In one line: Korea's 20-day exports hit hard by May’s fewer working days but underlying momentum was improving on a WDA basis.
Kelvin Lam (Senior China+ Economist)China+
- S&P's employment index has a poor long-term correlation with payrolls, but markets are paying attention now.
- Leading indicators leave us looking for an above-consensus 230K initial claims print today.
- "Various" FOMC members signalled willingness to hike in the minutes, but the data has moved on since then.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Malaysian export growth rose sharply in April, but this was mostly down to favourable base effects…
- …With this support likely to wane in coming months, all eyes are on the recovery in electronics exports.
- BI stood pat yesterday, after April’s shock hike; the economy has yet to feel the full force of this cycle.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Is the idea of a July rate cut sinking without a trace? Isabel Schnabel seems to think so.
- Today’s Q1 negotiated wage growth data are a wild card; one-offs in Germany are the main upside risk.
- We agree with Ms. Schnabel’s assessment that the natural rate has increased, at least temporarily.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect the MPC to cut Bank Rate in August, versus June previously, following strong April inflation.
- Services inflation barely slowed in April and was 0.4pp stronger than the MPC expected.
- The services strength was widespread and not concentrated in a handful of erratic items.
Rob Wood (Chief UK Economist)UK
In one line: Goods trade supported GDP last quarter
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: A solid Q1, but output will fall back in Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Lifted by a leap in the primary income surplus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- US - GDP growth is set to slow—but not collapse—squeezing down inflation
- EUROZONE - Sticky services inflation still the key threat to the outlook for rates
- UK - Sticking to June rate cut, as MPC words lately matter more than data
- CHINA+ - China’s activity data mixed, ahead of incoming support policies
- EM ASIA - Why you shouldn’t hang your hat on Thailand’s Q1 GDP surprise
- LATAM - Brazil’s activity index rebounds in Q1, but risks looming for H2
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- We see existing home sales unchanged last month, but the outlook for the rest of Q2 is dim.
- The May rise in Manheim used car prices looks like a blip; sluggish sales will lead to a further margin squeeze.
- Fed minutes unlikely to change market perceptions about easing timing.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Mixed signals in Colombia’s Q1 GDP, as strong consumption clashes with weak investment.
- Policy uncertainty under President Petro is stifling the investment recovery; the outlook remains bleak.
- The more than 30% collapse in capex since Petro took office highlights the hit, amid high interest rates.
Andrés Abadía (Chief LatAm Economist)Latin America
- Korean 20-day exports slowed sharply in May because of working-day effects.
- The underlying trend is actually improving after adjustment. Chip shipments remain the major driver.
- We expect no change at the upcoming BoK meeting but have pushed back our first rate cut to Q4.
Kelvin Lam (Senior China+ Economist)China+
- The EZ goods trade surplus widened in March, and net trade in goods likely boosted GDP in Q1.
- Advance data from China as well as surveys suggest this boost is disappearing in Q2...
- ...And we think rising imports means net trade is set to weigh on growth for the rest of the year.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Polls suggest the Labour Party will win the general election that must be held by January 2025.
- The party plans supply-side boosting initiatives, from freeing planning rules to ‘crowding in’ investment.
- Those policies pose modest upside risk to current UK potential growth of around 1.5% per year.
Rob Wood (Chief UK Economist)UK
PAYROLL GROWTH IS SET TO SLOW SHARPLY…
- …THE FED WILL RESPOND, BUT WHEN?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Our Homebase model points to an initial estimate of a subpar 150K rise in private payrolls in May.
- The Redbook measure of year-over-year growth in retail sales has been remarkably strong lately...
- ...But it has often overstated the trend in the official retail sales data in the recent past; we think it is again.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Chile’s economy gained traction in Q1, thanks mainly to improving domestic demand.
- Falling inflation and lower interest rates are gradually supporting the upturn, but downside risks remain.
- The recovery will likely lose speed but won’t collapse; further monetary policy normalisation will help.
Andrés Abadía (Chief LatAm Economist)Latin America
- GDP growth in Thailand smashed expectations in Q1, as it fell trivially to 1.5% from 1.7% in Q4…
- …But the consumption-and inventories-led quarterly bounce is dubious and unsustainable.
- Merchandise trade and investment went from bad to worse, though the latter should revive from Q2.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Policymakers on Friday announced a raft of property support measures aimed at tackling oversupply...
- ...But the funding allocated to buy up unsold housing inventory is just the start, and more will be needed.
- In April, second-hand housing prices plunged at their steepest rate since September 2014.
Duncan WrigleyChina+
- Were it not for the superbonus, Italian investment likely would be falling off a cliff...
- ...Interest rates faced by firms are among the high- est, credit standards tight and loan demand sinking.
- The lagged hit from rising interest rates on Eurozone investment will fade later this year, but only slowly.
Melanie Debono (Senior Eurozone Economist)Eurozone