- In one line:July GDP was dragged down by erratic sectors, it will rebound.
Rob Wood (Chief UK Economist)UK
- In one line: A decent performance in early Q3, but tight financial conditions remain a threat.
Andrés Abadía (Chief LatAm Economist)Latin America
In one line: As expected; plenty to talk about on the press conference.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: As expected; plenty to talk about on the press conference.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- PPI and CPI data collectively point to a 0.14% increase in the August core PCE deflator.
- Slowing wage growth, a margin squeeze and lower energy prices will return core inflation to 2% in Q2.
- Jobless claims have fallen since July, but hiring is dropping faster; expect even lower job growth in Q4.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Mexico’s manufacturing struggles continue, as global demand and the outlook weaken.
- Political risk and judicial reforms spark market fears, threatening the industrial and capex recovery.
- Nearshoring benefits are delayed, and tight financial conditions and uncertainty weigh on manufacturing.
Andrés Abadía (Chief LatAm Economist)Latin America
- China’s early reporting data point to softening domestic demand in August.
- Officials are likely to blame poor activity readings on bad weather, but that’s only part of the story.
- Structural adjustment is dragging on demand, with piecemeal policy support only a partial offset.
Duncan WrigleyChina+
- The ECB cut by 25bp as expected; an October cut is now a tall order, but a December cut is back on.
- The rise in the ECB’s core inflation forecast will prevent the Bank from being mugged by reality in Q4.
- Early signs show that the ECB is noticing the sustained weakness in EZ domestic demand.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect the MPC to vote 7-to-2 to keep Bank Rate on hold at next week’s policy meeting.
- Rate-setters will note slowing inflation supports faster cuts but a solid labour market suggests caution.
- The MPC will signal further rate cuts are likely, but that policy will need to stay sufficiently restrictive.
Rob Wood (Chief UK Economist)UK
Don’t panic, it's noise not signal; the core PCE probably rose by about 0.22%
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
Don’t panic, it's noise not signal; the core PCE probably rose by about 0.22%.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The uptick in the core CPI in August largely was due to the reversal of erratic price falls in prior months.
- We expect smaller increases in primary rent, falling services inflation and flat goods prices through Q4.
- The CPI data tentatively imply a 0.22% core PCE, but will hone our forecast after today’s PPI data.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Mexico — Headwinds amid reform uncertainty
- Colombia — Signs of recovery despite many headwinds
- Peru — Resilient despite global noise
Andrés Abadía (Chief LatAm Economist)Latin America
- Germany’s economy is now in recession, judging by the trend in investment and survey data…
- …But we think rising consumers’ spending will just about keep the economy’s head above water in Q3.
- We’re lowering our German GDP growth forecasts for Q3, Q4 and Q1 by a cumulative 0.3pp.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A second consecutive month of unchanged GDP gives little reason for worry.
- GDP was depressed by erratic sectors; they will rebound, and surveys point to robust growth.
- So, the MPC will still wait until November to cut interest rates again despite the downside GDP surprise.
Rob Wood (Chief UK Economist)UK
Punishingly high borrowing costs continuing to weigh on hiring and capex plans.
Oliver Allen (Senior US Economist)US
In one line: China's exports buoyed by strong BRICS and EU demand
Kelvin Lam (Senior China+ Economist)China+
In one line: China's exports buoyed by strong BRICS and EU demand
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s foreign reserves climb in August amid weakening dollar and falling treasury yields
Kelvin Lam (Senior China+ Economist)China+
