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.
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…
Alicia García Herrero (Natixis) | China has long been a focal point for global companies, European ones included. However, a shift seems to be happening with foreign direct investment (FDI) into China, as it is now plummeting rather than booming. In fact, China’s inward FDI has turned to negative growth for the first time in 25 years. Several questions seem warranted when exploring this phenomenon. Firstly, the deceleration of FDI in…
Alicia García Herrero (Natixis) | China has become one of the most important luxury consumption markets for foreign brands, but economic headwinds may cloud the outlook. With rising purchasing power and appetite in luxury spending, Chinese consumers have become more relevant globally. This report addresses what to expect in China’s luxury segment amid structural economic deceleration and geopolitical tensions. Introducing Natixis China Luxury Consumption Index We aim to analyze the…
The tax burden in Spain has increased across the board, both on companies and on citizens, in contrast to a very small increase in the tax burden in most advanced economies. Specifically, the tax burden on average wages (including social security contributions and personal income tax) will rise to 40.2% of gross labour costs in 2023, six tenths more than the previous year, according to figures published yesterday by the…
Alicia García Herrero (Natixis) | China’s Two Sessions – the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) – took place from March 4-11 in Beijing. This year, the Two Sessions have been particularly important for understanding where the Chinese economy is heading, as new Premier Li Qiang delivered his first “Work Report,” which marked the beginning of a new economic era….