MADRID | By JP Marin Arrese | Prices like the weather inescapably lead to widespread demurral. They always look either overly hot or unduly cold. Yet the current debate on potential deflation seems largely shrugged off in Spain, even confronted with a CPI dwelling in minus territory. A predictable reaction in a country that scores a solid record of relentless price hikes.
LONDON | By Barclays analysts | Under our macroeconomic scenario of a mild and uneven recovery combined with subdued inflation, we do not expect the ECB to cut rates further in the coming months despite recent speculation (Bloomberg news) that it was considering a negative deposit rate.
Alicia García Herrero (Natixis) | China’s most important annual gathering, the so-called Lianghui(两会) will ended on March 11 after over a week of meetings by the legislative body, the National People’s Congress (NPC), but also the most important consultative body, the Chinese People’s Political Consultative Conference (CPPCC). One of the key objectives of these “Two Sessions”, as they are generally referred to in English, was to offer the key economic…
Bankinter | Price indicators continue to show the weakness of the Chinese economy. (i) CPI (February): down 0.7% year-on-year versus 0.4% expected versus up 0.5% previous. Core rate: down 0.1% year-on-year versus up 0.6% previous; (ii) Industrial Prices (February): down 2.2% year-on-year versus 2.1% expected versus 2.3% previous. Bankinter analysis team’ view: More negative news for the Chinese economy. Inflation has fallen back into negative territory (for the first time…
Banca March | China sets growth target for 2025 at 5%, with budget deficit rising to 4% (from 3% in 2024). The The government document presented by Prime Minister Li Qiang to parliament sets the GDP target at 5% for the third consecutive year, a demanding goal that will require more aggressive stimulus measures. The focus is on strengthening consumption and counteracting deflationary pressures – the government has lowered its…
Bankinter | China’s inflation data remained unchanged in December and CPI ended at 0.1%, in line with expectations. The Underlying Rate rises one tenth of a percentage point to 0.4% year-on-year. Producer prices closed at 2.3% down year-on-year, slightly better than the 2.4% expected versus 2.5% previously. Analysis team’s view: Inflation continues to weaken and to approach 0% and to reach the lowest since March 2024, while Industrial Prices remain…
Bankinter: The one-year rate, which is the benchmark for corporate loans, remained at 3.10%. The five-year rate, which is the benchmark for mortgage loans, remained at 3.60%. In October, commercial banks cut these rates by -25bp following the PBOC cut that was part of a stimulus plan to revitalise the economy approved at the end of September. Market sentiment: This pause in the process of rate cuts by commercial banks…
Norbolsa | New stimulus measures to counteract the weakness of the PMIs. The central bank set the date of early October to cut rates on existing mortgage loans by an average of 50 bps. The market reacted with strong rallies to the news, and buying piled up ahead of the ‘Golden Week’ holiday period that China is celebrating this week. The disappointing PMI data for September, which did not reflect…
Capital Group | The winds of change are blowing in Japan. Corporate reform, wage growth and the digital revolution are ending decades of deflation and driving the market to highs not seen since 1989. Policymakers are urging companies to put shareholders first, and the government has created a digital agency to close the innovation gap with other countries. Digitalisation is a key issue to overcome demographic problems and boost productivity….
Alicia García Herrero (Natixis) | The market is closely watching the long-awaited Third Plenum in China, which will be hosted from July 15 to July 18 in 2024. Historically, this event has been pivotal in signaling key policy shifts and economic reforms in China. This time around, market participants and China watchers have a very specific question: will measures be announced for the Chinese economy to revive after years of…