- All bets are off for November, so it makes little sense to change macro forecasts at this point.
- The further fall in pending home sales in May points to a steep decline in existing home sales in June.
- We expect a weaker labor market and ongoing lack of supply to mean sales remain subdued for some time.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The Mexican economy sent positive signals in May amid domestic political uncertainty and global risk.
- The service and construction sectors drove May’s growth; retail sales reflect an economic deterioration.
- Election-linked fiscal stimulus will wane; high rates and political risk are clouding the economic outlook.
Andrés Abadía (Chief LatAm Economist)Latin America
- The PBoC yesterday took markets by surprise with a 10bp policy rate cut to support the economy.
- Policymakers are prioritising growth support after the disappointing Q2 GDP outturn.
- President Xi’s comments confirm the ‘advanced manufacturing first’ reform strategy.
Duncan WrigleyChina+
- We’re flying half-blind on Q2 GDP data in Germany, but we’re lifting our forecasts slightly, all the same.
- Construction investment was a drag on growth in Q2, but consumers’ spending likely rebounded.
- Our forecasts for Germany for the rest of 2024 see domestic demand now rebounding.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Chancellor Rachel Reeves hinted she would accept 5.5% public-sector pay rises this year.
- We also expect Ms. Reeves to raise government borrowing by £22B in 2029/30 in the Autumn Statement.
- Higher public-sector pay rises than expected will have only a minor effect on the interest rate outlook.
Rob Wood (Chief UK Economist)UK
In one line: The headline should soon fall; foreign demand for EZ assets remain strong.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- In one line:Unrealistic spending plans mean the next government will borrow more and raise taxes.
Rob Wood (Chief UK Economist)UK
- In one line:Colder weather deters shoppers but overall GDP will still jump in Q2.
Rob Wood (Chief UK Economist)UK
- In one line: Imminent interest rate cuts boost consumers’ confidence.
Rob Wood (Chief UK Economist)UK
- Interest rate rules monitored by the FOMC suggest rates should already have been reduced to 4%.
- Policy rules are sensitive to the assumed neutral rate, but also to unemployment, which will rise further.
- The latest readings for a raft of leading indicators suggest that lower housing inflation is here to stay.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Colombia’s and Argentina’s economies are recovering, amid persistent challenges and uncertainty.
- Agriculture is driving economic growth in Colombia, but construction and commerce are struggling.
- Fiscal consolidation has improved Argentina’s balance sheet but raises concerns about social impact.
Andrés Abadía (Chief LatAm Economist)Latin America
- Malaysia’s advance GDP growth print for Q2 was much stronger than consensus, at 5.8%...
- ... As construction activity picked up and stronger external demand boosted manufacturing growth.
- We still see GDP growth in 2024 at 5.2%, higher than the government’s forecast of 4-to -5%.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- The summary document from China’s Third Plenum hints at further short-term growth support.
- The reform strategy prioritizes manufacturing and high-tech development.
- But bold reforms to fill the demand hole left by the tanking property sector seem unlikely.
Duncan WrigleyChina+
- This week sees a raft of business surveys for July; we expect increases across the board.
- Political uncertainty in France is a threat, but the unclear outcome of the elections removes tail risks...
- ...German industrial surveys were too weak in June, given early signs from hard data; they will rebound.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Cooler weather in June led to a 1.2% month-to-month fall in retail sales volumes.
- We think the ONS data exaggerate the drop in retail sales because surveys suggest a stronger reading.
- The new government will likely borrow £10B-to-£20B a year more and raise taxes to fund more spending.
Rob Wood (Chief UK Economist)UK
In one line: "September is wide open”, apparently.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: "September is wide open”, apparently.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Claims boosted by auto plant shutdowns and Hurricane Beryl, but the underlying trend is rising.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
In one line: No signal of a cut in September; we look for such a signal at the press conference.
Claus Vistesen (Chief Eurozone Economist)Global
