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July 24, 2024
South Africa’s Inflation Slightly Eased to %5.1 YoY in June
July 24, 2024 11:25 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on July 24, CPI marginally decreased to 5.1% YoY in June due to slowdown in costs for food, fuel and transportation coupled with suspended power cuts (load shedding) in June. The inflatio
July 23, 2024
China: The Squeezed Middle and Bottom 50%
July 23, 2024 8:15 AM UTC
Uncertainty over income and employment, adverse wealth effects from lower house prices, plus growing risk aversion, will likely mean that consumption continues to struggle. This is one of the key reasons why we forecast slower H2 GDP growth and look for 4% in 2025.
July 22, 2024
China: Surprise 7 Day Reverse Repo Rate Cut
July 22, 2024 8:41 AM UTC
China 10bps cut in the 7 day reverse repo rate and 1 and 5yr Loan Prime Rate (LPR) was sooner than expected, as a move had not been anticipated until the Fed cuts rates. However, this is not the start of a new aggressive policy phase, but rather a tactical move given the targeted nature of easing.
July 17, 2024
Stable Rupiah, Steady Growth: Inside Bank Indonesia's Latest Rate Decision
July 17, 2024 1:13 PM UTC
Bank Indonesia held its key interest rate at 6.25% to stabilize the rupiah and attract FX inflows, while maintaining interventions in the FX and bond markets. Inflation remains within target, and GDP growth forecasts are steady. Future rate cuts depend on US Federal Reserve actions. A 25bps cut is e
July 15, 2024
Inflation Heatwave: India's CPI and WPI Climb
July 15, 2024 6:35 PM UTC
India's inflation surged in June with wholesale prices hitting a 16-month high at 3.36% y/y, driven by soaring food costs. The CPI also rose to 5.1% y/y, reversing a five-month decline, prompting caution from the RBI, which anticipates inflation to ease as seasonal factors stabilise. Governor Shakti
China: Retail Sales Drags Q2 GDP
July 15, 2024 7:33 AM UTC
We are revising down our 2024 GDP forecast from 4.9% to 4.7%, both due to the weaker than expected Q2 GDP figure but also the weak underlying momentum of consumption. Some further targeted policy measures are likely in the coming months, but will struggle to lift economic momentum.
July 12, 2024
Turkiye’s Current Account Deficit: Services Surplus and Decreasing Trade Deficit Succour
July 12, 2024 1:28 PM UTC
Bottom Line: Turkiye’s annualized current account deficit (CAD) stood at $25.2 billion as of May 2024, marking its lowest level since June 2022, down from $31.7 billion a month earlier driven by strong services income and improving foreign trade balance, supported by accelerated capital inflows. W
July 11, 2024
South Africa: Parliament to Open on July 18
July 11, 2024 9:41 AM UTC
Bottom Line: After African National Congress (ANC) and Democratic Alliance (DA) formed a government of national unity (GNU) along with other smaller parties, and president Ramaphosa announced the cabinet on June 30, South Africa should now quickly turn its attention to economic urgencies. The parlia
India CPI Preview: Weather Disruptions to Propel Headline Inflation
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
Russia’s Inflation Continued Its Rally in June: 8.6% YoY
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
Brazil CPI Review: Inflation Below Expectations in June
July 10, 2024 5:11 PM UTC
The IBGE's June CPI figures show a 0.21% monthly increase, below market expectations. The Y/Y index rose to 4.2%, driven by increases in potatoes, milk, and coffee. The floods in the South had a minimal impact. Health and Housing saw modest rises, while core CPI remained stable. Despite potential ri
China: Weak CPI and M2 Trends
July 10, 2024 7:27 AM UTC
China disinflation process is clear in the June CPI data, with excess production and soft consumer spending producing a lower than expected outcome. Combined with weak M2 money growth, parts of China economy remain weak and point to a softening of GDP growth in H2. However, policy action will li
July 05, 2024
Russian Economy Expands by 4.5% YoY in May
July 5, 2024 11:56 AM UTC
Bottom Line: According to the figures announced by the Russian Ministry of Economic Development, Russia's GDP grew by 4.5% YoY in May. We foresee Russian economy will expand by 2.5% in 2024 driven in part by a significant increase in military spending due to intensified Russian offensive operation
July 03, 2024
Turkiye’s Inflation Slowed for the First Time in 8 Months: 71.6% in June
July 3, 2024 5:26 PM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on July 3 that Turkish CPI cooled to 71.6% annually and 1.6% monthly in June partly supported by the ease in energy and food prices in June compared to a month earlier. As we predicted, favourable base effects, tightened monetary and fiscal
July 02, 2024
Softening inflation will provide BI room to hold rate
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.
China: 3rd Plenum Incremental Not Game Changing
July 2, 2024 8:10 AM UTC
The 3 plenum July 15-18 will likely see some additional measures that will support or stimulate China economy. However, they are unlikely to be game changers, such as a Yuan2-4trn program of buying most unsold homes or structural increase in the unemployment/health and pension safety nets to free
July 01, 2024
Coalition’s Determination will be Key for Narrowing South Africa’s Current Account Deficit
July 1, 2024 10:32 AM UTC
Bottom Line: Current account deficits (CAD) continue to be a major headwind for South African economy ignited by logistical constraints, power cuts (load shedding), and weaker external demand especially from China and the EU. We think CA will be still bolstered by a trade surplus in H2 2024, support
June 28, 2024
Banxico Review: Continuing the Pause
June 28, 2024 1:59 PM UTC
The Mexico Central Bank (Banxico) kept the policy rate unchanged at 11.0%, despite one member advocating a 25 basis points cut. Banxico hinted at potential rate cuts in 2024 due to a slowing economy and inflation outlook. An August cut remains possible but seems premature. Market and Banxico inflati
June 26, 2024
June 25, 2024
Outlook Overview: Cyclical and Structural Forces
June 25, 2024 10:15 AM UTC
• The global economy is showing signs of healing, as inflation comes back towards targets and growth recovers momentum in some economies. Nevertheless, the cyclical headwind of lagged monetary tightening remains in DM countries, and will likely be one of the forces slowing the U.S. economy
June 24, 2024
LatAm Outlook: Pausing the Cuts
June 24, 2024 6:00 PM UTC
· Brazil and Mexico growth will decelerate from the growth rates 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 2023 while Mexico is on the limit of growing due to a
EMEA Outlook: Stubborn Inflation Dominates
June 24, 2024 1:00 PM UTC
· In Turkiye, we expect Central Bank of Republic of Turkiye (CBRT) will likely halt the key rate at 50% until the end of 2024, which is our baseline scenario. We expect a fall in inflation likely after July due to favorable base effects, additional macro prudential measures, public savings
Modi 3.0 to be Much Like Previous Two Terms
June 24, 2024 6:47 AM UTC
A weakened BJP has formed a government with support from regional parties and independents. The BJP holds 240 seats in parliament on its own and with its partners the government in power now holds 303 seats, which is substantially higher than the 272 needed to form a government. As a consequence, po
June 21, 2024
Asia/Pacific (ex-China/Japan) Outlook: Growth Momentum but Delayed Rate Cuts
June 21, 2024 9:45 AM UTC
• Economic activity in emerging Asian economies is forecast to remain strong. Despite several challenges, including a tight oil market, constrained liquidity conditions, and delayed rate cuts, the region's economic activity is expected to show resilience. Other potential obstacles include u
Bank Indonesia Holds Rate Despite IDR Weakness
June 21, 2024 5:54 AM 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.
June 20, 2024
Commodities Outlook: Fundamentals Kick In
June 20, 2024 10:00 AM UTC
West Texas Intermediate (WTI) is projected to end 2024 at USD82. We anticipate that the voluntary cuts introduced in November 2023 will likely be reversed during H1 2025 and not in Q4 2024, as initially communicated by OPEC+. The scenario is built on our expectation that demand will not increase suf
June 19, 2024
South Africa’s Inflation Stayed Stable at 5.2% in May
June 19, 2024 10:28 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on June 19, the inflation held steady at 5.2% YoY in May, unchanged from April due to suspended power cuts (load shedding) coupled with unchanged food and non-alcoholic beverages (NAB) pr
China Outlook: 2024 on Track, but 2025 Headwinds
June 19, 2024 9:35 AM UTC
Public investment and industrial production in high tech and renewables are helping to support growth and should get the economy close to 5% in 2024. However, underneath the surface, consumption is slowing, private sector investment and employment growth is sluggish, and residential property inves
June 17, 2024
South Africa: ANC-DA-IFP-PA Coalition Will Run the Government
June 17, 2024 11:23 AM UTC
Bottom Line: As we predicted, African National Congress (ANC) and Democratic Alliance (DA) formed a government of national unity (GNU) with the ANC-lead on June 14, along with two smaller opposition parties, Inkatha Freedom Party (IFP) and Patriotic Alliance (PA). Lawmakers voted to put former presi
China Data: Mixed Momentum and No MTF Cut Until October
June 17, 2024 6:59 AM UTC
Overall the May data suggests that enough momentum exists for Q2 GDP to be above 5.0% Yr/Yr, which given the Q1 GDP figure means that the odds are good that the 2024 5.0% GDP target can be meet. However, we see a softer of H2 GDP and 4.0% GDP in 2025, given weak domestic demand is unlikely to chan
June 14, 2024
Russia’s Inflation Continued to Surge in May: 8.3% YoY
June 14, 2024 5:40 PM UTC
Bottom Line: According to Russian Federal Statistics Service data released on June 14, inflation surged to 8.3% YoY in May after hitting 7.8% YoY in April, the highest since February 2023, due to high military spending, currency weakening, tight labour market, and fiscal policy igniting domestic dem
June 12, 2024
China CPI: Core Slows and 10bps June 17 MLF Cut?
June 12, 2024 7:34 AM UTC
China disinflation is clear in the latest numbers for May, with core falling 0.2% on the month. Further stimulus will likely arrive in the form of monetary easing. While it is a close call, we look for a 10bps cut in the medium-term lending facility rate (MLF) from 2.50% on June 17.
June 11, 2024
Brazil CPI Review: 0.5% Rise in May and Worsening Conditions
June 11, 2024 1:55 PM UTC
Brazil’s CPI grew by 0.46% in May, exceeding expectations. Year-over-year CPI rose to 3.9%, driven by significant increases in food and beverage prices. Services inflation also increased. Strong labor market demand and supply disruptions from floods are pushing prices up. With the BRL devaluation
June 07, 2024
China Excess Production: Exports Going Cheap?
June 7, 2024 8:45 AM UTC
China excess of production over domestic demand is causing disinflation pressures in China, but also leading to a fall in export prices as China companies seek buyers for production. Though this is a helpful factor to the global inflation debate, it is causing trade tensions with the U.S. and EU o
June 06, 2024
June 04, 2024
India Elections: Early Trends Point to a Weakened BJP Government
June 4, 2024 2:02 PM UTC
Election counting trends indicate that the BJP-led NDA is on track to secure 290 seats, with the BJP projected to win 235-240 seats. The INDIA alliance is expected to secure around 230 seats. Final results will be announced later tonight. A weakened BJP is expected to form a government with its alli
June 03, 2024
Modi's Marathon: Exit Polls Predict Third Term with Sweeping Majority
June 3, 2024 12:59 PM UTC
Exit polls for the 2024 general elections indicate another Modi wave. The markets have welcomed the exit poll results and the overall business sentiment is euphoric. Exit polls forecast a landslide victory for the BJP-led NDA, with projections nearing the '400' mark. The BJP has also secured a signi
Turkiye’s Inflation Hits 75.5% in May
June 3, 2024 11:49 AM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on June 3 that Turkish CPI ticked up 75.5% annually and 3.4% monthly in May due to increases in education, housing, restaurant & hotel prices. We foresee favourable base effects, tightened monetary and fiscal policies, additional macro prud
China Finance Weakest Links: Small Banks and Property Finance
June 3, 2024 9:19 AM UTC
China authorities appear to have the financial stability spill over from the property sector until control currently, through a combination of direct support for housing and forced mergers of weak banks (mainly rural so far). This game plan will likely be followed for the next few years. However,
May 31, 2024
South Africa Elections: A Coalition Government is on the Horizon
May 31, 2024 3:03 PM UTC
Bottom line: As we forecasted in our previous pieces, it seems a coalition government with an ANC-lead will be formed following the presidential elections on May 29, according to the preliminary results. It is very likely that ANC will be losing its majority dipping below 50% as it is currently the
Turkish Economy Grew by a Strong 5.7% in Q1
May 31, 2024 12:18 PM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on May 31 that Turkish economy expanded by 5.7% in Q1 driven by the buoyant demand, invigorated private consumption and government spending. Despite strong Q1 figure, we expect the pace of the GDP growth to decelerate in the rest of 2024 du
May 27, 2024
Fed Easing Expectations: Volatile and Data Driven
May 27, 2024 12:05 PM UTC
Bottom Line: Fed easing expectations have been reset to higher for longer. However, softer real sector data, plus less worrying inflation monthly outcomes, can rebuild easing expectations. We see the first 25bps coming at the September 19 FOMC meeting and around this time a noticeable increase
Votes to Volatility: Potential Market Outcomes and Policy Directions Post Elections
May 27, 2024 6:47 AM UTC
As India’s month long 2024 General Elections are almost coming to a close, lower voter turnout has increased uncertainty despite expectations of a BJP victory. While we still expect a BJP victory, the markets are becoming increasingly cautious. A decisive BJP win would likely strengthen the rupee
May 23, 2024
Support to ANC is on the Rise
May 23, 2024 6:24 AM UTC
Bottom line: We continue to foresee two possible outcomes of South African presidential elections on May 29, either an African National Congress (ANC) win (40% probability) or a coalition government (60% probability). According to recent polls, ANC continues to be at the risk of losing its majority