At a 0.5% rate, the preliminary estimate of the third quarter GDP represents a deceleration after the 0.7% increase in Q2.
There has been a good indication of the psychological 100.00 level holding in USD/JPY and recent Bank of Japan communication indicates a strong commitment from the Central bank to ease monetary policy as necessary.
In my opinion, it depends on how you define the positive trend. Prices returned to pre-Brexit levels as the degree of awareness for the risks and the risk aversion returned to the previous marks.
At this point I would argue with analysts, because we think that it is actually likely that the Central bank will end up quite close to the 4% inflation target next year.
More persistent weakness in employment would signal something worse, so we would have to judge the strength of the number against those views.
I do have another rate cut in my forecast for October, which I would say is quite likely; however, I am an outlier in that, as I am probably the only one calling for a rate cut this year.
My base case scenario is that I do not expect them to announce anything at the meeting between OPEC and non-OPEC producers in Algeria this week.
We do think UK inflation is going to rise quite sharply at the end of this year and then through most of 2017.
We expect one rate hike from the Federal Reserve this year in December and two more next year, the first in June and the second in December of the next year.
I think the likelihood of a rate cut could be as high as 40%; however, I would caution that it is more a question of not oil prices or the level of the currency, but actually the weakness in the non-energy exports sector, which is the biggest concern for the Bank of Canada at the moment.
It is important to differentiate here between the market related and the real economic impact of the Brexit vote. The market shock was indeed less severe than many investors had feared.
The latest economic data showed the US economy grew at a 1.2% pace in the Q2 and the country's retail sales showed no growth in July, driving the price of gold higher. In your point of view, will gold remain high or is it just a temporary appreciation?To my mind, it is going to remain high, as the US economy
I think the likelihood of a deal among the OPEC producers is low, though we have not ruled that out entirely. The reality is that they failed at the Qatar meeting in April
I think there are already signs of an industrial recovery in Russia. In fact, industrial production expanded in year-on-year terms in the second quarter of this year; though more generally, it seems to be the only sector of the economy that really shows signs of improvement.
I do not think this data is strong enough to see a hike as soon as next month. The employment growth has obviously accelerated again in the last couple of months; however, while that is encouraging, we still have some sides of slack in the labour market.
I think we will see a rebound from the May print but the pace of growth is likely to still remain quite subdued. At this point, what is really going on is that once the economy heals from the wildfires impact, what we will need to see is more evidence that growth in the non-energy sector is continuing.
For the Euro side, it will probably be quite minimal, most certainly we will see a little dip in the Q3 as a result; however, I doubt that it will linger beyond the next six months.
Overall, in terms of economic data, we have seen better than expected inflation development in the second quarter. Particularly, the preferred inflation measure by the RBA, the "Trimmed Mean", stayed stable at 1.7% instead of declining towards 1.5% as analysts as well as the RBA had anticipated.
We know that NPLs in Italy is around €360bn according to IMF estimate, which is a very big number. We also know that the Italian economy has shown real problems in creating stable recovery.
According to the ISM's recent reports, services sector looks solid indeed; however, it is still not at the great level. As concerns the ISM manufacturing index, we have seen a little bounce recently, but at the moment we do not see much further improvement for a couple of reasons.
Certainly, the Bank of England has to ensure that banks continue to function and can provide a supply of credit.
It mostly depends on what happens to the global fears over ‘Brexit'. If we see a big pick up in risk aversion, perhaps on worries about the outlook for the wider EU, then the Yen will almost certainly strengthen further.
Since November last year, The People's Bank of China has been targeting both the USD/CNH currency pair and currency basket, as they have their own CFETS RMB Index's currency basket, which means that the PBOC is no longer forced to follow the USD.
I think it is reasonable, although it is still questionable. The reason for me to say that is the weakness in the US economy that we are seeing right now, which is coming through labour markets, particularly through slower employment growth that historically has been a very key indicator of expansion and contraction in the US economy.