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July 12, 2024

U.S. July Michigan CSI - Lower, as are inflation expectations
Freemium Article

July 12, 2024 2:20 PM UTC

July’s preliminary Michigan CSI showed a modest fall to 66.0 from 68.2, the lowest monthly reading since November 2023 though above the preliminary June reading of 65.6. Inflation expectations also fell, to 2.9% from 3.0% on both a 1-year and 5-10 year view.

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ECB Preview (Jul 18): Policy to Pause Amid Mixed Data
Freemium Article

July 12, 2024 9:36 AM UTC

ECB thinking comes backs onto the radar screen next Thursday.  Given the hints from Council members, all policy rates will be held this time around. But markets will be more focused on hints on the speed and timing of further moves, not least after what was one formal dissent last time, and amid wi

July 11, 2024

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India CPI Preview: Weather Disruptions to Propel Headline Inflation
Paying Article

July 11, 2024 7:49 AM UTC

Bottom line: India’s June inflation level is expected to trend up to 4.9% y/y, rising from 4.7% y/y in May, reflecting higher food prices. The persisting heatwaves and the advance of the monsoon and its impact on produce will weigh on food prices in the near term, which could potentially see price

July 10, 2024

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Russia’s Inflation Continued Its Rally in June: 8.6% YoY
Freemium Article

July 10, 2024 6:51 PM UTC

Bottom Line: According to Russian Federal Statistics Service data released on July 10, inflation jumped to 8.6% YoY in June after hitting 8.3% YoY in May, the highest reading since February 2023, due to strong military spending, tight labour market, and fiscal policy igniting domestic demand. The ne

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Nigeria and South Africa: Country Risk Ratings
Paying Article

July 10, 2024 1:42 PM UTC

We provide extra country risk reviews for Sub Sahara Africa countries including Nigeria and South Africa.    

July 09, 2024

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Mexico CPI Review: 0.38% Inflation in June
Paying Article

July 9, 2024 7:46 PM UTC

INEGI reports Mexico's CPI rose 0.38% in June, above expectations. Year-over-year CPI increased to 5.0%, with core CPI at 4.1% and non-core CPI at 7.7%. Non-agricultural goods drove the rise, raising concerns about inflation due to climate-related agricultural shocks. Food and beverages saw the high

July 08, 2024

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France Gets PPP - Protracted Policy Paralysis?
Freemium Article

July 8, 2024 6:46 AM UTC

French politics is getting used to surprises.  After the unexpected snap election that saw the far right poll the most in the first round of parliamentary results last week, Sunday’s second round surprisingly saw President Macron's centrist forces perform more strongly than expected by coming in

July 04, 2024

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ECB: Council Policy Reservations Deeper Than Expected?
Freemium Article

July 4, 2024 12:23 PM UTC

The account of the June ECB Council meeting confirmed one dissent against the widely flagged 25 bp rate cut but also revealed perhaps clearer reservation among some other members about easing at that juncture.  Indeed, there seemed to be disagreement about interpreting data; what is the basis for a

July 03, 2024

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EZ: Is the Labor Market Starting to Labor?
Freemium Article

July 3, 2024 10:51 AM UTC

With markets and policy makers very much focused on inflation, the EZ labor market continues to shine – apparently! Indeed, the EZ jobless rate has remains at a record-low of 6.4%, hinting at labor market tightness that will perturb ECB hawks wary of higher ensuing wage pressures.  But this appar

July 02, 2024

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Softening inflation will provide BI room to hold rate
Freemium Article

July 2, 2024 1:36 PM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25%. The move comes at a time when the weakness in the Indonesia Rupiah has increased in recent weeks. A rate cut is therefore not on the horizon. 

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EZ HICP Review (Jul 2): Disinflation Resumes Amid Services Resilience – July Cut Off Table?
Freemium Article

July 2, 2024 9:33 AM UTC

The clear disinflation trend was still evident even after higher and higher-than-expected May numbers, where the headline moved up from 2.4% to a three-month high of 2.6%.  That trend looks more discernible after the partial drop back to 2.5% seen in the June flash HICP, albeit with some far from r

July 01, 2024

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German Data Review (Jul 1): Inflation Moves Back Down
Freemium Article

July 1, 2024 12:28 PM UTC

Base effects have caused the German disinflation process not to be smooth and this was even more clearly the case in the May numbers where a second successive and slightly larger rise in the headline HICP rate occurred rising 0.4 ppt to 2.8%, albeit a rise half that size seen in the accompanying CPI

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France: Heading for Policy Paralysis?
Freemium Article

July 1, 2024 6:45 AM UTC

After the largely expected first round of parliamentary results, in which the far right won the most votes, equally expected has been the fact that both the centrist and left parties have already called for tactical voting to stop the right winning an actual majority in run-offs on Jul 7.  It is st

June 28, 2024

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Eurozone: Monetary Messages Gaining More Prominence?
Paying Article

June 28, 2024 11:11 AM UTC

Amid speculation about the size and durability of any EZ real economy recovery, one important thing is still lacking.  Indeed, monetary data remain weak; while money supply growth measures have turned positive what we think are the more important aspects, namely credit data remain feeble.  Data th

June 27, 2024

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Sweden Riksbank Review: Slightly Less Gradual
Paying Article

June 27, 2024 9:29 AM UTC

The Riksbank is more confident in the current disinflation process.  While none expected any further cuts at this policy verdict today, especially after the 25 bp rate cut it made last month, the Board updated Monetary Policy Report suggested there may an additional such cut in H2 over and beyond t

June 26, 2024

Continuum Economics Calendar July 2024
Paying Article

June 26, 2024 10:52 AM UTC

Data and Events Calendar July 2024.

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EZ HICP Preview (Jul 2): Broad Disinflation Resumes? – A Round-Up of Recent Trends
Paying Article

June 26, 2024 10:29 AM UTC

The clear disinflation thrust of recent data (Figure 1) has obviously affected most ECB thinking.  Notably, the downward trend is still evident even after higher and higher-than-expected May numbers, where the headline moved up from 2.4% to a three-month high of 2.6%.  More notable perhaps was tha

June 24, 2024

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German Data Preview (Jul 1): Inflation Moves Back Down And Broadly So?
Paying Article

June 24, 2024 10:57 AM UTC

As we have repeatedly underlined, base effects continue to distort the German HICP/CPI readings and the path down for inflation has not been smooth.  This was even more clearly the case in the May numbers where a second successive and slightly larger rise in the headline HICP rate occurred rising 0

June 19, 2024

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Sweden Riksbank Preview (Jun 27): Doing It Gradually
Paying Article

June 19, 2024 3:24 PM UTC

As much as the 25 bp rate cut it made last month was the clear hint of two further such cuts in H2 this year, this chiming with its policy outlook in the March (Figure 1) Monetary Policy Report (MPR) as well as our own long-standing view.  By moving at that early juncture, the Board was both reacti

June 18, 2024

U.S. May Industrial Production - Improvement above trend may be difficult to sustain
Paying Article

June 18, 2024 1:37 PM UTC

May industrial production has seen a surprisingly strong rise of 0.9%, both overall and in manufacturing, the latter more than reversing a 0.4% decline in April. This is stronger than a previously near flat trend, though that may prove difficult to sustain.

June 14, 2024

U.S. June Michigan CSI - Lower on current conditions
Paying Article

June 14, 2024 2:11 PM UTC

June’s preliminary Michigan CSI showed an unexpected fall to 65.6 from 69.1, to its lowest since November. Significantly the fall was led by current conditions, a sign that the economy may be slowing, as also suggested by yesterday’s sharp rise in initial claims.

BoJ Review: Pushing Hikes to July, if any
Paying Article

June 14, 2024 5:24 AM UTC

BoJ keep rates and bond purchase the same, suggesting the planning for bond purchase cut will be decided in July

June 11, 2024

BoJ Preview: The Step of Faith
Paying Article

June 11, 2024 3:33 AM UTC

BoJ will likely decrease bond purchase from six trillion JPY to five trillion and hike interest rate by 0.1% as wage growth will bring trend inflation higher

June 10, 2024

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European Parliament Election Results: A Swing to the Centre Right But Further Right in France
Paying Article

June 10, 2024 8:52 AM UTC

This week-end’s European Parliament elections produced the widely expected swing to the right, albeit more an electoral rebuff for incumbent ruling parties as voters registered their protests against current governments.   Hard-right parties largely did well but there were clear exceptions (Belg

June 07, 2024

Mexico CPI Review: Some Pressure in Services
Paying Article

June 7, 2024 5:10 PM UTC

INEGI reported a 0.2% CPI decrease in May, with annual CPI stable at 4.7%. Electricity prices dropped, contributing to the decline. Core CPI rose 0.2%, while Non-Core fell 1.3%. Persistent Services CPI and food price shocks may sustain inflation. Peso volatility could also pressure inflation, likely

June 06, 2024

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ECB Review: Clearly No Policy Pre-Commitment But Policy Entering New Phase
Paying Article

June 6, 2024 2:11 PM UTC

As has been the case with many recent ECB verdicts, markets are keener to hear what is being said by the Council rather than what has been done.  In regard to the latter, and given the almost unanimous hints from Council members, all policy rates were cut by the expected 25 bp, with the key deposit

June 04, 2024

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European Parliament Election: A Swing to the Right?
Paying Article

June 4, 2024 9:09 AM UTC

This week-end (Jun 6-9 actually) sees fresh European Parliament elections, with it likely that that compared to the last (2019) result, there will be a clear swing to right-wing and/or populist parties.  However, polls do not suggest anything like enough of swing away from the current parliamentary

May 31, 2024

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EZ HICP Review: Core Disinflation Unwinds as Services Resilience Persists?
Paying Article

May 31, 2024 9:42 AM UTC

Very much having affected ECB thinking, there has been repeated positive EZ news in the form of falling EZ HICP inflation and somewhat broadly so. This abated last month and even more so in these May numbers, with the headline moving up from the unchanged 2.4% reading to a three-month high of 2.6%,

May 30, 2024

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ECB Preview (June 6): D-Day
Paying Article

May 30, 2024 10:44 AM UTC

Given the almost unanimous hints from Council members, something unexpected is needed to prevent the ECB from starting to cut its policy rates on June 6, most notably the key deposit rate currently at an unprecedented 4.0%. The question markets are considering is how/when this widely expected 25 bp

May 28, 2024

Continuum Economics Calendar June 2024
Paying Article

May 28, 2024 11:13 AM UTC

Data and Events Calendar June 2024.

May 24, 2024

U.S. May Final Michigan CSI - Less weak than the preliminary, with less of a bounce in inflation expectations
Paying Article

May 24, 2024 2:21 PM UTC

May’s preliminary Michigan CSI showed a substantial fall in confidence and a significant rise in inflation expectations. The final data shows a slightly smaller fall in confidence and less evidence of rising inflation expectations.

May 23, 2024

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Eurozone: PMIs Offer More Positive Gimmers – Still Too Good to be True?
Paying Article

May 23, 2024 9:19 AM UTC

The latest PMI data suggest the EZ economic recovery gained further momentum in May as the composite index rose to 52.3 in May from 51.7 in April, thereby implying positive private sector growth for the third consecutive month.  We remain wary about the messages from the data (see below and Figure

May 22, 2024

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EZ HICP Preview (May 31): Core Disinflation Continues?
Paying Article

May 22, 2024 11:10 AM UTC

Very much having affected ECB thinking, there has been repeated positive EZ news in the form of falling EZ HICP inflation and somewhat broadly so. This abated in April, with the headline staying at 2.4% but with the core down a further 0.2 ppt to a 27-mth low of 2.7%, as higher fuel prices were offs

May 21, 2024

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German Data Preview (May 29): Inflation to Rise Again Albeit Amid Soft Core Rate Trends?
Paying Article

May 21, 2024 2:08 PM UTC

As we have repeatedly underlined, base effects continue to distort the German HICP/CPI readings and the path down for inflation has not been smooth.  This will be even more clearly the case in the looming May numbers where a second successive and slightly larger rise in the headline rate is on the

May 16, 2024

U.S. April Industrial Production - Underlying picture looks flat
Paying Article

May 16, 2024 1:31 PM UTC

April industrial production was unchanged with a downward revision to March offset by an upward revision to February. Manufacturing was weak at -0.3% though outside a negative correction in autos the drop was only 0.1%, leaving a fairly flat underlying picture. 

May 15, 2024

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Eurozone: Consumers - Still Missing?
Paying Article

May 15, 2024 10:34 AM UTC

Revised national account data confirmed the upside surprise in the preliminary data with EZ GDP rising 0.3% q/q.  The question is whether this emergence from the modest H2 2023 recession is the start of more sustained momentum.  We think not, mainly due to what are still weak consumer fundamentals

May 10, 2024

U.S. May Michigan CSI - Lowest since November, inflation expectations highest since November
Paying Article

May 10, 2024 2:12 PM UTC

May’s preliminary Michigan CSI of 67.4 from 77.2 is the weakest since November 2023 and hints at a loss of momentum in the economy, but with higher inflation expectations, the 1-year view up significantly to 3.5% from 3.2% and the 5-10 year view up marginally to 3.1% from 3.0%.

May 09, 2024

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Mexico CPI Review: 0.2% Growth in April
Freemium Article

May 9, 2024 6:11 PM UTC

April's CPI data, despite a 0.2% m/m growth, reveals a significant y/y uptick to 4.6% from March's 4.4%, challenging norms due to electricity tariff adjustments. Core CPI maintained stability with a 0.2% increase, while Core Goods CPI rose by 0.3% and Services CPI by 0.1%, accumulating a 5.2% y/y gr

May 08, 2024

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Sweden Riksbank Review: Biting the Bullet
Paying Article

May 8, 2024 8:24 AM UTC

It very much seemed to be a question of when, not if, as far as policy easing is concerned for the Riksbank.  In this regard, albeit surprising in terms of timing, the Riksbank delivered, cutting its policy rate by 25 bp (to 3.75%), despite clear concerns it has flagged about recent and continued k

May 01, 2024

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Sweden Riksbank Preview (May 8): When, Not If?
Paying Article

May 1, 2024 8:09 AM UTC

It seems to be a question of when, not if as far as policy easing is concerned.  Even at it previous policy assessment in February it was clear(er) that the Riksbank accepted that it could and should make its policy stance less contractionary, at least in conventional terms.  But its last decision

April 30, 2024

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Eurozone Data Review: Less Weak But Soft Domestic Demand Taking Less Toll on Core Inflation?
Paying Article

April 30, 2024 9:29 AM UTC

According to revised official national accounts data, the EZ economy was in recession in H2 last year, albeit modestly so and against a backdrop of marked, if not increasing, national growth divergences. This geographical variation continued into Q1 (Figure 1) where the flash GDP reading exceeded ex

April 29, 2024

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German Data Review: Inflation Edges up Amid Less Resilient Services and Core Rate?
Paying Article

April 29, 2024 12:38 PM UTC

As we have repeatedly underlined, base effects continue to distort the German HICP/CPI readings, but the March data came in a notch below expectations for a third successive month.  Indeed, it fell from 2.7% to a 33-month low of 2.3% in the March HICP data, dominated by a clear fall in food inflati

April 26, 2024

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BoJ Review: No change with upward revision in CPI Forecasts
Paying Article

April 26, 2024 7:38 AM UTC

BoJ has kept interest rate at 0-0.1%.
2024 CPI has been revised higher and GDP lower

April 25, 2024

BoJ's Intervention and its impact
Paying Article

April 25, 2024 6:24 AM UTC

In the period of time when JPY significantly weakens or strengthens, BoJ will intervene in the FX market either through verbal or actual intervention. As JPY weakened significantly in the past months, once again we found ourselves in the proximity of FX intervention with unknowns for anonymity is ke

April 24, 2024

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Eurozone GDP Preview (Apr 30): Less Weak?
Paying Article

April 24, 2024 11:06 AM UTC

According to revised official national accounts data, the EZ economy was in recession in H2 last year, albeit modestly so and against a backdrop of marked, if not increasing, national growth divergences. This geographical variation is likely to have continued into Q1 (Figure 1) where we see a flat o

April 23, 2024

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EZ HICP Preview (Apr 30): Core Disinflation Signs to Flatten Out Further?
Paying Article

April 23, 2024 9:43 AM UTC

Very much having affected ECB thinking, there has been repeated positive EZ news in the form of falling EZ HICP 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,

April 22, 2024

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German Data Preview (Apr 29): Inflation Drop to Continue Amid Less Resilient Services?
Paying Article

April 22, 2024 12:58 PM UTC

As we have repeatedly underlined, base effects continue to distort the German HICP/CPI readings, but the March data came in a notch below expectations for a third successive month.  Indeed, it fell from 2.7% to a 33-month low of 2.3% in the March HICP data, dominated by a clear fall in food inflati

April 17, 2024

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UK CPI Inflation Review: Inflation Fall Further, But Services Momentum Still Evident
Paying Article

April 17, 2024 6:52 AM UTC

UK headline and core inflation have been on a clear downward trajectory in the last few months, the former having peaked above 10% in February last year and the latter at 7.1% In May. After a pause in the preceding three months, this downtrend seemingly resumed in the February CPI numbers and clearl

April 16, 2024

U.S. March Industrial Production - Manufacturing backing improved ISM signal
Paying Article

April 16, 2024 1:34 PM UTC

March industrial production with a 0.4% increase was in line with expectations though manufacturing with a rise of 0.5% exceeded expectations and there appears to be some underlying improvement there.