- Japan’s exports grew solidly in March, thanks to burgeoning Chinese demand and a weaker JPY.
- Demand from the US and EU slowed, car-related shipments fell sharply, but chip exports soared.
- The export recovery will be safeguarded by the ICT upturn, while capital goods demand should improve.
Kelvin Lam (Senior China+ Economist)China+
- China’s Q1 GDP growth picked up, thanks to robust industrial output and consumer services spending.
- But a marked fall in industrial capacity utilisation points to burgeoning oversupply issues...
- …Fiscal stimulus should boost demand to mitigate the oversupply, eventually; meanwhile, PPI deflation.
Duncan WrigleyChina+
- Rising energy inflation is a threat to the June rate cut, but we think falling core inflation will do the trick.
- The early Easter sustained services inflation in March, due to a leap in airfares; it will fall in April.
- Our forecast for a July rate cut is now hanging by a thread; we’ll update our view with the April HICP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Headline and services inflation overshot the MPC’s forecast by 0.1pp and 0.2pp, respectively…
- …Reflecting stronger-than-expected underlying price pressures, not the impact of an early Easter.
- We still expect the MPC to cut Bank Rate in June, but are very close to delaying that first cut to August.
Rob Wood (Chief UK Economist)UK
Encouraging, but too soon to call a real recovery.
Oliver Allen (Senior US Economist)US
Large fall is likely an Easter timing quirk; the trend still looks flat.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
LABOR MARKET WARNING SIGNS ARE FLASHING RED…
- …BUT CHAIR POWELL SEES NO “CRACKS”
Ian Shepherdson (Chief Economist, Chairman and Founder)US
In one line: A setback was coming, but the improvement remains intact.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Chinese GDP beats expectations, despite an uneven recovery and looming oversupply issues
Duncan WrigleyChina+
- US The core PCE deflator for March likely will scrape in just below 0.3%
- Eurozone Hunting for early Easter effects in the German and French CPIs
- UK Bernanke Review a missed opportunity for the BoE
- China+ China begins to flesh out its consumer goods trade-in plan
- EM Asia Singaporean manufacturing on a gradual recovery path, at best
- LATAM Broadening disinflation paves way for bold COPOM rate cut in May
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- Chair Powell signals that the Fed requires much more data to start easing soon; June odds down again.
- The widening spread between part-time and full-time job growth is an alarming signal for payrolls.
- The early Easter hit March housing starts but, in any event, a sustained recovery is some way off.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Fiscal and exchange rate measures curb Argentina’s inflation picture; we expect further good news.
- Argentina’s fiscal situation is showing signs of improvement as the government tackles the deficit.
- Peru’s economy is gaining momentum amid low inflation and looser monetary policy.
Andrés Abadía (Chief LatAm Economist)Latin America
- Net sales growth in the Philippines remains in the red; remittances now look unlikely to save the day.
- The consumer debt binge is lasting much longer than we thought, but the payback is looming.
- The much-needed savings rebuild looks to be reversing, and confidence is now plunging.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The PBoC left the MLF rate unchanged yesterday, likely wary of currency pressure.
- Social financing growth slowed in March, due to soft domestic demand and lower bond issuance.
- Government-bond issuance is likely to pick up in Q2, the key plank of short-term growth support.
Duncan WrigleyChina+
- Spain was again the star performer in Q1; we look for GDP to have risen by 0.6% quarter-to-quarter.
- Italy was close behind, faring better than France and Germany, as construction investment rose again.
- Growth should rise in Spain and Italy later this year, but risks are to the downside, especially in Italy.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The MPC will note the sharp employment drop, which suggests a risk the labour market is loosening quickly.
- But the headline jobs data are ropey, and surveys point to employment slowly rising.
- The MPC will focus more on stronger-than-expected pay, which suggests June is the earliest for a rate cut.
Rob Wood (Chief UK Economist)UK
Limited inventory of existing homes continues to help homebuilders.
Oliver Allen (Senior US Economist)US
Consumption is still booming...for now.
Oliver Allen (Senior US Economist)US
Too volatile to make us fear a renewed downturn in manufacturing.
Ian Shepherdson (Chief Economist, Chairman and Founder)US