In one line: EZ inflation expectations jumped on the eve of the tariff shock.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Growth slowed but remained solid; Inflation comes in below expectations.
Melanie Debono (Senior Eurozone Economist)Eurozone
- US - Payroll growth is unlikely to have slowed decisively as soon as April
- EUROZONE - PMIs sink as domestic demand falters; EZ–US trade surplus jumps
- UK - Wages stay strong and inflation heading to 3.5% in April
- CHINA+ - Chinese policymakers keep heads down, focusing on domestic issues
- EM ASIA - Easter rewind: the start of tougher times for Indonesian exports
- LATAM - Persistent inflation pressures in Brazil challenge COPOM’s roadmap
ian shepherdson (Chief Economist, Chairman and Founder)Global
- An unprecedented surge in the goods trade deficit in Q1 points to a huge drag on GDP growth.
- We think GDP fell by about 1%, but total private sector demand likely still rose at a healthy rate.
- The looser labor market points to much lower wage growth and underlying services inflation ahead.
Oliver Allen (Senior US Economist)US
- Colombia’s suspension from the IMF’s Flexible Credit Line marks a turning point in its economic trajectory.
- The move is technically temporary, but it reflects deep fiscal vulnerabilities.
- BanRep is likely to hold rates as the FCL suspension raises policy constraints and market pressures.
Andrés Abadía (Chief LatAm Economist)Latin America
- Spanish growth slowed in Q1 but still comfortably outperformed growth in the rest of the big four.
- The SNB is easing policy without cutting rates, signalling a desire to steer clear of negative rates.
- Money and credit data remain positive on outlook for the EZ economy but tariffs still threaten.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect the initial April payrolls estimate to show a fall of 30K month-to-month.
- LFS unemployment will likely tick up to 4.5% in March, and LFS employment should gain 166K.
- Pay growth remains strong; we expect private ex-bonus AWE to rise 0.3% month-to-month.
Rob Wood (Chief UK Economist)UK
- In one line: Manufacturing activity improves according to the CBI, but the trade war will hurt businesses.
Elliott Laidman Doak (Senior UK Economist)UK
- In one line: Consumers' major purchases held up, but downside risks to the retail spending build.
Rob Wood (Chief UK Economist)UK
- In one line:Retail sales were heating up before President Trump’s tariffs upended the outlook.
Rob Wood (Chief UK Economist)UK
- In one line: Capping off an unremarkable Q1.
Miguel Chanco (Chief EM Asia Economist)Global
UNCERTAINTY OVER GLOBAL TRADE WILL WEIGH ON GROWTH...
- ...A SHORT TECHNICAL RECESSION IN H2 IS NOW OUR BASELINE
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect GDP growth of 0.5% in Q1, although big questions hang over net trade and inventories.
- GDP likely will broadly stagnate over the rest of this year, as tariffs hit real incomes and investment.
- Shortages of products made in China are unlikely to emerge in stores until July.
Oliver Allen (Senior US Economist)US
- February’s IGAE rebound brought short-term relief but failed to alter Mexico’s waning growth trajectory.
- External trade tensions and domestic political uncertainty continue to weigh heavily on capex.
- Government growth forecasts are disconnected from prevailing conditions, with recession risk high.
Andrés Abadía (Chief LatAm Economist)Latin America
- Thai exports continued to soar in Q1, on the back of US tariff front-loading, which leapt in March…
- …But their boost to GDP growth should be counter-balanced markedly by much more destocking…
- …While service exports likely will impose their first big drag post-Covid, given falling Chinese tourists.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Industrial profitability improved further in Q1, on the back of strong manufacturing production.
- China’s industrial output was bolstered by stimulus demand and tariff front-loading activity.
- External uncertainty does not bode well for producers’ profit outlook, as overcapacity issues are worsening.
Kelvin Lam (Senior China+ Economist)China+
- Market expectations for the ECB’s deposit rate to stay below 2.0% next year are a sitting duck.
- Bunds are fairly valued at 2.5%; fiscal policy poses upside risk, but trade wars pull in the other direction.
- EURUSD is overshooting our models; EZ equities are set to struggle for a while longer.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The insolvency rate remains low, and well below recession levels.
- Payroll-tax hikes have stopped the insolvency rate falling, and leading indicators have ticked up a little.
- We expect corporate distress to stay low, even as the trade war weighs on GDP growth.
Elliott Laidman Doak (Senior UK Economist)UK
