LATAM RECOVERY REMAINS RESILIENT...
- ...BUT CHALLENGES PERSIST, PARTICULARLY ON THE POLICY FRONT
Andrés Abadía (Chief LatAm Economist)Latin America
Probably depressed marginally by Juneteenth; the trend remains upwards.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- In one line: In line with expectations despite political noise and floods.
Andrés Abadía (Chief LatAm Economist)Latin America
Consistent with slowing consumption growth and a gently rising unemployment rate.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- We look for a small dip in initial claims to 235K, due to Juneteenth, but the trend still is rising.
- May’s durable goods orders likely will point to a big drag on Q2 GDP growth from equipment investment.
- Net trade also looks set to weight heavily on Q2 growth, even if the goods trade deficit narrowed slightly in May.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
THE SLOWDOWN IS REAL, AND WILL PERSIST…
- …THE FED IS RUNNING THE RISK OF DELAYING TOO LONG
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- US - Trebling of shipping costs likely to add 0.04pp at most to core PCE inflation
- EUROZONE - EZ PMIs stumbled at the end of Q2; will they pick up again in Q3?
- UK - The MPC is itching to cut, so two rate reductions this year are likely
- CHINA+ - Japan’s stagflation conundrum; service sector at risk of stagnation
- EM ASIA - A reprieve for Singapore’s long-suffering semiconductor sector
- LATAM - Mexican economy falters amid challenges and uncertainty
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The latest services surveys point to lower underlying inflation and a further slowdown in wage growth.
- New home sales probably dipped in May, reflecting the rise in mortgage rates since the start of the year.
- Conference Board confidence data signal slower spending growth and rising unemployment.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Colombia’s economic activity rebounded in April, but growth momentum likely will be sluggish in H2.
- Challenges persist amid political and policy uncertainty—hindering investment—and fiscal pressures.
- The fiscal backdrop, as outlined in the MTFF, presents a complex picture of challenges and commitments.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: The long decline in core goods inflation has no further to run.
Andrés Abadía (Chief LatAm Economist)UK
- Shipping costs have rocketed, but they likely will add less than 0.1pp to core PCE inflation next year.
- The spike in shipping costs probably will unwind after tariff-related risks have abated.
- Consumer confidence likely dropped in June, with adverse implications for consumption growth.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Mexico’s inflation uptick in June signals caution from Banxico; the next rate cut is likely delayed to August.
- Rising non-core inflation and MXN volatility challenge Banxico’s monetary policy stance.
- Brazil’s foreign investment inflows show resilience despite economic challenges.
Andrés Abadía (Chief LatAm Economist)Latin America
New mortgage rates still far too high for transactions to recover
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Stocks will like Fed easing, but will be less enamored of a potentially steep drop in gross margins.
- Existing home sales fell a bit further in May and a sustained recovery looks a long way off.
- The pick-up in the employment index of S&P Global PMI survey in June is probably a red herring.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Mexico’s economy struggled in April amid headwinds; high rates and political uncertainty are threats.
- Ms. Sheinbaum’s cabinet choices indicate a balance between ideological allies and technocratic expertise.
- Concerns about power concentration are valid, but Ms. Sheinbaum is not merely AMLO’s puppet.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A solid start to Q2 following a poor Q1.
Andrés Abadía (Chief LatAm Economist)Latin America
- In on line: A hawkish hold, prioritising inflation anchoring, and restoring credibility.
Andrés Abadía (Chief LatAm Economist)Global
- In on line: A hawkish hold, prioritising inflation anchoring, and restoring credibility.
Andrés Abadía (Chief LatAm Economist)Latin America
