Headline index surges, but the details still point to weakness.
Oliver Allen (Senior US Economist)US
- PCE-relevant components of the PPI collectively rose in July at the slowest rate for 11 months.
- Hospital services prices will rebound soon, but core goods prices will drop as retailers’ margins contract.
- We look for a weak July retail sales report Thursday, with the control measure falling by 0.3%.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The July collapse in inflation in India below the key 4.0% mark, alone, won’t matter to RBI policy.
- A tepid bounce in August, however, with vegetable prices now correcting, would support calls for a cut.
- We also think that this month’s Q2 GDP will disappoint heavily; our final forecast is 6.0%
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- China's total social financing growth ticked up in July, but credit demand remained very weak.
- Net new loans fell for first time in 19 years, with notable weakness in household and business lending.
- The PBoC are trying hard to raise long-term bond yields, but we will wait to see if that can be sustained.
Kelvin Lam (Senior China+ Economist)China+
- The Eurostoxx 50 is currently priced for negative medium-term returns, based on book value.
- Margins are a wild card for EZ equities, but unless they remain near record highs, prices will fall further.
- We look for a further 5-to-10% decline in EZ equities as margins compress and earnings growth slows.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The MPC will be encouraged that wage growth is slowing in line with its forecast for Q2.
- Rate-setters will downplay the still unreliable unemployment rate, which fell to 4.2% in June.
- But a range of data shows robust employment, which suggests the MPC will cut rates only slowly.
Rob Wood (Chief UK Economist)UK
- July PPI data likely to reverse to June’s jump in retailers’ gross margins; a profit squeeze lies ahead.
- The NFIB survey likely will show small firms remain under intense pressure from high interest rates.
- Inflation expectations are trending down, but the plunge in the NY Fed’s three-year measure is noise.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Italy’s new wealth tax on foreign income will help public finances but won’t balance the books…
- ...Spending needs to come down, and significantly, to get Italy away from a near 6% deficit this year.
- As expected, the SNB intervened to stem the rise in the franc last week; more CHF sales will be needed.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We estimate that last week’s financial market volatility will cut 1 point off August’s PMI services.
- Strong new orders and firms’ confidence means the PMI services should still rise two points in August.
- The financial ructions are likely to have sliced just two points off consumers’ confidence.
Rob Wood (Chief UK Economist)UK
- In one line: Manufacturing gains offset weakness in other sectors, for now.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A mixed picture, as transportation costs rise while food prices decline.
Andrés Abadía (Chief LatAm Economist)Global
- In one line: A mixed picture, as transportation costs rise while food prices decline.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A prudent rate cut, defying consensus, reflects improved inflation dynamics.
Andrés Abadía (Chief LatAm Economist)Global
- In one line: A prudent rate cut, defying consensus, reflects improved inflation dynamics.
Andrés Abadía (Chief LatAm Economist)Latin America
In one line: Inflation will drop back sharply this month.
Melanie Debono (Senior Eurozone Economist)Eurozone
Producer deflation set for only modest improvement in H2
Duncan WrigleyChina+
China's consumer inflation buoyed by seasonal food inflation, rather than demand
Producer deflation extends decline amid oversupply
Duncan WrigleyChina+
Underlying sales momentum in Indonesia was fading heading into Q3
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
