- Food CPI in India will soon tank on base effects, but don’t underestimate the improving monthly story…
- …Inflation expectations remain unfazed, though more signs are pointing to a U-turn in core inflation.
- Average inflation should still fall to 4.6% this year, but we have raised our 2025 forecast to 4.5%.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Swiss inflation held steady in May but is likely to fall in the coming months, to around just 1% by August.
- Weak growth will drag down domestic inflation, and gas & oil prices point to a falling imported rate.
- The SNB will probably cut its key policy rate again this week, by 25bp to 1.25%; more cuts are likely.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The MPC can take some comfort from one-year consumer inflation expectations falling back to average.
- But five-year expectations are elevated, and trust in the central bank is failing to recover as inflation falls.
- Trust in the BoE is faring worse than trust in the ECB, suggesting UK inflation will prove more persistent.
Rob Wood (Chief UK Economist)UK
May core PCE likely rose just 0.11%, well below the Fed’s expectations.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
May core PCE likely rose just 0.11%, well below the Fed’s expectations.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
In one line: Headline points to weakness but the details are more positive
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Producer price reflation hastens in May
Kelvin Lam (Senior China+ Economist)China+
In one line: China's CPI print points to sluggish domestic demand; Producer price reflation hastens in May
Kelvin Lam (Senior China+ Economist)China+
- In one line: Tapping an RRR hike to cool the property market.
Moorthy Krshnan (Senior Asia Economist)Global
- In one line: Tapping an RRR hike to cool the property market.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- In one line: Higher mortgage rates take a toll but estate agents expect a recovery later in the year.
Rob Wood (Chief UK Economist)UK
- In one line: Higher mortgage rates take a toll but estate agents expect a recovery later in the year.
Rob Wood (Chief UK Economist)UK
- The CPI and PPI data imply that the core PCE deflator rose by just 0.11% in May…
- …Below the 0.19% average run rate forecast by the Fed; September’s SEP update will support a rate cut.
- The Michigan sentiment index probably bounced this month, but job loss worries seem to be mounting.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- A whirlwind start for President Milei in Argentina; reforms, protests, economic turmoil…and disinflation.
- The Senate has narrowly approved a controversial bill giving him a badly needed first legislative victory.
- Brazil’s retail sales rise in April but undershoot expectations; the medium-term outlook is worsening.
Andrés Abadía (Chief LatAm Economist)Latin America
- The CBC made no change to its policy rate yesterday, but raised its RRR by 0.25pp...
- ...To stymie the flow of credit to the property sector, which has brushed off previous cooling measures.
- We expect the CBC to stay on hold, but upside risks to inflation might provoke another hike in Q3.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- Italy’s economy had a decent Q1 and will continue to grow this year...
- ...But a correction in investment remains on the cards and is now likely to come as soon as Q2.
- We forecast GDP growth of 1% in 2024, as in 2023, before 1.8% next year; risks remain to the downside
Melanie Debono (Senior Eurozone Economist)Eurozone
- We expect the MPC to vote 7-to-2 to hold Bank Rate, after growth, wages and inflation beat its forecasts.
- Inflation persistence fading more slowly than expected means the MPC will keep its guidance unchanged.
- We think slowing wage growth and inflation will trigger a rate cut in August.
Rob Wood (Chief UK Economist)UK
