- US - Dovish pivot complete; the Fed now has serious catching-up to do
- EUROZONE - Olympic boost to the EZ PMIs, and a big drop in Q2 wage growth
- UK- Higher output, lower inflation; MPC will still be wary of labour demand
- CHINA+ - China’s consumption struggles amid low confidence and policy challenges
- EM ASIA - BoT held, again, but is becoming anxious about domestic demand
- LATAM - COPOM’s cautious stance amid inflation risks and economic threats
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- We look for a 0.13% rise in the July core PCE deflator, implying downside risk to the 0.2% consensus.
- Real consumption probably rose by 0.3% in July, setting up a strong base for growth in Q3…
- …But we expect a slowdown ahead, due to weak income growth and rising the saving rate.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Destatis confirmed the decline in German GDP in Q2, despite still not publishing services data.
- Survey data for Q3 paint an ugly picture for the start of the second half of the year.
- We suspect surveys may be underestimating growth, but we will need to wait and see.
Melanie Debono (Senior Eurozone Economist)Eurozone
- GDP growth for Q2 was below the MPC’s projection, but we estimate it is trending above potential.
- CPI services inflation was below the market consensus in July, for only the second time this year.
- We think these data do not warrant another rate cut in September; the next will come in November.
Elliott Laidman Doak (Senior UK Economist)UK
- In one line: Relax; the trade balance is stabilising.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Ignore the headline, the underlying trend is very weak.
Oliver Allen (Senior US Economist)US
- Ignore the near-10% surge in headline durable goods orders in July; the details were weak…
- …Real core capital goods shipments fell by 0.5%, pointing to falling equipment investment in Q3.
- A hit to sentiment among Republicans probably weighed on overall consumer confidence in August.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Brazil’s COPOM is navigating inflation concerns and an economic slowdown, keeping a cautious stance.
- Inflation risks persist despite recent data, which will force the COPOM to hold rates in the near term.
- Softening economic activity, core inflation in check and the Fed’s easing will allow cuts in late Q4 or Q1.
Andrés Abadía (Chief LatAm Economist)Latin America
- Headline inflation in Singapore stayed at 2.4%, as services disinflation offset transportation inflation...
- ...But it is too early to celebrate, since the drop was due to external-facing travel services disinflation.
- Taiwanese retail sales started Q3 disappointingly, but rising wage growth is a promising signal.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- China's July retail sales bounce is misleading; it is simply a recovery from June's unexpected fall.
- Consumption has been beset by socioeconomic factors: jobs, income, policies, social norms.
- Demand-side policies will remain targeted; Western- style handouts to consumers are unlikely.
Kelvin Lam (Senior China+ Economist)China+
- Near- and longer-term consumer inflation expectations are stabilising above 2%...
- ...Firms’ selling price expectations are mixed, but analysts and forecasters see inflation reaching 2%.
- Inflation expectations support our call for further easing by the ECB in coming months.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The official ONS measure of house prices has risen above its 2022 peak and will likely keep gaining...
- ...as private-sector house price indices have returned to growth, and mortgage interest rates are falling.
- We expect mortgage approvals for house purchase to rise to 63K in July.
Elliott Laidman Doak (Senior UK Economist)UK
THE ECB WILL CUT INTEREST RATES TWICE MORE THIS YEAR
- SEPTEMBER AND OCTOBER LOOK MOST LIKELY TO US
Claus Vistesen (Chief Eurozone Economist)Eurozone
New home sales unlikely to keep rising.
Oliver Allen (Senior US Economist)US
- In one line: Slow start to Taiwanese retail spending growth in Q3.
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
In one line: Solid, but not enough to reverse the plunge in July.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Cooling of Singaporean services inflation prone to reversal
Moorthy Krshnan (Senior Asia Economist)Emerging Asia
- Chair Powell’s Jackson Hole speech foreshadows a rapid easing of policy in the coming months.
- Headline durable goods orders likely jumped in July, but the details will be far less impressive.
- New home sales reportedly surged last month, but are unlikely to keep on climbing.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Expect a small rise in H2 sales, but the weakening labor market will constrain activity.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
