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China, a balance between growth, risks and globalisation

March 14, 2017
The National People's Congress is without doubt one of the most important events in China’s political calendar. This year is especially important given that the 19th Congress of the Communist Party of China will take place in October, where we will oversee the most important leadership reshuffle since 2012, when Xi Jinping became president.

China | Strong start to 2017 but headwinds abound

March 14, 2017
Last year’s recovery continued into 2017. The latest data releases point towards another month of strong growth. In particular, Fixed asset investments and industrial production strengthened in February, while trade figures improved in line with a pickup in global trade. We expect growth to edge down towards 6.0-6.5% by year-end as headwinds continue.

Mexico | Monthly Report on Banking and the Financial System. March 2017

March 14, 2017
Businesses are finding the environment less favourable in terms of accessibility to banking finance and its cost. IMF publishes a study on financial depth in Mexico. Update of the housing price index at the close of 2016. Better-than-expected US economic data sustain risk appetite; the peso appreciates, underpinned by the measures taken by Banco de México

U.S. | Auto industry chartbook (March 2017)

March 14, 2017
Solid employment growth, stable gasoline prices and low interest rates contributed to robust vehicle sales through the end of 2016. Demand continues to be biased towards light-trucks and away from cars. Auto lending remains healthy, but this could be impacted by future interest rate hikes.

Portugal: GDP growth forecasts for 2018 reviewed upwards to 1.7%

March 14, 2017
Growth of the Portuguese economy in 4Q16 reached 0.6% QoQ1, once again causing positive surprise (BBVA Research forecast 0.3% QoQ), albeit lower than that seen in the previous quarter (0.9% QoQ). As a result Portugal ended 2016 with GDP growth of 1.4% YoY, less than the 1.6% YoY posted in 2015, but slightly more than the BBVA Research forecast of mid-2016 (1.2%).

Consequences of the increase in the Minimum Wage

March 13, 2017
Every economic policy has intended and unintended consequences. The significant increase in Spain’s legal minimum wage in 2017 will barely have any effect on employment or economic activity. Therefore in principle the measure’s success will lie in the attainment of the objectives presumably pursued: improving the income of workers whose wages are tied to the minimum wage.

U.S. | Weekly podcast: trade deficit, interest rates and inflation

March 11, 2017
Weekly economic update focusing on the major economic indicators to be released the week of March 13, 2017. Special topic: the U.S. trade deficit

FOMC Preview: March 14th-15th Meeting

March 11, 2017
Rate hike imminent as Fed uses intermeeting period to cajole markets back to life. Labor market fundamentals and inflation outlook support new baseline for 3 hikes in ‘17. Commitment to a “gradual” pace dependent on FOCM view of neutral interest rates and risks

Mexico | What is the US trade deficit with Mexico really saying?

March 11, 2017
State trade data for the US revealed that Michigan and California accounted for 87.4% of the US trade deficit with Mexico of USD 58.4 billion in 2015. Both states have large- and medium-sized cars as their top two import products, which contain a significant share of US inputs. Thus, such trade deficits do not reflect the true nature of the US-Mexico trade relationship

Slight change in ECB wording

March 10, 2017
The ECB is more optimistic regarding the growth outlook. Inflation is revised significantly up this year to 1.7% YoY on increasing energy prices, but the ECB barely changes its broad view on core inflation. They still maintain a dovish bias, but they introduce a small tweak that could be the prelude of additional changes in the coming months