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30 Oct. 2015 Can the Recovery in Business Investment Maintain Its Pace? (Publication Centre)

Business investment has punched above its weight in the economic recovery from the crash of 2008; annual real growth in capex has averaged 5% over the last five years, greatly exceeding GDP growth of 2%. This recovery is unlikely to grind to a halt soon, since profit margins are still high and borrowing costs will remain low. But corporate balance sheets are not quite as robust as they seem, while capex in the investment-intensive oil sector still has a lot further to fall.

23 May 2017 Has the Outlook for Business Investment Brightened? (Publication Centre)

The recent deceleration in households' real spending means that either business investment or net exports will have to pickup if the economy is to avoid a severe slowdown this year.

21 September 2016 Still Little Scope for Optimism on Business Investment (Publication Centre)

If the economy is to enter recession, falling business investment probably will have to be the main driver. Growth in consumer spending likely will slow sharply over the next year as firms become more cautious about hiring new workers and inflation begins to exceed wage growth again.

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.

02 Feb. 2016 Is the Recovery in Business Investment About to Fizzle Out? (Publication Centre)

Business investment has been resilient to the slowdown in the wider economy so far, with year-over-year growth in the first three quarters of 2015 averaging a very respectable 6.2%. Outside the oil sector, firms are generating healthy profits and can borrow cheaply.

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

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

14 June. 2016 Eurozone Investment is Improving, But Growth will Slow in Q2 (Publication Centre)

Data today likely will show that manufacturing in the Eurozone was off to a strong start to the second quarter. Advance country data suggest that industrial production jumped 1.1% month-to-month in April, pushing the year-over-year rate up to 1.9% from 0.1% in March. The rise in output was driven mainly by Germany and France, but decent month-to-month gains in Ireland, Portugal and Greece also helped.

15 Oct. 2015 Investment Likely Rebounded in Q3, but No Change in Weak Trend (Publication Centre)

Yesterday's industrial production report was poor, but the headline was better than we, and the market, feared. Output fell 0.5% month-to-month in August, but the July data were revised up 0.2%, pushing the year over-year rate--using the seasonally- and working day-adjusted index--higher to 1.9% from 1.4% in July. Bloomberg reported the year-over-year rate fell to 0.9% from 1.7% in July, but they used an index which is only working day-adjusted.

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.

29 July. 2015 Is EM Weakness Threatening Investment Recovery in the EZ? (Publication Centre)

Volatility in commodities and emerging markets has intensified since the beginning of July, with the stock market drama in China taking centre stage. The bubble in Chinese equities inflated without much ado elsewhere, and can probably deflate in isolation too. But the accelerating economic slowdown in EM is becoming an issue for policy makers in the Eurozone.

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.

3 Dec. 2014 Decent Consumption, Dreadful Investment in Eurozone GDP (Publication Centre)

Retail sales data later today will give us the first hard data from the fourth quarter, and the story should be altogether more positive than the still downbeat message from the manufacturing sector.

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?

16 Feb. 2015 Solid GDP data, but investment needs to pick up to sustain the momentum (Publication Centre)

Normal service was resumed in the euro area with Friday's GDP reports pointing to solid growth in Germany amid weakness in Italy and France. Real GDP in the Eurozone grew 0.3% quarter-on-quarter in the final three months of last year, up from 0.2% in Q3.

25 August 2017 Trade and Investment are Failing to Offset the Consumption Slowdown (Publication Centre)

The second estimate of GDP left the estimate of quarter-on-quarter growth unrevised at 0.3%, a trivial improvement on Q1's 0.2% gain.

26 Mar. 2015 Survey Data Point to a Recovery for German Investment in Q1 (Publication Centre)

The IFO survey released yesterday provides further evidence that the cyclical recovery in Germany's economy continued in the current quarter. The headline business climate index rose to 107.9 in March from 106.8 in February, lifted by increases in both the current assessments and expectations index.

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.

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.

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

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

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.

27 June. 2016 Plunging Investment Will Be the Main Driver of the Brexit Downturn (Publication Centre)

The U.K.'s political situation is extremely fluid, so it would be risky automatically to assume that the U.K. is heading for Brexit. Although the Prime Minister has resigned, his attempt to hold out until October to begin the formal process of exiting the E.U. signals that he may be seeking to engineer a revised deal, or at least to force his successor to make the momentous decision of whether to trigger Article 50, to begin the leaving process.

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.

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

The second estimate of Q3 GDP last week confirmed that the Brexit vote didn't immediately drain momentum from the economic recovery. But it is extremely difficult to see how growth will remain robust next year, when high inflation will cripple consumers and the impact of the decline in investment intentions will be felt.

28 September 2017 Is Business Capex Finally Breaking to the Upside, led by Small Firms? (Publication Centre)

We have been waiting a long time to see signs that business investment spending is becoming less reliant on movements in oil prices.

28 July 2017 Korean GDP and Chinese Pro ts Con rm China is Slowing (Publication Centre)

Korean real GDP growth slumped in Q2 to 0.6% quarter-on-quarter, from 1.1% in Q1, as both the main drivers--construction and exports--ran out of steam simultaneously. Construction investment grew by 1.0%, sharply slower than the 6.8% in Q1 and contributing just 0.2% to GDP growth in Q2, a turnaround from the 1.1 percentage point contribution in the first quarter.

26 Jan. 2016 The Collapse in Oil Prices Won't Reinvigorate the Economy in 2016 (Publication Centre)

The response of U.K. producers and consumers to lower oil prices could not have been more different to those on the other side of the Atlantic. Counter-intuitively, U.K. oil production has grown strongly over the last year, while investment hasn't collapsed to the same extent as in the U.S., yet. Meanwhile, U.K. households have thrown caution to the wind and already have spent the windfall from the previous drop in oil prices, unlike their more prudent--so far--U.S. counterparts. With the costs still to come but most of the benefits already enjoyed, lower oil prices will be neutral for 2016 U.K. GDP growth, at best.

25 May. 2016 German Domestic Demand Growth to Slow in Q2, After a Solid Q1 (Publication Centre)

Detailed GDP data yesterday showed that the domestic German economy fired on all cylinders in the first quarter. Real GDP rose 0.7% quarter-on-quarter in Q1, up from 0.3% in Q4, lifted by strong investment and spending. Domestic demand rose 0.8%, only slightly slower than the 0.9% ris e in the fourth quarter. Net exports fell 0.3%, a bit better than in Q4, when gross exports fell outright.

3 July 2017 National Accounts Expose Britain's Economic Fragility (Publication Centre)

Last week's national accounts confirmed that the economy lost momentum abruptly in Q1, with net trade and investment failing to offset weaker growth in households' spending.

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

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

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.

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.

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

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

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

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

24 August. 2015 U.S and U.K. Demand, Not China, Drives the Eurozone Trade Surplus (Publication Centre)

The sell-off in risky assets intensified while we were away, driven by China's decision to loosen its grip on the currency, and looming rate hikes in the U.S. The Chinese move partly shows, we think, the PBoC is uncomfortable pegging to a strengthening dollar amid the unwinding investment boom and weakness in manufacturing.

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.

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

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

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

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

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.

24 August 2017 Second Estimate of Q2 GDP to Show U.K. Missing out on G7 Boom (Publication Centre)

We expect today's second estimate of Q2 GDP to confirm that the U.K. has been the slowest growing G7 economy this year.

25 August 2017 Sizzling Business Sentiment in France Signals Firm Q3 GDP (Publication Centre)

Yesterday's barrage of French business surveys contains hundreds of indicators, but its central story is comfortably simple.

25 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 July. 2016 Should We Believe the Downbeat PMI? (Publication Centre)

Last week's news that the composite PMI collapsed to 47.7 in July--its lowest level since April 2009--from 52.4 in June is the first clear indication that the U.K. is heading for a recession.

25 November. 2016 German GDP Growth Will Rebound in Q4 (Publication Centre)

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

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

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

24 August. 2016 "Breaking News": EZ PMIs Signal Unchanged GDP Growth in Q3 (Publication Centre)

Yesterday's advance EZ PMI data were virtually unchanged from previous months, yet again. The composite PMI rose trivially to 53.3 in August from 53.2 in July; this means that the index has been almost stable since February. The headline was lifted by a small increase in services, which offset a slight decline in manufacturing.

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

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

24 March 2017 Rapid Disinflation will Allow the BCB to Ease More Quickly (Publication Centre)

Brazil has made a convincing escape from high inflation in the past few months, laying the groundwork for a gradual economic recovery and faster cuts in interest rates. Mid-March CPI data, released this week, confirmed that inflation pressures eased substantially this month.

25 Sept. 2015 Yellen Defends Orthodoxy: Policy Lags Mean Rates to Rise this Year (Publication Centre)

Fed Chair Yellen set out a robust and detailed defense of the orthodox approach to monetary policy in her speech in Amherst, MA, yesterday afternoon. Her core argument could have come straight from the textbook: As the labor market tightens, cost pressures will build. Monetary policy operates with a "substantial" lag, so waiting too long is dangerous; the "...prudent strategy is to begin tightening in a timely fashion and at a gradual pace".

24 Nov. 2015 Bullish PMI Survey Won't Prevent Further ECB Stimulus (Publication Centre)

Yesterday's PMI reports repeated the message of a firm cyclical Eurozone recovery, despite investors' angst over deflation and the underwhelming Q3 GDP data earlier this month. The composite index in the zone rose to a 54-month high of 54.4 in November from 53.9 in October, lifted by strong output and solid new business growth. Our first chart shows the rise in the PMI points to slight upside risks in Q4 to the four quarter trend in real GDP growth of 0.4% per quarter.

24 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.

26 August. 2015 Solid Net Trade Lifts German GDP in Q2, but Payback Likely in Q3 (Publication Centre)

The IFO did its part to alleviate the stock market gloom yesterday, with the business climate index rising slightly to 108.3 in August from 108.0 in July. The August reading doesn't reflect the panic in equities, though, and we need to wait until next month to gauge the real hit to business sentiment. The increase in the headline index was driven by businesses assessment of current output, with the key expectations index falling trivially to 102.2 from a revised 102.3 in July. This survey currently points to a stable trend in real GDP growth of about 0.4% quarter-on-quarter, consistent with our expectation of full year growth of about 1.5%.

26 May 2017 Soft GDP Shows Sterling's Drop to be the Least Successful Ever (Publication Centre)

The second estimate of Q1 GDP made for grim reading. Quarter-on-quarter GDP growth was revised down to 0.2%--the joint-slowest rate since Q4 2012--from the preliminary estimate of 0.3%.

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

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

26 May. 2015 All Eyes on the U.S. and the FOMC for Next Big Move in the Euro (Publication Centre)

The euro has so far defied the most bearish forecasters' predictions that it is on track for parity with the dollar. Currencies can disregard long-run parity conditions, however, for longer than most investors can hold positions.

27 August. 2015 Mr. Praet's Dovish Comments Don't Signal Easing Next Week (Publication Centre)

ECB board member Peter Praet fired the first shot across the markets' bow yesterday following this week's turmoil. Speaking to journalists in Germany, Mr. Praet noted "increased downside risk of achieving a sustainable inflation path towards 2%," and assured investors the current QE program is fully flexible, and can be readily adjusted in response to an adverse development in inflation expectations. We don't think, though, this is a pre -cursor for additional easing at next week's ECB meeting.

27 January 2017 Q4 Growth Likely Hit by Foreign Trade, Temporarily (Publication Centre)

We expect to learn today that the economy expanded at a 1.7% rate in the fourth quarter. At least, that's our forecast, based on incomplete data, and revisions over time could easily push growth significantly away from this estimate. The inherent unreliability of the GDP numbers, which can be revised forever--literally--explains why the Fed puts so much more emphasis on the labor market data, which are volatile month-to-month but more trustworthy over longer periods and subject to much smaller revisions.

26 July 2017 Preliminary GDP to Confirm Growth Remained Sluggish in Q2 (Publication Centre)

Today's preliminary estimate of GDP likely will show that the economy continued to struggle in response to high inflation, further fiscal austerity and Brexit uncertainty.

26 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.

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

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

26 Feb. 2016 A Tale of Two Current Account Paths, Adjusting to New Realities (Publication Centre)

Brazil's external accounts continue to be the country's bright spot, having improved considerably in recent quarters. The unadjusted current account deficit for January, USD4.8B, was lower than expected and much smaller than the USD12.2B shortfall a year earlier.

26 Jan. 2015 Banxico on Hold, Thanks to Slowing Inflation--But No Easing (Publication Centre)

Mexican inflation fell sharply in the first two weeks of January, dipping by 0.2% from two weeks earlier, thanks to lower energy prices and a reduction in long-distance phone tariffs. Telecom reform explains about 15bp of the headline reduction.

26 Jan. 2016 IFO Points to Slow Start to Q1 for the German Economy (Publication Centre)

Yesterday's IFO report reinforced the message from the PMIs that the Eurozone economy stumbled slightly at the beginning of the first quarter. The headline business climate index fell to an 11-month low of 107.3 in January, from a revised 108.6 in December, hit mainly by a drop in the expectations component. Intensified market volatility and worries over further weakness in the Chinese economy likely were the main drivers. Last week's dovish message from Mr. Draghi, however, came after the survey's cut-off date, leaving us cautiously optimistic for a rebound next month.

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

Argentina's economy continues to recover steadily.

23 Oct. 2015 Dovish Mr. Draghi All But Promises More QE in December (Publication Centre)

Mr. Draghi gave one of his most dovish performances to date yesterday. The central bank kept its main interest rates and the pace of QE unchanged, but reiterated that risks to growth and inflation are tilted to the downside. The president noted further that the existing policies will be "reexamined" in December in light of updated staff projections. It is difficult to see how the downbeat assessment on the economy will change materially from now until December, indicating that further stimulus is likely.

21 February 2017 Brazil's Current Account Remains Healthy, FDI In ows are Robust (Publication Centre)

Brazil's current account data last week provided further evidence of stabilisation in the economy, despite the modest headline deterioration. The unadjusted current account deficit increased marginally to USD5.1B in January, from USD4.8B in January 2016, but the underlying trend remains stable, at about 1.3% of GDP. Our first two charts show that the overall deficit began to stabilize in mid-2016, as the rate of improvement in the trade balance slowed, reflecting the easing of the domestic recession.

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

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

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.

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

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

20 July. 2016 How Fast Will Oil Capex Rebound in the Wake of Higher Oil Prices? (Publication Centre)

We have been arguing for some time that the drag on growth from falling capital spending in the oil sector would fade to nothing in the third quarter, and would then likely be followed by a small increase in the fourth quarter. But we seem to have been too cautious. It now seems much more likely that oil capex will rebound strongly as soon as the third quarter, following the clear upturn in the rig count data produced by Baker Hughes, Inc.

21 December 2016 Is FDI Now the Main Driver of Eurozone Capital Outflows? (Publication Centre)

The Eurozone's external surplus is on track for a record-breaking year in 2016. Data yesterday showed that the current account surplus rose to €28.4B in October, from €27.7B in September. The trade surplus in goods fell, but this drag was offset by a higher services and income surplus, and a lower current transfers deficit.

20 May. 2015 Chile is Recovering, But Colombia Faces Further Near-Term Softness (Publication Centre)

Colombia, the third largest economy in LatAm, has not been immune to the headwinds of the global economy since the financial crisis in 2008, though it remains one of the fastest growing economies in the region. GDP growth slowed sharply to just 1.7% in 2009, but that was still much better than the 1.2% contraction of the region as a whole.

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

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

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

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

21 Dec. 2015 How Vulnerable is the U.K. to a Current Account Crisis? (Publication Centre)

The latest balance of payments figures, released Wednesday, look set to show that the current account deficit widened in Q3, underlying the U.K.'s vulnerability to a sudden change in overseas investor sentiment. The risk of a full-blown sterling crisis, however, is lower than the enormous current account deficit would appear to suggest.

20 October 2017 Chinese Q3 Real GDP Growth was Stable but Below the Official Print (Publication Centre)

On the official gauge, China's real GDP growth fell minimally to 6.8% year-on-year in Q3, from 6.9% in Q2. Growth edged down to 1.7% quarter-on-quarter from an upwardly revised 1.8% in Q2.

21 Jan. 2015 Colombia Will Lose Momentum in 2015, But Don't Panic Just Yet (Publication Centre)

Colombia is one of the few larger economies in Latin America to have enjoyed solid, positive economic growth over the past two years. But lower commodity prices and last year's central bank tightening, to curb high inflation generated by strong growth, have started to become visible in the main economic data.

20 Feb. 2015 Greek deal in sight, despite German rejection (Publication Centre)

Greek Finance Minister Yanis Varoufakis' letter requesting a six-month loan extension has been interpreted widely as Syriza throwing in the towel. But we don't see this way. The best possible outcome for Greece is to be able to participate in the ECB's sovereign QE program, and to negotiate a new deal with the Troika; the request for an extension could very well achieve both.

23 July. 2015 Slow, but Steady, Recovery in French Manufacturing This Year (Publication Centre)

The manufacturing industry in France is recovering slowly, but surely. The headline INSEE index rose to 102 in July from 101 in June, close to a post-crisis high, pointing to steady improvement for manufacturers. Our first chart shows the main leading components of the survey, indicating a modest, but positive, trend in output. The increase in sentiment in July was driven by firming new orders--especially in the export sector--pushing the new orders-to-inventory ratio to an 18-month high.

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.

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

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

23 June 2017 Will French Domestic Demand in Rebound in Q2? (Publication Centre)

The June batch of the French statistical office's business surveys continues to signal a firming cyclical recovery. The aggregate business index rose to cyclical high of 106 in June from a revised 105 in May, continuing an uptrend that began in the middle of 2016.

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

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

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

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

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.

21 November. 2016 Soft Chilean Data Likely Leading to Rate Cuts Next Year (Publication Centre)

Chile's central bank left rates unchanged at 3.5% last Thursday, as expected, and maintained its neutral tone. Inflation pressures are easing, economic activity remains sluggish and global risks have increased.

22 August 2017 Tourism is Key to Financial Stability in the Spanish Economy (Publication Centre)

Last week's attacks in Barcelona--one of Spain's most popular tourist spots--struck at the heart of one of the economy's main growth engines.

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".

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

Global economic growth continues to fall short of expectations, and the call for aggressive fiscal stimulus is growing in many countries. This is partly a function of the realisation that monetary policy has been stretched to a breaking point. But it is also because of record low interest rates, which offer governments a golden and cheap opportunity to kickstart the economy. One of the main arguments for stronger fiscal stimulus is based on classic Keynesian macroeconomic theory.

24 Apr. 2015 Cyclical recovery remains on track in the Eurozone Economy (Publication Centre)

The preliminary April PMIs point to a continuation of the cyclical bounce, despite falling slightly from last month. The composite PMI in the Eurozone fell to 53.5 in April, down from 54.0 in March.

29 August 2017 No Hints on the Future of QE from Mr. Draghi in Jackson Hole (Publication Centre)

Mr. Draghi snubbed investors looking for hints on policy and the euro in his Jackson Hole address--see here--on Friday.

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.

30 June 2017 Q1 National Accounts Won't Meet the Governor's Rate Hike Criteria (Publication Centre)

Markets will be extremely sensitive to economic data in the run-up to the MPC's next meeting on August 3, following signals from several Committee members that they think the cas e for a rate rise has strengthened.

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

Today will be an incredibly busy day for EZ investors with no fewer than eight major economic reports. Overall, we think the data will tell a story of a stable business cycle upturn and rising inflation. Markets will focus on advance Q4 GDP data in France and in the euro area as a whole. Our mo dels, and survey data, indicate that the EZ economy strengthened at the end of 2016, and we expect the headline data to beat the consensus.

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

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

30 August. 2016 Reports of the Economy's Resilience are Greatly Exaggerated (Publication Centre)

Over the sleepy August holidays, a view has gained traction in the media that the U.K. economy is showing little damage from the Brexit vote. Optimists argue that the size and composition of the 0.6% quarter-on-quarter rise in Q2 GDP, the 1.4% month-to-month jump in retail sales volumes in July, and the slight dip in the unemployment claimant count demonstrate that the recovery is in good shape.

30 August. 2016 Banxico is Waiting for Fiscal Policy Action, and the Fed (Publication Centre)

The minutes from Banxico's August 11 monetary policy meeting--in which Board members unanimously voted to keep rates on hold at 4.25%--confirmed that the bank's policy guidance remains broadly neutral. Subdued economic activity, favourable inflation and gradual fiscal consolidation explain policymakers' position.

3 October 2017 Robust Overseas Demand Isn't Persuading Manufacturers to Invest (Publication Centre)

U.K. manufacturers are benefiting from rapid growth in the Eurozone, but increasingly they are being held back by weak domestic demand.

7 Dec. 2015 Mexico's Leading Indicators Point to a Solid Fourth Quarter (Publication Centre)

Mexico's economy is not accelerating, but it is holding up well in extremely difficult circumstances for EM. Growth is reasonably healthy, inflation is under control and the labor market is resilient. In short, Mexico is a success story, given the backdrop of plunging oil prices. The contrast with the disaster in Brazil is stark. Last week's survey and hard data continued to tell an upbeat story on Mexico's economy. The IMEF manufacturing index, Mexico's PMI, rose to 52.1 in November up from 51.6 in October, lifted mainly by gains in the employment and deliveries indexes.

7 Apr. 2016 The Oil Industry Won't Disappear - the Contraction Will End Soon (Publication Centre)

If the current rate of contraction continues, the U.S. onshore oil industry will cease to exist in the third week of January next year. Over the past six weeks, the number of operating rigs has dropped by an average of 8.5, and 362 rigs were running last week. At the peak, in early October 2014--just 18 months ago--the rig count reached 1,609.

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

Recently data from Argentina continue to signal a firming cyclical recovery. According to INDEC's EMAE economic activity index, a monthly proxy for GDP, the economy grew 4.0% year-over-year in June, up from an already-solid 3.4% in May.

31 May. 2016 Rebound in German Inflation is the Beginning of a Sustained Pick-Up (Publication Centre)

Advance CPI data yesterday continue to indicate that inflation pressures remain depressed in the Eurozone's largest economy, for now. Inflation in Germany rose slightly in May, but only to 0.1% year-over-year, from -0.1% in April. The downward pressure on the headline from the crash in oil prices remains significant. Energy prices fell 7.9% year-over-year, slowing slightly from the 8.5% drop in the year to April.

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

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

6 Apr. 2016 Productivity Slowdowns Have Happened Before, and Reversed (Publication Centre)

With only three weeks to go until the release of the initial official estimate of first quarter GDP, the Atlanta Fed's GDPNow measure shows growth at just 0.4%. Our own estimate, which includes our subjective forecasts for the missing data--the Atlanta Fed's measure is entirely model-based--is a bit higher, at 1%, and both measures could easily be revised significantly.

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

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

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

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

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 Mar. 2015 The BCB Hikes Again But The Tightening Cycle is Not Quite Over (Publication Centre)

The Brazilian industrial sector started this year on a very downbeat note, despite a 2% month-to-month jump in output. The underlying trend in activity is still very weak. Production fell 5.2% year-over-year.

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

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

5 July 2017 Cyclical Improvement in Brazil's Trade Balance is Nearly Over (Publication Centre)

Brazil's external position continue to improve, but we are sticking to our view that further significant gains are unlikely in the second half, given the stronger BRL. For now, though, we still see some momentum, with the unadjusted trade surplus increasing to USD7.2B in June, up from USD4.0B a year earlier. Exports surged 24% year-over-year but imports rose only 3%.

4 July. 2016 Industrial Output in Brazil has Hit Bottom, but No Quick Recovery (Publication Centre)

Friday's Brazilian industrial production data were relatively positive. Output was unchanged month-to-month in May, and April's marginal gain was revised slightly higher. The flat monthly reading pushed year-over-year growth in output up marginally to -8.9% from -9.1%. May production rose month-to-month in two of the four major categories.

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

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

4 October 2017 The Current Account Deficit Still Poses Downside Risks for Sterling (Publication Centre)

Sterling's depreciation has done little to remedy the U.K.'s dependence on external finance.

5 April 2017 The Brazilian Economy is Improving: Expect a Modest Q1 GDP Recovery (Publication Centre)

Brazilian February industrial production data, released yesterday, were relatively positive. Output rose 0.1% month-to-month, pushing the yearover- year rate down to -0.8% from 1.4% in January. Statistical quirks were behind February's year-over-year fall, though.

7 March 2017 Can Italy's Economy Overcome Weak Real Wage Growth in 2017? (Publication Centre)

The Italian economy slowed at the end 2017, and it continues to underperform other major EZ economies. Real GDP rose 0.2% quarter-on-quarter in Q4, a bit slower than the 0.3% gain in Q3, pushing full-year growth up to a modest 1.0%. This compares poorly, though, with growth of 1.6% in the euro area as a whole.

7 September. 2016 Capex Rebounding in Q3, Except in the Housing Component (Publication Centre)

If you had asked us in the spring where the action would be in capital spending over the summer, we would have said that the housing component was the best bet. Right now, though, the opposite seems more likely, with housing likely to be the weakest component of capex.

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.

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.

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

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

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

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

3 March 2017 Banxico is Facing a Tough Dilemma, but the Copom is Sitting Pretty (Publication Centre)

Banxico's Quarterly Inflation Report--QIR--for Q4 2016, published this week, confirmed that the monetary authority is concerned about the slowing pace of economic activity and rising inflation pressures. Banxico noted that signs of a recovery have emerged in external demand, but it also pointed out that the Trump administration might impose policies which would hit FDI flows into Mexico.

28 March 2017 EZ Money Supply Hit by Non-M1 Components in February (Publication Centre)

Momentum in the euro area's money supply slowed last month. M3 growth dipped to 4.7% year-over-year in February, from a downwardly-revised 4.8% in January. The headline was mainly constrained by the broad money components. The stock of repurchase agreements slumped 24.3% year-over-year and growth in money market fund shares also slowed sharply.

28 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 Oct. 2015 Upbeat IFO Survey, Despite Dip in Headline Business Climate Index (Publication Centre)

Economic sentiment in the Eurozone's largest economy stayed solid at the start of the fourth quarter, despite subdued manufacturing and poor investor sentiment. The headline IFO business climate index fell slightly to 108.2 in October from 108.5 in September, due to a fall in the current assessment index. The expectations index rose, though, to 103.8 from 103.5 last month pointing to a resilient outlook for businesses and solid GDP growth in coming quarters.

28 April 2017 Current Account in Brazil Still Improving, But not for Long (Publication Centre)

Brazil's recovery has been steady in recent months, and Q1 likely will mark the end of the recession. The gradual recovery of the industrial and agricultural sectors has been the highlight, thanks to improving external demand, the lagged effect of the more competitive BRL, and the more stable political situation, which has boosted sentiment.

28 April 2017 The Economy Appears to have Stalled in Q1, but Q2 Will be Better (Publication Centre)

Whatever number the BEA publishes this morning for first quarter GDP growth -- we expect zero -- you probably should add about one percentage point to correct for the persistent seasonal adjustment problem which has plagued the data for many years. Reported first quarter growth has been weaker than the average for the preceding three quarters in 21 of the 31 years since 1985 -- and in eight of the past 10 years.

28 August. 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.

3 May 2017 EZ Q1 GDP Growth Likely won't Live up to the Soaring Surveys (Publication Centre)

Survey data point to a very strong headline, 0.6%-to-0.7% quarter-on-quarter, in today's Q1 advance Eurozone GDP report. But the hard data have been less ebullient than the surveys. A GDP regression using retail sales, industrial production and construction points to a more modest 0.4% increase, implying a slowdown from the upwardly-revised 0.5% gain in Q4.

9 September. 2016 The ECB Underwhelms, But QE Extension is Likely in December (Publication Centre)

Yesterday's ECB policy decision was a carbon copy of the announcement in July. The central bank maintained its key refinancing rate at 0.00%, and also kept its deposit and marginal lending facility rates unchanged at -0.4% and 0.25% respectively. The ECB also kept the pace of QE unchanged at €80B per month. Finally, the central bank refrained from formally extending QE.

8 June. April Production to Underline Poor Prospects for Q2 GDP Growth (Publication Centre)

April's production data, released today, look set to indicate that the industrial sector's recession--its third in the last eight years--deepened in the second quarter. We think the consensus expectation that industrial production held steady in April is too upbeat. We look for a 0.3% month-to-month drop.

8 March 2017 Brazil's Economy Struggled Late Last Year, Will it Grow in Q1? (Publication Centre)

Markets have been positively surprised by Brazil's rapid disinflation, the efforts at fiscal reform, and the prospect of growth in the economy this year. The Ibovespa index is now above its pre-crisis high and the real has approached the key level of three per USD in recent months. But the latest GDP report, released yesterday, showed that the economy struggled in Q4. Real GDP fell 0.9% quarter-on-quarter, worse than the revised 0.7% drop in Q3.

3 October 2017 EZ Manufacturing is Helping to Propel the Cyclical Upturn (Publication Centre)

Manufacturing in the Eurozone remained a strong driver of GDP growth in the third quarter. The headline EZ manufacturing PMI rose to 58.1 in September, from 57.4 in August, only a tenth below the initial estimate 58.2.

8 June. 2016 EZ Domestic Demand Rose Solidly in Q1, but Will Slow in Q2 (Publication Centre)

The third estimate of euro area growth in the first quarter provides clear evidence that measuring GDP is not an exact science. Real GDP rose 0.6% quarter-on-quarter in Q1, accelerating from 0.4% in Q4. This latest estimate is higher than the previous estimate, 0.5%, but in line with the first calculation. Eurostat and all the large Eurozone economies now provide early estimates of GDP, before data for the full quarter is available.

7 September. 2016 Q2 GDP Data Add to the Evidence of a Peak in the EZ Business Cycle (Publication Centre)

A plunge in imports saved the EZ economy from a contraction in second quarter GDP. Yesterday's final data showed that real GDP growth rose 0.3% quarter- on-quarter, slowing from a 0.5% jump in Q1. A 0.4 percentage points boost from net exports was the key driving force.

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

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

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.

9 October 2017 Britain's Productivity Problem can no Longer Hide Below the Surface (Publication Centre)

Britain's productivity problem has been building under the surface for years, but it is set to be more pertinent now that the economy is close to full employment.

9 July. 2015 Oil Firms' Capex Rollover is Almost Over, Provided Prices Stabilize (Publication Centre)

After 29 straight weekly declines, the number of oil rigs in operation in the U.S. rose to 640 in the week ended July 2, from 628 the previous week, according to oil services firm Baker Hughes, Inc. If today's report for the week ended July 9 shows the rig count steady or up again, it will b e much easier to argue that the plunge in activity since the peak--1,601 rigs, in mid-September--is now over.

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

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

8 September 2017 The ECB is worried about a strong euro (Publication Centre)

The ECB made no changes to its policy stance yesterday. The central bank left its refinancing and deposit rates at 0.00% and -0.4%, respectively, and maintained the pace of QE at €60B per month. The program will run until December "or beyond, if necessary."

27 March 2017 Stronger Global Growth set to Boost U.S. Export Performance (Publication Centre)

It has been difficult to be an optimist about U.S. international trade performance in recent years. The year-over-year growth rate of real exports of goods and services hasn't breached 2% in a single quarter for two years.

16 October 2017 MXN to Remain under Strain due to NAFTA and Political Risks (Publication Centre)

The Mexican peso and spreads have recently come under severe pressure. Last week, for instance, the MXN plummeted 2% against the USD to 18.9, the weakest level since May, as our first chart shows.

11 May. 2016 German GDP Growth Likely Rose Strongly in the First Quarter (Publication Centre)

Yesterday's industrial production data in Germany were downbeat. Output fell 1.3% month-to-month in March, pushing the year-over-over rate down to 0.3%, from 2.0% in February. Production was held back by weakness in manufacturing and a plunge in construction, Meanwhile, energy output rebounded slightly following last month's fall. Over Q1 as a whole, though, the industrial sector performed strongly.

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

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

11 November. 2016 French Industrial Output Weak in Q3, Likely Better in Q4 (Publication Centre)

Yesterday's French industrial production data were worse than we expected. Output slipped 1.1% month-to-month in September, pushing the year-over-year rate down to -1.1% from a revised +0.4% in August. Mean-reversion was a big driver of the poor headline, given the upwardly-revised 2.4% jump in August.

11 May. 2015 Net Trade Signals Slight Downside Risk for German Q1 GDP (Publication Centre)

March data for retail sales and manufacturing have tempered our optimism for the advance Q1 GDP estimate in Germany next week. Industrial production fell 0.5% month-to-month in March, equivalent to a mere 0.1% increase year-over-year, mainly as a result of weakness in core manufacturing activities.

11 May 2017 A Poor Q1 for French Industrial Production, but Q2 will be Better (Publication Centre)

French manufacturing came roaring back at the end of Q1. Industrial production jumped 2.0% month-to- month in March, driving the year-over-year rate higher to +2.0%, from a revised -0.7% in February.

11 Feb. 2015 Chile's Outlook Improving Slowly - Oil Price are a Clear Tailwind (Publication Centre)

The resilience and adaptability that the Chilean economy has shown over previous cycles has been tested repeatedly over the last year. Uncertainty on the political front, falling metal prices, and growing concerns about growth in China have been the key factors behind expectations of slowing GDP growth.

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 September 2017 Will the MPC Step up its Rhetoric to Support the Pound? (Publication Centre)

The key question for the MPC at this week's meeting is whether it is prepared to tolerate the consequences for inflation of sterling's further depreciation since its last meeting in August.

12 Feb. 2015 Still waiting for growth in Italy (Publication Centre)

In yesterday's Monitor, we lamented the lack of growth in the French economy. The outlook is not much brighter in Italy. We think Italian GDP was unchanged quarter-on-quarter in Q4, slightly better than the -0.1% consensus but still very soft.

13 February 2017 Too Soon to Conclude the Economy is Finally Rebalancing (Publication Centre)

Data on industrial production and trade released last week have fanned hopes that the U.K.'s growth model is moving away from its excessive reliance on household spending, and towards production and exports. But a close look at the underlying drivers of the strong headline figures suggests that it is too soon to hope that the economy is undergoing a major rebalancing.

13 June 2017 Solid Mexican Manufacturing Eclipsed By Other Key Sectors (Publication Centre)

Activity in the Mexican industrial sector cooled marginally at the start of the second quarter, but the drop was not as dramatic as the headlines suggested. Output fell 4.4% year-over-year in April, after a 3.4% increase in March.

13 Feb. 2015 Cyclical outlook is improving in the euro area (Publication Centre)

GDP data today will probably show that the Eurozone economy accelerated to 0.3% quarter-on-quarter in Q4, up from 0.2% a quarter earlier. Industrial production came in disappointingly at 0.0% month-to-month in December, but this is not enough to change our forecast in the light of solid data on household spending.

12 Nov. 2015 NFIB Points to Rising Capex, and Modest Increases in Core Inflation (Publication Centre)

To the extent that markets bother with the NFIB survey at all, most of the attention falls on the labor market numbers. But these data--hiring, compensation, jobs hard-to-fill--haven't changed much in recent months, and in any event most of them are released the week before the main survey, which appeared yesterday. The message from the labor data is unambiguous: Hiring remains very strong, employers are finding it very difficult to fill open positions, and compensation costs are accelerating.

12 Feb. 2016 Poor EZ Q4 GDP Data Likely Already Priced-in by Markets (Publication Centre)

Today's Q4 GDP report in the Eurozone likely will show that growth slowed again at the end of last year. We think GDP growth dipped to 0.2% quarter-on-quarter in Q4, down from 0.3% in Q3, and risks to our forecast are firmly tilted to the downside. The initial release does not contain details, but we think a slowdown in consumers' spending and a drag from net exports were the main drivers of the softening.

12 July 2017 BoJ's Curve Targeting is More Stimulatory than Base Targeting (Publication Centre)

Japanese M2 growth increased trivially in June to 3.9% year-on-year from 3.8% in May, significantly higher than the 3.2% rate in August, before the BoJ began targeting the yield curve.

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

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

11 Apr. 2016 Slowing German Export Growth Adds to Manufacturing Woes (Publication Centre)

The first quarter probably saw continued weakness in German net trade, despite the modest February rebound in gross exports. The seasonally-adjusted trade surplus rose to €19.7B from €18.7B in January, lifted by a 1.3% month-to-month rise in exports, which offset a 0.4% increase in imports.

05 Feb. 2016 The Strong Dollar is Supporting Mexico's Domestic Economy (Publication Centre)

Mexico's structural reforms, robust fundamentals, and its close ties to the U.S. should have conferred a degree of protection from the turmoil in EMs over the past year. But its markets have been hit as hard as other LatAm countries by the sell-off in global markets in recent weeks. The MXN fell about 5% against the USD in January alone, and has dropped by 20% over the last year.

05 May. 2015 Eurozone Q1 GDP beat the U.S. and the U.K., But It Won't Last (Publication Centre)

Advance data indicate that Q1 annualized GDP growth in the U.S. was a trivial 0.2%. And in the U.K., annualized growth is estimated to have slowed to 1.2%, from 2.4% in Q4.

04 October. 2016 EZ Manufacturing Continues to Punch Above its Weight (Publication Centre)

Yesterday's survey data tell a story of resilient manufacturing in the Eurozone. The headline EZ PMI rose to 52.6 in September, from 51.7 in August, lifted by a rise in new orders to a three-month high.

04 August. 2015 Stable Manufacturing in the EZ, but Slowing China is a Risk (Publication Centre)

Eurozone manufacturing is showing signs of stabilisation. Final PMI data showed the headline gauge falling trivially to 52.4 in July from 52.5 in June, slightly above the initial estimate of 52.2. New orders slowed, though, with companies reporting weakness in export business amid firm domestic demand.

02 Feb. 2016 EZ Public Spending will Support GDP Growth in 2016 (Publication Centre)

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

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

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

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

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

1 June 2017 Money Data Suggest Q1's Slowdown Won't be Short-lived (Publication Centre)

April's money and credit figures suggest that GDP growth has remained sluggish in Q2. Households' broad money holdings increased by just 0.3% month-to-month in April.

10 May 2017 Mexico's Confidence Indicators are Improving, but Headwinds Remain (Publication Centre)

Market participants and analysts have gradually softened their cautious stance towards Mexico, as concerns about the new U.S. administration's trade and immigration policies have eased, and risks of a credit rating downgrade have lessened.

10 Sept. 2015 Wage Cuts Pay off as Periphery Leads EZ Employment Higher (Publication Centre)

Workers in the euro area remain scarred by the zone's repeated crises, but the strengthening cyclical recovery is slowly starting to spread to the labour market. The unemployment rate fell to a three-year low of 10.9% in July, and employment has edged higher after hitting a low in the middle of 2013. Germany's outperformance is a key story, with employment increasing uninterruptedly since 2009, and the unemployment rate declining to an all-time low of 6.4%. Among the other major economies, the unemployment rate in Spain and Italy remains higher than in France. But employment in Spain has outperformed in the cyclical recovery since 2013.

10 May 2017 German GDP Growth Likely Accelerated in the First Quarter (Publication Centre)

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

10 March 2017 Don't Take the Public Borrowing Forecasts at Face Value (Publication Centre)

Investors in the gilt market would be wise not to take the new official projections for borrowing and debt issuance at face value. The forecast for the Government's gross financing requirement between 2017/18 and 2021/22 was lowered to £625B in the Budget, from £646B in the Autumn Statement.

20 Apr. 2016 Capex Growth Will Mean-Revert As the Drop in Oil Spending Ends (Publication Centre)

As we're writing, the price of U.S. crude oil is only about 50 cents per barrel lower than on Thursday, when markets began to anticipate an OPEC deal to cut production over the weekend. The failure of the Doha talks generated an initial sharp drop in oil prices, but the damage now is very limited, as our first chart shows.

10 June. 2015 Inflation In Mexico Falls Below the Target - No Rush to Increase Rates (Publication Centre)

Mexico's headline inflation fell to a record low of 2.9% in May, down from 3.1% in April and below the middle of Banxico's inflation target, 2-to-4%, for the first time since May 2005. C ore inflation was unchanged at 2.3% in May; higher services prices were offset by a slowing in the rate of increase of goods prices to 2.4% from 2.7% in April, confirming that the pass-through effect from the MXN's depreciation has been very limited.

13 March 2017 A Slowdown in the U.K. Will Dent the German Trade Surplus (Publication Centre)

Germany's external surplus remained resilient at the start of the year. Data on Friday showed that the seasonally adjusted trade surplus rose marginally to €18.5B in January, from a revised €18.3B in December.

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

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

19 Apr. 2016 Eurozone Productivity Growth has Slowed Alarmingly in this Cycle (Publication Centre)

The Eurozone has a productivity problem. Between 1997 and 2007, labour productivity rose an average 1.2% year-over-year, but this rate has slowed to a crawl--a mere 0.5%--since the crisis. These data tell an important story about the peaks in EZ GDP growth over the business cycle. Before the financial crisis in 2008, cyclical peaks in Eurozone GDP growth were as high as 3%-to-4% year-over-year.

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

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

18 Nov. 2015 Weak Manufacturing Won't Push the EZ Economy into Recession (Publication Centre)

Historical evidence suggests that we should be worried about the relative weakness in the Eurozone's manufacturing sector. Industrial production ex-construction has historically been a key indicator of the business cycle, despite accounting for a comparatively modest 19% of total value-added in the euro area. In all three previous major downturns, underperformance in the manufacturing sector sounded the alarm six-to-nine months in advance that the economy was about to slip into recession.

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

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

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

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

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

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

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

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

2 Dec. 2015 Brazil's Q3 Data Confirm The Worst Recession On Record (Publication Centre)

Brazil's recession is getting uglier. Real GDP in Brazil fell 1.7% quarter-on-quarter in Q3, much worse than expected, though marginally less terrible than the downwardly revised 2.1% contraction in Q2. Year-over-year, the economy plunged by 4.5% in the third quarter, down from -3.0% in Q2, and -2.5% in the first half. The disappointment was widespread in Q3; though rising mining output was a positive, the underlying trend in mining is still falling. The key story here, though, is that the economy has sunk into its worst slump since the Great Depression.

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

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

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

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

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

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

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 Dec. 2015 Plunging German Unemployment Will Challenge the ECB Next Year (Publication Centre)

The labour market in the Eurozone continues slowly to improve. The unemployment rate fell to 10.7% in October from 10.8% in September, reaching its lowest level since 2013. The divergence in rates, however, between the major economies remains significant. Unemployment in France, Italy and Spain is still above 10%, but the advance German number continued their record-breaking form in November.

2 June 2017 PMIs Signal a Strong Q2 for the EZ Manufacturing Sector (Publication Centre)

Yesterday's final May manufacturing PMIs confirmed that the EZ industrial sector is in fine form. The PMI for the euro area was unchanged at a cyclical high of 57.0 in May, in line with the initial estimate.

16 July. 2015 The ECB Will be Put on the Spot for Its Role in the Greek Chaos (Publication Centre)

The ECB will keep its main interest rates and the pace of QE purchases unchanged today. Mr. Draghi will also reiterate the commitment to continuing QE until September next year, at least. But the press conference likely will focus on Greece, and the central bank's role in the chaos. Greek financial institutions are on the verge of collapse, partly because the ECB has been forced to cap emergency liquidity assistance--ELA--at €89B, and raise collateral haircut requirements following the announcement of the referendum.

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

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

15 August 2017 Weak Q2 for Mexico's Industrial Activity, but What Happens in Q3? (Publication Centre)

Last week's industrial report confirmed that the Mexican economy softened at the end of the second quarter. Industrial production was unchanged year- over-year in June, calendar-and seasonally adjusted, down marginally from +0.1% in May.

15 Jan. 2016 Modest Retail Sales Gains in Brazil in Q4, But Outlook Remains Murky (Publication Centre)

Wednesday's better-than-expected, but still grim, November retail sales report in Brazil does not change the miserable underlying trend. Sales volumes rose 1.5% month-to-month, much better than expected, and the biggest increase in a year. But the year-over-year rate fell to -7.8% from -5.7% in October. The details underscored our view that the month-to-month jump in sales was due mostly to temporary factors.

14 Sept. 2015 Italy's Structural Problems Persist, but Cyclical Upturn is Firming (Publication Centre)

Italy's long-term challenges--chiefly, structurally high government debt and deteriorating demographics--remain daunting, but the cyclical picture is improving steadily. Final GDP data last week revealed that growth in the first half of the year was 0.2% better than initially estimated, taking the annualised growth rate to 1.4%, the highest in five years. This is the first sign of a durable business cycle upturn since the sovereign debt crisis crashed the economy in 2012.

14 October. 2016 Mexican Manufacturing is Recovering, But Oil Still a Big Drag (Publication Centre)

Wednesday's Mexican industrial production report was upbeat for manufacturing, but it revealed that the oil and public construction sectors remain under severe strain.

14 August 2017 Peru's Central Bank Holds Rates but Points to Further Stimulus (Publication Centre)

Peru's central bank left its policy interest rate unchanged at 3.75% last week, but signalled that further easing is on the way. According to the press release accompanying the decision, policymakers noted that inflation expectations are within their target range and still falling.

14 Jan. 2016 A Downbeat Outlook for Q4 GDP Data in the Eurozone (Publication Centre)

EZ survey data were solid in the fourth quarter, pointing to robust GDP growth, but numbers from the real economy have so far not lived up to the rosy expectations. Data yesterday showed that industrial production fell 0.7% month-to-month in November, pushing the year-over-year rate down to 1.1% from a revised 2.0% in October. Italian data today likely will force marginal revisions to the headline next month, but they are unlikely to change the big picture.

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.

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 Feb. 2016 The ECB Remains on Track to Deliver More Easing in March (Publication Centre)

Mr. Draghi's introductory statement before yesterday's hearing at the European Parliament repeated that the ECB will "review and possibly reconsider its monetary policy stance in March." But it didn't provide any conclusive smoking gun that further easing is a done deal.

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.

15 November. 2016 Mexico's Benign Industrial Outlook Clouded by the U.S. Policy Agenda (Publication Centre)

Mexico's latest industrial production data were worse than we expected. Output rose just 0.1% month-to-month in September, pushing the year- over-year rate down to -1.3%, from a downwardly revised +0.2% in August.

15 November. 2016 EZ GDP Growth Likely was Stable in Q3, in Line With First Estimate (Publication Centre)

Investors face a busy EZ calendar today, but the second estimate of Q3 GDP, and the advance GDP data in Germany, likely will receive most attention. Yesterday's industrial production report in the Eurozone was soft, but it won't force a downward GDP revision, as we had feared.

15 March 2017 Headline Inflation in Germany will Ease in the Next Few Months (Publication Centre)

The German inflation rate soared at the start of 2017, but it likely will fall in the next few months. Final February data yesterday showed that inflation rose to 2.2% in February, from 1.9% in January, consistent with the initial estimate. Since December, headline inflation in Germany, and in the EZ as a whole, has been lifted by two factors. Base effects from the 2016 crash in oil prices have pushed energy inflation higher, and a supply shock in fresh produce--due to heavy snowfall in southern Europe--has lifted food inflation.

15 May 2017 The Jump in Q1 German GDP Growth Likely Overstates the Trend (Publication Centre)

The German economy fired on all cylinders at the beginning of the year. Advance data on Friday showed that real GDP rose 0.6% quarter-on-quarter, accelerating from a 0.4% increase in Q4.

15 Jan. 2015 Inflation Data Confirm Investment Malaise in the French Economy (Publication Centre)

France just about avoided slipping into deflation in December, with the CPI rising 0.1% year-over-year, down from 0.3% in November. The 4.4% drop in the energy component should have pushed inflation below zero, but a seasonal increase in tourism services was enough to offset the drag from oil prices.

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

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

8 Oct. 2015 Weak, but Stable, Trend in German Manufacturing Investment in Q3 (Publication Centre)

Yesterdays' industrial production report capped a poor week for German manufacturing. Output fell 1.2% month-to-month in August, well below the consensus, +0.2%, though note that a 0.5% upward revision to the July data made the August headline look worse. Similar to the factory orders report earlier this week--see our October 6th Monitor--base effects also mean that production accelerated to 2.5% year-over-year, from a revised 0.8% gain in July.

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

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

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.

18 July. 2016 Will Fiscal Loosening and Sterling's Drop Stave off Recession? (Publication Centre)

With plenty of evidence emerging that consumer spending and business investment are set to suffer from a collapse in confidence, attention is turning to whether other sectors of the economy are ready to step up and support growth. But the fruits from reduced fiscal contraction and stronger net trade will be small and will take a long time to emerge.

18 May. 2015 A Dovish Mr. Draghi Confirms Pledge to Implement QE in Full (Publication Centre)

Comments by Mr. Draghi in Washington last week point to a high bar for an adjustment to the QE program. The ECB president noted that while asset purchases and negative interest rates have driven a notable improvement in confidence and asset prices, the real key to the central bank's policies' success is a lasting boost to investment, consumption and inflation.

19 August. 2015 Colombia's Domestic Economy is Resilient, But Real Risks Remain (Publication Centre)

The Colombian economy has been able to grow this year despite the plunge in oil prices since the middle of 2014. Gains in consumers' spending and investment have offset part of the hit from falling exports. But private spending growth, nonetheless, slowed considerably during the first few months of the year, as shown in our char t below, in part due to rising prices for imported goods after the depreciation of the COP, as well as broad-based concerns over the state of the economy.

18 October. 2016 Is Portugal on the Brink of a Debt Downgrade and a New Bailout? (Publication Centre)

The Portuguese economy has faltered recently. In the year to Q2, real GDP rose only 0.8%, down from a 1.5% increase in the preceding year. Slowing growth in investment has been the key driver, but consumers' spending has weakened too.

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

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

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

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

*May 2017 - U.K. Economic Chartbook* (Publication Centre)

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

*Jan 2017 - U.K. Economic Chartbook* (Publication Centre)

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

04 May. 2015 Q1 Trade Hit to GDP Will Reverse in Q2, but Oil Capex to Drop Again (Publication Centre)

Just two components of first quarter GDP were weak enough together to depress growth by 2.0 percentage points. Net foreign trade subtracted 1.25 percentage points, while falling investment in non-residential structures reduced growth by 0.75pp.

1 February 2017 Expect a Slightly More Hawkish FOMC Tone, to Keep March Alive (Publication Centre)

We're expecting the FOMC to vote unanimously not raise rates today, but we do expect a modestly hawkish tilt in the statement. Specifically, we're expecting an acknowledgment of the upturn in business investment reported in the Q4 GDP data, and of the increase in market-based measures of inflation expectations, given that 10-year TIPS breakevens are now above 2% for the first time since September 2014.

1 Sept. 2015 Manufacturing Woes Changing as Oil Hit Eases but Dollar Gains Bite (Publication Centre)

The pressures on U.S. manufacturers are changing. For most of this year to date, the problem has been the collapse in capital spending in the oil business, which has depressed overall investment spending, manufacturing output and employment. Oil exploration is extremely capital-intensive, so the only way for companies in the sector to save themselves when the oil prices collapsed was to slash capex very quickly.

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.

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

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

7 April 2017 What Place will QE have in the Bank's Future Policy Mix? (Publication Centre)

Markets were jolted yesterday by news that the U.S. Fed is mulling ending, or at least slowing, the reinvestment of Treasuries and mortgage-backed securities later this year. Such a move would reduce liquidity in global markets that has underpinned soaring equity prices in recent years.

4 Mar. 2015 Brazil's Central Bank Set to Respond As Inflation Fails to Slow (Publication Centre)

Brazil is now paying the price of President Rousseff's first term, which was characterized by unaffordable expansionary policies. As a result, inflation is now trending higher, forcing the BCB to tighten at a more aggressive pace than initially intended--or expected by investors--depressing business and investment confidence.

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

The Fed yesterday toned down its warnings on the potential impact on the U.S. of "global economic and financial developments", and upgraded its view on the domestic economy, pointing out that consumption and fixed investment "have been increasing at solid rates in recent months". In September, they were merely growing "moderately". Policymakers are still "monitoring" global and market developments, but the urgency and fear of September has gone. The statement acknowledged the slower payroll gains of recent months--without offering an explanation--but pointed out, as usual, that "underutilization of labor resources has diminished since early this year" and that it will be appropriate to begin raising rates "some further improvement in the labor market".

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

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

8 Dec. 2015 Energy Production Will Depress German Industrial Output in Q4 (Publication Centre)

German industrial output was off to a sluggish start in the fourth quarter. Production eked out a marginal 0.2% month-to-month gain in October, pushing the year-over-year rate down to 0.0% from a revised 0.4% in September. Manufacturing output rose 0.6%, led by a 2.7% jump in production of capital goods, but the underlying trend in the sector overall is flat. On a more positive note, construction output rose 0.7% month-to-month in October, and leading indicators suggest this could be the beginning of a string of gains, lifting investment spending in coming quarters.

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

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

8 February 2017 Banxico to Hike Rates Tomorrow, but its Tone Likely Will be Softened (Publication Centre)

Banxico's likely will deliver the widely-anticipated rate hike this Thursday. Policymakers' recent actions suggests that investors should expect a 50bp increase, in line with TIIE pric ing and the market consensus. The balance of risks to inflation has deteriorated markedly on the back of the "gasolinazo", a sharp increase in regulated gasoline prices imposed to raise money and attract foreign investment.

29 Feb. 2016 The Weaker Pound has not Transformed the Export Outlook (Publication Centre)

In theory, any hit to sentiment and business investment as the E.U. referendum nears could be offset by a better foreign trade performance, due to the Brexit-related depreciation of sterling. But not every cloud has a silver lining.

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

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

23 August. 2016 The Inventory Cycle is About to Turn, Worsening the Downturn (Publication Centre)

Whether the economy enters recession will hinge more on corporate behaviour than on consumers. Household spending accounts for about two thirds of GDP, but it is a relatively stable component of demand. By contrast, business investment and inventories--which are often overlooked--are prone to wild swings.

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.

27 May. Q1 GDP Just the Beginning of a Prolonged Slowdown (Publication Centre)

The second estimate of Q1 GDP confirmed that the recovery has lost momentum and revealed that growth would have ground to a halt without consumers. GDP growth likely will slow further in Q2, as Brexit risk undermines business investment.

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

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

25 August. 2016 The Collapse in Core Capex Orders is Over, Where's the Rebound? (Publication Centre)

The alarming-looking decline in core capital goods orders since late 2014 has been substantially due, in our view, to the rollover in investment in the mining sector. But the 29% jump in the number of oil rigs in operation, since the mid-May low, makes it clear that the collapse is over.

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

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

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

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

Claus Vistesen

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

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

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

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

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

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

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

DAILY TELEGRAPH - Surprise comeback for France as economy grows twice as fast as UK (Media Centre)

Chief Eurozone economist Claus Vistesen comments on the latest GDP figures from France

EURO INSIGHT - Households Save the Day for Eurozone GDP (Media Centre)

Chief Eurozone Economist Claus Vistesen on Eurozone GDP

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

Ian Shepherdson comments on strong construction data

CNBC - Fed hike hint surprises economist (Media Centre)

Chief U.K. Economist Ian Shepherdson on Brexit risk to a June rate hike

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