- The ECB will cut its policy rate by 25bp this week, as widely expected, but what happens in Q4?
- We see a higher chance than markets of an October cut, and a lower probability of December easing.
- Will the ECB lift its Q4 core inflation forecasts this week? We think so, but how far?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- CPI inflation likely rose to 2.3% in August, from 2.2% in July, 0.1pp below the MPC’s forecast.
- Airfares will rebound from July’s slowdown, which was driven by the early CPI collection date.
- Almost anything is possible with hotel prices, but they likely fell less than in August 2023.
Rob Wood (Chief UK Economist)UK
In one line: Held back by deteriorating views on Germany.
Melanie Debono (Senior Eurozone Economist)Eurozone
- In one line: One trick, AI pony continues to support trade.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- In one line: Slowing pay growth but the MPC will wait until November to cut rates again.
Rob Wood (Chief UK Economist)UK
The upcoming seasonal rebound in construction activity won’t decisively turn around falling producer prices
Duncan WrigleyChina+
China's slowing core consumer inflation indicates weak demand
Producer deflation steepens as construction activity splutters
Duncan WrigleyChina+
- In one line: Supporting BCCh’s cautious easing stance.
Andrés Abadía (Chief LatAm Economist)Latin America
In one line: Revised down; held back by consumption and investment.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Industry is unlikely to recover until the external picture improves.
Melanie Debono (Senior Eurozone Economist)Eurozone
Vietnamese exports are regaining momentum, thanks in large part to US demand
We’ve seen enough; downgrading our inflation forecasts for Vietnam
Actual retail sales growth in Vietnam remains in the log single-digit range
The latest slump in Philippine sales is starting to bottom out, just
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The trend in private payrolls has halved to just 100K in six months; NFIB data signal further slowing.
- The August dip in unemployment was due to a jump in temporary layoffs unwinding; the trend is rising.
- FOMC members Waller and Williams don’t sense the urgency; expect only a 25bp easing this month.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil’s industrial production declined in July following a solid H1, and the outlook is now cautious.
- A weaker trade surplus and rising import demand point to mounting external pressures.
- Chile’s inflation rose in August; food and housing prices led the increase, due to temporary shocks.
Andrés Abadía (Chief LatAm Economist)Latin America
- Vietnam’s seasonally adjusted trade surplus barely moved in August , but exports to the US are flying…
- …We still expect GDP growth to slip modestly in Q3, with IP and retail sales clearly losing momentum.
- Philippine CPI returned quickly to the BSP's range in August; the door ’s ajar for a 50bp cut in October.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- EZ GDP rose less than expected in Q2, mainly due to downward revisions to French and Irish GDP.
- Consumption and investment held back growth, while net trade did all the heavy lifting.
- Compensation-per-employee growth eased, in line with other measures of wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect the Chancellor to raise taxes by £10B per year, only partially offsetting higher spending.
- So, the OBR will likely increase its forecasts for government borrowing over the next five years.
- Ms. Reeves likely will meet her fiscal rules by changing the definition of government debt used.
Rob Wood (Chief UK Economist)UK
- August unemployment has often surprised to the upside, perhaps due to shifting seasonality…
- …But continuing claims and state-level data suggest unemployment overshot its trend in July.
- Growth in unit labor costs is now running well below 2%, pointing to weak underlying inflation.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
