Deceleration Continues: Turkiye's GDP Growth Hits 2.1% YoY in Q3

November 29, 2024 3:12 PM UTC

Bottom Line: Turkish Statistical Institute (TUIK) announced on November 29 that Turkish economy expanded by 2.1% YoY in Q3 driven by higher contribution from net exports. As we expected, the pace of the GDP growth decelerated in Q3, when compared to Q1 and Q2, as demand ebbed - especially in the se

Ukraine War Update: What is Next in Ukraine under New Trump Administration?

November 26, 2024 1:14 PM UTC

Bottom Line: After Trump was elected for his second term, we foresee two major and one alternative scenario in Ukraine. Our first scenario is based on a negotiated settlement backed by the Trump administration, which could help Russia to gain assurance of no NATO/EU entry in the foreseeable future f

SARB MPC Review: Fall in Inflation Sparked Easing Cycle to Continue on November 21

November 21, 2024 3:58 PM UTC

Bottom line: South African Reserve Bank (SARB) cut the key rate by 25 bps to 7.75% at its final meeting of the year on November 21 given power cuts (loadshedding) are suspended, inflation expectations decelerated, and CPI softened further to 2.8% YoY in October due to falling fuel prices and slowing

No Surprises: CBRT Held Key Rate Stable at 50% on November 21

November 21, 2024 11:48 AM UTC

Bottom Line: Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% for the eighth consecutive month on November 21. In its press release, CBRT highlighted that tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation

SARB MPC Preview: Easing Cycle to Continue on November 21

November 15, 2024 4:04 PM UTC

Bottom line: After South African Reserve Bank (SARB) cut the key rate to 8.0% on September 19 following seven consecutive meetings at a 15-year peak of 8.25% given that September inflation hit below the midpoint of target band of 3% - 6%, power cuts (loadshedding) are suspended and inflation expecta

Elevated Inflation in Russia Remains Persistent and Sticky in October

November 13, 2024 5:21 PM UTC

Bottom Line: According to Russian Federal Statistics Service (Rosstat) data released on November 13, inflation slightly cooled off to 8.5% YoY in October after hitting 8.6% in September but remained well above the Central Bank of Russia’s (CBR) midterm target of 4%, due to surges in services and

CBR’s October MPC Summary Signals Another Rate Hike in December

November 7, 2024 7:22 PM UTC

Bottom Line: Central Bank of Russia (CBR) published the summary of October MPC meeting on November 6, and signaled another rate hike in December by noting that “While a rate hike at the next meeting is not predetermined, the probability is very high,” which can be associated with elevated inflat

BoE Review: Gradualism Still the Order of the Day

November 7, 2024 1:43 PM UTC

In what was something of a more hawkish assessment and outlook, the BoE nevertheless delivered the expected further 25 bp Bank Rate cut to 4.75% with only one (expected dissent against.  But after what had been hints of a possibly more policy activism from Governor Bailey last month, the MPC instea

Norges Bank Review: A Tweak in Policy Guidance

November 7, 2024 9:29 AM UTC

Aided by more downside inflation surprises and the accelerated pace of central bank easing nearby, speculation that the Norges Bank would ease by year –end had grown, but have now largely dissipated.  However, after the widely expected stable policy decision today, the possibility that a cut may

Sweden Riksbank Review: Faster, But Not (Yet) Any Further?

November 7, 2024 8:50 AM UTC

A fourth successive rate cut was widely seen at this Riksbank meeting, but rather than the 25 bp moves seen hitherto, there was the 50 bp move (to 2.75%) that was hinted at as part of the two further cuts advertised at the last (September) meeting.  What seems clear is that inflation worries have s

Marginal Fall in October: Turkiye’s CPI Cooled off to 48.1% YoY

November 4, 2024 3:30 PM UTC

Bottom line: After CPI plummeted to 49.4% y/y in September backed by the lagged impacts of the tightening cycle, relative slowdown in credit growth, and tighter fiscal stance, inflation hit 48.6% in October as food, education and rental pricing pressures continued to build while the deceleration p

BoE Preview (Nov 7): Activism vs Gradualism Debate Ferments MPC Divisions?

November 4, 2024 12:07 PM UTC

As with several recent BoE verdicts, the Nov 7 policy decision will be more important for what is said, than done, especially as it seems that even a further projected undershoot of the inflation target may not placate the MPC hawks!  A 25 bp cut to 4,7% seems highly likely but the question is whet

Russian Economy Grew by 2.9% YoY in September

October 31, 2024 10:51 AM UTC

Bottom Line: According to the preliminary figures announced by the Ministry of Economic Development, Russia's GDP expanded by 2.9% YoY in September driven by military spending and investments. Ministry of Economic Development significantly upgraded its GDP growth outlook to 3.9% from 2.8% for 2024

Medium Term Budget Policy Statement Foresees Wider Budget Deficit but a Better Growth Prospect

October 30, 2024 5:21 PM UTC

Bottom line: The coalition government announced its first Medium-Term Budget Policy Statement (MTBPS) on October 30, setting government policy goals and forecasts over the next three years. According to MTBPS, South African Treasury sees consolidated deficit at 5% of GDP in the fiscal year ending in

Sweden Riksbank Preview (Nov 7): Rate Cuts Driven Increasingly by Weak Economy

October 29, 2024 10:09 AM UTC

A fourth successive 25 bp rate cut (to 3.0%) is widely seen at the looming Riksbank meeting (Nov 7), with the risk that it may even be the 50 bp move that was hinted at as part of the two further cuts advertised at the last (September) meeting.  What seems clear is that inflation worries have subsi

Norges Bank Preview (Nov 7): Options A Little More Open?

October 28, 2024 1:14 PM UTC

Aided by more downside inflation surprises and the accelerated pace of central bank easing nearby, speculation that the Norges Bank would ease by year –end had grown, but now largely dissipated.  The Bank has two policy meeting left this year – Nov 7 and Dec 19- but has offered no encouragement

BRICS Summit 2024: Kazan Declaration not a Game Changer

October 28, 2024 11:41 AM UTC

Bottom Line: The BRICS Summit, which was held in Kazan on October 22-24, was the first summit following BRICS has expanded to include Ethiopia, Iran, Egypt and the United Arab Emirates. Despite expectations, Kazan deceleration, which was a joint statement signed after the summit, is not a game-chan

CBR Hiked Key Rate to Historic 21% Level

October 25, 2024 12:31 PM UTC

Bottom Line: Central Bank of Russia (CBR) announced on October 25 that it increased its policy rate by 200 bps to 21% to tame the stubborn price pressures stemming from high military spending, tight labour market and fiscal policy igniting domestic demand. CBR said in a press release that “Over th

Deceleration Trend Continues: South Africa’s Inflation Cooled to 3.8% YoY in September

October 23, 2024 2:29 PM UTC

Bottom Line: After inflation decreased to 4.4% YoY in August, the downward trend continued in September and CPI hit 3.8% YoY given suspended power cuts (loadshedding), a relatively stable Rand (ZAR), decrease in inflation expectations in Q3 coupled with Fed started cutting rates. Taking into account

South Africa: Medium Term Budget Policy Statement to be Announced on October 30

October 18, 2024 4:50 PM UTC

Bottom line: The coalition government will announce its first Medium-Term Budget Policy Statement (MTBPS) in Parliament on October 30, which is anticipated to set government policy goals and priorities and forecast macroeconomic trajectory and the fiscal framework over the next three years, includin

CBRT Continued to Hold Key Rate Stable at 50% for Seventh Consecutive Meeting

October 17, 2024 4:27 PM UTC

Bottom Line: Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% for the seventh consecutive month on October 17. CBRT’s press release remained almost unchanged, as the regulator highlighted that tight monetary stance will be maintained until a significant and sustained decline in th

Turkiye Unveils New Medium Term Program Towards 2024-2027

October 15, 2024 6:30 PM UTC

Bottom Line: Turkiye announced the Medium-Term Program (MTP) for 2024-2027 on September 5. According to the announcement, the main goal of the program aims to bring inflation down to single digits, and ensure price stability. GDP growth aimed to accelerate to 4% next year, 4.5% in 2026 and 5% in 202

Russia CPI Review: Moderate Fall in Inflation in September but Still Elevated

October 11, 2024 6:48 PM UTC

Bottom Line: According to Russian Federal Statistics Service data released on October 11, inflation cooled off to 8.6% YoY in September after hitting 9.1% both in August and July, but remained elevated due to surges in food and services prices, weakening Ruble (RUB), and huge military spending. The

SARB in 2025: Rate Cuts Will Continue

October 8, 2024 5:25 PM UTC

Bottom line: After South African Reserve Bank (SARB) started cutting the key rate on September 19 and decreased it from 8.25% to 8.0% given fall in inflation below midpoint of target band of 3% - 6%, suspended power cuts (loadshedding) and deceleration in inflation expectation, we now foresee the ra

Ukraine War Update: Kursk Battle is Turning into a Stalemate

October 4, 2024 7:05 PM UTC

Bottom Line: After Ukraine’s offensive inside Russia's western Kursk region started early August, it seems the Russian military command is continuing to prioritize offensive operations in priority sectors of the frontline over long-term planning for Russia's theater-wide campaign in Ukraine as Rus

BOE: Gradual to Activist?

October 4, 2024 8:53 AM UTC

The contrast between BOE Bailey and Pill comments suggest a debate is occurring in the BOE over more easing than a simple quarterly pace of 25bps cuts.  This is not just about data, but some members could be putting more weight on forward looking forecasts than current inflation trends.  The Decem

Turkiye Inflation Review: CPI Decelerated to 49.4% YoY in September Indicating a Positive Real Interest Rate

October 3, 2024 9:32 AM UTC

Bottom line: As we envisaged, CPI cooled off to 49.4% y/y in September from 51.9% in August backed by the lagged impacts of the tightening cycle, relative slowdown in credit growth, and tighter fiscal stance but the deceleration pace was less-than expected. We continue to think the falling trend wi

Markets: Rate Cuts or Geopolitics?

October 2, 2024 9:36 AM UTC

Israel will likely counteract Iran, which will prompt a further missile attack by Iran.  However, our bias remains that Israel main aim is to have a buffer zone in southern Lebanon up to the Latani river and not fight a prolonged war with Iran.  This limits the economic fallout globally and on oil

Turkiye Inflation Preview: CPI will Continue to Decelerate in September

September 30, 2024 11:40 AM UTC

Bottom line: After easing to 51.9% y/y in August from 61.8% y/y in July due to favorable base effects, the lagged impacts of the tightening cycle, relative slowdown in credit growth, and tighter fiscal stance, we expect the falling trend will continue in September supported by moderate slowdown in

September Outlook: Rate Cuts But How Far?

September 27, 2024 7:44 AM UTC

The 15 chapters of our September Outlook have now been published.  See the headlines and weblinks enclosed for links to the articles on economic, policy and markets for the 23 countries that we cover.

SNB Review: More Cuts on the Way

September 26, 2024 8:24 AM UTC

Very much as expected, the SNB today repeated the 25 bp policy rate cut that it had made twice since March.  This took the policy rate to 1.0% and reflected an even clearer below-target inflation picture in both recent actual numbers and the updated outlook (Figure 1).  This flagged further easing

Sweden Riksbank Review: Rate Cuts – Faster and a Little Further?

September 25, 2024 8:15 AM UTC

A third successive 25 bp rate cut (to 3.25%) surprised no-one at this month’s Riksbank meeting.  More notably, updated forecasts more formally validated both the likelihood and the rationale for the two added cuts by end-year that the Board hinted at after the August easing and which largely are

Outlook Overview: Rate Cuts But How Far?

September 25, 2024 7:30 AM UTC

·        The U.S. economy is slowing, with the critical question being whether this is a soft or harder landing.  Our broad analysis leaves us inclined to the soft landing view into 2025, though we shall watch real sector data closely over the next 3-6 months to check the trajectory.  Else

EMEA Outlook: Rate Cuts Loading in 2025

September 25, 2024 7:00 AM UTC

·     In Turkiye, we still foresee upside risks emanating from buoyant domestic demand, the stickiness of services inflation, and adverse geopolitical impacts leading average inflation to stand at 58.8% and 35.3% in 2024 and 2025, respectively. We think Central Bank of Republic of Turkiye (CBRT

DM Rates Outlook: Rate Cuts Arrive Except Japan

September 24, 2024 9:00 AM UTC

•    For U.S. Treasuries, we see 2yr yields coming down further on our baseline soft landing view, as the Fed moves consistently to a 3.00-3.25% Fed Funds rate. However, with considerable Fed easing already discounted, 2yr yield decline should be modest and 2yr yields should bottom mid-2025. 1

Equities Outlook: Choppy U.S. and Outperformance Elsewhere

September 24, 2024 8:30 AM UTC

 •     We now forecast 5450 for the S&P500 for end 2024, but could see a move to 5200/5000 in the next 3-6 months as volatile data keeps the soft v hard landing debate alive.  On our baseline of a U.S. soft landing, we would see the S&P500 at 5600 by end 2025. The tech sector is still really i

Commodities Outlook: Fragile Foundations

September 23, 2024 9:30 AM UTC

Oil prices in the short to medium term will be shaped by demand in China and the U.S. In particular, we expect weak data in China to continue weighting on oil prices in Q4 2024, with limited upside risks from supply-side developments. In 2025, demand growth will likely remain slow in the first half,

Time Has Come: SARB Cut the Key Rate to 8.0% on September 19

September 19, 2024 3:57 PM UTC

Bottom line: As we expected, South African Reserve Bank (SARB) started cutting the key rate at the upcoming MPC meeting on September 19 and decreased it from 8.25% to 8.0% given recent fall in inflation, suspended power cuts (loadshedding) after March, deceleration in inflation expectations and a re

SNB Preview (Sep 26): Another Cut All But Certain But How Large an Inflation Target Undershoot

September 19, 2024 1:54 PM UTC

Along with market thinking, we see the SNB next Thursday repeating the 25 bp policy rate cut that it has now made twice since March.  This would take the policy rate to 1.0% and where the very clear below-target inflation picture in both recent actual numbers and the outlook flagged by the SNB in J

No Surprises as CBRT Continued to Hold Key Rate Stable at 50% on September 19

September 19, 2024 1:11 PM UTC

Bottom Line: As predictions were centred around no change, Central Bank of Turkiye (CBRT) kept the policy rate stable at 50% for the sixth consecutive month on September 19. CBRT reiterated in a statement that tight monetary stance will be maintained until a significant and sustained decline in the

BoE Review: Explicit Gradualism

September 19, 2024 12:05 PM UTC

The expected unchanged MPC decision came with what some may regard was a lack of any major dissent beyond that from arch-dove, Swati Dhingra.  But that 8:1 vote is very much a reaction to the closeness of the MPC vote last month to cut Bank Rate by 25 bp to 5.0%.  It is also preference from the MP

Norges Bank Review: Heads Still in the Sand?

September 19, 2024 8:57 AM UTC

As with the five previous policy meetings, the Norges Bank kept its policy rate at 4.5% and equally unsurprising moderated its previous hawkish rhetoric - slightly. While it still fought against market expectations by suggesting policy will remain on hold until year end it did drop its recent stress

South Africa’s Inflation Dips Below Midpoint Target with 4.4% YoY in August

September 18, 2024 9:01 AM UTC

Bottom Line: After inflation decreased to 4.6% YoY in July due to slowdown in costs for food, fuel, housing and transportation, the downward trend continued in August and CPI hit 4.4% YoY given suspended power cuts (loadshedding), a relatively stable Rand (ZAR), decrease in inflation expectations co

UK CPI Review: Inflation Stable and Services Resilience Still Evident?

September 18, 2024 6:31 AM UTC

The July CPI was notable for the clear and larger-than-expected fall in services inflation, one driven by a fall in restaurant/hotel inflation, this often seen as a bellwether indicator of price persistence.  The August data showed mixed signs on such a basis.  Indeed, services inflation rose back

Sweden Riksbank Preview (Sep 25): Rate Cuts – Faster and Further?

September 17, 2024 8:45 AM UTC

A third successive 25 bp rate looms at this month’s Riksbank meeting verdict (Sep 25) to 3.25%.  More notably, updated forecasts are likely to more formally validate the rationale for the two added cuts by end-year that the Board hinted at after the August easing and which now seem all but certai

September 27 Outlook Webinar: Rate Cuts But How Far?

September 15, 2024 11:17 AM UTC

    Uncertainty about whether the U.S. economy will have a soft or hard landing is growing as the market approaches Q4.  This is shaping the debate regarding the scale of easing through the remainder of 2024 and 2025 by the Fed.  European easing is underway, but how much further will central ba

Sep 27 Outlook Webinar: Rate Cuts But How Far?

September 15, 2024 10:30 AM UTC

    Uncertainty about whether the U.S. economy will have a soft or hard landing is growing as the market approaches Q4.  This is shaping the debate regarding the scale of easing through the remainder of 2024 and 2025 by the Fed.  European easing is underway, but how much further will central ba

As we Expected, CBR Hiked Key Rate to 19% as Inflation Continues to Soar

September 13, 2024 4:20 PM UTC

Bottom Line: As we predicted, Central Bank of Russia (CBR) announced on September 13 that it increased its policy rate by 100 bps to 19% to tame the stubborn price pressures stemming from high military spending, tight labour market and fiscal policy igniting domestic demand. CBR said in a press rele