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Peru Economic Outlook. First quarter 2019

February 1, 2019
We estimate that GDP advanced around 4.6% yoy in Q4 2018. As a result, GDP growth in 2018 would have been around 3.9%. This year, due to a strong increase in mining investment, but also more restrained public spending and less favourable external conditions, we forecast that GDP will advance 3.9% in 2019, a similar figure to that of our previous report.

Market Comment | The Fed’s dovish tone dragged down the USD and US yields

February 1, 2019
As expected, the FOMC left interest rates unchanged and reinforced the “pause” in its tightening path. Judging from market reaction, the FOMC sounded more dovish than had been expected as it hinted at a longer pause. In this context, the USD and US yields fell, and US stocks rose. Today, the USD and US Treasuries yields remained at their recent lower level

U.S. Recession Risk Monitor. January 2019

January 31, 2019
The probability of a recession steadies after sharp rise at the end of 2018. Financial markets adjusts to dovish monetary policy shift and stable growth outlook. Fiscal policy risk increasing with divided White House and Congress. Pressures on corporate spreads ease, as perception of near-term downside risks decline.

Mexico | Traditional bank deposit keeps its pace of growth

January 31, 2019
In November 2018, the nominal annual growth rate of traditional deposits (demand + term) of commercial banks was 9.8% (4.8% real), slightly higher than the previous month (9.4%), but lower than the nominal growth rate registered in November 2017 (10.9%).

Market Comment | The USD remained steady ahead of today’s FOMC decision

January 31, 2019
Mild movements in markets awaiting news from the two-days trade talks between the US and China which began today. The optimism about a deal is partially offset by fears of escalating US tariffs on Chinese goods in early March if a trade truce fails. Apart from this, the Fed’s policy decision will be announced later today, in which we do not expect any change in rates.

Eurozone | Downward GDP growth revision due to increasing uncertainty and global headwinds

January 30, 2019
The EZ growth slowed more than expected in 2H18 as easing global support was exacerbated by one-off factors. This along with increasing uncertainty led us to revise downwards growth to 1.4% in 2019-20, but domestic factors remain solid underpinned by lower oil prices and accommodative policies. Risks are tilted to the downside, mostly related to political issues

U.S. Economic Outlook. January 2019

January 30, 2019
GDP growth to moderate in 2019. Risk of recession remains elevated over the next 24 months. Fed to delay raising rates in 1H19 as it continues to engineer a soft-landing. Labor market slack remains minimal. Inflation expectations down, as pass-through from rising input costs muted. 10-year Treasury to follow shallower path.

Market Comment | Markets remain expectant ahead of Brexit vote

January 30, 2019
Calm in financial markets ahead of the main events of this week, which will start this evening with the Brexit vote. Additionally, all eyes remained on tomorrow’s start of trade talks between China and the US, as fresh news could condition the outcome of upcoming negotiations. The US accusations against Huawei raised concerns about the progress of upcoming trade talks.

Global | Mild adjustment of global growth, but more uncertain due to political risks

January 30, 2019
The global environment has worsened because of economic and financial deterioration. It partly responds to transitory factors and uncertainty about growth (protectionism, financial conditions, Brexit) that will disappear throughout the year. However, we have revised the global growth forecast downwards, especially in the developed economies.

Market Comment | Risk assets drop ahead of an eventful week. FOMC preview  

January 29, 2019
Financial markets started the week on the wrong foot, awaiting the outcome of a raft of events that will take place this week. High-level US-China trade talks and Wednesday’s FOMC meeting will be the main milestones. Additionally, a vote on May’s Brexit “plan B” along with the release of economic data in the US, Europe and China will also take investors’ attention.

How does the global economic panorama look for the next two years?

January 28, 2019
The adjustment that took place in financial markets towards the end of 2018 was mainly brought about by worsening macroeconomic data at the global level, particularly in the manufacturing sector, and much influenced by the trade tensions between the US and China.

Pure uncertainty

January 28, 2019
Is this the beginning of the end? Fears that the answer may be yes, due to the US economy’s going into recession and a marked slowdown in China’s growth, both in 2020, explain the sharp correction in financial markets at the end of 2018.

U.S. | Oil Prices Outlook. January 2019

January 27, 2019
OPEC+ decision to reduce output prevented prices from declining further. The expiration of import waivers of Iranian oil could have a positive effect on prices. U.S. production is expected to remain robust through the year. Demand is projected to slow down as global economic growth weakens. Prices could move between $60 and $70 in 2019, but may decelerate further in 2020.

Mexico Regional Sectoral Outlook. Second half 2018

January 26, 2019
In the first half of 2018, the Mexican economy grew at a lower rate than expected, with the service sector contributing 86.9% of GDP growth, less than the 92.1% observed in 2017. Manufacturing industries recovered in 2017, contributing 11.8% of growth, although uncertainty in the first half of the year affected their growth potential.

Mexico | Proposed changes to the SAR Law w/potential benefits for workers and the system

January 26, 2019
The most relevant proposed changes are: a) incorporation of returns in the determination of the fee collection scheme, b) greater flexibility of the investment regime, c) greater ease for workers to have voluntary savings, and d) transformation of the figure of "investment companies specialized in retirement funds" to "investment funds specialized in retirement funds".

Market Comment | Markets remained stable despite mounting signs of slowing growth

January 26, 2019
Cautious mood in markets during the week, amid the resurfacing of concerns about global growth. The release of China’s 4Q18 GDP -which confirmed the expected slowdown-, the cut in the IMF’s global economic growth forecast and disappointing confidence data pointed in this direction. Meanwhile, uncertainty about Brexit developments and ECB meeting were the main drivers

Financial Regulation: Weekly Update . 25 January 2019

January 25, 2019
Highlights: BCBS reviews its Principles for sound liquidity risk management and supervision. IOSCO issues statement on environmental, social and governance disclosure. BIS issues report regarding domestic capital markets. ECB issues principles for effective fallback provisions for euro-denominated cash products. FCA consults on cryptoassets guide.

China Economic Outlook. First quarter 2019

January 25, 2019
The low Q4 GDP figure sends the 2018 whole year GDP growth slowing down to 6.6%, the lowest growth rate for the past 28 years since 1990. This suggests that Chinese economy further moderated amid the unsettled trade war with the US and previous domestic deleveraging measures. It prompted the authorities to beef up their easing measures to offset headwinds to the economy.

ECB: no decisions, but more dovish on the balance of risks

January 25, 2019
The ECB is assessing the extent of the slowdown before discussing monetary policy measures. The balance of risks has moved to the downside. No modification in the policy or forward guidance, but the door is open for changes in the coming months.

Market Comment | The EUR recovered after Draghi’s speech despite surrounding risks

January 25, 2019
Cautious mood seemed to prevail in markets. Today`s attention was on the euro zone due to the release of confidence data and the ECB meeting.  Meanwhile, despite the non-representation of the US administration in Davos, the US-China trade dispute continued in the forefront as the major players in the global economy pointed to this issue as a significant economic risk