Tuesday, February 19 2019 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 54 min 53 sec ago
Lower prospects for global growth with mixed data across regions in 3Q18, as the US keeps outperforming while quarterly figures disappoint in China and the EZ. Global trade remains solid, but partly reflects the frontloading of Chinese exports to avoid further tariffs early next year. Our BBVA-GAIN model suggests growth will keep adjusting in 4Q18 to around 0.9% q/q.
Highlights: EC issues communication on the Brexit agreement, and on contingency measures for a no-deal scenario. SRB issues work programme and expectations for Brexit. FSB issues 2018 G-SIB list, reports on resolution and benchmarks, the Cyber Lexicon, and consults on CCP resolution. CESFI starts the process to become the Spanish macroprudential authority
Industrial Production (IP) decreased by 2.7% yoy in calendar adjusted terms in September, lower than the market expectation ( 1.5% Bloomberg vs -7.5% ours). Our monthly GDP indicator (GBTRGDPY Index at Bloomberg) nowcasts 2.2% yoy growth in September and 0.6% annual contraction in October (with 96% and 47% of info including our Retails Sales Indicator, respectively).
One board member voted for a 50bp hike. Risks are now tilted to an additional 25bp hike in December but the call will most likely dependent of the 2019 fiscal budget outcome and its effect on confidence.
The growth of the Spanish economy could be between 0.6% and 0.8% quarterly during Q4. However, the downward surprise recorded in Q3 (0.6% QoQ as against an estimate of 0.7% QoQ), together with the persistence of the risks that hang over the scenario, is maintaining the downward bias on the growth forecast for 2018 by BBVA Research (2.6%).
Modest upside risk to growth in 2018, baseline for 2019 unchanged but risks tilted to the downside. Although models suggest low risk of recession, qualitative analysis indicates downside risks are increasing. FOMC remains poised to raise rates in December. Baseline assumes 3 additional increases in 2019. Labor market slack minimal, as unemployment rate nears 50 year lows.
Why is the use of NLP important in economics and Monetary policy? Understanding Central Banks: “What”, “How” and “Who” is talking (or writing) about? Quick glance over the data and the methodology from the extraction to the sentiment analysis.
The economy of the Community of Madrid grew 3.4% in 2017 and will moderate its rate of growth up to 3.2% in 2018 and 2.6% in 2019. Unemployment will be reduced to 11.4% in 2019, but some risks are more likely now than a few months ago. Once the GDP per capita has returned to its pre-crisis level, the challenge is to reach 2008 level of employment and improve its quality.
Thanks to the digital revolution, microdata will give us detailed information about customers' financial situations, as is already the case for a patient’s health in the Healthcare System. This will be the cornerstone on which the new ways of understanding Financial Inclusion are based.
With the most recent data, GDP growth remains solid, but it would have slowed down in all autonomous communities. Tourism deepens the moderation of activity in the Mediterranean and island communities. In addition, the lower dynamism in the first half of exports and consumption weighs on growth also in the rest in 2018.
A batch of October economic indicators is announced today, together with the credit data, suggesting that the recent policy easing helped to stabilize economic growth. However, headwinds from the unsettled trade war with the US and domestic deleveraging still weigh on growth. As such, we expect monetary and fiscal policy to become more pro-growth in the rest of the year.
Our call is based on MPC’s hawkish forward guidance and the materialization of some risks, especially a weaker MXN. A lot has changed in the intermeeting period and in our view a hike is warranted. We are not expecting an additional hike in December for now, but will depend on the MXN performance which will most likely be driven by the fiscal budget outcome.
The economy of Asturias grew 3.5% in 2017, but will moderate it to 2.5% in 2018 and 2.6% in 2019. The unemployment rate will reduce to 11.2% in 2019, although some risks are more likely to materialize now, than they were some months ago. While pre-crisis per capita GDP will be reached, absolute GDP will not; better and stronger job creation remains as a challenge.
Policy recipe offered by Xi at import expo will help to solve trade disputes and rebalance China's economy. The China International Import Expo started in Shanghai on Nov 5, and the inaugural event, announced more than a year ago, stands in stark contrast to the escalated trade tension between China and the United States.
The people working on the fiscal budget for next year - which has to be approved before 15 December - are presumably redoing the calculations using new assumptions for the main macroeconomic variables, the outlook for which has changed with the decision to cancel the Texcoco airport project.