In one line: New year relief, but still subdued.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- In one line: Under control, but core pressures are increasing.
Andrés Abadía (Chief LatAm Economist)Latin America
- The modest monthly ICPA-15 gain masks underlying inflation pressures in Brazil.
- External noise and fiscal uncertainty complicate Brazil’s inflation outlook and policy decisions.
- Mexico’s economy slowed in Q4, as policy uncertainty, high real rates and global risks persist.
Andrés Abadía (Chief LatAm Economist)Latin America
- India’s key services PMI has plunged to a 15-month low; the Q1 data so far point clearly to a GDP drop.
- We expect only a modest bounce in GDP growth in the Philippines in Q4, to 5.4%, from 5.2% in Q3.
- Thai exports stayed solid in Q4, but equally robust imports mute their lift, and downside risks prevail.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The ECB will cut its deposit rate by 25bp this week; discussions on the level of neutral will intensify.
- Upside risks to energy, downside risks to the core in the national CPI and HICP data this week.
- EZ PMIs firmed in January, supporting our call for stronger EZ GDP growth in the first quarter.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Both the PMI output growth and output price balances surprised to the upside in January.
- The MPC will cut rates in February, but inflation pressure means only three rate cuts in total this year.
- Payroll falls pose a downside risk to growth, but the ONS likely will revise up the December drop.
Rob Wood (Chief UK Economist)UK
- In one line: Jobs market is loosening gradually, but strong wage growth is a block to quick MPC rate cuts.
Rob Wood (Chief UK Economist)UK
In one line: Poor, but details better than the headline.
Claus Vistesen (Chief Eurozone Economist)Eurozone
A robust end to the year for Thai exports, despite flattening DM demand
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Japan's export growth rebounds m/m SA, thanks to improved shipments to the EU and US
Duncan WrigleyChina+
RISING UNEMPLOYMENT TO SPUR FURTHER FED EASING…
- …INFLATION WILL STILL FALL UNDER MOST TARIFF SCENARIOS
Samuel TombsUS
- In one line:Public sector borrowing exceeded the OBR’s latest forecasts in December.
Rob Wood (Chief UK Economist)UK
- Disinflation in Mexico is full on track, prompting Banxico to consider accelerated rate cuts ahead.
- Core inflation pressures linger beneath weak domestic demand and subdued commodity prices.
- Colombia’s economic recovery wavers amid political noise, violence and sluggish Q4 GDP performance.
Andrés Abadía (Chief LatAm Economist)Latin America
- Taiwan’s retail sales look like they are picking up, as growth rose to 2.9% year-over-year in December.
- This is not the whole story; paradoxically, inflation continues to bolster the headline figure.
- Three typhoons, stubborn inflation and high credit costs have led to sluggish increases in volumes.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Our baseline assumes a mild US tariff rate increase and therefore limited impact on EZ exports and GDP.
- If the US raises tariffs on all goods apart from EU goods, GDP could rise by twice as much this year.
- A big universal tariff increase instead could see a Eurozone recession and GDP falling by 1% or so.
Melanie Debono (Senior Eurozone Economist)Eurozone
- 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
