- MPC members are giving formal speeches less frequently now than before Covid.
- There is evidence that they retreated even further from communicating when inflation surged in 2022.
- We think this has made their reaction function more difficult to understand and is impacting markets.
Rob Wood (Chief UK Economist)UK
- US - Core inflation still likely to be lower by year-end in most tariff scenarios
- EUROZONE - The outlook for EZ inflation in Q1; a hot headline, but a soft core?
- UK - Ignore the December inflation drop; it’s still heading above 3% in April
- CHINA+ - China’s stimulus policies worked in Q4, but recovery won’t be easy
- EM ASIA - BI shrugs off IDR slump and starts 2025 with shock cut; a good move
- LATAM - Will headwinds from a protectionist US hurt the Mexican economy?
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- Brazil — Fiscal reform, and Lula’s diplomatic efforts
- Mexico — Troubles due to Mr. Trump’s re-election
- Chile — General election approaching
Andrés Abadía (Chief LatAm Economist)Latin America
- Polls are little changed in Germany; a grand coalition between CDU/CSU and SPD still looks the best bet.
- The debt brake is ripe for change, but what is the best way to loosen Germany’s fiscal rules?
- AFD’s support is rising; is a two-party coalition with the CDU/CSU an outsized risk?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Monthly insolvencies have fallen back towards their pre-pandemic trend.
- The insolvency rate, which controls for the size of the economy, is almost at pre-pandemic levels.
- Even modest GDP growth will keep a lid on insolvency growth in 2025.
Elliott Laidman Doak (Senior UK Economist)UK
In one line: Falling back but still consistent with a supra-50 EZ composite PMI.
Melanie Debono (Senior Eurozone Economist)Eurozone
- In one line: Under strain, due to still-tight financial conditions.
Andrés Abadía (Chief LatAm Economist)Latin America
- Retail sales plummet as Banxico signals potential bold rate cuts to ease the pain on economic activity.
- Ms. Sheinbaum’s early presidency has been marked by complex reforms and a difficult political picture.
- Mr. Milei’s economic wins: a soaring trade surplus, impressive fiscal surplus, and plummeting inflation.
Andrés Abadía (Chief LatAm Economist)Latin America
- India’s volatile gold imports corrected sharply in December, but their upward normalisation is intact.
- Total exports enjoyed a solid Q4, as the goods side revived, though services faltered heading into 2025.
- Net trade should hit Q4 GDP by 0.2pp, down from +1.5pp in Q3, due to adverse import base effects.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- A US move to use energy as a bargaining chip in trade negotiations would send EZ prices higher.
- The Greenland question could inadvertently spark a trade war between the EU and the US.
- Mr. Trump’s pledge to end the war in Ukraine quickly is a key test case for America’s NATO commitment.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The labour market is stronger than payrolls show; revisions should raise December’s drop to no change.
- Redundancies remain low and jobless claims show little sign of a sharp labour-market downturn.
- The MPC will ease in February, but strong wage growth blocks rapid interest rate reductions this year.
Rob Wood (Chief UK Economist)UK
In one line: Construction supported growth in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
China's benchmark lending rates unchanged, as PBoC puts immediate focus on currency stability
Duncan WrigleyChina+
China's benchmark lending rates unchanged, as PBoC puts immediate focus on currency stability
Duncan WrigleyChina+
In one line: Upside risks building in energy, but the Q1 core looks benign on our forecasts.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: Upside risks building in energy, but the Q1 core looks benign on our forecasts.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Manufacturing still looks fragile despite this improvement.
Oliver Allen (Senior US Economist)US
