- The BCRP left rates unchanged, defying expectations once again, as core inflation remains sticky in Peru.
- Muted inflation and soft economic activity will allow further policy normalisation in H2.
- Another boost for President Milei as inflation in Argentina slowed in May, undershooting expectations.
Andrés Abadía (Chief LatAm Economist)Latin America
May core PCE likely rose just 0.11%, well below the Fed’s expectations.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
May core PCE likely rose just 0.11%, well below the Fed’s expectations.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The CPI and PPI data imply that the core PCE deflator rose by just 0.11% in May…
- …Below the 0.19% average run rate forecast by the Fed; September’s SEP update will support a rate cut.
- The Michigan sentiment index probably bounced this month, but job loss worries seem to be mounting.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- A whirlwind start for President Milei in Argentina; reforms, protests, economic turmoil…and disinflation.
- The Senate has narrowly approved a controversial bill giving him a badly needed first legislative victory.
- Brazil’s retail sales rise in April but undershoot expectations; the medium-term outlook is worsening.
Andrés Abadía (Chief LatAm Economist)Latin America
Disinflation is back on track; expect two easings in today’s 2024 dot plot.
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
Disinflation is back on track; expect two easings in today’s 2024 dot plot.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The Fed’s hawkish dotplot is likely to have a short shelf life; the data will force faster easing than they expect.
- The May core CPI slowdown was deep-rooted; we expect just 0.20% average gains through year-end.
- CPI data signal a 0.16% rise in the core PCE deflator, but we will finalize our estimate after today’s PPI.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil — Extending losses amid uncertainty
- Mexico — Increased political risk rattling markets
- Colombia — Struggling amid fiscal uncertainty
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Manufacturing remains under strain and the near-term outlook is difficult.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Hit by increased food prices, due to the floods in the south.
Andrés Abadía (Chief LatAm Economist)Global
- In one line: Hit by increased food prices, due to the floods in the south.
Andrés Abadía (Chief LatAm Economist)Latin America
- US - September easing remains a decent base case, despite May payrolls
- EUROZONE - Domestic political risk returns to Eurozone financial markets
- UK - Labour market data help the chances of an August rate cut
- CHINA+ - China’s exports turn the corner; on track for modest growth this year
- EM ASIA - An August RBI rate cut seems both so close and yet so far
- LATAM - Brazil’s economic momentum hits a speed bump after promising Q1
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The high core PCE prints in Q1 will force the Fed to revise up its Q4 forecast, and cut one easing.
- A jump in used car and vehicle insurance prices probably drove a 0.3% increase in the May core CPI...
- ...But core services CPI inflation likely slowed further, indicating monetary policy is tight enough.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil faces an uphill inflation battle amid multiple headwinds, despite relatively subdued core pressures.
- The floods, BRL sell-off and fiscal woes have intensified the COPOM’s inflation challenges.
- Mexico’s industry is struggling due to a manufacturing slump, while construction remains resilient.
Andrés Abadía (Chief LatAm Economist)Latin America
- The NY Fed survey shows wage growth and long-run inflation expectations are in line with the 2010s.
- People plan to spend 5% more over the next year, but expectations correlate poorly with actual spending.
- Tight credit conditions are weighing heavily on small firms, an ominous sign for the economy at large.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil’s trade surplus is holding steady, despite exports slowing amid challenging conditions…
- …Imports are showing signs of recovery, but tight financial conditions are limiting growth.
- Colombia’s current account deficit has shrunk, despite weak domestic demand and ongoing challenges.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Upside pressures will keep policymakers on the alert.
Andrés Abadía (Chief LatAm Economist)Global
- In one line: Upside pressures will keep policymakers on the alert.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Modest core pressures point to further monetary easing this month.
Andrés Abadía (Chief LatAm Economist)Global
