The Weekly Briefing from Capital Economics

Last week began with another US bank failure and ended with hotter-than-expected headline jobs data. In between, Jerome Powell sounded optimistic about the likelihood of a soft economic landing. But how realistic is that? Group Chief Economist Neil Shearing talks to David Wilder about credit conditions, labour markets and why the Fed may have stopped hiking, even as the ECB is set to carry on. Plu...

After months of resistance, China has been making positive noises around talks on restructuring the debt of a number of EM borrowers. But William Jackson , our Chief EM Economist, isn’t optimistic. He talks to Chief Asia Economist Mark Williams about the mounting challenges facing these restructuring talks in an age of global fracturing. Plus, it’s a big week in central banking, with a rate decisi...

It’s one of the big questions in markets after March’s banking sector turmoil but the prevailing guides to financial conditions don’t paint a very clear pictures. That’s why Simon MacAdam, our Senior Global Economist, has revamped and relaunched our Financial Conditions Indices – and he’s got a very worrying message about what they have to say about the ease of funding availability and what that m...

Julian Evans-Pritchard , our Head of China Economics, talks to Steven Altman , Director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management, about what lies ahead for globalisation in an age of economic fracturing.  The discussion includes the current health of globalisation, the risks of a broad reversal of trade flows and evidence so far of US-China decoupli...

How will the ructions in the banking sector be reflected in the data? Tracking the credit impact of March’s events isn’t as straightforward as it appears, says Group Chief Economist Neil Shearing . He talks to David Wilder about how to cut through the noise and where to look for signs that banks are curbing lending activity – including in our proprietary Financial Conditions Indices. Plus, with th...

It may be too soon to say that the banking turmoil is definitively over, but it’s not too early to try to understand why events of the past few weeks are going to leave a painful legacy for the US economy. Chief US Economist Paul Ashworth talks to David Wilder about the coming credit crunch, what this means for the Fed's next moves, and why sentiment can shift like a dam bursting. Also this week:...

Two weeks into the banking sector turmoil and there are few signs that the panic is ending. David Wilder speaks to Neil Shearing about why investors are still uneasy, whether central banks have made a mistake, and why there's growing focus on commercial property holdings amid the intensifying hunt for the next source of instability.  Plus, wheat consumption has typically grown along with the globa...

As the dust began settling on a hastily arranged takeover of Credit Suisse by UBS, our economists briefed clients on what’s next in this recent surge in turmoil in the banking sector. In these excerpts from the briefing, you’ll hear them discuss key issues, including:  Whether the Credit Suisse deal draws a line under this crisis;  What to expect from the Federal Reserve and Bank of England’s Marc...

A rushed deal for UBS to take over embattled rival Credit Suisse ahead of the start of the Monday open is the latest effort by authorities to restore market confidence and staunch a crisis in the banking sector that is now threatening to run into its third week. Has enough been done? As details of the UBS-Credit Suisse deal trickled out, Group Chief Economist Neil Shearing discusses some of the un...

Could turmoil in the US banking sector mark the end of Fed rate hikes? What are the contagion risks from the collapse of SVB and Signature Bank? What will the regulatory response look like? This is a special Capital Economics Weekly Briefing episode all about the SVB crisis. It contains some key edited excerpts from an online briefing held for clients with Group Chief Economist Neil Shearing, Chie...

Was Silicon Valley Bank's failure an isolated case of bad balance sheet management, or does it point to the start of another financial crisis? As policymakers scrambled to shore up market confidence ahead of the open, Group Chief Economist Neil Shearing discussed what SVB means for the broader economic and policy outlook. Plus: · Julian Evans-Pritchard, our Head of China Economics, on what another...

It’s US payrolls week and all eyes will be on whether January’s blowout jobs growth number was just a one-off or confirmation that – despite the Fed’s actions – the labour market remains tight. Labour market conditions matter hugely for how much further central banks across advanced economies have to go to whip inflation. The challenge is in understanding how they're evolving as pandemic-era disto...

By mid-century, India will have risen to become the world’s third biggest economy. But China will remain at number two, despite forecasts that it is set to overtake the US. These are findings from our latest Long Run Economic Outlook, a report which looks out decades to show a global economy that has been reshaped by intense US-China competition, but also by major demographic shifts and the widesp...

Russia invaded Ukraine a year ago this week, prompting a torrent of prediction about how much this singular moment would change Europe’s economy forever. 12 months later, David Wilder talks to Andrew Kenningham, our Chief Euro-zone Economist, and Liam Peach, our Emerging Europe research head, all about how the war in Ukraine has – and hasn’t – altered Europe’s economic picture. Plus: A looming UK...

Not only have emerging market economies, for the most part, come through this aggressive global tightening cycle without being plunged into a 1980s or 90s-style debt crisis. In many cases, their central banks were raising rates even as their advanced economy peers were still debating whether inflationary forces were “transitory”. In the latest episode of The Capital Economics Weekly Briefing: ·   ...

A stunning January jobs report has shifted the market narrative around the US economy, but has the fundamental story really changed that much? And does the economic picture justify the market’s bullish start to 2023 or have investors been partying in the face of a looming recession? Paul Ashworth, our Chief US Economist, joins Chief Markets Economist John Higgins for a discussion about what’s real...

In this episode: Forecasts are being revised up, the global tightening cycle is slowing down and markets are cheering. But are things really looking better? Group Neil Shearing reviews the recent data – including January’s stunning US payrolls numbers – as he explains why the isn’t an entirely feelgood story. Plus; Long-standing buyers of US Treasuries may not have the appetite they once did, says...

In this week's episode: It's a big week for markets, with US December payrolls due and the Fed, the ECB and the Bank of England all set to deliver their first policy decisions of the year. Group Chief Economist Neil Shearing discusses what to expect, showing how the economic landscape has shifted since these institutions last voted on rates and highlighting the scope for any surprises. Also this w...

Headlines have been dominated by talk of what follows this most recent era of globalisation, forming the basis of this year’s Davos meetings and a new IMF paper warning of a potentially major hit to the global economy. It’s a theme we’ve been discussing with clients for months, leading up to and following last October’s publication of our work on the fracturing of the global economy. Group Chief E...

This special episode is all about property markets, with Chief Property Economist Andrew Burrell leading wide-ranging discussions about what to expect in 2023 and some key sector trends. In this episode: Andrew outlines our forecasts for US, UK and European markets this year, explaining how bad things can get as recessions take hold; Kiran Raichura, head of our US Commercial Property coverage, and...

China’s economy was tied down by the government’s tough zero-COVID regime. And then it wasn’t. The virus appears to have ripped through much of China’s urban population in the wake of the dramatic policy U-turn by Beijing, setting the stage for a dramatic rebound in economic activity this year. But how big will it be, and what will it mean for the global outlook in 2023? Group Chief Economist Neil...

It was meant to be a discussion all about the upside and downside risks that clients should keep an eye on in 2023. But a growing online debate about attempts to push the renminbi in energy trade between China and the GCC countries sidetracked it. Group Chief Economist Neil Shearing does talk about potential inflation surprises – both positive and negative – and address what post-zero-COVID China...

The Bank of Japan's last policy meeting of 2022 was a big one, with a surprise announcement of changes to its yield curve control policy. In this special episode, Marcel Thieliant, who leads our Japan coverage, speaks to David Wilder about out what the Bank has done, whether it is sustainable and what it means for the Japanese policy outlook. 

Say what you want about 2022, but it wasn’t a dull year. After 12 months of geopolitical upheaval, the biggest inflationary spike in decades, central bankers going full Volcker and giant swings in financial markets, what will 2023 bring? In this special end-of-2022 episode, Neil Shearing, our Group Chief Economist, and Chief Markets Economist John Higgins discuss what to expect in the coming year...

Last week was a relatively quiet one for markets. The same won’t be said about this coming week. US inflation data and a slew of central bank decisions will give investors plenty to chew over as they scan for signs that the end of monetary tightening cycles could finally be looming into view. Will policymakers at the Fed, the ECB and/or the Bank of England give the market what it wants? Plus, the...