In one line: Services boosted by the Olympics; manufacturing is sinking without a trace.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: Services boosted by the Olympics; manufacturing is sinking without a trace.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect the MPC to agree in September that QT will continue at a £100B-a-year pace from October.
- The BoE has welcomed increased use of its short-term repo facility as part of a strategic shift…
- ...to a demand-driven reserves system, while small changes to active QT would be fine-tuning.
Rob Wood (Chief UK Economist)UK
- Construction output jumped in June but still fell over the second quarter as a whole…
- ...This is consistent with a drop in construction capex, which accounts for nearly half of investment in GDP.
- The outlook for the sector is bleak; it will remain a drag on growth for the rest of this year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The Bank of Thailand left its policy rate at 2.50% yesterday in another six-to-one split vote…
- …We got this one wrong, but we continue to believe that 50bp of cuts will be made by year-end.
- The MPC is finally worrying about local demand; better late than never, as exports won’t help.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The only question for September is the size of the Fed move; we still expect 25bp, but hope for 50.
- The downward revision to March payrolls is big, but this tells us very little about the near-term outlook.
- Existing home sales probably bounced in July, but are unlikely to climb much further in Q3.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
REBOUNDING GROWTH AND SLOWLY EASING WAGES
- ...THE MPC WILL CUT IN NOVEMBER AND THREE TIMES IN 2025
Rob Wood (Chief UK Economist)UK
- In one line:Spending is already overshooting Budget forecasts, government borrowing will exceed the Budget forecasts.
Rob Wood (Chief UK Economist)UK
- In one line: Still sticking to our call for Q4 easing, but a September move can’t be ruled out.
Miguel Chanco (Chief EM Asia Economist)Global
- In one line: Still sticking to our call for Q4 easing, but a September move can’t be ruled out.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Still believe that cuts are just around the corner.
Miguel Chanco (Chief EM Asia Economist)Global
- In one line: Still believe that cuts are just around the corner.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- China’s commercial banks left loan prime rates unchanged in August as their NIM hit a record low.
- The PBoC is in no rush to lower policy rates; fiscal policy is bearing the burden of driving the recovery.
- Q2 inward direct investment was negative again; 2024 is set for the largest net outflows since the 2000s.
Kelvin Lam (Senior China+ Economist)China+
HOUSE-PRICE RECOVERY STRENGTHENING...
...WE EXPECT 4.5% HOUSE-PRICE INFLATION IN 2024
Elliott Laidman Doak (Senior UK Economist)UK
- US - Homebase points to strong August payrolls, but we’re looking elsewhere
- EUROZONE - Some wage growth indices are rising, but the ECB will still cut
- UK - An even-handed MPC would look through the services undershoot
- CHINA+ - China’s July activity data point to softer economic momentum
- EM ASIA - Starting gun fired; the BSP likely to step up cuts to 50bp each
- LATAM - The service is on holiday, returning next week
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- Leading indicators suggest that the upturn in initial claims in recent months is petering out.
- But the slowdown in employment growth will likely continue, as companies continue to reduce hiring.
- Benchmark payroll revisions are unforecastable, but have been small in recent years.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Both export and import growth in Malaysia beat consensus by a large margin in July…
- …But the stronger surge in import growth resulted in the trade surplus more than halving.
- Smaller trade surpluses are likely to be typical in H2, but a pick-up in real activity should support GDP.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- EZ inflation data suggest market pricing for 70bp-worth of easing this year is much too ambitious.
- The ECB will cut by 25bp in September; we still see a second cut in October, but this is a very close call.
- Inflation in food, core goods and energy are all set to firm in Q4, and services inflation will fall only slightly.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ONS Blue Book revisions raised the level of GDP in Q4 2022 by 0.8%.
- Statistician’s will publish full revisions up to the latest data in Q2 2024 on September 30.
- Revisions to growth two years ago will have little effect on monetary or fiscal policy.
Rob Wood (Chief UK Economist)UK
