Nomura

What's on the horizon for the global economy?

Our weekly updated overview highlights the key releases of global economic market data from around the globe and provides an economic outlook for the rest of 2019 by region.

  • Our updated calendar identifies the top events that should be on your radar this week.
  • We also provide an outlook overview region by region for the rest of the year.
Global Markets Research Economic Data and Events Calendar

Our view in a nutshell

Japan

  • Despite relatively stable domestic demand, a downside risk to growth remains as drags from real exports could re-emerge.
  • We expect core CPI inflation to remain around 0.5% y-o-y for a while as it continues to decelerate for a while
  • We expect the current YCC policy to remain untouched in the longer run, despite continuing hints from the BOJ for further rate cuts
  • The risk is renewed yen appreciation caused by our concerns over a global recession and US protectionism.

Asia

  • The export-led downturn has spilt into capex, and consumption is now at risk. We don’t expect a recovery until Q1 at the earliest
  • We expect more central bank rate cuts: China, Korea, India, Indonesia, Malaysia, Thailand, the Philippines and Australia.
  • The region’s new stars in terms of rising long-run potential growth are mainly in parts of Southeast Asia.
  • China: We expect the slowdown to worsen and policy easing to continue; the outbreak of Wuhan coronavirus is a new risk
  • Korea: We expect the BOK to deliver a 25bp rate cut in Q3 2019 (most likely July) and another in Q4 (most likely November).
  • India: We expect the cumulative effects of monetary policy easing to support a cyclical recovery starting Q3 2019.
  • Indonesia: President Jokowi’s re-election bodes well for further reforms, investment spending and potential growth.
  • Australia: We see better, but still-sub trend growth, continuing low inflation and two more 25bp rate cuts (Q4, Q1).

United States

  • Growth has slowed to potential but we expect a modest acceleration starting in H2 2020 as uncertainty wanes.
  • Recession risk has dissipated as consumer fundamentals help sustain the expansion.
  • Core inflation should pick up as higher tariffs pass through to consumer prices and labour markets remain tight.
  • After cutting rates three times in 2019, we expect the Fed to remain on hold over the forecast horizon.
  • Balance sheet expansion has started but the FOMC will need to make adjustments in coming quarters.
  • Risks include aggressive trade policy, elevated levels of corporate debt and a sudden tightening of financial conditions.

Europe

  • We expect growth to stay weak but to slowly recover in 2020. Manufacturing recession risks spilling over into services/jobs.
  • We see euro area core inflation rising gradually over time, but remaining well below the ECB’s inflation aim.
  • We expect the ECB to remain on hold as survey data improve and underlying measures of inflation grind higher.
  • The tail risks of a Brexit cliff edge at the end of 2020 remain, but we expect a free trade deal to be agreed which avoids that.
  • UK growth has been volatile thanks to Brexit uncertainty but we see a recovery in the run-rate of growth in 2020.
  • The BoE revised down its growth and inflation views materially but still sees inflation modestly above target in three years.
  • We expect an interim BoE rate cut in January, though this will require ongoing weakness in the economic data.

For more information read our weekly report here

Contributors

  • Lewis Alexander

    Chief US Economist

  • George Buckley

    Chief UK & Euro Area Economist

  • Ting Lu

    Chief China Economist

  • Takashi Miwa

    Chief Japan Economist

  • Rob Subbaraman

    Head of Global Macro Research and Co-head of Global Markets Research

  • Sonal Varma

    Chief Economist, India and Asia ex Japan

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