Japan Chart Pack Flirting with zero Japan’s 10-year government bond yield has been flirting with zero since the start of the year. Not so long ago, it was climbing towards the 0.2% ceiling of the “tolerance band” managed by the Bank of... 14th January 2019 · 1 min read
India Data Response Consumer Prices (Dec.) The drop in headline consumer price inflation in December further diminishes the case for rate hikes in the near term. The RBI’s new governor seems keen to lower rates but, with core inflation still... 14th January 2019 · 1 min read
India Data Response Wholesale Prices (Dec.) Headline wholesale price inflation eased in December, further undermining the case for any further rate hikes in the near term. But the appointment of a dovish new governor of the RBI means we are... 14th January 2019 · 1 min read
US Economics Weekly How patient will the Fed be? With financial markets rebounding this week and the incoming domestic activity data relatively strong, we still expect the “patient” Fed to raise interest rates this year. But core PCE inflation looks... 11th January 2019 · 1 min read
US Data Response Consumer Prices (Dec.) The 0.1% m/m fall in headline consumer prices in December won’t concern the Fed as it can be explained by the plunge in gasoline prices. But the 0.2% m/m gain in core prices, which left the core CPI... 11th January 2019 · 1 min read
Latin America Data Response Brazil IPCA (Dec.) The fall in Brazilian inflation to a seven-month low of 3.7% y/y in December, coming alongside the continued strength of the real, means the central bank is likely to strike a more dovish line in the... 11th January 2019 · 1 min read
Middle East & North Africa Data Response Egypt CPI (Dec.) & Whole Economy PMIs (Dec.) The sharp fall in Egyptian inflation in December increases the chances that policymakers start to cut interest rates again at the next MPC meeting in February. If inflation falls a bit further this... 10th January 2019 · 1 min read
Nordic & Swiss Data Response Norway CPI (Dec.) & Sweden Production (Nov.) December’s stronger-than-expected inflation data for Norway suggest that the Norges Bank is almost certain to follow through with its plan to raise interest rates in March. But we think it will then... 10th January 2019 · 1 min read
China Data Response Consumer & Producer Prices (Dec.) Following the drop back in oil prices, consumer price inflation returned below 2% last month. Meanwhile, producer prices are now on the brink of returning to deflation territory. Slowing inflation is... 10th January 2019 · 1 min read
Europe Economics Update New (lower) forecasts for the euro-zone We are revising our forecasts for economic growth in the euro-zone and now expect GDP to increase by only 1% this year and a bit less in 2020. Core inflation is also likely to be around 1% this year... 9th January 2019 · 1 min read
Latin America Data Response Mexico Consumer Prices (Dec.) The rise in Mexican inflation, from 4.7% y/y in November to 4.8% y/y in December, means that another 25bp interest rate hike (to 8.50%) at next month’s meeting is still likely. However, this will... 9th January 2019 · 1 min read
India Economics Update Inflation Monitor (Dec.) The recent weakness of headline consumer price inflation, which we think dropped a little further in December, has undermined the case for any further rate hikes in the near term. But we are more... 9th January 2019 · 1 min read
Nordic & Swiss Data Response Swiss Consumer Prices (Dec. 18) & Riksbank Minutes The drop in headline inflation in Switzerland in December is a sign of things to come, as inflation is set to fall to just above zero in the coming months. Meanwhile, the minutes of the Riksbank’s... 9th January 2019 · 1 min read
Japan Economic Outlook Full employment not good enough for BoJ The sales tax hike is likely to trigger a fall in output in Japan later this year but, thanks to counter-measures from the government, the downturn will be much less sharp than after similar tax... 9th January 2019 · 1 min read
Japan Data Response Labour Cash Earnings (Nov.) The pick-up in wage growth in November has probably further to run as the unemployment rate declines ahead of the sales tax hike. But wages may not rise fast enough to meet the BoJ’s 2% inflation... 9th January 2019 · 1 min read
Latin America Data Response Brazil Ind. Prod. (Nov.) & Chile CPI (Dec.) The softer-than-expected Brazilian industrial production figure for November of 0.1% m/m underscores the weakness of the economy and supports our view that some of the optimism about growth prospects... 8th January 2019 · 1 min read
