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September 10, 2024

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India CPI Review: Easing Prices, but Monsoon Risks Loom
Freemium Article

September 10, 2024 9:14 AM UTC

Bottom line: India’s August inflation level is expected to trend down to 3.5% yr/yr, from 3.53% y/y in July, reflecting higher base effects. Interest rate cut is unlikely though as the RBI perceives this as a temporary reprieve. 

September 09, 2024

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China Equities: More of the Same or Game changing Policies
Paying Article

September 9, 2024 9:15 AM UTC

 We remain strategically underweight China Equities in global and EM equity baskets, due to the structural slowing of growth and low EPS prospects. Event risk around the U.S. presidential election will also start to be considered.  Further targeted policies from China authorities could cause inter

September 06, 2024

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U.S. August Employment - A little stronger than downwardly revised June and July
Freemium Article

September 6, 2024 1:10 PM UTC

August’s non-farm payroll is a little weaker than expected with a 142k rise overall, 118k in the private sector, with significant negative back month revisions in the preceding two months totaling 86k. However the data is stronger than July’s, not only in the payroll, but also a correction lower

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Eurozone: Sobering Services and Domestic Demand News is Food for ECB Doves
Freemium Article

September 6, 2024 10:53 AM UTC

The fact that EZ growth was revised down a notch to 0.2% in Q2 is of little importance – it partly reflects a small recovery in imports that we have been flagging for some time would be a likely break on recorded activity.  Over and beyond more signs of slowing wage pressures in Q2 data, more not

September 05, 2024

U.S. August ISM Services - Still showing modest expansion
Paying Article

September 5, 2024 2:13 PM UTC

August’s ISM services index at 51.5 is almost unchanged from July’s 51.4 and implies an economy continuing to expand at a modest pace. Employment at 50.2 is down from July’s 51.1, but in being above the neutral 50 remains stronger than the readings seen from February through June.

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A Harder Landing and the Fed
Freemium Article

September 5, 2024 9:30 AM UTC

Though our baseline view is for a soft landing for the U.S. economy and the Fed cutting to 3.00-3.25% by end 2025 (here), uncertainty exists over the scale of the slowdown.  If the U.S. economy has a harder landing (stagnation/technical recession with 20-25% probability), then the Fed could likely

September 04, 2024

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Eurozone: Labor Market Faltering
Freemium Article

September 4, 2024 10:36 AM UTC

There are suggestions that worries about weaker growth are now reverberating within the ECB, albeit with the hawks still more mindful of service price resilience.  But the former worries chime with our long-standing concern of downside risk to what we still see is a below-consensus growth outlook,

September 03, 2024

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Country Risk in MENA
Paying Article

September 3, 2024 10:00 AM UTC

Country risk in Middle East and North Africa is impacted by the ongoing war in Gaza, alongside reviews of Bahrain, Egypt, Iran and Qatar.     

September 02, 2024

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China Harder Landing Scenario
Paying Article

September 2, 2024 10:55 AM UTC

 We see a 30% probability of a harder landing in China GDP growth in 2025, which we most likely be in the 3-4% region but could persist into 2026 (Figure 1).  A large than projected slowdown in consumption would be a key concern, alongside persistently moderate negative deductions from residential

August 30, 2024

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U.S. July Personal Income and Spending - Core PCE Prices subdued, savings at a 2-year low
Paying Article

August 30, 2024 1:00 PM UTC

July’s PCE price data, up 0.2% both overall and core (with both subdued at 0.16% before rounding) is on consensus, as is a 0.5% increase in personal spending. Income at 0.3% is stronger than consensus, but still underperforms spending, leaving the savings rate at 2.9%, the lowest since June 2022.

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Sub Sahara Africa: Country Risk Ratings
Paying Article

August 30, 2024 10:00 AM UTC

We provide country risk reviews for Sub Sahara Africa countries including Ethophia/Angola/Senegal/Sudan and Tunisia.  

August 29, 2024

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Preview: Due August 30 - U.S. July Personal Income and Spending - PCE prices a close call between 0.1% and 0.2%
Paying Article

August 29, 2024 1:38 PM UTC

We expect July core PCE prices to be consistent with the core CPI, up by 0.2% but a little less before rounding. We expect a healthy 0.5% rise in personal spending to outperform a subdued 0.1% increase in personal income.

August 28, 2024

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China Consumer Volatility
Paying Article

August 28, 2024 1:30 PM UTC

China consumption patterns are divergent; slowing and becoming more volatile at a sub sector level.  Less certainty over new employment and wage growth, plus wealth worries over housing are some of the causes.  We forecast GDP to slow in H2 and be 4.0% in 2025.

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2024 Q2 Country Insights Scores to Download in Excel
Paying Article

August 28, 2024 9:00 AM UTC

The Country Insights Model is a comprehensive quantitative tool for assessing country and sovereign risk by measuring a country’s risk of external and domestic financial shocks and its ability to grow. The access to our full range of scores across 174 countries corresponding to the second quarter

August 26, 2024

U.S. July Durable Goods Orders - Aircraft surge inflated by seasonal adjustments, underlying picture subdued
Paying Article

August 26, 2024 12:49 PM UTC

July durable goods orders surged by 9.9% but this was fully due to a surge in aircraft which appears to be exaggerated by seasonal adjustments. Ex-transport orders maintained a fairly flat picture, with a dip of 0.2%, weaker than expected net of a downward revision to June to a 0.1% increase from 0.

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Israel/Hezbollah War Risks
Paying Article

August 26, 2024 8:02 AM UTC

The probability of an Israel/Hezbollah war in the next 12 months has move up from low to modest probability, but would be a high impact event geopolitically and for global markets.  For global markets, a distinction would be drawn between an Israel/Hezbollah war that did not involve Iran/U.S. and o

August 23, 2024

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Powell Jackson Hole Guidance
Paying Article

August 23, 2024 2:38 PM UTC

  Fed Powell clearly signaled a Sep 18 FOMC cut, but his analysis on the economy is softer than harder landing.  Though the option of 50bps was not ruled out, the comments from Powell and other Fed officials are more consistent with 25bps than 50bps.  Nevertheless, the Fed is now more focused on

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Banxico Minutes: Cuts on the Table, Divided Board
Paying Article

August 23, 2024 1:02 PM UTC

Banxico has resumed its rate-cutting cycle, reducing the policy rate from 11% to 10.75%, with a split board decision. Most members noted weakening domestic activity and external volatility impacting the exchange rate. While some view the rise in non-core inflation as transitory, others see it, along

August 21, 2024

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Mexico: FDI Increases but No Sign of Nearshoring
Paying Article

August 21, 2024 2:50 PM UTC

Mexico's FDI reached USD 31 billion in the first half of 2024, a 7% increase from 2023. However, this figure may be inflated by not accounting for USD inflation, potentially reducing real growth. While nearshoring discussions continue, current FDI largely reflects reinvestment by existing foreign fi

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China Housing Bailout: More Needed
Freemium Article

August 21, 2024 9:00 AM UTC

Though China’s authorities have taken some action to help the residential construction sector, the negative drags from the huge excess completed housing and uncompleted projects continues to weigh directly on the construction/steel and cement sector and consumer confidence. Aggressive policy actio

August 19, 2024

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Fed Decision Making/H1 2025 Fiscal Tensions and Yield Curve Steepening
Paying Article

August 19, 2024 8:15 AM UTC

2yr U.S. Treasury yields can fall gradually by end 2025 to 3.25%, as a more neutral Fed Funds era is discounted.  10yr yields ability to decline on a soft landing is more difficult, given high net supply facing the market.  We also remain concerned that the U.S. will see some temporary fiscal stre

August 16, 2024

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Mexico: Moving Towards Deficit as Expected
Paying Article

August 16, 2024 8:10 PM UTC

Mexico's fiscal situation is becoming challenging, with a primary deficit emerging due to increased support for PEMEX and overestimated growth projections. The Debt/GDP ratio is expected to rise to around 50.8% by 2024, possibly stabilizing around 49-54% depending on fiscal consolidation efforts. Wh

August 15, 2024

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Preview: Due August 30 - U.S. July Personal Income and Spending - PCE prices a close call between 0.1% and 0.2%
Paying Article

August 15, 2024 3:15 PM UTC

We expect July core PCE prices to be consistent with the core CPI, up by 0.2% but a little less before rounding. We expect a healthy 0.5% rise in personal spending to outperform a subdued 0.1% increase in personal income.

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U.S. July Retail Sales and Initial Claims show resilience, easing slowdown fears
Paying Article

August 15, 2024 12:52 PM UTC

July retail sales with a stronger than expected 1.0% increase shows the consumer still has some momentum at the start of Q3, while a dip in initial claims to 227k from 234k suggests the labor market is not seeing increased weakness in early August. August manufacturing surveys from the Philly Fed at

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China Data: Soft Start to Q3
Freemium Article

August 15, 2024 6:40 AM UTC

Overall, the July data is consistent with our forecast of a weaker H2 and we still look for 4.7% GDP growth for 2024.  The data is also consistent with our forecast of 4.0% in 2025 GDP growth.  Consumption behavior could stall further and cause more of a drag than we anticipate and we now see a 30

August 14, 2024

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EM Markets Divergence with China Harder Landing Concerns
Paying Article

August 14, 2024 3:35 PM UTC

Global market turbulence has had a spillover impact into EM, but also some EM assets have benefitted from rotation away from the U.S.  What are the prospects in the coming months?
We see scope for a 2nd wave of U.S. equity and Japanese Yen (JPY) correction, which are a mixed influence for EM assets

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U.S. July CPI - Core below 0.2% before rounding for a third straight month
Freemium Article

August 14, 2024 1:08 PM UTC

July CPI is consistent with inflationary pressures continuing to ease towards target with gains of 0.2% overall and ex food and energy as expected, but before rounding the gains were only 0.155% and 0.165% respectively.

August 13, 2024

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Market Turbulence and What has Changed?
Paying Article

August 13, 2024 12:22 PM UTC

 •   We see the recent market turbulence as being partially a reduction in risky positions.  However, the U.S. economy is slowing and triggering a debate about a soft or harder landing (we see slowing rather than recession in our baseline), while EZ data shows the recovery is not gaining moment

Chart EUR/CAD Update: Cautious trade - studies remain under pressure
Paying Article

August 13, 2024 10:23 AM UTC

 The anticipated minor test higher has met expected selling interest beneath 1.5040

FX Daily Strategy: N America, August 13th
Paying Article

August 13, 2024 9:05 AM UTC

US PPI risks slightly on the downside
USD therefore has downside risks across the board
UK to see weakening in earnings data
GBP vulnerable against EUR

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India CPI Review: Cooling Inflation - Will India’s RBI Shift Gears?
Freemium Article

August 13, 2024 8:02 AM UTC

India's inflation cooled to 3.54% yr/yr in July, marking its lowest in nearly five years and slipping below the RBI's 4% target. With food prices driving the decline, the central bank may now consider a rate cut. However, future inflation risks remain amid uncertain monsoon patterns and global price

FX Daily Strategy: Europe, August 13th
Paying Article

August 13, 2024 5:28 AM UTC

US PPI risks slightly on the downside
USD therefore has downside risks across the board
UK to see weakening in earnings data
GBP vulnerable against EUR

August 12, 2024

FX Daily Strategy: Asia, August 13th
Paying Article

August 12, 2024 9:00 PM UTC

US PPI risks slightly on the downside
USD therefore has downside risks across the board
UK to see weakening in earnings data
GBP vulnerable against EUR

FX Daily Strategy: APAC, August 13th
Paying Article

August 12, 2024 3:07 PM UTC

US PPI risks slightly on the downside
USD therefore has downside risks across the board
UK to see weakening in earnings data
GBP vulnerable against EUR

Chart EUR/CAD Update: Balanced in support area - prices remain under pressure
Paying Article

August 12, 2024 10:33 AM UTC

Little change, as prices extend pressure on support at the 1.4980 Fibonacci retracement and congestion around 1.5000

August 11, 2024

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Despite Favourable Metrics RBI Committed to Tightening
Paying Article

August 11, 2024 5:03 PM UTC

The RBI will retained its stance of withdrawal of accomodation and maintained benchmark rate of 6.5% in its August meeting, staying on the path of inflation target. Concerns around high food inflation and geopolitical instability ensured that the RBI remained committed to its monetary tightening sta

August 09, 2024

FX Weekly Strategy: August 12th-16th
Paying Article

August 9, 2024 2:35 PM UTC

Stabilisation in risk appetite should allow some focus on relative fundamentals
JPY still has scope for gains, CHF gains look overdone
AUD and NOK both look relatively cheap
Scope for GBP recovery with risk sentiment looks quite small

FX Daily Strategy: N America, August 9th
Paying Article

August 9, 2024 8:49 AM UTC

NOK weakness looks out of line with yield spreads…
…so there may be scope for a sharp recovery
CAD weakness more in line with spread moves…
…but positioning suggests a strong employment report could trigger a squeeze

August 08, 2024

FX Daily Strategy: Asia, August 9th
Paying Article

August 8, 2024 9:00 PM UTC

NOK weakness looks out of line with yield spreads…
…so there may be scope for a sharp recovery
CAD weakness more in line with spread moves…
…but positioning suggests a strong employment report could trigger a squeeze

FX Daily Strategy: APAC, August 9th
Paying Article

August 8, 2024 3:02 PM UTC

NOK weakness looks out of line with yield spreads…
…so there may be scope for a sharp recovery
CAD weakness more in line with spread moves…
…but positioning suggests a strong employment report could trigger a squeeze

FX Daily Strategy: Europe, August 8th
Paying Article

August 8, 2024 4:40 AM UTC

Light Thursday calendar with US jobless claims the highlight
JPY still undervalued
NOK and CAD have potential to extend gains

August 07, 2024

FX Daily Strategy: Asia, August 8th
Paying Article

August 7, 2024 9:00 PM UTC

Light Thursday calendar with US jobless claims the highlight
JPY still undervalued
NOK and CAD have potential to extend gains

FX Daily Strategy: APAC, August 8th
Paying Article

August 7, 2024 3:12 PM UTC

Light Thursday calendar with US jobless claims the highlight
JPY still undervalued
NOK and CAD have potential to extend gains

FX Daily Strategy: Europe, August 7th
Paying Article

August 7, 2024 4:44 AM UTC

More choppy risk sensitive trading seen
JPY downside looks very limited given low level and still low risk premia
CHF strength may be overdone unless there is stronger evidence of recession risk
AUD and NOK weakness may be overdone; GBP more vulnerable

August 06, 2024

FX Daily Strategy: Asia, August 7th
Paying Article

August 6, 2024 9:00 PM UTC

More choppy risk sensitive trading seen
JPY downside looks very limited given low level and still low risk premia
CHF strength may be overdone unless there is stronger evidence of recession risk
AUD and NOK weakness may be overdone; GBP more vulnerable

FX Daily Strategy: APAC, August 7th
Paying Article

August 6, 2024 3:13 PM UTC

More choppy risk sensitive trading seen
JPY downside looks very limited given low level and still low risk premia
CHF strength may be overdone unless there is stronger evidence of recession risk
AUD and NOK weakness may be overdone; GBP more vulnerable