- In one line: Downside wage growth surprise will raise MPC confidence that inflation pressures are fading.
Rob Wood (Chief UK Economist)UK
In one line: The core is sticky, but will fall back soon; beware an incoming rebound in food inflation.
Claus Vistesen (Chief Eurozone Economist)Eurozone
A decent, if quiet, start to the year for Philippine trade
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- U.S. - Job growth is on the verge of a serious slowdown, perhaps in March
- EUROZONE - EZ economy at a standstill in Q4; Q1 will be better
- U.K.- Strong real incomes to deliver an economic rebound in 2024
- CHINA+ - NPC: China’s ramps up fiscal support, notably for industrial development
- EM ASIA - Be wary of extrapolating the solid start to 2024 in ASEAN’s PMI
- LATAM - Rapid disinflation in Mexico opens the door to a rate cut this month
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- February’s core CPI was less bad than January’s, but unhelpful to the case for an early Fed rate cut.
- Nothing is yet definitive, given how much inflation and labor market data will appear before the May FOMC.
- Small firms are much less cheerful than implied by the stock rally, and they are hiring many fewer people.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Another 50bp rate cut is warranted in Brazil next week, with underlying inflation in check.
- We still see the possibility of a bigger cut in Q2, but challenging external conditions are posing a threat.
- Mexico’s industrial sector faces challenges despite the good start to Q1; future prospects are bright.
Andrés Abadía (Chief LatAm Economist)Latin America
- Slowing employment growth shows that the labour market continues to loosen gradually.
- LFS sample problems mean the MPC won’t place much weight on the unemployment rate.
- Softer-than-expected wage growth will give the MPC a little extra confidence in a summer rate cut.
Rob Wood (Chief UK Economist)UK
- The BTP-Bund spread has fallen, in line with our call; we still believe it will hit 100bp by year-end.
- Will the attractive carry maintain foreign investor appetite for BTPs in 2024? We think so.
- Assuming no fiscal disasters, BTPs will continue to close the gap to their Spanish counterparts.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: China’s consumer price inflation bounces in February; Upstream industries continue to see disinflationary pressure
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s upstream industries continue to see disinflationary pressure.
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s consumer price inflation bounces in February, thanks to the timing of the Lunar New Year holiday.
Kelvin Lam (Senior China+ Economist)China+
In one line: Investors return to China’s stock markets in February
Kelvin Lam (Senior China+ Economist)China+
- All eyes on OER today; the most likely outcome is a significantly smaller increase than in January.
- Core services prices ex-rent likely rose much less quickly in February too, allowing the Fed to breathe.
- Small business sentiment usually rises when stocks do well; are credit conditions finally biting?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- US job market data stabilises yields, boosting LatAm currencies and easing pressure on policymakers.
- Colombia’s disinflation pace eased in February but will soon gather speed, as domestic demand is struggling.
- The COP’s stability will also help, assuming President Petro continues to face challenges in Congress.
Andrés Abadía (Chief LatAm Economist)Latin America
- The Philippines’ unemployment rate jumped in Q1, to 4.5%; a smaller labour force is partly to blame.
- Weakness is surfacing, and another minimum wage hike will make matters worse outside the capital.
- The regional reserves rebuild is far from complete; Vietnam's and the Philippines’ lag is the main worry.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- China’s CPI rebounded due to the timing of Lunar New Year and stronger demand in food and services.
- By contrast, PPI slid further as deflationary pressure on upstream industries persists.
- We expect headline CPI disinflation to resume, and China continues to export deflation to rest of world.
Kelvin Lam (Senior China+ Economist)China+
- We think the headline rate of CPI inflation fell to 3.5% in February from 4.0% in January.
- Risks are for a lower reading, as our headline CPI inflation forecast is on the cusp of rounding to 3.4%.
- We expect services inflation to slow to 6.1% in February, from 6.5%, matching the MPC’s forecast.
Rob Wood (Chief UK Economist)UK
- Comments from ECB policymakers are keeping hopes of an April rate cut alive, but we still see June.
- The bar is high for the March HICP to deliver a down- side surprise big enough for the ECB to cut in April.
- We think bond yields will drift lower over the summer, before an inflection point in late Q3.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- In one line: Overshooting expectations, once again, by far.
Andrés Abadía (Chief LatAm Economist)Global
The current trend in payrolls is steady, but a clear downturn is coming
Ian Shepherdson (Chief Economist, Chairman and Founder)US
