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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

U.S. | The trade deficit: Don’t fear the beast

March 9, 2017
Public perception towards the trade deficit has shifted from being fact-based to sentiment-based. Economic pattern of the deficit strongly correlates with the structural shift in the U.S. economy. U.S. has a higher per capita deficit with Ireland and Germany than it does with China or Mexico

Mexico | Bank deposits: loss of dynamism due to lower growth in its two components

March 9, 2017
In December 2016 the nominal annual growth rate of traditional bank funding (demand + term) was 13.2%, 1.6 percentage points lower than the previous month, and 0.1 percentage points lower than the same month of the previous year

Geo-World: Conflict & Social Unrest - February 2017 Update

March 9, 2017
While ISIS lost ground in Syria and Iraq, Al-Qaeda resumed its offensive operations. Meanwhile, tensions between Russia and Ukraine stabilized after last month’s sharp conflict escalation. Geopolitical tensions in China could intensify as uncertainties regarding the US policy stance in the region remained and North Korea remains testing.

Turkey: Ongoing Economic Activity Recovery

March 8, 2017
Our monthly GDP indicator shows economic activity continued to recover gradually in January (of 96% information). According to the soft data survey indicators the economic activity is gaining momentum in February (33% of info and still to be checked by hard data). Improving external demand supports exporting sectors, while domestic demand follows only a gradual pick-up.

Mexico | Credit to the private sector: starts the year by moderating its performance

March 8, 2017
In December 2016, the balance of outstanding credit granted by commercial banks to the private sector grew at a nominal annual rate of 13.0% (7.9% real), lower than the rate observed in the previous month (15.3%) and in January 2016 (16.3%)

Presentation U.S. Economic Outlook. First Quarter 2017

March 8, 2017
The Fed in recognizing the underlying strength of the economy is all but certain raise rates in March and embark on a more aggressive tightening schedule in 2017. Full employment on horizon, as the unemployment rate trends at 4.8%. If improvements in labor market continue at current pace the approximately 1 million left out of the labor force should be absorbed by 2018

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