Turkey: GDP Surprises on the Downside
At 1.6% y/y, Q3 GDP growth was weaker than the expectations (2.6% y/y) and our forecast (3.2% y/y). On a seasonally adjusted basis GDP grew by 0.2% q/q in Q3, broadly in line with our expectation. The downward surprise in the headline growth number was mostly on the back of weaker-than-expected private investment and exports. The contribution of private sector investment was -2.2pp to growth. The expansion in exports slowed down to 11.9% y/y in Q3 from 20.9% y/y in Q2, still the contribution of foreign demand was 3.4pp. Consumption of households subtracted 0.4pp from growth whereas public sector spending contributed 0.8pp to growth. At the same time, Q1 GDP growth was revised to 3.4% from 3.3%, and Q2 GDP growth to 3% from 2.9%.
Monday, December 10, 2012
Colombia Weekly
Colombia Weekly
Economics/FX/Interest Rate Teams,Rodrigo Fuenmayor,William Pereira - FX/Rates
Colombia Weekly | 10 Dec 2012 16:12 |
Summary
The minutes show the BanRep’s resolve to remain on hold for a while.
The minutes of November’s meeting (when the bank cut its policy rate by 25bp) appear very similar to the minutes of the October meeting (when the board remained on hold). Both sets of minutes are broadly neutral, in our view.
Economics/FX/Interest Rate Teams,Rodrigo Fuenmayor,William Pereira - FX/Rates
Colombia Weekly | 10 Dec 2012 16:12 |
Summary
The minutes show the BanRep’s resolve to remain on hold for a while.
The minutes of November’s meeting (when the bank cut its policy rate by 25bp) appear very similar to the minutes of the October meeting (when the board remained on hold). Both sets of minutes are broadly neutral, in our view.
Eco Analysis - Disappointing data across Asia: CH trade, AU home loans, JP in recession (K. Baader, W. Yao, K. Katahira)
Eco Analysis - Disappointing data across Asia: CH trade, AU home loans, JP in recession (K. Baader, W. Yao, K. Katahira)
■ Disappointing China's trade data reflected structural weakness in both external and domestic demand.
Contrary to the activity data released over the weekend, China's trade growth in November disappointed, with exports growing 2.9%yoy (Cons. 9%, SG 7%, Previous 11.9%) and imports flat yoy (Cons. 2%, SG 0%, Previous 2.4%). As a result of weak exports, the trade surplus also came in smaller than expected at USD19.6bn (Cons. & SG, USD26.8bn), down from USD32bn in October.
■ Disappointing China's trade data reflected structural weakness in both external and domestic demand.
Contrary to the activity data released over the weekend, China's trade growth in November disappointed, with exports growing 2.9%yoy (Cons. 9%, SG 7%, Previous 11.9%) and imports flat yoy (Cons. 2%, SG 0%, Previous 2.4%). As a result of weak exports, the trade surplus also came in smaller than expected at USD19.6bn (Cons. & SG, USD26.8bn), down from USD32bn in October.
Asia Insights: China: Exports slowed but domestic demand remains stron
Fixed Income | Asia Ex-Japan
10 December 2012
Asia Insights: China: Exports slowed but domestic demand remains strong
·China’s export growth slowed more than expected in November to 2.9% y-o-y from 11.6% in October.
·Import growth slowed to 0.0% y-o-y from 2.4%, but import growth for domestic consumption picked up.
·We expect the growth recovery to remain on track, as it is mainly driven by domestic demand.
10 December 2012
Asia Insights: China: Exports slowed but domestic demand remains strong
·China’s export growth slowed more than expected in November to 2.9% y-o-y from 11.6% in October.
·Import growth slowed to 0.0% y-o-y from 2.4%, but import growth for domestic consumption picked up.
·We expect the growth recovery to remain on track, as it is mainly driven by domestic demand.
Sunday, December 9, 2012
First Insights: China: Trade slows but the growth recovery remains on track
First Insights: China: Trade slows but the growth recovery remains on track
Export growth slowed to 2.9% y-o-y in November from 11.6% in October (Consensus 9%, Nomura 7%), while import growth slowed to 0% from 2.4% (Consensus 2.0%, Nomura 0%).
Export growth slowed to 2.9% y-o-y in November from 11.6% in October (Consensus 9%, Nomura 7%), while import growth slowed to 0% from 2.4% (Consensus 2.0%, Nomura 0%).
Turkey: Still in a sweet spot
Commerzbank Corporates & Markets
Emerging Markets
https://research.commerzbank.com
Turkey: Still in a sweet spot
Following our October visit, we wrote that the Turkish economy had entered a sweet spot – that slower growth and low commodity prices were having a materially positive impact on Turkey’s current account and inflation imbalances. Last month, current account and inflation data improved further. Meanwhile, Fitch upgraded Turkey to investment grade – the only such upgrade in the region since Lehman. Moody’s holds a positive outlook. Understandably, foreign capital is piling in.
Analyst:
Tatha Ghose
Emerging Markets
https://research.commerzbank.com
Turkey: Still in a sweet spot
Following our October visit, we wrote that the Turkish economy had entered a sweet spot – that slower growth and low commodity prices were having a materially positive impact on Turkey’s current account and inflation imbalances. Last month, current account and inflation data improved further. Meanwhile, Fitch upgraded Turkey to investment grade – the only such upgrade in the region since Lehman. Moody’s holds a positive outlook. Understandably, foreign capital is piling in.
Analyst:
Tatha Ghose
Eco Analysis - The Chinese economy is undoubtedly heating up (W. Yao)
Eco Analysis - The Chinese economy is undoubtedly heating up (W. Yao)
■ Inflation advanced but less than expected
China's consumer price inflation came in slightly below expectations at 2.0%yoy in November (Cons. & SG 2.1%), up from 1.7%yoy in October. The 0.4ppt increase was a result of a 1.2pp increase in food inflation to 3.0%yoy. Within the non-food components, housing inflation moved up marginally to 2.6%yoy from 2.5%yoy, while other categories unexpectedly softened to 1.2%yoy from 1.4%yoy, according to our calculation.
■ Inflation advanced but less than expected
China's consumer price inflation came in slightly below expectations at 2.0%yoy in November (Cons. & SG 2.1%), up from 1.7%yoy in October. The 0.4ppt increase was a result of a 1.2pp increase in food inflation to 3.0%yoy. Within the non-food components, housing inflation moved up marginally to 2.6%yoy from 2.5%yoy, while other categories unexpectedly softened to 1.2%yoy from 1.4%yoy, according to our calculation.
Saturday, December 8, 2012
Eco Analysis - US Employment Report: Surprisingly Good (B. Jones)
Eco Analysis - US Employment Report: Surprisingly Good (B. Jones)
■ Nonfarm job growth eclipsed all projections for a second straight month in November
The Bureau of Labor Statistics (BLS) reported that nonfarm payrolls expanded by 146K in November, following a revised 138K rise in October (was 171K) and 132K increase in September (was 148K). Last month's print exceeded both our (122K) and the median Street (85K) expectations. Indeed, for the second month in a row, the front-month job gain eclipsed all published economist projections.
■ Nonfarm job growth eclipsed all projections for a second straight month in November
The Bureau of Labor Statistics (BLS) reported that nonfarm payrolls expanded by 146K in November, following a revised 138K rise in October (was 171K) and 132K increase in September (was 148K). Last month's print exceeded both our (122K) and the median Street (85K) expectations. Indeed, for the second month in a row, the front-month job gain eclipsed all published economist projections.
Friday, December 7, 2012
Eco Analysis - Energy prices to put upward pressure on French inflation in December and January (M. Martinez)
Eco Analysis - Energy prices to put upward pressure on French inflation in December and January (M. Martinez)
Energy prices to put upward pressure on French inflation in December and January
French inflation gauges have been slowing down since the beginning of the year. After another drop in annual rates in November, we expect this trend to break in January, owing mainly to an increase in energy and food prices. Indeed, energy prices have been constrained by the government over past months, but are likely to catch up in December and January. We expect FRCPIxt to rise by 1.75% yoy in the first two months of 2013.
■ Excise duties on gasoline prices to rise progressively
Following up on a promise made by François Hollande during his presidential campaign, excise duties on fuels (TICPE) were temporary reduced by €3ct per litre between 29 August and 30 November. At the same time, gasoline retailers matched the price cut, leading to an average reduction of €6ct per litre. Last week, the government announced that the return to normal TICPE excise duties will occur in four stages, beginning with a €1ct hike on 1 December, followed by €½ct on 11 December, €½ct on 21 December and lastly €1ct on 11 January. We expect gasoline prices to gradually increase by €6ct during this period. The cumulated impact on headline inflation in December and January is estimated at 20-25bp.
■ Gas prices to rise by 3.0% on 1 January.
Gas tariffs are administered by the government in France. Household tariffs increased by 2% in October, as the government apparently ignored the recommendation of the French energy regulator (Commission de regulation de l'énergie, CRE) which estimated that prices should be increased by 6.1%. As a result, ANODE, the French gas suppliers association, took the French government to court, and subsequently, on 29 November, the Conseil d'Etat (Counsel of State) which hears cases against decisions made by the government, ruled in favour of ANODE. On 10 December, the government is to announce the official hike, which is to take effect on 1 January. We expect the hike to be close to 3.0% which translates into a 3bp hike in headline inflation.
■ Food prices to grow in line with average seasonality
We expect food prices to increase by 1.0% over the next three months (November to January), thereby adding 15bp to the headline figures, representing the average observed over the last 10 winters (from November to January). In actual fact, food prices grew at a slower pace (0.6%) between November 2011 and January 2012. However, we believe the summer surge in global agricultural prices is likely to have exerted upward pressure.
■ French inflation to slow down in 2013 and accelerate in 2014
On a different note, household and motor insurance tariffs are set to increase by 2.0-3.0bp in January (adding 3bp to headline figures). Assuming an average seasonal profile for other core prices, we expect French inflation (FRCPIxt) to print at 1.75% yoy in January. Looking ahead, we expect French HICP inflation to grow at 1.9% yoy in 2013 and 2.4% yoy in 2014. As part of our central scenario, we take into account the VAT hike in January 2014 (see PM Ayrault sends positive signals on competitiveness). Note that our monthly inflation forecasts are available on Bloomberg (function SXEI).
MARTINEZ Michel
Energy prices to put upward pressure on French inflation in December and January
French inflation gauges have been slowing down since the beginning of the year. After another drop in annual rates in November, we expect this trend to break in January, owing mainly to an increase in energy and food prices. Indeed, energy prices have been constrained by the government over past months, but are likely to catch up in December and January. We expect FRCPIxt to rise by 1.75% yoy in the first two months of 2013.
■ Excise duties on gasoline prices to rise progressively
Following up on a promise made by François Hollande during his presidential campaign, excise duties on fuels (TICPE) were temporary reduced by €3ct per litre between 29 August and 30 November. At the same time, gasoline retailers matched the price cut, leading to an average reduction of €6ct per litre. Last week, the government announced that the return to normal TICPE excise duties will occur in four stages, beginning with a €1ct hike on 1 December, followed by €½ct on 11 December, €½ct on 21 December and lastly €1ct on 11 January. We expect gasoline prices to gradually increase by €6ct during this period. The cumulated impact on headline inflation in December and January is estimated at 20-25bp.
■ Gas prices to rise by 3.0% on 1 January.
Gas tariffs are administered by the government in France. Household tariffs increased by 2% in October, as the government apparently ignored the recommendation of the French energy regulator (Commission de regulation de l'énergie, CRE) which estimated that prices should be increased by 6.1%. As a result, ANODE, the French gas suppliers association, took the French government to court, and subsequently, on 29 November, the Conseil d'Etat (Counsel of State) which hears cases against decisions made by the government, ruled in favour of ANODE. On 10 December, the government is to announce the official hike, which is to take effect on 1 January. We expect the hike to be close to 3.0% which translates into a 3bp hike in headline inflation.
■ Food prices to grow in line with average seasonality
We expect food prices to increase by 1.0% over the next three months (November to January), thereby adding 15bp to the headline figures, representing the average observed over the last 10 winters (from November to January). In actual fact, food prices grew at a slower pace (0.6%) between November 2011 and January 2012. However, we believe the summer surge in global agricultural prices is likely to have exerted upward pressure.
■ French inflation to slow down in 2013 and accelerate in 2014
On a different note, household and motor insurance tariffs are set to increase by 2.0-3.0bp in January (adding 3bp to headline figures). Assuming an average seasonal profile for other core prices, we expect French inflation (FRCPIxt) to print at 1.75% yoy in January. Looking ahead, we expect French HICP inflation to grow at 1.9% yoy in 2013 and 2.4% yoy in 2014. As part of our central scenario, we take into account the VAT hike in January 2014 (see PM Ayrault sends positive signals on competitiveness). Note that our monthly inflation forecasts are available on Bloomberg (function SXEI).
MARTINEZ Michel
Ukraine: S&P downgraded Ukraine's rating by one notch to B (negative outlook)
Ukraine: S&P downgraded Ukraine's rating by one notch to B (negative outlook)
Today S&P downgraded Ukraine's rating by one notch to B (negative outlook). Previously this week, the country's rating was downgraded by Moody's. The main concern is clear: the country is scheduled to redeem USD7.2bn in 2013 while sources of refinancing are still uncertain. We reiterate our call that the new deal with the IMF is essential for financial and economic stability in the short term. We expect more efforts of the government to reach a compromise with the fund. However, the mission visit has been recently postponed to the beginning of 2013 when the new government is supposed to be formed. We maintain our call on economic recession in the coming quarters and hryvnya deval to UAH9 per $ in the near future.
Today S&P downgraded Ukraine's rating by one notch to B (negative outlook). Previously this week, the country's rating was downgraded by Moody's. The main concern is clear: the country is scheduled to redeem USD7.2bn in 2013 while sources of refinancing are still uncertain. We reiterate our call that the new deal with the IMF is essential for financial and economic stability in the short term. We expect more efforts of the government to reach a compromise with the fund. However, the mission visit has been recently postponed to the beginning of 2013 when the new government is supposed to be formed. We maintain our call on economic recession in the coming quarters and hryvnya deval to UAH9 per $ in the near future.
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