited by the April Jump in EZ Core Inflation (Publication Centre)

Eurozone inflation pressures snapped back in April. Friday's advance report showed that headline inflation rose to 1.9% year-over-year, from 1.5% in March, lifted by a jump in the cor e rate to 1.2% from 0.7% the month before.

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.

6 Sept 2019 Chile's Central Bank Cuts Rates and will Act if the Trade War Escalates (Publication Centre)

Chile's economy started the third quarter decently, after taking a series of hits, including low commodity prices and the slowdown of the global economy.

6 Sept 2019 Don't be Swayed if August Payrolls Jump a Real Slowdown is Coming (Publication Centre)

We're nudging up our forecast for today's August payroll number to 180K, in the wake of the ADP report.

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

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

6 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 November 2017 Payrolls Restored, Expect a Dramatic Labor Market Tightening Next Year (Publication Centre)

The 351K net increase in payrolls reported Friday--a 261K October gain and a 90K total revision to August and September--puts the labor market back on track after the hurricanes temporarily hit the data.

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.

6 March 2019 ISM Non-manufacturing Rebound is Welcome Further Gains Unlikely (Publication Centre)

The rebound in the ISM non-manufacturing index in February was in line with our forecast, but behind the strong headline, the employment index dropped to an eight-month low.

6 September 2017 August's PMIs Show the Economy is too Brittle to Handle a Rate Hike (Publication Centre)

Our conviction that the economy continues to grow at a snail's pace increased yesterday following the release of August's Markit/CIPS services survey.

7 Aug 2019 Will Tory Rebels Vote with the Opposition in a No-Confidence Vote? (Publication Centre)

According to Shadow Chancellor John McDonnell, it is "almost inevitable" that Labour will table a no-confidence motion in the government next month, shortly after MPs return from the summer recess on September 3.

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

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

7 June 2018 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 December 2017 Tory Eurosceptics Are Not an Invincible Barrier to a Soft Brexit (Publication Centre)

Brexit talks have hit an impasse over the Irish border. The Republic of Ireland will veto any deal that creates a hard border with Northern Ireland. This means that Northern Ireland must remain in the EU's customs union.

7 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 December 2016 Brazil's Copom is Ready to Act Boldly, but Politics Pose Risks (Publication Centre)

In Brazil, the minutes of the Copom's November meeting, released yesterday, are consistent with our forecast for a 50bp rate cut in January. At its last two meetings, the BCB cut the Selic rate by only 25bp, to 13.75%, amid concerns about services inflation, global uncertainty, and the Fed's likely rate hike next week.

6 March 2017 Fed Fears Hit LatAm FX Last Week - is a Renewed Sell-off Coming? (Publication Centre)

LatAm assets have struggled in recent days as it has become clear that the Fed will hike next week. But we don't expect currencies to collapse, as domestic fundamentals are improving and the broader external outlook is relatively benign.

6 March 2017 PMIs Signal Stronger EZ Growth, but Will the Hard Data Follow? (Publication Centre)

Survey data continue to suggest that GDP growth will accelerate in Q1. The final PMI reports on Friday showed that the headline EZ composite index rose to 56.0 in February, from 54.4 in January, in line with the first estimate.

5 Sept 2019 The PMIs Recession Signal is Misleading, GDP Will Rise in Q3 (Publication Centre)

Recession fears were fanned yesterday by the renewed deterioration of the Markit/CIPS services survey.

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

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

5 Sept 2019 Japan's Q2 GDP is set for a Minor Downgrade Clouds on the Horizon (Publication Centre)

We've been surprised by the fast rate of Japanese GDP growth in the first half, though the Q1 pop merely was due to a plunge in imports.

5 October 2018 Jobs Likely Weaker than ADP but Still Solid (Publication Centre)

In the wake of the ADP report released Wednesday, we moved up our payroll forecast to 150K from 100K, but we've now taken a closer look at the post-Florence path of jobless claims.

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."

5 March 2019 Argentina's Medium-term Outlook is Improving, but Challenges Remain (Publication Centre)

The outlook for Argentina is gradually improving, after a long and painful recession.

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.

6 August 2018 Don't Worry About July's Payroll Numbers, Trend is Still 200K-plus (Publication Centre)

We are not worried, at all, by the slowdown in headline payroll growth to 157K in July from an upwardly-revised 248K in June.

6 June 2017 The Spanish Economy is Punching Above its Weight. Can it Last? (Publication Centre)

Yesterday's final May PMI data in the Eurozone confirmed the strength of the cyclical upturn. The composite PMI was unchanged at 56.8, in line with the initial estimate.

6 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.

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

Economic activity is slowing in Colombia. The ISE activity index--a monthly proxy for GDP--rose only 0.6% year-over-year in April, down from 2.3% in March, and we expect it to rise at this pace over the coming months. During the first quarter, the index rose at an average year-over-year rate of 3.0%.

6 February 2019 The Chilean Economy Eased Off in Late Q4 2019 will be Better (Publication Centre)

Chile's Imacec index confirmed that economic growth ended the year on a soft note, due mainly to weakness in the mining sector.

6 December 2018 No Real Signs of the Slowdown Story in the Labor Market Data (Publication Centre)

Behind all the talk of slowdowns and Fed pauses, we see no sign that the labor market is loosening beyond a very modest uptick in jobless claims, and even that looks suspicious.

6 February 2018 Argentina Ended 2017 Strongly but Challenges are Mounting (Publication Centre)

Argentina's economy was improving late last year, albeit slowing at the margin, according to the latest published indicators. GDP data confirmed that the revival continued during most of Q4, with the economy growing 0.4% month-to-month in November.

7 March 2017 Mexicans' Confidence Rebounds, Partly, but the Trend is Still Poor (Publication Centre)

Mexican asset prices and sentiment have been helped in recent weeks by less-harsh rhetoric from the Trump administration. The headline consumer confidence for February, reported yesterday, rose to 75.7 from 68.5 in January; all the sub-components improved. The data are not seasonally adjusted, so most local analysts look at the data in year-over-year terms.

7 March 2017 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.

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 October 2018 Bright Spots, and Some Warning Signs, in Japan's Wage Data (Publication Centre)

Japan's average monthly labour earnings growth tumbled to 0.9% year-over-year in August, from 1.6% in July. This is not a disaster.

8 Sept. 2015 The German Manufacturing Sector is Still Stuck in Neutral (Publication Centre)

Industrial production in Germany had a decent start to the third quarter. Output rose 0.7% month-to-month in July, less than we and the consensus expected, but the 0.5% upward revision to the June data brings the net headline almost in line with forecasts. Rebounds of 2.8% and 3.2% month-to-month in the capital goods and construction sectors respectively were the key drivers of the gain, following similar falls in June. A 3.2% fall in consumer goods production, however, was a notable drag.

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

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

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

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

8 May 2019 Chile's Economy Slowed in Q1, but Expect a Modest Q2 Rebound (Publication Centre)

Economic growth in Chile slowed in Q1, despite a relatively strong end to the quarter, and the chances of an accelerating recovery remains disappointingly low, due to both global and domestic headwinds.

8 May 2019 Where Current MMT Prescriptions Fall Short for Japan... and China (Publication Centre)

In our Friday Monitor, we came to the conclusion that prescriptions arising from Modern Money Theory have been designed primarily with the U.S. in mind.

9 December 2016 Mexico's Consumers Will Face a Tough 2017 (Publication Centre)

Mexico's economic outlook has dimmed recently, a point driven home by sentiment data released last week. Still, we think GDP growth will slow only marginally in Q4, to about 11⁄2% year-over-year. Consumers' spending likely will remain strong in the near term, thanks mainly to rising remittances from the U.S., driven by fear of policy changes under the Trump administration.

9 January 2017 Will Sterling Take a Further Pounding in 2017? (Publication Centre)

Sterling was the worst performing G10 currency in 2016 and most analysts anticipate further weakness in 2017. The cost of purchasing downside protection for sterling over the next year also continues to exceed upside protection, as our first chart shows.

9 October 2018 Risks to the Consensus for August GDP Lie to the Upside (Publication Centre)

We expect August's GDP figures, released on Wednesday, to show that month-to-month growth slowed to 0.1%, from 0.3% in July.

9 Sept 2019 Brexiteers Lost the Brexit Day Battle, But Will They Win the Election War (Publication Centre)

After last week's drama, the pace of political developments should slow down this week.

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 June 2017 The ECB's World: Accelerating GDP Growth and Lower Inflation (Publication Centre)

The headline changes in yesterday's ECB policy announcement were largely as expected. The central bank left its main refinancing and deposit rates unchanged at 0.00% and -0.4% respectively, and maintained the pace of QE at €60B per month. The central bank also delivered the two expected changes to its introductory statement. The reference to "lower levels" was removed from the forward guidance on rates, signalling that the ECB does not expect that rates will be lowered anytime soon.

9 January 2018 Colombian Inflation Ended 2017 Above Target 2018 Will be Better (Publication Centre)

Colombian inflation ended 2017 slightly above the central bank's 2-to-4% target range, after a year in which policymakers cut interest rates to boost economic growth.

9 July 2019 It Won't Be Just "One and Done" for the MPC, in the Event of No-Deal (Publication Centre)

The sharp fall in markets' expectations for Bank Rate over the last month has partly reflected the perceived increase in the chance of a no-deal Brexit. Betting markets are pricing-in around a 30% chance of a no-deal departure before the end of this year, up from 10% shortly after the first Brexit deadline was missed.

8 March 2019 Payrolls Constrained by Reversals of Weather and Shutdown Boosts (Publication Centre)

Our below-consensus 125K forecast for today's February payroll number is predicated on two ideas.

8 March 2019 Business and Consumer Sentiment in Stark Contrast Who's Right (Publication Centre)

Consumer sentiment in Mexico continues to improve, consistent with tailwinds from the relatively strong labour market and the president's rising approval ratings.

7 Oct 2019 Payrolls Gains will Slow Further Unemployment will Start to Rise (Publication Centre)

The two big surprises in the September employment report--the drop in the unemployment rate and the flat hourly earnings number--were inconsequential, when set against the sharp and clear slowdown in payroll growth, which has further to run.

8 August 2017 Will Mexico's Economy Resilience Continue in the Second Half? (Publication Centre)

The Mexican economy maintained its relatively strong momentum in Q2. The first estimate of Q2 GDP, released last week, confirmed that growth was resilient during the first half of this year, despite the confidence hit caused by domestic and external headwinds.

7 November 2017 Central Bank in Argentina and Peru to Leave Rates on Hold this Week (Publication Centre)

Argentina's central bank likely will leave its main interest rate at 27.75% tomorrow at its biweekly monetary policy meeting.

7 March 2019 The ECB Will Take a Knife to its GDP and CPI Forecasts Today (Publication Centre)

In some sense, today's ECB meeting will be a sobering one for policymakers.

7 March 2018 Brazil's Industrial Sector Remains Solid, Despite Slipping in January (Publication Centre)

Brazil's industrial sector was off to a soft-looking start in Q1, but the fall in January output was chiefly payback for an especially strong end to 2017.

7 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.

8 January 2018 Japan's Services Sector will Pick Up in Q1, Wage Pressure Mounts (Publication Centre)

Japan's services sector PMI last week was disappointing.

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

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

8 March 2017 Could a Bad Payroll Report for February Really Stop the Fed? (Publication Centre)

With the FOMC decision now just seven days away, the forcefulness of recent Fed speakers has led many analysts to argue that only a spectacularly bad payroll report, or an external shock, can prevent a rate hike next week. External shocks are unpredictable, by definition, and we think the chance of a startlingly terrible employment report is low, though substantial sampling error does occasionally throw the numbers off-track.

8 March 2018 The Spring Statement Really Will Be a Non-Event (Publication Centre)

The Treasury has tried to dampen expectations for Tuesday's Spring Statement, which has replaced the Autumn Statement since the Budget was moved last year to November.

8 June 2018 China is Ill-equipped to Keep up with Fed Hikes in the Next 18 Months (Publication Centre)

China's FX reserves data pointed to an about-turn in net capital flows in May, with capital leaving the country again after two months of net inflows, and a current account deficit in Q1.

8 July 2019 Will the Weakness of Mexican Capex and Consumption Continue? (Publication Centre)

Data released last week confirmed that Mexico's economy stumbled in the first half of the year, hurt by a temporary shocks in both the industrial and services sectors, and heightened political uncertainty, due to policy mistakes at the outset of AMLO's presidency.

8 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 July 2019 No Quick Relief from Food Inflation in Sight for India and China (Publication Centre)

One of the main reasons we expect the Reserve Bank of India to roll back at least one of this year's rate cuts before the end of the year is the likely further rise in food inflation.

5 June 2019 Don't Overlook the Construction Sector's Hidden Supports (Publication Centre)

The flow of downbeat business surveys continued yesterday, with the release of the Markit/CIPS construction survey.

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.

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 Oct. 2015 The Third Quarter ECI is Set to Rebound, but How Far? (Publication Centre)

We have been asked by a few readers how much confidence we have in our forecast of a 1% rebound in the third quarter employment costs index, well above the 0.6% consensus and the mere 0.2% second quarter gain. The answer, unfortunately, is not much, though we do think that the balance of risks to the consensus is to the upside.

30 October 2018 Are Chinese Pro ts Normalising But the Headwinds Remain (Publication Centre)

Chinese headline industrial profits data show that growth slowed to just 4.1% year-over-year in September, from 9.2% in August.

30 May 2018 Argentina's Economy had a Solid Q1, but the Pain is Starting to Show (Publication Centre)

Hard data released in Argentina over recent weeks showed that the economy was resilient in Q1 and early Q2.

30 January 2019 Slightly Softer Language from the Fed, but no Hints of Easing (Publication Centre)

Today's FOMC meeting will be the first non-forecast meeting to be followed by a press conference.

30 April 2019 Three Soft Core PCE Deflator Numbers Don't Make a Trend (Publication Centre)

It's pretty easy to spin a story that the recent core PCE numbers represent a sharp and alarming turn south.

30 January 2018 Mexico's Trade Gap Shrank in 2017, Helped by NAFTA-Related Fears (Publication Centre)

Mexico's trade balance shrank slightly last year, to USD11B, from USD13B in 2016. The main driver was a big swing in the non- energy balance, to a record USD8.0B surplus, following a USD0.4B deficit in 2016.

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

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

31 January 2018 FOMC Likely More Bullish on Growth, but No Policy Changes (Publication Centre)

Chair Yellen's final FOMC meeting today will be something of a non-event in economic terms.

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

The outlook for Argentina is improving. We expect economic growth to remain quite strong over the next year, despite a relatively soft start to 2017 and increasing external threats in recent weeks. The INDEC index of economic activity--a monthly proxy for GDP--is volatile, rising 1.9% month-to-month in March after a 2.6% drop in February, but the underlying trend is improving.

31 May 2018 Italy isn't Headed for Euro Exit, but Markets Need Clarity to Calm Fears (Publication Centre)

Our Chief Eurozone Economist, Claus Vistesen, is covering the Italian situation in detail in his daily Monitor but it's worth summarizing the key points for U.S. investors here.

31 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.

18 September 2018 Andean Economies Started Q3 Strongly, Can this Trend Continue (Publication Centre)

Colombia's economy remained resilient in July, thanks to strong domestic demand and relatively good external conditions for the country's top exports.

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

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

31 July 2018 Employment Costs are Accelerating, but Slowly... For Now (Publication Centre)

The most important number, potentially, in today's wave of economic reports is the Employment Costs Index for second quarter.

30 April 2019 Focus on Accelerating M1 Growth amid Still-Poor Survey Data (Publication Centre)

Yesterday's economic numbers in the Eurozone were mixed, but we are inclined to see them through rose-tinted glasses.

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

Japan's Q1 is coming more sharply into focus.

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

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

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

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

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

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

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

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

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

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

29 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

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

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

3 July 2017 Is the Jump in Eurozone Core Inflation Really Temporary? (Publication Centre)

Friday's euro area inflation reported capped a difficult week for EZ bondholders, although most of the damage was done beforehand by the advance German data.

3 October 2018 Investment is Dropping, but Don't Rule out a Rebound Next Year (Publication Centre)

One of the more disheartening aspects of the Q2 national accounts, released last week, was the downward revision to business investment. Quarteron-quarter growth was revised to -0.7%, from +0.5% previously.

3 October 2018 September ADP Employment Likely Subdued, thanks to Florence (Publication Centre)

We're fully expecting to see a hit to September payrolls from Hurricane Florence, which struck during the employment survey week.

3 Oct 2019 Regional Polling Data Point to a Tory Majority, But The Race Will Narrow (Publication Centre)

We continue to expect a general election to be held in December.

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.

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

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

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

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

31 May 2019 Q&A on the Government Takeover of Baoshang Bank (Publication Centre)

Was this an isolated occurrence, connected to the graft investigation into Chinese billionaire Xiao Jianhua, and his financial conglomerate?

31 October 2017 China's Developers Increase Risky Debt Issuance as Property Cools (Publication Centre)

In yesterday's Monitor we suggested that China's profits surge has been party dependent on developers' risky debt issuance practices.

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

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

4 Sept 2019 Will Italian 10-Year Yields Go to Zero We Don't See Why Not (Publication Centre)

We sympathise if readers are sceptical of our opening gambit in this Monitor.

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

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

4 October 2017 Survey Data Suggest Recoveries in Brazil and Mexico are on Track (Publication Centre)

The Brazilian economy has been recovering at a decent pace in recent months. The labor market is on the mend, with the unemploymen t rate falling rapidly to 12.5% in August from 14% at the end of Q1.

4 May 2017 Strong Q1 GDP Data in the EZ, but the Annualised Trend is not 2% (Publication Centre)

The Eurozone enjoyed a strong start to 2017. Yesterday's advance data showed that real GDP rose 0.5% quarter-on-quarter in Q1, a similar pace to Q4, which was revised up by 0.1 percentage points. The year-over-year rate dipped to 1.7%, from an upwardly revised 1.8% in Q4.

4 Oct 2019 Don't be Fooled by Good September Payrolls the Trend is Slowing Sharply (Publication Centre)

We look for a 150K increase in September payrolls, rather better than the August 130K headline number, which was flattered by a 28K increase in federal government jobs, likely due to hiring for the 2020 Census.

4 September 2017 China's PMIs Imply Producer Prices are Still Rising Rapidly (Publication Centre)

This Monitor provides a summary of the main points of interest over the two weeks we were out. The Chinese Caixin manufacturing PMI, published last Friday, confounded expectations for a modest fall, rising to 51.6 in August from 51.1 in July.

5 December 2018 How's the Maths in Parliament Looking for a People's Vote? (Publication Centre)

With less than a week to go until MPs' meaningful vote on Brexit legislation, on December 11, the Prime Minister still looks set to lose.

5 July 2018 ADP Likely to Report Another Solid Gain in Payrolls (Publication Centre)

Payroll growth rebounded to 223K in May, after two sub-200K readings, and we're expecting today's June ADP report to signal that labor demand remains strong.

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

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

5 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 February 2019 Spain's Economy is Still the Unsung Hero in the Eurozone (Publication Centre)

The majority of headlines from last week's advance Q4 GDP data in the Eurozone--see here--were negative.

5 December 2018 China and U.S. Agree a Truce Exports Still Face Headwinds (Publication Centre)

Data last Friday showed Japan's labour market trends deteriorating.

5 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%.

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

The Fed surprised no-one yesterday, leaving rates on hold, saying nothing new about the balance sheet, and making no substantive changes to its view on the economy. The statement was tweaked slightly, making it clear that policymakers are skeptical of the reported slowdown in GDP growth to just 0.7% in Q1: "The Committee views the slowing in growth during the first quarter as likely to be transitory".

4 March 2019 Does the Flatter Phillips Curve Mean the Next Downturn will be Severe (Publication Centre)

Investors focussed last week on Chair Powell's semi-annual Monetary Policy Testimony, but he said nothing much new.

4 April 2019 More Evidence of a Relatively Resilient Domestic EZ Economy (Publication Centre)

Yesterday's economic reports added to the evidence the euro area economy as a whole is showing signs of resilience in the face of still-terrible conditions in manufacturing.

4 January 2019 Bank Equities can do Well in 2019, even as Credit Growth Slows (Publication Centre)

Money supply growth in the euro area eased further towards the end of Q4.

4 Apr. 2016 ECB QE is Failing to Lift Equities, but Bond Yields are Being Crushed (Publication Centre)

Today's Sentix survey of Eurozone investor sentiment likely will remain downbeat. We think the headline index rose only trivially, to 6.0 in April from 5.5 in March, and that the expectations index was unchanged at 2.8. Weakness in equities due to global growth fears and negative earnings revisions likely is the key driver of below-par investor sentiment.

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

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

31 October 2018 Japan's Unemployment Rate is Likely to Tick up Again in Q4 (Publication Centre)

The Japanese unemployment rate fell again in September, to 2.3% from 2.4%. In the same vein, the job-to-applicant ratio rose to 1.64, from 1.63.

31 October 2018 Mexico's Airport Cancellation will Damage the Economic Outlook (Publication Centre)

Mexico's financial markets and risk metrics plunged early this week, following the AMLO government's decision to cancel the construction of the new airport in Mexico City, after a public consultation held in the previous four days.

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

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

4 January 2019 Poor End to 2018 Underscores the Hastiness of the Bank of Korea Hike (Publication Centre)

Korean hard data for December, so far, leave the door ajar for the possibility that the Bank of Korea will roll back its November hike sooner than we expect.

4 June 2019 The Official PMI has it Right Tariff hit has Derailed China's Trade Recovery (Publication Centre)

The Caixin manufacturing PMI was steady in May, at 50.2, in contrast to the official gauge published on Friday, which dropped to 49.5, from April's 50.2.

4 March 2019 A Solid Finish to 2018 for Colombia Momentum Will be Sustained (Publication Centre)

Colombia's GDP growth hit a relatively solid 2.8% year-over-year in Q4, up from 2.7% in Q3, helped by improving domestic fundamentals, which offset the drag from weaker terms of trade.

4 June 2018 The Labor Market Continues to Tighten, No end in Sight (Publication Centre)

The May employment report was somewhat overshadowed by the furor over the president's tweet, at 7.15AM, hinting--more than hinting--that the numbers would be good.

4 June 2018 The Economy Should be Less Lethargic in 2019 (Publication Centre)

We're relatively optimistic--yes, you read that correctly--on the outlook for the U.K. economy in 2019.

4 July 2019 Investors are Seeing Carney's Comments Through a Dovish Prism (Publication Centre)

Investors have concluded from June's Markit/CIPS PMIs and Governor Carney's speech on Tuesday that the chance of the MPC cutting Bank Rate before the end of this year now is about 50%, rising to 55% by the time of Mr. Carney's final meeting at the end of January.

4 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.

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

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

16 March 2018 New Car Sales in the Eurozone are Solid, But Italy is a Grim Outlier (Publication Centre)

Growth in new EZ car sales slipped last month, following a strong start to the year. New registrations rose 4.4% year-over-year in February, slowing from a 8.7% rise in January.

12 July 2018 Trade Skirmishes are on the Brink of Spiralling into War, but not Quite Yet (Publication Centre)

The U.S. Commerce Department on Tuesday released a list of Chinese imports, with an annual value of $200B, on which it is threatening to impose a 10% tariff, after a two-month consultation period.

12 July 2017 Financial Conditions in the Eurozone are Tightening, Slowly (Publication Centre)

The debate about the ECB's policy trajectory is bifurcated at the moment. Markets are increasingly convinced that a rapidly strengthening economy will force the central bank to make a hawkish adjustment in its stance.

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

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

12 July 2019 What's Behind China's Likely 0.2pp Slippage in Q2 Real GDP Growth (Publication Centre)

China's Q2 official GDP growth, to be released on Monday, likely slowed to 6.2% year-over-year, from 6.4% in Q1.

12 June 2018 Andes' Disinflation is Over, but Risks will Remain Under Control (Publication Centre)

In yesterday's report we discussed the recent performance of current inflation and inflation expectations in the biggest economies in LatAm, highlighting that risks are tilted to the upside, given the recent FX sell-off and rising political and external risks.

12 March 2018 Expect Rate "Adjustments" from the BoJ, a 2019 "Exit" Looks Unlikely (Publication Centre)

One critical point emerged from last week's otherwise uneventful BoJ meeting: Governor Kuroda said that the BoJ might "adjust" rates before hitting the 2% inflation target.

12 June 2019 Rising Wage Growth Bolsters the Case for Gradual Rate Hikes (Publication Centre)

The case for continuing to increase Bank Rate gradually--recently reiterated by MPC members Andy Haldane and Michael Saunders-- strengthened yesterday with the release of April's labour market report, which revealed renewed momentum in wage growth.

12 December 2018 China's Monetary Conditions are Still Tightening (Publication Centre)

China's M2 growth stabilised in November, at 8.0% year-over-year, matching the October rate.

12 December 2017 After Micro-loans Crackdown, China's Offshore Borrowing is Next (Publication Centre)

Chinese monetary conditions show signs of a temporary stabilisation. M2 growth picked up to 9.1% year-over-year in November from 8.8% in October, though largely as a correction for understated growth in recent months.

11 Sept 2019 AMLO Delivers Fiscally Responsible Plans, but Some Details are Shaky (Publication Centre)

This week, Mexico's government unveiled its 2020 fiscal budget proposal.

11 October 2018 Armageddon on Hold China Still Passes the Debt Stress Tests (Publication Centre)

We have recently looked at China's capacity to grow its way out of the debt overhang--see here--and whether last year's deleveraging can be sustained; see here.

11 March 2019 Inflation Data in the Andes Validate Forecasts for Stable Interest Rates (Publication Centre)

Inflation in the Andes remains in check and the near term will be benign, suggesting that central banks will remain on hold over the coming months.

11 Sept 2019 The Labour Market no Longer Looks Bulletproof (Publication Centre)

A cursory glance at July's labour market report gives no cause for alarm. The headline, three-month average, unemployment rate returned to 3.8% in July, after edging up to 3.9% in June.

11 September 2017 China's Trade Surplus Edges Lower with net Trade Contributing Little (Publication Centre)

Chinese exports grew by just 5.5% in dollar terms year-over-year in August, down from 7.2% in July. Export growth continues to trend down, with a rise of just 0.2% in RMB terms in the three months to August compared to the previous three months, significantly slower than the 4.8% jump at the p eak in January.

12 Aug 2019 China's CPI--PPI Split will Persist, the PPI will Dictate Policymaking (Publication Centre)

The PBoC will find itself between a rock and a hard place in the coming months, as CPI inflation creeps further up towards its 3% target but PPI deflation deepens.

12 April 2019 The Brexit Extension isn't the Death Knell for a 2019 Rate Hike (Publication Centre)

The E.U.'s decision to grant the U.K. a Brexit extension until October 31 does not extinguish the possibility that the MPC will raise Bank Rate before the end of the year.

12 March 2018 January Data Point to Slower GDP Growth in Q1 (Publication Centre)

Last week's official data supported our forecast that GDP growth likely will slow further in Q1, suggesting that a May rate hike is not the sure bet that markets assume.

12 May. 2016 Does the Challenger Survey Signal an Upturn in the Pace of Layoffs? (Publication Centre)

You may have seen the chart below, which shows what appears to be an alarming divergence between the official jobless claims numbers and the Challenger survey's measure of job cut announcements. We should say at the outset that the chart makes the fundamental mistake of comparing the unadjusted Challenger data with the seasonally adjusted claims data.

13 March 2018 Taking the Pulse on EZ Investment Can the Upturn be Sustained? (Publication Centre)

Last week's detailed GDP data in the Eurozone confirmed that the economy is benefiting from an investment cycle for the first time since before the financial crisis.

13 June 2019 Let's Take a Minute to Cheer the Strengthening French Economy (Publication Centre)

On all accounts, growth in France has been modest in the past six-to-12 months, but in relative terms, the French economy is slowly but surely asserting itself as one of the key engines of growth in the EZ.

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

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

13 Sept 2019 Brazil's Retail Sector Started Q3 Solidly will the Uptrend Continue (Publication Centre)

Brazil's outlook is still improving at the margin, as positive economic signals mix with relatively encouraging political news.

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

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

13 Sept 2019 House Price Growth Has Reached its Nadir, Expect a Recovery in 2020 (Publication Centre)

The housing market appears to be emerging gradually from the coma induced by Brexit uncertainty at the start of the year.

13 July 2017 Don't Extrapolate from May's Uptick in Basic Wage Growth (Publication Centre)

Yesterday's labour market data gave sterling a shot in the arm on t wo counts. First, the headline, three-month average, unemployment rate fell to just 4.5% in May, from 4.6% in April.

13 April 2018 Decent Industrial Data in Mexico, but Brazilian Retail Sales Weaken (Publication Centre)

Mexico's February industrial production report was weaker than markets expected. Output expanded by 0.7% year-over-year, below the consensus, 1.2%, and slowing from 0.9% in January.

12 September 2016 Will the MPC Stand By its Rate Cut Guidance this Week? (Publication Centre)

The Monetary Policy Committee likely will not follow up August's stimulus measures with another rate cut at its meeting on Thursday. The partial revival in surveys of activity and confidence have weakened the case for immediate action.

12 October 2017 China's Real GDP Growth Should Continue to Trend Down in Q3 (Publication Centre)

Next week is a big one for China. The five yearly Party Congress opens on Wednesday, and on Thursday, the monthly raft of activity data is published, along with Q3 GDP.

13 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.

13 December 2016 Mexico's Industrial Sector Started Q4 Slowly, 2017 will be Poor (Publication Centre)

Industrial production in Mexico remained under pressure at the start of Q4. Output rose just 0.1% month-to-month in October, leaving the year-over-year rate unchanged at -1.4%, down from an average of -0.8% in Q3.

13 December 2018 Expect a Dovish Mr. Draghi Today, but Don't Bet Money on It (Publication Centre)

We suspect that today's ECB meeting will be a sideshow to the political chaos in the U.K., but that doesn't change the fact that the central bank's to-do list is long.

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

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

11 March 2019 Chinese Authorities are Right to be Increasingly Worried about Exports (Publication Centre)

China's unadjusted trade surplus collapsed in February, to just $4.1B, from $39.2B in January.

11 June 2019 Chile's Central Bank Folded in the Face of the Trade War (Publication Centre)

The border security agreement between the U.S. and Mexico has strengthened hopes that the Sino- U.S. trade war will end soon.

1 May 2019 Uncertainty in Mexico Triggered a Sharp Economic Slowdown in Q1 (Publication Centre)

Yesterday's first estimate of Q1 GDP in Mexico confirmed that growth was under severe pressure at the start of the year.

1 March 2019 Slightly Disappointing Brazil Q4 GDP Data Point to Greater Slack (Publication Centre)

Brazil's GDP growth slowed to just 0.1% quarter- on-quarter in Q4, from a downwardly-revised 0.5% in Q3.

1 March 2018 The PM's Inevitable Capitulation is Still a Way Off ,Clouding Sterling's Outlook (Publication Centre)

Sterling fell to $1.38, from $1.39, in the hour following the EU's publication of a draft Article 50 withdrawal treaty, which set out the practical consequences of the principles the U.K. agreed to in December.

1 November 2017 Will the Fed Upgrade its View on Growth Today? (Publication Centre)

The Fed will do nothing today, but the FOMC's statement will re-affirm the intention to continue its "gradual" tightening.

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%.

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

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

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

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

1 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.

1 August 2018 Expect a Placeholder Statement from the FOMC Today (Publication Centre)

The Fed shifted its stance significantly in June, so we're expecting only trivial changes in today's statement.

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

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

04 October. 2016 Manufacturing Revival Bolsters Case for the MPC to Hold Fire (Publication Centre)

The odds of the MPC cutting interest rates again in November took another knock yesterday after further signs that the manufacturing sector is getting back on its feet quickly.

03 October. 2016 Deutsche's Woes Persist but it's not a European Lehman Moment (Publication Centre)

The European financial sector was in the news again on Friday, propelled by further weakness in Deutsche Bank's share price. In our Monitor of September 27, we said that worries of a European "Lehman Moment" were overblown.

18 Sept 2019 Can Investors Count on the EZ as Global Uncertainty Bites (Publication Centre)

Our colleagues have been telling some unpleasant stories recently.

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.

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

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

1 April 2019 The PM Will Pick a Softer Brexit over No-deal (Publication Centre)

The Prime Minister is in a position on Brexit all chess players dread: zugzwang.

10 April 2019 Brazil's Retail Sector Slowed in Q1 Better Credit Conditions will Help (Publication Centre)

Brazil's economic activity data have disappointed in recent months, firming expectations that the Q1 GDP report will show another relatively meagre expansion.

10 January 2019 Japanese Households Face Cross-currents Time to Tighten the Belt (Publication Centre)

Japan's wage growth surprised us with a jump to 2.0% year-over-year in December, up from 1.5% in November.

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

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

11 February 2019 Winter Bonuses will Help Q4 GDP, but they Mask Underlying Softness (Publication Centre)

Wage growth in Japan accelerated to a six-month high in December, inching up to 1.8% year-over-year, from November's 1.7%.

11 February 2019 Banxico Dials Down its Hawkish Tone, but no Rate Cuts Until late Q3 (Publication Centre)

Banxico's monetary policy meeting on Thursday was the first to be attended by the two new deputy governors, Jonathan Heath and Gerardo Esquivel, economists appointed by AMLO.

11 January 2019 MPs Will Steer the PM to a Softer Brexit After Next Week's Defeat (Publication Centre)

The government remains on course to lose next Tuesday's Commons vote on the Withdrawal Agreement--WA--by a huge margin.

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

Recent economic indicators in Mexico have been relatively positive.

11 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 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.

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

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

10 October 2018 Hurricane Michael Means Another "Soft" Payroll Number (Publication Centre)

Our hopes of a hefty rebound in payrolls in October, following the hurricane-hit September number, have been dashed by the imminent landfall of Hurricane Michael in Florida panhandle.

10 May 2019 Is the Risk of a No-Deal Brexit Rising Again? (Publication Centre)

Unsurprisingly, cross-party Brexit talks are not going well.

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

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

10 June 2019 Job Gains will Rebound, May's Slowdown is no Reason to Cut Rates (Publication Centre)

Payroll growth has slowed, no matter how you slice and dice the numbers.

10 May 2019 The PBoC will Stick to Loose Policy, Despite a Host of New Challenges (Publication Centre)

China's money and credit numbers for April were a mixed bag. M2 growth merely inched down, to 8.5% year-over-year, from 8.6% in March, keeping its gradual uptrend intact.

10 May 2019 Underlying Core Inflation is Stable, Despite the Weak Q1 Core PCE (Publication Centre)

On the face of it, our forecast of higher core inflation by the end of this year is seriously challenged by the recent data.

10 October 2017 Inflation is Finally Abating in Mexico But no Banxico Easing Until Q2 (Publication Centre)

Inflation in Mexico fell significantly in September. Data yesterday showed that the CPI rose just 0.3% month-to-month, pushing the year-over-year rate down to 6.4% from 6.7% in August, its highest level in 16 years.

10 Oct 2019 Lower Tariffs won't Stop CPI Inflation Surging in the Event of No-deal (Publication Centre)

We remain confident in the success of legislation designed to compel the PM to request a further extension of the U.K.'s E.U. membership on October 19, in the overwhelmingly likely scenario that an exit deal is not agreed at next week's E.U. Council meeting.

13 September 2017 The French Labour Market is on the Up. Will Reforms Follow? (Publication Centre)

In theory, the headline labour market data in France should be a source of comfort and support for the new government.

1 April 2019 Don't Be Fooled, Japan's Labour Market Won't Tighten Further (Publication Centre)

Japan's unemployment rate returned unexpectedly to its 26-year low of 2.3% in February, falling from 2.5% in January.

16 Sept 2019 The MPC Is Under No Pressure to Change its Tune (Publication Centre)

We look for yet another unanimous vote by the MPC to keep Bank Rate at 0.75% on Thursday, with no new guidance on the near-term outlook.

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 Oct 2019 Colombia's Economy Solid in Q3, but Expect a Challenging Q4 (Publication Centre)

Evidence of accelerating economic activity in Colombia continues to mount, in stark contrast with its regional peers and DM economies.

17 April 2018 The March Drop in Retail Sales will Overshadow Slowly Reviving Wages (Publication Centre)

This week's labour market, inflation and retail sales data--the last before the MPC meets on May 10--will have a major bearing on the Committee's decision.

17 January 2019 How Many Government Workers are Making Unemployment Claims (Publication Centre)

The weekly jobless claims numbers tend to be choppy around the turn of the year, and our take on the seasonal adjustments points to a clear increase in today's report, for the week ended January 11, even without the impact of the government shutdown.

17 July 2017 CPI Inflation Likely Held Steady in June, but will Exceed 3% Soon (Publication Centre)

Economists are divided evenly on whether Tuesday's consumer price figures will show that CPI inflation held steady at 2.9% or edged down to 2.8% in June.

17 July 2017 ASF Strength Implies Spiralling Financial Risk, not Strong GDP (Publication Centre)

China's money data, out last week, bode ill for real GDP growth in the second half. June M2 growth dipped to 9.4% year-over-year from 9.6% in May and 10.5% in April.

16 Oct 2019 China's Q3 GDP Likely was Dismal, Recovery Still Pending (Publication Centre)

China's official real GDP growth likely slowed to 6.0% year-over-year in Q3, from 6.2% in Q2.

16 November 2018 When Parliament Votes Down the Withdrawal Deal, What Next? (Publication Centre)

Even if the Prime Minister fends off an emerging leadership challenge--as we write, the rebels still are short of the 48 signatures required to trigger a confidence vote--her chances of getting parliament to back the Withdrawal Agreement in its current form are slim.

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

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

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

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

16 June 2017 What Do the Internal MPC Members Need to See to Raise Rates? (Publication Centre)

Sterling received a shot in the arm yesterday following the release of the minutes of the MPC's meeting, which revealed that three members voted to raise interest rates to 0.50%, from 0.25% currently. Markets and economists--including ourselves--had expected another 7-1 split, but Ian McCafferty and Michael Saunders switched sides and joined Kristin Forbes in seeking higher rates.

16 May 2018 Better Fundamentals and Fading Political Risk to Support Colombia (Publication Centre)

Colombia's Q1 GDP report confirms that the economy is improving. Leading indicators and survey data suggest that the recovery will continue over the second half of the year.

16 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 November 2018 Banxico is Pushed to Hike Rates Further Tactical Tightening is Likely (Publication Centre)

Banxico hiked its policy rate by 25bp to a cyclical-high of 8.0% yesterday, in line with market expectations.

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.

17 July 2018 Is the Prime Minister "A Dead Woman Walking"? (Publication Centre)

Former Chancellor George Osborne famously quipped after last year's general election that Theresa May was "a dead woman walking and the only question is how long she remains on death row".

17 July 2019 Punchy Wage Gains are Tying the MPC's Hands (Publication Centre)

Labour costs are rising so quickly that the MPC cannot justify an "insurance" cut in Bank Rate to counteract the impending damage from Brexit uncertainty in the run-up to the October deadline.

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 August 2017 Retail Sales Accelerated in June, But Were Weak Over Q2 as a Whole (Publication Centre)

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

18 August 2017 Japan's Trade Surplus Bounced. Exports to U.S. Strengthen (Publication Centre)

Japan's July adjusted trade surplus rebounded to ¥337.4B from ¥87.3B in June, far above consensus. On our seasonal adjustment, the rebound is slightly smaller but only because we saw less of a drop in June.

18 January 2019 Manufacturing Output Likely Jumped in December Don't be Deceived (Publication Centre)

The monthly industrial production numbers are collected and released by the Fed, rather than the BEA, so today's December report will not be delayed by the government shutdown.

18 June 2018 When is a BoJ Dove not a Dove? When the Experiment has Failed (Publication Centre)

Governor Kuroda has sounded increasingly dovish recently.

14 Aug 2019 Labour Market Data Point to Higher Rates if a No-Deal Brexit is Averted (Publication Centre)

Another month, another strong set of labour market data which undermine the case for the MPC to cut Bank Rate, provided a no-deal Brexit is avoided.

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 April 2018 Colombia's Softer Activity Data is Temporary, Expect an Acceleration (Publication Centre)

The February activity report in Colombia showed a modest pick-up in manufacturing activity and strength in the retail sales numbers.

17 Sept 2019 Economic Activity in the Andes Remains the Silver Lining in LatAm (Publication Centre)

Colombia's July activity numbers, released on Friday, portrayed still-strong retail sales and a reviving manufacturing sector, with both indicators stronger than expected.

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 Brazil's Economy Faltered in Q1 a Flimsy Upturn is in Prospect (Publication Centre)

Economic data released on Wednesday underscored that Brazil was struggling at the end of the first quarter, strengthening our case that Q1 GDP fell 0.2% quarter-on-quarter, the first contraction since Q4 2016.

17 May 2018 Japan has Paid for Breaking the Speed Limit in H1 Last Year (Publication Centre)

The Japanese GDP report yesterday contained substantial revisions to Q4. We had expected the Q1 contraction, but the revisions recast the health of the recovery, making the domestic demand performance look much less impressive recently, with the economy struggling since the burst of growth in the first half last year.

17 November 2017 Commodities Tailwind Helping Andean Economies to Recover (Publication Centre)

Colombian activity data released this week were relatively strong, but mostly driven by the primary sectors; consumption remains sluggish compared to previous standards.

17 Oct 2019 Korea's Q3 GDP Report to Highlight the Futility of the BoK's Second Cut (Publication Centre)

The Monetary Policy Board of the Bank of Korea voted yesterday to lower its policy base rate to 1.25%, from 1.50%.

17 October 2018 The MPC Needn't Accelerate its Tightening Plans to Tame Wages (Publication Centre)

The stand-out news from August's labour market report was the pick-up in the headline three-month average rate of year-over-year growth in average weekly wages, excluding bonuses, to 3.1%--its highest rate since January 2009--from 2.9% in July.

17 Oct 2019 The Upward Trend in Domestically- Generated Inflation Is Clear (Publication Centre)

The case for the MPC to hold back from implementing more stimulus was bolstered by September's consumer prices figures.

16 July 2019 Italy's Economy is Still on the Ropes, even as Markets Soar (Publication Centre)

Financial markets and economic data don't always go hand-in-hand, but it is rare to find the divergence presently on display in Italy.

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%.

14 November 2018 China's Potential H1 Recovery Just Fizzled out... Before it Started (Publication Centre)

Credit to the Chinese authorities for sticking it out with the marginal approach to easing for so long... at least two quarters.

14 November 2018 Banxico Likely Will Hike Tomorrow Interventionist Threats are Growing (Publication Centre)

After recent interventionist moves and plans in Mexico from AMLO's incoming administration and his political party, uncertainty and soured sentiment are the name of the game.

14 November 2017 Poor EZ Production Data Won't Dent Second Q3 GDP Estimate (Publication Centre)

Soft September data in Germany and Italy suggest that today's industrial production report in the Eurozone will be poor. Our first chart shows that data from the major EZ economies point to a 0.8% month-to- month fall in September.

14 Oct 2019 Resilient Consumption in Brazil, Manufacturing in Mexico Slowing (Publication Centre)

Hard data for Brazil and Mexico, released last week, support the case for further interest rate cuts.

14 Oct 2019: A Brexit Deal with a NI-Only Backstop won't get Through this HoC (Publication Centre)

Sterling leapt to $1.27, from $1.22 last week, amid some positive signals from all sides engaged in Brexit talks.

15 Aug 2019 Today's Data Wave Will be Split Strong Consumers, Weak Industry (Publication Centre)

Today brings an astonishing eight economic reports, so by the end of the wave of numbers we'll have a pretty good idea of how the economy performed in the first month of the third quarter.

15 Aug 2019 Germany's Economy is in Trouble, but the EZ as a Whole is Stable (Publication Centre)

Yesterday's data showed that growth in the EZ slowed in the second quarter.

14 May 2019 China's Retaliation is a Face-Saving Operation Somebody Tell Mr. Trump (Publication Centre)

Yesterday, China finally retaliated against Mr. Trump's Friday tariff hikes, promising to increase tariffs on around $60B-worth of U.S. goods.

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

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

14 July 2017 Core Inflation Pressures in the Eurozone Will Rise in Q3 and Q4 (Publication Centre)

Bond investors in the Eurozone are licking their wounds following a 40 basis point backup in 10-year yields since the end of last month. Nothing goes up in a straight line, but we doubt that inflation data will provide much comfort for bond markets in the short term.

14 December 2017 Korea's Public Sector Jobs Drive Fizzles out. BoK to Hike Anyway (Publication Centre)

The Korean unemployment rate edged back up to 3.7% in November from October's 3.6%. Young graduates--the usual suspects--accounted for most of the rise.

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

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

14 June 2019 Johnson is a Shoo-In For the Final Round, but He'll Face a Soft Brexiteer (Publication Centre)

After the first round of voting by Tory MPs, Boris Johnson remains the clear favourite to be the next Prime Minister.

16 July 2018 Will Eurozone Investment Take a Hit from the Global Trade Conflict? (Publication Centre)

Last week's packed political agenda in Europe confirmed that political relations between the U.S. and the major Eurozone economies remain difficult.

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

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

14 March 2018 The Chancellor Remains Boxed-in by Deficit Pledges and a Downbeat OBR (Publication Centre)

The Chancellor kept his word and made only trivial policy changes in the Spring Statement, but he hinted at higher spending plans in the Autumn Budget.

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.

14 September 2017 PBoC Pushes Back on RMB Rise. Stability is Still King, for now (Publication Centre)

The RMB has risen strongly in recent months, initially with the euro and the yen, but China's currency rose on a trade-weighted basis in August.

16 Aug 2019 Consumers Aren't Going to Blink as the Brexit Deadline Nears (Publication Centre)

July's retail sales figures--the first official data for Q3--provided a reassuring signal that consumers can be counted on to drive the economy as the Brexit deadline nears.

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 September 2017 Brazil Started Q3 Strongly, and the Recovery Should Continue in Q4 (Publication Centre)

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

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 Brazil's Black Friday Drove Sales Higher Will the Splurge Reverse (Publication Centre)

Brazil's consumer sluggishness in Q3 and early Q4 eased in November.

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.

15 October 2018 Mexico's Industrial Output will Improve Fundamentals are Strong (Publication Centre)

The industrial production trajectory in Mexico looked strong going into Q3, but Friday's report for August threatens to change that picture.

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

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

15 Oct 2019 The China Trade Nothingburger won't Turn the Economy Around (Publication Centre)

The New York Times called the China trade agreement reached Friday "half a deal", but that's absurdly generous.

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

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

15 January 2019 Mexican Capex Improved Slightly in Early Q4, but Uncertainty is a Drag (Publication Centre)

Data released yesterday showed that gross fixed investment in Mexico started Q4 on a decent note, increasing on the back of healthy purchases of imported machinery and equipment and construction spending.

15 July 2019 The MPC is Set to Delay for Longer, but Procrastination has a Price (Publication Centre)

We are pushing back our forecast for the next rise in Bank Rate to May 2020, from the tail-end of this year.

15 Oct 2019 China's Year-over-Year Trade Figures are Overly Grim (Publication Centre)

China's September imports missed expectations, but commentators and markets tend to focus on the year-over-year numbers.

15 March 2019 Will Brazil's Supply and Demand Divergence Continue this Year (Publication Centre)

Brazil's industrial sector keeps losing momentum, despite interest rates at record lows and improving confidence.

15 June. 2016 Good Start to Q2 for Brazil's Retail Sales, but Details Are Less Upbeat (Publication Centre)

Brazil's retail sales improved at the start of the second quarter, increasing 0.5% month-to-month in April, partially reversing the 0.9% contraction in March. But the details were less upbeat than the headline.

22 Apr. 2016 The ECB is Worried About Elevated Financial Market Volatility (Publication Centre)

The ECB held fire yesterday and kept its main refinancing and deposit rates unchanged at 0.0% and -0.4%, respectively. The central bank also left the pace of monthly asset purchases unchanged at €80B. The introductory statement overall confirmed the central bank's dovish stance.

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

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

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

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

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

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

11 Feb. 2015 Will private investments in France ever pick up? (Publication Centre)

The French industrial sector ended last year on an upbeat note, but the underlying trend in activity is still weak. Industrial production rose 1.5% month-to-month in December, equivalent to a 0.1% fall year-over-year.

15 Feb. 2016 Upbeat Q4 GDP Headline, but Private Demand Likely Slowed (Publication Centre)

Eurozone GDP data last Friday suggest the cyclical recovery continued at the end of last year. Real GDP in euro area rose 0.3% quarter-on-quarter in Q4, the same as in Q3, lifted by growth in all the major economies. This was in line with the consensus forecast, but noticeably higher than implied by monthly industrial production and retail sales data.

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

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

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

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

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

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

BUSINESS INSIDER - Here come private payrolls ... (Media Centre)

In a note to clients ahead of the report, Ian Shepherdson at Pantheon Macro said that while ADP isn't all that reliable of an indicator for the government's payroll release, set for Friday morning.

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.

9 June. 2016 Eurozone Credit Markets Cheer as ECB Private QE Begins (Publication Centre)

The ECB's corporate bond purchase program began yesterday with purchases concentrated in utilities and telecoms, according to media sources. This is consistent with the structure of the market, and the fact that bond issues by firms in these sectors are the largest and most liquid. But debt issued by consumer staples firms likely also featured prominently.

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

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

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

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

28 November 2017 Chinese Profits Headline Overstates Growth. Private Firms Struggling (Publication Centre)

Chinese industrial profits growth officially edged down to 25.1% year-over-year in October, from 27.7% in September. This is still very rapid but we think the official data are overstating the true rate of growth.

19 August. 2015 Colombia's Domestic Economy is Resilient, But Real Risks Remain (Publication Centre)

The Colombian economy has been able to grow this year despite the plunge in oil prices since the middle of 2014. Gains in consumers' spending and investment have offset part of the hit from falling exports. But private spending growth, nonetheless, slowed considerably during the first few months of the year, as shown in our char t below, in part due to rising prices for imported goods after the depreciation of the COP, as well as broad-based concerns over the state of the economy.

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%.

18 Sept. 2015 No Need to Put the Weekend on Hold for Greek Election Results (Publication Centre)

Greece goes to the polls this weekend, but unlike the chaos in the summer, we doubt it will be a nail-biting experience for investors. Polls put Syriza and the conservative New Democracy neck-and-neck, but neither party likely will be able to form a majority. Syriza has ruled out a grand coalition, which potentially means tricky negotiations with minority parties. But we are confident that any new government will be committed to euro membership, and a constructive dialogue with the EU and IMF.

2 July. 2015 Strong Jobs Numbers a Decent Bet, but Reasons for Caution too (Publication Centre)

Most of the indicators we follow point to another very strong payroll report today; we look for a 260K gain, matching May's performance. The best single leading indicator, the NFIB small business hiring intentions number, points to a massive 320K leap in private payrolls, as our first chart shows.

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.

18 Jan. 2016 Falling Energy Prices Won't Prevent Inflation Rising (Publication Centre)

December's consumer prices figures, released tomorrow, look set to show CPI inflation ticked up to 0.2% from 0.1% in November, despite the renewed collapse in oil prices. The further fall in energy prices this year means that the inflation print won't reach 1% until May's figures are published in June. But Governor Carney has emphasised that core price pressures will motivate the first rate hike--a focus he likely will reiterate in a speech on Tuesday-- meaning that a May lift-off is still on the table.

17 January 2019 Special report: How Bad is China's Bad Debt, and can the Government Still Manage it? (Publication Centre)

In our daily Monitors we've talked about the four paths that we see for the Chinese economy over the medium-to-long term. First, China could make history and actively transition to private consumption-led growth.

18 Jan. 2016 BCRP Hikes Rates - BCCh on Hold, Both Maintain Hawkish Bias (Publication Centre)

The Andean economies have been punished with high inflation triggered by currency depreciation and El Niño. Under these circumstances, Peru's central bank, the BCRP, admitted defeat yet again in the face of these temporary inflationary effects, increasing interest rates by 25bp to 4.0% last Thursday, the third hike in five months. Inflation in Peru remains stubbornly high, climbing to 4.4% year-over-year in December from 4.2% in November, and the upside risks remain elevated.

2 June 2017 May Payrolls Likely Solid, but Calendar Quirk will hit Wage Data (Publication Centre)

The 253K increase in May private payrolls reported by ADP yesterday was some a bit stronger than our 225K forecast. Plugging the difference between these numbers into our payroll model generates our 210K forecast for today's official number.

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

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

18 October 2018 Headline Inflation in the Eurozone will Stay Close to 2% in Q4 (Publication Centre)

Headline inflation in the EZ remained elevated in September, rising by 0.1 percentage point to 2.1%, while the core rate was unchanged at 0.9% in August; both numbers are in line with the initial estimates.

2 Oct. 2015 Eurozone Manufacturing is Weak, and Will Likely Deteriorate in Q4 (Publication Centre)

Final PMI data in the Eurozone yesterday confirmed that manufacturing remains under pressure from global headwinds. The manufacturing PMI in the zone fell to 52.0 in September from 52.3 in August, in line with the initial estimate. A rare upside surprise in France was not enough to offset weakness in the other major economies, and the trend in private investment growth likely will stay subdued this year.

23 February 2018 PBoC Fights Back Against RMB Strength but BoJ Le to Jawbone (Publication Centre)

The PBoC managed to keep interest rates well- anchored around the Chinese New Year holiday, when volatility is often elevated.

22 September 2017 How far will the Hurricanes Depress September Payrolls? (Publication Centre)

The trend rate of increase in private payrolls in the months before Hurricane Katrina in 2005 was about 240K per month.

23 Mar. 2015 Manufacturing remains the key driver of the EZ business cycle (Publication Centre)

The Eurozone economy is becoming increasingly service-oriented. The private services sector has contributed just over 50% of gross value added-- GVA -- in the past three years, up from 44% in the seven years before the crash of 2008.

23 Mar. 2016 Mortgage Lending Conditions Improving - Where are the Sales? (Publication Centre)

Further evidence emerged yesterday in support of our view that mortgage lending conditions are easing. The monthly mortgage origination report from Ellie Mae, Inc., a private mortgage processing firm, shows average credit scores for both successful and unsuccessful loan applications continue to trend downwards--though the latter rose marginally in February--while loans are closing much more quickly than in the recent past.

23 October 2018 Business Surveys have Flattened Richmond Fed due to Correct (Publication Centre)

All the regional PMIs and Fed business surveys are volatile in the short-term, so observations for single months need to be viewed with due skepticism.

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

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

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

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

2 Nov. 2015 Brazil's Central Bank Minutes Underline Policymakers' Problems (Publication Centre)

Banxico left Mexico's benchmark interest rate at a record low of 3% last week, maintaining its neutral tone and indicating that the balance of risks has worsened for growth, while the risks for future inflation are unchanged. Policymakers acknowledged the external headwinds to the Mexican economy, but underscored that private consumption has gathered strength thanks to improving employment, low inflation, higher overseas remittances, and better credit conditions.

17 August 2017 The Manufacturing Recovery Continues, but no Boom in Sight (Publication Centre)

The elevated readings from the ISM manufacturing survey this year have not been followed by rapid growth in output. The headline ISM averaged 55.8 in the second quarter, a solid if unspectacular reading. But output rose by only 1.2% year-over-year, and by 1.4% on a quarterly annualized basis.

2 Sept. 2015 August ADP and Official Payrolls Likely to be sub-200K (Publication Centre)

As a general rule, the best forecast of ADP payrolls in any given month is the official estimate for private payrolls in the previous month. This partly reflects the simple observation that payroll trends, once established, tend to persist, but it also is a consequence of ADP's methodology. The ADP number is generated from a model which combines both data collected from firms which use ADP for payroll processing, and lagged official data. The latter appear to be more important in determining in the month-to-month swings in the ADP number. ADP does not hide the incorporation of lagged official data in its model--you can read about it in the technical guide to the report--but neither does it shout it from the rooftops.

20 September 2016 The Recycling of the EZ's Current Account Surplus Continues (Publication Centre)

The external surplus in the EZ economy slipped in July. The seasonally-adjusted current account surplus dropped to €21.0B, from a revised €29.5B in June, hit by an increase in the current transfers deficit, and a falling trade surplus. The recent increase in the transfers deficit partly is due to the migrant deal with Turkey, and we expect it to remain elevated.

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

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

15 Apr. 2016 Once More Unto the Breach in the Troubled Italian Banking Sector (Publication Centre)

Negotiations between the Italian government and the EU on how to fix the problem of non-performing loans in the banking sector have been predictably slow. Earlier this year the government announced that it will provide a first-loss guarantee on securitised loans sold to private investors.

1 March 2017 The Mexican Labor Market is Solid, But it Likely will soon Disappoint (Publication Centre)

Strong fundamentals have supported private consumption in Mexico recently, but we now expect a slowdown. Spending will not collapse, though, because consumer credit growth, formal employment, real wage income and remittances will continue to underpin consumption for the next three-to-six months.

1 June. 2016 Chile's Domestic Demand Growth to Slow in Q2, A fter a Solid Q1 (Publication Centre)

Chile's April retail sales data, released on Monday, show that private consumption started the second quarter on a solid footing. Sales rose 3.0% month-to-month, pushing the year-over-rate up to 7.9% from 1.4% in March and an average of 4.0% in Q1. The headline was boosted by a favourable calendar effect, as April this year had two more trading days than April 2015.

10 March 2017 February Payrolls Look set for Strength, Seasonals Permitting (Publication Centre)

We're expecting a hefty increase in February payrolls today, but even a surprise weak number likely wouldn't prevent a rate hike next week. The trends in all the private sector employment surveys are strong and improving, and jobless claims have dropped to new lows too, though we think that's probably less important than it appears.

10 May. 2016 Do Falling Earnings Signal a Rollover in Payroll Gains? (Publication Centre)

In the wake of the payroll report on Friday, several readers sent us a version of the chart reproduced below, showing the rates of growth of S&P earnings and private sector payrolls. The message from the chart appears to be that the current trend in payroll growth, a bit over 200K per month cannot be sustained.

10 September 2018 Inflation in Mexico is Edging Higher, but it Will Fall in the Fourth Quarter (Publication Centre)

The Mexican economy's brightest spot continues to be private consumption.

1 June 2017 ADP Likely to Rebound Strongly, but Probably Will Overstate Payrolls (Publication Centre)

We're expecting a strong-looking 225K increase in the May ADP measure of private sector payroll growth, due today. The consensus forecast is 180K.

1 Dec. 2014 Brazil Resumed Growth In Q3, But The Details Are Still Muddy (Publication Centre)

Brazil's GDP rose by 0.1% quarter-on-quarter in the third quarter, according to the report published last Friday. The slight growth was driven by investment and government spending, both growing 1.3%, while private consumption fell 0.3%, the biggest drop since late 2008.

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

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

01 May. 2015 Fed doves on the defensive as wages break to the upside (Publication Centre)

The 0.7% first quarter increase in the ECI measure of private sector wages and salaries raised the year-over-year rate to 2.8%, the highest since late 2008 and significantly stronger than the 2.1% increase in hourly earnings in the year to March.

07 October. 2016 Payrolls Likely Unexciting Last Month, But Wages Should Rebound (Publication Centre)

Private sector payroll growth has averaged 190K over the past year, but the six-month average has slowed to 150K. The downshift is consistent with the weakening in survey-based measures of hiring intentions, which began to soften at the turn of the year.

1 August 2017 Money Data Show Diverging Household and Corporate Fortunes (Publication Centre)

The latest money and credit data highlight that the financial fortunes of firms and households have begun to differ markedly. Private non- financial corporations--PNFCs--are enjoying strong growth in their broad money holdings. The 1.2% month-to-month increase in PNFC's M4 was the largest rise since August 2016, and it lifted the year- over-year growth rate to 9.3%, from 9.0% in May.

11 April 2017 Divergent Inflation Trends in the Andes, Will Policymakers Act Soon? (Publication Centre)

Inflation is falling quickly in Colombia, despite the VAT increase in Q1, so we expect more BanRep rate cuts over the next few months. Consumer prices rose 0.5% month-to-month unadjusted in March, pushing the inflation rate down to 4.7% year-over-year, from 5.2% in February. This is the lowest rate in almost two years, thanks to a favourable base effect and fading pressures from food prices.

12 Jan. 2015 - Unemployment Plunging Towards the Nairu - What Will the Fed Do? (Publication Centre)

The strength in payrolls in recent months is real. The three-month moving average increase in private payrolls now stands at 280K, despite adverse seasonal adjustments totalling 91K in the fourth quarter, compared to the same period last year.

14 September 2016 Labour Market Report Likely to be Soft all Round (Publication Centre)

Today's figures likely will bring the first real signs that the Brexit vote has had an adverse impact on the labour market. The employment balances of the key private-sector surveys weakened sharply in July, and recovered only partially in August. In addition, the three-month average level of job vacancies fell by 7K between April and July.

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

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

15 July. 2016 The Mexican Economy is at the Mercy of Softening Spending (Publication Centre)

Industrial data released this week showed that the Mexican economy stumbled during the second quarter. Private consumption, however, continues to rise, albeit at a more modest pace than in recent months. The ANTAD same store sales survey rose 5.3% year-over-year in June, up from 2.8% in May, but this is misleading.

16 Feb. 2016 The Great Shale Oil Crunch is Underway - Production is Falling (Publication Centre)

Outside the U.S., global oil production is dominated by national oil companies, which are effectively arms of their states. State actors respond differently to private oil producers when prices fall, especially in states where oil revenues are the key element of government cashflow.

14 June. 2016 Kuczynski is Good For Peru, But he Won't Find it Easy to Rule (Publication Centre)

Pedro Kuczynski, the centre-right candidate of the Peruvians for Change party, won the presidential election held in June 5th. Mr. Kuczynski, a former finance minister and World Bank economist, defeated Ms. Keiko Fujimori, the candidate of the conservative Fuerza Popular party, and the daughter of jailed former leader Alberto Fujimori. Mr. Kuczynski's margin of victory over Ms. Fujimori was fewer than 43K votes, or just 0.2%.

14 Jan. 2016 Inflation Outlook Still Could Push MPC to Hike Before the Summer (Publication Centre)

Markets' judgement that the Monetary Policy Committee--which meets today--will wait until 2017 to raise interest rates overestimates the role that the drop in oil prices and slower GDP growth will play in its decision-making. The inflation risks emanating from the increasingly tight labour market still could motivate a tightening before the summer.

12 Jan. 2016 Why are Payroll Gains So Strong Relative to GDP Growth? (Publication Centre)

The combination of astounding fourth quarter payroll numbers and weak GDP growth has prompted a good deal of bemused head-scratching among investors and the commentariat. The contrast is startling, with Q4 private payrolls averaging 276K, a 2.4% annualized rate of increase, while the initial estimate for growth seems likely close to 1%. Even on a year-over-year basis, stepping back from the quarterly noise, Q4 growth is likely to be only 2% or so.

12 May. 2015 A Recipe for Growth in the Eurozone - Revival of SMEs (Publication Centre)

The four-quarter average growth trend in private investment, excluding dwellings, fell to 0.1% in Q4, and the recent improvement in the PMIs indicates only a modest upturn in Q2. The dearth of investment by non-financial corporates remains one of the biggest threats to long-term growth in the Eurozone.

13 March 2018 Piñera Takes Office in Chile Will he be Able to Deliver on his Promises? (Publication Centre)

The second presidency of Chile's conservative Sebastián Piñera, a billionaire turned politician, began on Sunday, March 11, in favourable economic circumstances.

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

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

16 May 2017 Sterling and Elections: Evidence from the Past Five Decades (Publication Centre)

It's now four weeks since the Prime Minister called a snap general election, and the Conservatives still are riding high in the opinion polls. The average of the last 10 polls suggests that the Tories are on track to take 47% of the vote, well above Labour's 30%.

5 Dec. 2014 Sovereign QE at the ECB is Likely on Menu Early Next Year (Publication Centre)

The divergence between talk and action is steadily widening into a chasm at the ECB. Mr. Draghi continued to strike a dovish tone yesterday reiterating the elevated worries over low inflation and the unanimous commitment to provide further stimulus if needed.

6 July. 2015 Labor Market is Still Tightening, Despite June Payroll Miss (Publication Centre)

First, a deep breath: June payrolls, with a margin of error of +/-107K, missed the consensus by 10K. Adding in the -60K revisions and the miss is still statistically insignificant. The story, therefore, is that there is no story. Even relative to our more bullish forecast, the miss was just 37K. Nothing bad happened in June. But we hav e to acknowledge that payroll growth has now undershot the pace implied by the NFIB's hiring intentions number--lagged by five months--in each of the past four months. In June, the survey pointed to a 320K jump in private employment, overshooting the actual print by nearly 100K.

5 October 2017 ADP Confirms that Hurricanes hit Payrolls (Publication Centre)

The ADP employment report for September showed private payrolls rose by 135K, trivially better than we expected.

6 Oct. 2015 Will the Industrial Slowdown Drag Down the Rest of the Economy? (Publication Centre)

The elevated September ISM non-manufacturing index reported yesterday--it dipped to 56.9 but remains very high by historical standards--again served to underscore the depth of the bifurcation in the economy. The services sector, boosted by the collapse in gasoline prices and the strong dollar, is massively outperforming the woebegone manufacturing sector.

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

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

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

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

5 February 2019 Rising Debt Servicing Costs Will Constrain any Recovery in Capex (Publication Centre)

Private non-financial corporations' profits have held up well over the last two years, despite the net negative impact of sterling's depreciation and modest increases in Bank Rate.

4 January 2019 December Payrolls Look Set for Hefty Gain, but Downside AHE Risk (Publication Centre)

Today's December payroll number was a tricky call even before yesterday's remarkably strong ADP report, showing private payrolls soaring by 271K.

30 Sept. 2015 No Slowdown in Key Jobs Data, But Expect "Weak" ADP Today (Publication Centre)

Barely a day passes now without an email asking about "evidence" that the U.S. economy is slowing or even heading into recession. The usual factors cited are the elevated headline inventory-to-sales ratio, weak manufacturing activity, slowing earnings growth and the hit from weaker growth in China. We addressed these specific issues in the Monitor last week, on the 23rd--you can download it from our website--but the alternative approach to the end-of-the-world-is-nigh view is via the labor market.

31 August 2017 Does the Corporate Borrowing Surge Signal a Capex Recovery? (Publication Centre)

The summer usually is a quiet time for business, but seemingly not for CFOs this year. Yesterday's money and credit figures from the Bank of England showed that borrowing by private non-financial corporations has rocketed. Net finance raised by PNFC's from all sources increased by £8.9B in July, compared to an average increase of just £2.5B in the previous 12 months.

31 August. 2016 Cheaper Borrowing Costs Won't Reignite Firms' Investment Appetite (Publication Centre)

July's money and credit figures provided more evidence that firms have become reluctant to invest following the Brexit vote. Lending by U.K. banks to private non-financial companies--PNFCs--rose by just 0.2% month-to-month in July, below the average 0.5% increase of the previous six months.

4 Feb. 2015 ADP Should Beat Consensus, but it's not a Reliable Indicator (Publication Centre)

The least-bad way to forecast the ADP employment number is to look at the official private payroll number for the previous month. ADP's methodology generates employment numbers from a model incorporating lagged data from the Bureau of Labor Statistics as well as information from companies which use ADP for payroll processing.

7 July 2017 Upside Risk for Payroll. Despite Soft ADP. Robust AHE a Decent Bet too (Publication Centre)

ADP's reported 158K increase in private payrolls was very close to our model-based estimate, so it doesn't change our 220K forecast for todays official payroll number, well above the 177K consensus.

7 November 2017 JOLTS Report will Confirm that Labor Demand is Rising Strongly (Publication Centre)

No single measure of labor demand is always a reliable leading indicator of the official payroll numbers, which is why we track an array of private and official measures.

ASIAN DATA WRAP 15 May 2019 (Publication Centre)

Our caution over China's March industrial production spike was justified. Chinese retail sales growth hits lows. Chinese FAI growth suggests private sector policy loosening isn't working. Japan's M2 growth upturn is a welcome break, but needs to be sustained. Korean unemployment jumps in April, showing the limits of the government's hiring spree.

ASIAN DATA WRAP 30 Sept 2019 (Publication Centre)

China's manufacturing PMIs suggest the private sector is recovering ahead of SoEs. China's non-manufacturing PMI again masks construction/services cross currents. Japan's industrial production continues to languish. OK so now Japanese households are front-loading spending. Korean IP corrects from the bumper July; the momentum from the Q2 recovery is waning.

LatAm Datanote: Retail Sales, Mexico, July (Publication Centre)

In one line: Decent momentum in private consumption, but threats are rising.

U.S. Datanote: Univ. of Michigan Consumer Sentiment, June (p) (Publication Centre)

In one line: Sentiment still very elevated; inflation expectations dip.

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 Feb. 2015 Labor Data Forcing the Fed Into a Corner - (Publication Centre)

It's always easy to find reasons to doubt single monthly observations of any economic time series, but our first chart makes it very clear that the labor market has strengthened markedly over the past few months. The underlying trend rate of growth in private payrolls is now above 300K for the first time in exactly 20 years, and we seen no reason to expect much change over the next few months.

8 Apr. 2015 Slowly does it for upturn in the German manufacturing sector (Publication Centre)

German factory orders probably bounced a modest 0.3% month-to-month in February, equivalent to a 0.5% decline year-over-year. We expect private investment growth to have picked up in the first quarter, but leading indicators for the industrial sector in Germany are sending conflicting signals.

8 Jan. 2015 - Payroll Still Set for Big December Gain - ADP is Unreliable (Publication Centre)

We aren't revising our payroll forecast in the wake of the ADP report, which showed private payrolls rising by 241K in December. We expected a bigger increase because ADP tends to lag the official data for the previous month, and the BLS reported a 314K jump in private employment in November, but the "shortfall" is too small to matter.

8 July. 2016 June Payrolls Should be Better than May, but no Return to Trend Yet (Publication Centre)

We have had a modest rethink of our June payroll forecast and have nudged up our number to 150K, still below the 180K consensus. Our forecast has changed because we have re-estimated some of our models, not because of the 172K increase in the ADP measure of private payrolls. ADP is a model-based estimate, not a reliable survey indicator.

8 June. 2015 Expect more jobs reports like May's, piling pressure on the Fed (Publication Centre)

The winter hit to payrolls is now ancient history. Private employment rose by an average of 273K per month in the second half of last year, so May's 262K has restored normal service, more or less. History strongly suggests the number will be revised up, so we are happy to argue that the data convincingly support our view that the weakness in late winter and early spring was temporary, substantially due to the severe weather.

30 Sept. 2015 Mexico's Labor Market Reflects Its Upbeat Domestic Story (Publication Centre)

Mexico's data over the last few weeks have confirmed our view that private consumption remains the key driver of the current economic cycle. Solid economic fundamentals, thanks to stimulative monetary policy and structural reforms, have supported the domestic economy in recent quarters. Falling inflation has also been a key driver, slowing to 2.5% by mid-September, a record low, from an average of 4% during 2014.

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.

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

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

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

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

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

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

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

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

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

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

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

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

30 November. 2016 ADP Likely to Signal Decent Payroll Growth (Publication Centre)

The November ADP employment report today likely will show private payrolls rose by about 180K. We have no reason to think that the trend in payroll growth has changed much in recent months, though the official data do appear to be biased to the upside in the fourth quarter, probably as a result of seasonal adjustment problems triggered by the crash of 2008. We can't detect any clear seasonal fourth quarter bias in the ADP numbers.

25 Feb. 2015 Capex Needs to Pick up in Germany to Sustain GDP Growth (Publication Centre)

Real GDP in Germany grew 0.7% quarter-on-quarter in Q4, thanks mainly to a 0.4% contribution from private consumption, and a 0.2% boost from net trade. Household consumption grew 2.2% annualised in 2014, the best year for German consumers since 2006.

25 January 2017 The EZ Economy is Performing Strongly, But Inflation is Picking Up (Publication Centre)

The Eurozone economy is in fine shape, according to the latest PMI data. The composite EZ PMI fell trivially to 54.3 in January, but remains strong. A marginal dip in the services index offset a small increase in the manufacturing PMI to a cyclical high of 55.1. These data tell a story of a strong private sector that continues to support GDP growth.

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

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

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

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

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

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

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

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

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

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

30 Nov. 2015 Capex to Rebound--Modestly--as the Oil Hit Is Overtaken (Publication Centre)

Capex data by industry are available only on an annual basis, with a very long lag, so we can't directly observe the impact the collapse in the oil sector has had on total equipment spending. But we can make the simple observation that orders for non-defense capital goods were rising strongly and quite steadily-- allowing for the considerable noise in the data--from mid-2013 through mid-2014, before crashing by 9% between their September peak and the February low. It cannot be a coincidence that this followed a 55% plunge in oil prices.

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

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

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

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

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.

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

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

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

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

28 Jan. 2016 Italy Gets its "Bad Bank," but Implementation Looks Difficult (Publication Centre)

Reports yesterday indicated that a deal has finally been struck between the European Commission and the Italian government to start dealing with bad loans in the banking system. The initial details suggest the government will be allowed to guarantee senior tranches on non-performing loans, supposedly making them easier to sell to private investors. In order to avoid burdening government finances as part of the sales--not allowed under the new banking union rules--the idea is to price the guarantees based on the credit risk of similar loans.

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

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

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

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

Samuel Tombs

Samuel Tombs has more than a decade of experience covering the U.K. economy for investors. At Pantheon, Samuel's research is rigorous, free of dogma and jargon, and unafraid to challenge consensus views. His work focuses on what matters to professional investors: The links between the real economy, monetary policy and asset prices. He has a strong track record of getting the big calls right. The Sunday Times ranked Samuel as the most accurate forecaster of the U.K. economy in both 2014 and 2018. In addition, Bloomberg consistently has ranked Samuel as one of the top three U.K. forecasters, out of pool of 35 economists, throughout 2018 and 2019. His in-depth knowledge of market-moving data and his forensic forecasting approach explain why he consistently beats the consensus. Samuel's work on Brexit goes beyond simply reporting developments and is always analytical and unbiased, enabling investors to see through the noise of the daily headlines. While his analysis points to a particular path that politicians will take, he acknowledges the inherent uncertainty and draws out the economic and financial market implications of all plausible Brexit scenarios. Samuel holds an MSc in Economics from Birkbeck College, University of London and an undergraduate degree in History and Economics from the University of Oxford. Prior to joining Pantheon in 2015, he was Senior U.K. Economist at Capital Economics. In 2011, Samuel won the Society of Business Economists' prestigious Rybczynski Prize for an article on quantitative easing in the UK. He is based in London but frequently visits our other offices. Recent key calls include: 2018 - Correctly forecast that GDP growth would slow and inflation would undershoot the MPC's initial forecast, prompting the Committee to shock investors and almost other economists by waiting until August to raise Bank Rate, rather than pressing ahead in May. 2017 - Argued that the MPC was wrong to expect CPI inflation to stay below 3% following sterling's depreciation. He also highlighted that economic indicators pointed to the Conservatives losing their outright majority in the snap general election.

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