- The EZ goods trade surplus widened in March, and net trade in goods likely boosted GDP in Q1.
- Advance data from China as well as surveys suggest this boost is disappearing in Q2...
- ...And we think rising imports means net trade is set to weigh on growth for the rest of the year.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Polls suggest the Labour Party will win the general election that must be held by January 2025.
- The party plans supply-side boosting initiatives, from freeing planning rules to ‘crowding in’ investment.
- Those policies pose modest upside risk to current UK potential growth of around 1.5% per year.
Rob Wood (Chief UK Economist)UK
PAYROLL GROWTH IS SET TO SLOW SHARPLY…
- …THE FED WILL RESPOND, BUT WHEN?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Our Homebase model points to an initial estimate of a subpar 150K rise in private payrolls in May.
- The Redbook measure of year-over-year growth in retail sales has been remarkably strong lately...
- ...But it has often overstated the trend in the official retail sales data in the recent past; we think it is again.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Chile’s economy gained traction in Q1, thanks mainly to improving domestic demand.
- Falling inflation and lower interest rates are gradually supporting the upturn, but downside risks remain.
- The recovery will likely lose speed but won’t collapse; further monetary policy normalisation will help.
Andrés Abadía (Chief LatAm Economist)Latin America
- GDP growth in Thailand smashed expectations in Q1, as it fell trivially to 1.5% from 1.7% in Q4…
- …But the consumption-and inventories-led quarterly bounce is dubious and unsustainable.
- Merchandise trade and investment went from bad to worse, though the latter should revive from Q2.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Policymakers on Friday announced a raft of property support measures aimed at tackling oversupply...
- ...But the funding allocated to buy up unsold housing inventory is just the start, and more will be needed.
- In April, second-hand housing prices plunged at their steepest rate since September 2014.
Duncan WrigleyChina+
- Were it not for the superbonus, Italian investment likely would be falling off a cliff...
- ...Interest rates faced by firms are among the high- est, credit standards tight and loan demand sinking.
- The lagged hit from rising interest rates on Eurozone investment will fade later this year, but only slowly.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We expect two-year gilt yields to fall to 3.9% by end- 2024 as the MPC cuts rates.
- But high government refinancing and BoE gilt sales limit the fall in 10-year gilt yields to 4.0% at end-2024.
- Upside risks remain from inflation persistence and implausibly low public-spending forecasts.
Elliott Laidman Doak (Senior UK Economist)UK
China's banks held LPR steady in May; More funding is need to prop up the real estate sector
Kelvin Lam (Senior China+ Economist)China+
China's banks held LPR steady in May; More funding is need to prop up the real estate sector
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan's Q1 GDP shrinks more than expected as domestic demand deteriorates
Kelvin Lam (Senior China+ Economist)China+
Don’t hang your hat on Thailand’s market-beating Q1 GDP print
Malaysian export recovery still in play despite headline trade figures likely falling in May
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
China activity - retail sales slow as industrial output rebounds; likely major property policy announcement due today
Duncan WrigleyChina+
Improvement in Singaporean export growth down to base effects
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- The lagged effect of tight credit and high rates is starting to bite; we're cutting our 2024 and 2025 forecasts.
- The small business sector is under pressure, and consumers are starting to wobble.
- Sustained slow growth will push unemployment up and inflation down; yields will drop, and stocks will struggle.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil’s real GDP rebounded in Q1, thanks mainly to improving domestic demand, but risks loom for H2.
- Fiscal challenges, a weakening external backdrop and bad weather conditions have clouded the outlook.
- COPOM minutes reinforce the hawkish stance, despite a split vote, and cite fiscal risks to inflation.
Andrés Abadía (Chief LatAm Economist)Latin America
- Base effects flattered Singaporean NODX growth in April, while real production is disappointing.
- The long-running slide in urban unemployment in India appears finally to have stalled in Q1.
- Remittances growth in the Philippines remains subpar; momentum is waning and the peso lift will fade.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia