Pantheon Publications
Below is a list of our Publications for the last 5 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep.
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Duncan Wrigley
In one line: exports hold up ahead of row with China
- China’s residential property market is weakening again, in the absence of robust new policy support.
- Broad inventory needs another 18 months to bottom out, but even that depends on sentiment stabilising.
- A modest rise in land sales this year, albeit from a very low base, is a flickering ray of light.
- Japan’s Q3 GDP shrank, hit by weaker net exports, a slower inventory rise and falling residential investment.
- The government aims to secure a larger supplementary budget than in 2024, leading to bond-market worries.
- The diplomatic spat with China over Taiwan could put a 0.3pp dent in GDP growth if Chinese tourism stops.
Weak net exports of goods and tourism hit growth
Private consumption was sluggish
Business non-residential investment was resilient
- China’s activity data deteriorated further in October, underscoring still-lacklustre domestic demand…
- …The weakness in FAI remains the focal point; it is on course to have its worst-performing year since 1994.
- Excess property inventory will take some time to digest; the market will now focus on December’s CEWC.
- China’s arithmetic fall in exports in October is mainly due to calendar effects, rather than a demand slump.
- Shipments to non-US markets dropped sharply, while exports to the US were still weak but didn’t worsen.
- Export growth is likely to slow next year, given limited capacity for the Global South to absorb rapid rises.
Full-time regular pay growth slowed a tad
Real wages extended their decline in September
Efficiency gains help profits but hurt labour demand
- China’s household saving rate has fallen, implying greater readiness for consumption spending...
- ...But not by enough to make up for the slump in residential sales since 2019; no wonder demand is soft.
- The October RatingDog services PMI reports efficiency gains; good for profits, but bad for jobs short term.
In one line: Investment stimulus should lift China's manufacturing index from October's trough
Investment stimulus should lift China's manufacturing index from October's trough
Tokyo inflation bump driven by local water subsidy expiry
- China is countering its investment slump by approving an additional RMB500B in local-government bonds...
- ...And driving though the disbursal of RMB500B in policy-bank funds for investment projects.
- This should boost the official manufacturing index from its October trough.
- President Xi’s commentary on Tuesday confirms an industry-first view of growth...
- ...with the domestic economy serving mainly as a hedge against external uncertainties.
- China will stick to manufacturing-led growth, with only modest support for domestic demand and property.
- Japan’s headline inflation ticked up in September, owing to higher energy inflation.
- The new Prime Minister, Sanae Takaichi, said on Friday that addressing inflation was her top priority.
- The October flash PMIs point to a broad weakening in activity, both manufacturing and services.
In one line: Fading demand weighs on flash PMI manufacturing activity
In one line: BoJ won’t be shocked by modest rise in inflation; likely to hold rates next week waiting for clarity on the new government’s fiscal easing
In one line: BoJ won’t be shocked by modest rise in inflation; likely to hold rates next week waiting for clarity on the new government’s fiscal easing
- The BoK held the policy rate yesterday, while signalling its readiness for a rate cut next month...
- ...But only if the KRW stabilises, in turn resting on US-Korea talks, and if the Seoul property market cools.
- China’s Fourth Plenum signalled continued reliance on the manufacturing-export growth model.
- China’s loan growth slowed in September, indicative of weak credit demand, notably among corporates.
- M1 growth surged, but this likely reflects the robust stock market, rather than domestic demand reviving.
- The PBoC is likely to save policy rate cuts to stabilise sentiment if US-China trade frictions worsen severely.
- China’s industrial development model has sustained growth and resulted in world-class sectors like EVs.
- Policymaker s will aim to curb the undesired side effects of excess capacity while keeping its essence.
- They will aim to spur demand, but not at the price of limiting industrial and technological-led growth.
