Europe Economics Weekly ECB only partly rows back from hawkish shift Sifting through the numerous statements by ECB policymakers this week leaves us still thinking that the ECB is likely to “recalibrate” its plans in March and pave the way for an end to QE and a first... 11th February 2022 · 6 mins read
Europe Data Response German Inflation (January) The upside surprise to Germany’s headline inflation rate in January was mostly due to higher energy prices rather than rising underlying inflation. Nonetheless, core inflation of 2.9% is well above... 11th February 2022 · 2 mins read
India Economics Weekly Inflation already closing in on RBI’s ceiling A key takeaway from the RBI’s policy meeting this week was that the Bank remains relaxed about the inflation outlook, expecting the headline CPI rate to peak within the tolerance band (2-6%) this... 11th February 2022 · 5 mins read
Nordic & Swiss Data Response Switzerland CPI (Jan.) Inflation was stronger than expected in Switzerland in January, although the upward surprise was not in the same league as that seen in the euro-zone and Swiss inflation is still consistent with the... 11th February 2022 · 2 mins read
Long Run Economic Outlook Higher inflation to persist and real rates stay negative Recent developments have supported our view that the pandemic will not do much permanent damage to the level of GDP in most countries, especially developed markets. Nonetheless, it will accelerate... 10th February 2022 · 1 hr, 8 mins read
Capital Daily Treasuries may keep struggling even after inflation peaks The longer inflation in the US stays high, the more it is likely to affect investors’ expectations. That is another reason why long-term Treasury yields might not drop back quickly even if inflation... 10th February 2022 · 6 mins read
US Data Response Consumer Prices (Jan.) The 0.6% m/m rise in consumer prices in January was slightly stronger than we had expected and illustrates that, even as the earlier upward pressure from rising energy prices and goods shortages fades... 10th February 2022 · 3 mins read
UK Economics Household incomes taking a big hit We estimate that the leap in utility prices and hike in taxes on 1 st April will reduce real household disposable incomes over the next two years by a cumulative £80bn. The resulting 2.0% decline in... 10th February 2022 · 8 mins read
Middle East & North Africa Data Response Saudi Arabia GDP (Q4, Flash) & Egypt Inflation (Jan.) Saudi Arabia’s economy grew by a stronger-than-expected 1.6% q/q in the final quarter of 2021 and we think rising oil production will drive above-consensus growth this year. Elsewhere, Egypt’s... 10th February 2022 · 3 mins read
Nordic & Swiss Data Response Norway Consumer Prices (Jan.) Given the backdrop of a tightening labour market, the fall in CPI-ATE is likely to be a one-off. We think that once the latest wave dissipates, the core inflation rate will pick up again and may rise... 10th February 2022 · 2 mins read
India Economics Update Inflation will force the RBI’s hand The recent hawkish turn by many major central banks did not faze the RBI today, which continued to project a dovish tone while keeping policy settings unchanged. But inflation risks are building and... 10th February 2022 · 3 mins read
Capital Daily Is the worst now over for US equities? We do not expect the S&P 500 to surge again following the rebound from its slump in January. Even so, we think that it will make more headway and end 2022 above its current level. 9th February 2022 · 6 mins read
Emerging Europe Data Response Russia Activity Data (Dec.) & Consumer Prices (Jan.) The latest data show that Russia’s economy grew strongly in December and that consumer price inflation rose to 8.7% y/y in January. The inflation reading was weaker than expected, but inflation looks... 9th February 2022 · 2 mins read
Latin America Data Response Brazil & Mexico CPI (Jan.) The fall in Mexican inflation to 7.1% y/y suggests that the headline rate has peaked, but the central bank will remain concerned about rising core inflation. As such, we expect another 50bp rate hike... 9th February 2022 · 2 mins read
Emerging Europe Economics Update NBP maintains steady tightening as inflation risks build The National Bank of Poland (NBP) raised its policy rate by another 50bp, to 2.75%, at today’s meeting and, while there was little change in language in the statement, we think a backdrop of strong... 8th February 2022 · 2 mins read
Europe Chart Pack Shift in ECB stance poses risks to the bond market Both we and the market are now discounting 100bp of ECB rate hikes by the end of 2023. And given the sequencing set out by Christine Lagarde, it seems likely that net asset purchases will end in Q3... 8th February 2022 · 12 mins read
