BoJ: The Pace of Exit

January 15, 2024 5:41 AM UTC

The BoJ has kicked the can down to the spring wage negotiation before another step in monetary policy. While current inflation forecast has exceeded BoJ's 2% target in all three items of headline, ex fresh food and ex fresh food & energy, the wage growth did not reach a "sustainable" level, which Ue

U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture

December 15, 2023 10:01 AM UTC

·         Given the strength of recent GDP growth the Fed is rightly cautious about declaring victory on inflation despite recent encouraging progress. Should data surprise to the upside, the Fed could still tighten again, even if it now looks unlikely. However, we believe that data will sh

LatAm: Long Term Growth Differences

November 24, 2023 11:52 AM UTC

We see different patterns of growth for the Latin American countries. Brazil, Mexico and Argentina have different types of constraints that will define their long-term growth.
Figure 1: Annual GDP Growth
Source: Continuum Economics. *forecasts
We observe that the long-term growth trajectory for Brazil

U.S. Equities: Valuation or Earnings?

August 24, 2022 3:18 PM UTC

Figure 1: 10yr U.S. Real Treasury Yield Inverted and Forward S&P500 P/E Ratio (% rhs)
Source: Datastream, Continuum Economics using breakeven inflation from index-linked bonds
Valuations or Earnings Outlook
The bounce in U.S. equities since the start of July has been driven by short covering, specul

Eurozone Consumer Feeling the Heat

August 15, 2022 1:59 PM UTC

Figure 1: Eurozone HICP Forecast Change (% chg y/y)
Source: Continuum Economics
Stinging Without the Rain?
After COVID and then the Ukraine war, a further external shock is hitting the EZ economy, in the form of the drought caused by a wave of high temperatures and a lack of rainfall through much of Eu

Oil Prices: Recession Headwinds

August 11, 2022 12:39 PM UTC

Figure 1: WTI Net Non-commercial Future Positions
Source: CFTC
Various Factors Take the Steam Out of Oil
A number of factors are leading to our downward revision of the WTI oil price outlook.
Figure 2: OECD Oil Inventories in Number of Days
Source: U.S. EIA
Nevertheless, we do see oil prices rising in

Eurozone: Recession Risks Dominate despite Q2

July 29, 2022 11:04 AM UTC

Figure 1: GDP Forecast Change (% chg y/y)
Source: Continuum Economics
Some Positives but More Negatives?
There were some positive signs in the array of GDP numbers released today, with upside surprises in all but one of the four major economies. In Germany, data was as expected but with marked cumulati