- 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
- 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
