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China Outlook: The Struggle to Hit 5% Growth
Paying Article

March 20, 2024 11:00 AM UTC

China’s 5% growth target will likely be tough to meet with residential property investment likely to knock 1.0-1.5% off GDP and net exports a small negative. With sluggish private investment, this means some of the old engines of growth are not firing.  Some additional fiscal stimulus will likely

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BoJ Review: Zero
Paying Article

March 19, 2024 6:14 AM UTC

BoJ has moved interest rate to 0% and officially removed YCC. However, forward guidance suggest the BoJ is in no hurry to further tighten

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Japan Outlook: Beginning of A New Era?
Paying Article

March 25, 2024 4:54 AM UTC

Bottom Line:
Forecast changes: We revised 2024 GDP lower to +0.8% from +0.9% because private consumption is now expected to contract in Q1 2024. 2024 CPI is revised higher to +2.1% from +1.7% to address the stronger wage hike Japanese unions secured.

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Eurozone Outlook: ECB Finger on Easing Trigger?
Freemium Article

March 22, 2024 10:42 AM UTC

·        Our GDP outlook remains somewhat less below consensus and ECB thinking than envisaged three months ago, as other forecasters have reduced projections! Regardless, ECB policy has caused an increase in the cost of credit, alongside a fall in supply of credit. The result is that the ec

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Chartbook: Quarterly Forecasts FX/Rates/Equities For Q2 2024
Paying Article

March 26, 2024 9:23 AM UTC

Our latest quarterly Forecasts FX/Rates/Equities/Commodities for Q2 2024 are now available, see resources at the end.  

Continuum Economics Calendar April 2024
Paying Article

March 22, 2024 4:19 PM UTC

Data and Events Calendar April2024.

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ECB Preview (Apr 11): Still the Focus on Words Not Deeds – For Now!
Paying Article

April 4, 2024 12:22 PM UTC

As has been the case for several times now, the ECB meeting verdict due next Thursday (Apr 11) will be notable not for what the Council does but rather what is said just as at the March meeting whose minutes were released today.  A fifth successive stable policy decision is very much expected, albe

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U.S. February Core PCE prices provide some relief, Spending outpaces Income
Paying Article

March 29, 2024 1:07 PM UTC

February’s PCE price data comes as a relief, with a consensus 0.3% core rate up only 0.2615% before rounding, well below a core CPI that was rounded up to 0.4%, while the 0.3% headline (0.333% before rounding) is below consensus, after a strong CPI gain that was rounded down to 0.4%.

FX Daily Strategy: APAC, April 4th
Paying Article

April 3, 2024 3:22 PM UTC

Markets likely to market time ahead of US employment report…
…but underlying risk positive tone favours riskier currencies
CHF CPI to be a focus as CHF is increasingly the preferred funding currency
NOK has scope for further gains

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EZ HICP Preview (Apr 3): Core Disinflation Signs Start to Flatten Out?
Paying Article

March 27, 2024 1:25 PM UTC

Enough to have affected ECB thinking, there has been repeated positive EZ news in the form of plunging inflation. This continued in the February numbers, albeit with the 0.2 ppt drops in both headline and core being less that most anticipated. Regardless, the headline, at 2.6%, continued its recent

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DM FX Outlook: JPY weakness to reverse
Paying Article

March 25, 2024 12:21 PM UTC

·       Bottom Line: Q1 has seen a generally seen a rangebound USD against riskier currencies, but JPY weakness has resumed in spite of a BoJ rate hike and narrowing yield spreads. This reflects continued positive risk sentiment in developed market equities, but we still expect JPY strength t

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Outlook Overview: Europe in Focus, Then Elections Around the World
Paying Article

March 25, 2024 11:15 AM UTC

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Equities Outlook: Cyclical Recovery Versus Structural Headwinds
Paying Article

March 25, 2024 9:00 AM UTC

 ·        In the U.S., a tug of war between momentum and U.S. exceptionalism on the one side versus valuations and any deviations from the U.S. goldilocks scenario now means volatility and a risk of a correction.  We feel that the U.S. equity market recovery can push onto 5250 for the S&P5

LatAm Outlook: Getting Deeper in the Cutting Cycle
Paying Article

March 22, 2024 7:04 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh

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Asia/Pacific (ex-China/Japan) Outlook: Election Spending to Drive Growth
Paying Article

March 22, 2024 12:18 PM UTC

·       In 2024, growth trends across emerging Asia will exhibit a mixed pattern. Encouragingly, there will be a resurgence in demand for global electronics following a period of stagnation in 2022‑23, which will provide a boost to regional trade. Moreover, the initiation of monetary policy

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China: Unbalanced Growth
Paying Article

March 18, 2024 8:28 AM UTC

The February monthly data shows unbalanced growth.  Industrial production and public investment picked up, but retail sales slowed and residential property remains a negative drag on GDP.  While H1 GDP growth will be ok, it will likely slow in H2 and we still stick to a forecast of 4.4% for 2024 a

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ECB Review: ECB Hums Easing Tune for June
Paying Article

April 11, 2024 1:58 PM UTC

Surprising hardly anyone, the ECB is preparing to cut official rates, after what are now five successive stable policy decisions. It explicitly suggested that it could be appropriate to reduce the current level of monetary policy restriction, a policy hint backed up by dropping its previous rhetoric

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U.S. March CPI - Surprise not dramatic but picture is clearly too high
Paying Article

April 10, 2024 12:55 PM UTC

March CPI has shown a third straight disappointing month at 0.4% overall and ex food and energy, and this suggests that with the economy’s strength persisting, inflation has not yet been defeated, despite the encouraging data seen through the second half of 2023. Still, the market surprise was not

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Brazil: What About the Fiscal?
Paying Article

April 3, 2024 2:31 PM UTC

In 2023, Brazil witnessed a significant fiscal decline, with the GDP surplus of 0.5% in 2022 turning into a 2.1% deficit, surpassing the targeted 0.5% deficit set by the new fiscal rule. Despite measures aimed at reinstating fiscal sustainability, immediate adjustments are unlikely. The deterioratio

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EZ HICP Review: Core Disinflation Flattening Out?
Paying Article

April 3, 2024 9:34 AM UTC

Very much having affected ECB thinking, there has been repeated positive EZ news in the form of falling inflation and somewhat broadly so. This continued in the March HICP numbers, with the 0.2 ppt drops in both headline and core being a notch more sizeable than most anticipated. Regardless, the hea

FX Weekly Strategy: APAC, April 1st-5th
Paying Article

March 31, 2024 9:00 PM UTC

EUR/USD unlikely to break out of the range
USD/JPY upside looks very limited
CHF the preferred funding currency

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EMEA Outlook: Elections Set the Scene in Q2
Paying Article

March 25, 2024 2:00 PM UTC

·     Unlike South Africa and Russia, Turkiye continued with tightening monetary policy in Q1 due to stubborn inflation, pressure on FX and reserves. Meanwhile, Russia and South Africa halted their tightening cycles as of 2024 and will likely start cutting interest rates in Q3 depending on how

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U.S. Outlook: Fed to Ease as Economy Gradually Slows
Paying Article

March 22, 2024 10:00 AM UTC

•    The U.S. economy has continued to see growth surprising to the upside supported in particular by consumer spending. While the momentum of the second half of 2023 will be difficult to sustain the economy now looks poised for a soft landing, with risk that continued resilience in the econom

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Banxico Preview: Ready to Start Cutting
Paying Article

March 19, 2024 2:40 PM UTC

The Banxico board will meet on Mar. 21 to decide the policy rate after 12 months of unchanged rates at 11.25%. With inflation now at 4.4% and signs of economic deceleration, a cutting cycle is anticipated. Banxico's exclusion of forward guidance hints at potential cuts, despite possible dissent amon

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BoE Preview: Easing Bias to be Made Clearer?
Paying Article

March 14, 2024 10:23 AM UTC

It would be something of a shock if the BoE was to vote to do anything but keep policy on hold when the MPC gives its next verdict on Mar 21.  More likely than not there will be no further dissents in favor of a further hike, merely one again calling for a cut.  But despite recent CPI underlying f

U.S. Fed's Collins - Recent data reduce case for near term easing
Paying Article

April 11, 2024 4:47 PM UTC

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Eurozone Banks See Company Loan Demand Slump as ECB Unconventional Tightening Bites Further
Paying Article

April 9, 2024 9:22 AM UTC

While there may be few positive straws in the wind in the latest (April) 2024 bank lending survey (BLS), the ECB should fund the balance of results still troubling.  Company credit demand slumped afresh amid rising interest rates and deferred capex plans.  Admittedly, credit supply to firms tighte

Psychology for major markets Apr 2
Paying Article

April 2, 2024 10:22 AM UTC

USD firm after positive ISM manufacturing index.

FX Weekly Strategy: April 1st-5th
Paying Article

April 2, 2024 9:06 AM UTC

EUR/USD testing the range
USD/JPY upside looks very limited
CHF the preferred funding currency

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Asset Allocation: Pausing for Breath
Paying Article

April 2, 2024 9:00 AM UTC

Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to

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Outlook Forecasts to download in Excel
Paying Article

March 27, 2024 11:06 AM UTC

Below is an Excel file that contains our headline forecasts for GDP, Inflation, Monetary Policy, and Exchange Rates.

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EM FX Outlook: Domestic Drivers Key
Paying Article

March 26, 2024 9:01 AM UTC

   In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries.  Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)

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Western Europe Outlook: Easing Cycle Underway?
Paying Article

March 22, 2024 11:26 AM UTC

·        In the UK, downside economic risks may have dissipated but the tighter monetary stance has far from fully bitten. This accentuates and/or prolongs an already weak domestic backdrop into 2025 that will complement friendlier supply conditions in easing inflation. The BoE will likely e

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BoE Review: Easing Bias Continues
Paying Article

March 21, 2024 1:12 PM UTC

Although no shock that the BoE vote to keep policy on hold this month, there was some surprise that all hawkish dissents ended, with the one MPC member instead still again calling for a cut.  But despite recent CPI underlying falls, the majority continue to focus on assessing how ‘persistent’ a

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Commodities Outlook: A Promising Horizon
Paying Article

March 21, 2024 11:00 AM UTC

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Fed: 2024 Easing To Reduce Degree of Restriction
Paying Article

March 20, 2024 7:51 PM UTC

The March FOMC leaves the impression that the Fed still feels that they will reduce the scale of restrictive monetary policy and the upward revision to 2024 GDP and core PCE medians are not significant.  On balance, July is the most likely meeting, followed by two further cuts in Q4.  We see a fur

North American Summary and Highlights 15 Mar
Freemium Article

March 15, 2024 7:36 PM UTC

Overview - JPY weakness was the main story on Friday, on the crosses in Europe but against the USD in North America. 

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Russian Presidential Election: Putin Moves Towards His Fifth Term in Kremlin
Paying Article

March 15, 2024 10:29 AM UTC

Bottom line: We foresee two possible outcomes of Russian presidential election on March 15-17, either a Putin win (99%) or a second round on April 7 (1%), despite the latter has a very small chance to occur. We think Putin will secure his fifth term in Kremlin despite there are alleged concerns that

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How Durable are Better UK Housing Market Signs?
Paying Article

April 11, 2024 9:45 AM UTC

Amid some mixed remarks from one the MPC hawks, the BoE will be noting more positive housing market signs.  The latest RICS survey very much points to a clear pic-up in housing demand, something that chimes with the results in the just-published BoE Credit Conditions Survey (CCS), which also sugges

FX Daily Strategy: N America, April 11th
Paying Article

April 11, 2024 9:18 AM UTC

ECB likely to signal June rate cut on the cards
Widening yield spreads suggest EUR/USD can test the year’s low below 1.07
US PPI could impact post-CPI USD strength
Japanese authorities likely to hold off on intervention as long as USD/JPY gains represent USD strength rather than JPY weakness.

U.S. March NFIB survey weaker, but prices show a bounce
Paying Article

April 9, 2024 11:57 AM UTC

March’s NFIB small business optimism index of 88.5 from 89.4 is the weakest since December 2012 and a third straight decline but the survey’s inflationary signals are somewhat disappointing.

North American Summary and Highlights 5 Apr
Freemium Article

April 5, 2024 7:51 PM UTC

Overview - The USD rallied on a strong US employment report but erased most of its gains, though did end higher versus JPY and CAD, with weak Canadian employment data weighing on the CAD.  

U.S. Fed's Bowman - Not time to cut, won't rule out a further hike
Paying Article

April 5, 2024 4:50 PM UTC

Chart USD/ZAR Update: Consolidating test of 18.7500 - studies under pressure
Paying Article

April 3, 2024 11:00 AM UTC

The anticipated test of congestion support at 18.7500 is giving way to consolidation 

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Turkiye’s March Inflation Ticks Up to 68.5% Despite Continued Tightening
Paying Article

April 3, 2024 9:16 AM UTC

Bottom Line: Turkish Statistical Institute (TUIK) announced on April 3 that Turkish CPI surged to 68.5% annually and 3.2% monthly in March, and annual inflation swung to a 16-month high due to increases in food and education prices, coupled with the lingering impacts of the minimum wage hike on the

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March Outlook: Europe in Focus, Then Elections Around the World
Paying Article

April 3, 2024 9:00 AM UTC

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EZ: Labour Costs in Retreat Amid Hoarding and Workforce Jump
Paying Article

April 2, 2024 9:46 AM UTC

It is ever clearer how the labour market (and particularly labour costs) are the dominant theme for the ECB is assessing the policy backdrop and outlook.  While HICP inflation continues to subside amid an economy backdrop which is flat at best, the labor market still looks apparently unmoved, with

North American Summary and Highlights 28 Mar
Freemium Article

March 28, 2024 7:33 PM UTC

Overview - The USD saw some gains in Europe but corrected lower in North America, most notably against the CAD after strong Canadian GDP data. 

FX Weekly Strategy: April 1st-5th
Paying Article

March 28, 2024 3:51 PM UTC

EUR/USD unlikely to break out of the range
USD/JPY upside looks very limited
CHF the preferred funding currency

Psychology for major markets Mar 28
Paying Article

March 28, 2024 11:08 AM UTC

USD firm into Easter, JPY weakness stretched