THE LABOR MARKET IS ABOUT TO SLOW, SHARPLY…
- …THE FED WILL RESPOND, BUT WHEN?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
CHINA+ OUTLOOK
- CHINA’S TWO SESSIONS OFFER ONLY TARGETED STIMULUS
- BOJ EXITS FROM NEGATIVE RATES; NO NEAR-TERM MOVES
- DEMAND FOR HIGH-END CHIPS LIFTS KOREAN EXPORTS
Duncan WrigleyChina+
- Low income households now have a much smaller stock of real liquid assets than before Covid…
- The shortage of cash will crimp spending and push up delinquency rates on consumer credit instruments.
- Falling capex shipments point to an outright decline in Q1 equipment investment; Q2 perhaps a bit better?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazilian inflation overshot in March due to elevated food prices, yet core pressures are stable.
- We expect disinflation to gather momentum in Q2 as weather conditions ameliorate.
- The COPOM meeting minutes hint at further rate reductions of 50bp in May and possibly June.
Andrés Abadía (Chief LatAm Economist)Latin America
- Ignore the narrowing of Thailand’s customs trade deficit in February; the broad trend is deterioration…
- …Year-over-year export growth is topping out , with a number of major markets still very sluggish.
- Don’t get carried away by the jump in Taiwanese retail sales growth in February to nearly 10%.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- German consumer confidence remains depressed, but the headlines are poor indicators of spending.
- Rising real income growth and a stabilisation in the labour market are tailwinds for German consumers…
- ...But early-Q1 data on retail and car sales point to near-term downside risks for consumption growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We estimate that house prices were trending up at a 0.4% month-to-month rate in February.
- We expect monthly house-purchase mortgage approvals to rise to 65K in May, from 55K in January.
- Gradual mortgage-rate falls and firm income growth should allow house prices to rise 4% in 2024.
Rob Wood (Chief UK Economist)UK
- Core durable goods orders likely remained weak in February, despite mild weather.
- Equipment investment likely rose in Q1 due to a rebound in heavy truck sales, but a full-year drop is still a solid bet.
- The Conference Board’s confidence index likely is still consistent with steady spending growth in March.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Colombia’s BanRep ramped up the easing pace to 50bp, taking rates to a still-eye-watering 12.25%.
- The March decision was a divided vote, with future rate cuts expected to be data-dependent.
- BanRep will have some flexibility, given lower inflation, better external conditions and weak GDP.
Andrés Abadía (Chief LatAm Economist)Latin America
- Singaporean headline inflation increased to 3.4% in February, from 2.9%, on festive demand…
- …But, with goods disinflation well-behaved and one-off increases factored in, inflation is likely to fall.
- In Malaysia, new water tariffs caused headline inflation to rise in February, to 1.8% from 1.5%.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- The ECB faces a unique challenge in thinking about fiscal policy; fiscal tightening is now lifting inflation.
- We estimate that the unwinding of fiscal stimulus is now boosting EZ headline inflation by 0.4pp...
- ...In a fight for every percentage point to get inflation to target, this could prevent ECB rate cuts.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Last week the MPC hammered home the message that rate cuts are coming soon.
- The Committee will likely reduce inflation persistence in its May forecasts, setting up a June rate cut.
- We think the MPC will cut more slowly than the market expects, as it learns from the data where neutral is.
Rob Wood (Chief UK Economist)UK
Lunar New Year demand boosts headline CPI in Singapore
New tariff adjustment mechanism pushes up utilities inflation in Malaysia
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- In one line: Poor economic activity will put a lid on inflation.
Andrés Abadía (Chief LatAm Economist)Global
In one line: Retail sales are on track to drag the economy out of recession in Q1.
Rob Wood (Chief UK Economist)UK
- In one line: Strengthening finances will drive consumer spending this year.
Rob Wood (Chief UK Economist)UK
- The March Philly Fed and S&P surveys suggest the manufacturing sector’s downturn is over...
- ...But ongoing inventory rundowns and depressed global demand point to only modest growth ahead.
- New home sales likely rose for a third straight month in February; homebuilders will hang on to market share.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
