In one line: No clear sign of a hit from rising political uncertainty, for now.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Probably a blip in an otherwise uptrend.
Melanie Debono (Senior Eurozone Economist)Eurozone
A MODEST CYCLICAL UPTURN HAS BEGUN, AND RATES ARE FALLING
- …WILL POLITICAL UNCERTAINTY THROW A WRENCH IN THE WORKS?
Claus Vistesen (Chief Eurozone Economist)Eurozone
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
- China’s property market is still in the doldrums; prices and transactions are falling at pace.
- The secondary market is suffering bigger price falls due to higher inventory levels and consumer choice.
- The impact of re-lending facilities will not be felt immediately due to implementation problems.
Kelvin Lam (Senior China+ Economist)China+
- Polls point to a parliament split down the middle in France, but the second-round vote is a wildcard.
- RN’s and NFP’s economic plans will anger bond markets and the EU; Mr. Macron will likely welcome this.
- Survey data so far point to only a modest hit to sentiment in France from rising political uncertainty.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Official labour-market data remain unreliable despite statisticians’ attempts to boost the sample size.
- Surveys suggest labour-market loosening has slowed as GDP growth has rebounded.
- The decline in immigration removes one factor that has helped ease the labour market since 2022.
Rob Wood (Chief UK Economist)UK
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
- Malaysian headline inflation picked up in May due to a sharp rise in the price of streaming services…
- …It will rise further in June, as the lift from the diesel-subsidy removal shows up in the data.
- Labour-market tightness also looks set to stoke inflation, changes to administered prices aside.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- Revisions show that Spanish GDP rose by 0.8% on the quarter in Q1, more than previously thought.
- More of the same is likely in coming quarters; survey and hard data are positive, especially in services.
- Spain’s GDP will likely leap by 2.8% this year, in contrast to 0.8% in the Eurozone as a whole.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We upgraded our Q2 GDP growth forecast to 0.4% quarter-to-quarter, close to the MPC’s 0.5% call.
- Services inflation exceeded MPC forecasts by a widening margin in April and May.
- So we pushed back our first MPC rate cut to September, but we still expect two cuts by year-end.
Elliott Laidman Doak (Senior UK Economist)UK
- In one line: The long decline in core goods inflation has no further to run.
Andrés Abadía (Chief LatAm Economist)UK
- - CHINA’S ACTIVITY TICKING OVER ENOUGH
- - BOJ SIGNALS BOND BUYING TO SLOW
- - STRONG EXPORTS ALLOW BOK’S MORE HAWKISH STANCE
Kelvin Lam (Senior China+ Economist)China+
- 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
