In one line: The HICP comes in hot; April spending dented by Easter seasonals.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- In one line: House prices are resisting the mortgage rate rise.
Rob Wood (Chief UK Economist)UK
In one line: Disappointing, but don’t write off Q2 consumption just yet.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The Brazilian labour market’s resilience will continue to raise inflation concerns for policymakers.
- Robust economic activity in recent months likely will slow the disinflation process, but not for long.
- Downside risks persist for the economy in H2; tighter financial conditions will be the main drag, by far.
Andrés Abadía (Chief LatAm Economist)Latin America
- India’s Q1 GDP beat expectations, with growth slowing only modestly to 7.8% from 8.6% in Q4…
- …But an unsustainable jump in exports was the lone bright spot; domestic demand continues to slow.
- The slowdown in investment growth is intensifying, while private consumption remains woefully subpar.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The US has proposed new tariffs on Chinese imports, which will have limited impact, in our view.
- Lithium batteries likely will be most affected, among other items targeted, with the US more exposed to it.
- China’s manufacturing activity shrank unexpectedly in May, suggesting more stimulus might be needed.
Kelvin Lam (Senior China+ Economist)China+
- EZ services inflation snapped back in May; it will come down eventually, but this will take a while.
- The ECB will cut its policy rate this week, but hopes of a July cut are now lost; September is at risk too.
- EZ consumers’ spending, ex-services, fell in April, but this was mainly due to Easter seasonals in food.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The BoE money and credit data suggest higher mortgage rates have taken the steam out of consumption.
- But the consumer credit data are distorted by data issues, and saving was driven by a record ISA flow.
- Business confidence is still rising, so we think the economy will keep growing robustly.
Rob Wood (Chief UK Economist)UK
- The spike in the core PCE deflator is over, but Fed officials will want to see more data before they relax.
- Consumers’ spending is on course for another modest 2%-ish increase in the second quarter.
- Manufacturing is in better shape than implied by the grim Chicago PMI; auto sales headed for Q2 bounce.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
A housing market recovery is still some way off.
Oliver Allen (Senior US Economist)US
GDP details better than the headline, but growth is slowing.
Oliver Allen (Senior US Economist)US
In one line: The EZ labour market is in a good spot.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The National Living Wage hike will push private-sector regular pay to a solid 0.8% month-to-month April rise.
- But survey indicators continue to signal gradually slowing wage growth, as recruitment difficulties ease.
- Average weekly earnings growth should slow decisively in H2 2024 as the NLW distortions fade.
Rob Wood (Chief UK Economist)UK
- Inflation in the Eurozone likely rose a touch in May, to 2.5%, in line with the consensus.
- The EZ labour market is in rude health but poses no threat to the slowdown in wages and inflation, yet.
- The Swiss economy performed better than initially estimated in Q1, boosted by services.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Jump in services inflation stands out like a sore thumb.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: German core and headline inflation rebounded in May.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Looking up in Germany, but stalling in France.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The sustainability of two-way trade growth in Vietnam is our key concern, not the big May deficit.
- A modest bounce-back in GDP growth for Q2 looks secured, but households remain a huge weak spot.
- Inflation will flirt more closely with the 4.5% ceiling in June, but this should be the peak this year.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- We expect a 0.23% rise in the core PCE deflator in April, but a rounded 0.3% print would be no great surprise.
- Real personal consumption probably rose by just 0.1%, given the drop in retail sales in April.
- Final domestic sales growth was strong in Q1, despite the low GDP headline, but that's about to change.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- China’s new property-market measures aim to stabilise the sector, rather than return to the boom times.
- The focus on housing-inventory reduction is the right direction, but the funding so far is too small.
- First-tier cities will probably bottom out first, but overall a drawn-out rebound is still on the cards.
Duncan WrigleyChina+
