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Research Briefing | Aug 27, 2021

A framework for evaluating EM currencies’ fair value

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In our recent extended panel assessment on EM FX, we found most currencies have yet to recover ‘fair value’ after the March 2020 overshooting event. Estimates considered; regional stories emerge.

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Research Briefing | Aug 27, 2021

A framework for evaluating EM currencies’ fair value

Copy of Copy of Copy of Ipad Frame (67)

In our recent extended panel assessment on EM FX, we found most currencies have yet to recover ‘fair value’ after the March 2020 overshooting event. Estimates considered; regional stories emerge.

Read more

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Research Briefing | Aug 27, 2021

Australia | A four-phase migration recovery

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The halving of Australia’s arrival cap in July 2021 will drag on net overseas migration (NOM) in Q3 and Q4 2021, resulting in an estimated outflow of 35,000 people in FY2022. As much as active COVID-19 outbreaks are a setback, they have acted to speed up vaccination delivery, and pulled forward the mindset hurdle of living with the virus that is inherent in the transition to Phase 2.

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Research Briefing | Aug 27, 2021

Australia | A four-phase migration recovery

Copy of Ipad Frame (41)

The halving of Australia’s arrival cap in July 2021 will drag on net overseas migration (NOM) in Q3 and Q4 2021, resulting in an estimated outflow of 35,000 people in FY2022. As much as active COVID-19 outbreaks are a setback, they have acted to speed up vaccination delivery, and pulled forward the mindset hurdle of living with the virus that is inherent in the transition to Phase 2.

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Research Briefing | Aug 27, 2021

Institutional erosion a hidden risk in event of QE tapering

Institutional erosion a hidden risk in event of QE tapering

While we don’t expect the looming announcement of QE tapering by the US Fed to trigger a sharp rise in US yields a la 2013’s ‘taper tantrum’, it is impossible not to have flashbacks to those days. Back then, Latin America had only one delegate in what became known as the ‘Fragile 5’ group of vulnerable EMs. Eight years later, however, the region is in an even weaker position to withstand another EM sell-off.

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Research Briefing | Aug 27, 2021

Institutional erosion a hidden risk in event of QE tapering

Institutional erosion a hidden risk in event of QE tapering

While we don’t expect the looming announcement of QE tapering by the US Fed to trigger a sharp rise in US yields a la 2013’s ‘taper tantrum’, it is impossible not to have flashbacks to those days. Back then, Latin America had only one delegate in what became known as the ‘Fragile 5’ group of vulnerable EMs. Eight years later, however, the region is in an even weaker position to withstand another EM sell-off.

Read more

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Research Briefing | Aug 26, 2021

Canada | Bank of Canada eyes shift to average inflation targeting

Bank of Canada eyes shift to average inflation targeting - iPad

There’s a close race as the Bank of Canada weighs sticking with its successful flexible inflation targeting (FIT) or switching to average inflation targeting (AIT) when it renews its inflation-control agreement with the government later this year. We think the Bank slightly favours AIT and may in fact move to flexible average inflation targeting (FAIT) as implemented by the US Fed a year ago.

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Research Briefing | Aug 26, 2021

Canada | Bank of Canada eyes shift to average inflation targeting

Bank of Canada eyes shift to average inflation targeting - iPad

There’s a close race as the Bank of Canada weighs sticking with its successful flexible inflation targeting (FIT) or switching to average inflation targeting (AIT) when it renews its inflation-control agreement with the government later this year. We think the Bank slightly favours AIT and may in fact move to flexible average inflation targeting (FAIT) as implemented by the US Fed a year ago.

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Research Briefing | Aug 26, 2021

MENA | Saudi oil exports; GCC travel; Kuwait spending cuts

Saudi oil exports; GCC travel; Kuwait spending cuts

Oil exports from Saudi Arabia soared to SAR61.5bn in June, a 123% increase from a year earlier, as oil output started to rise and oil prices strengthened. Non-oil exports rose 41%, taking total exports 92% higher than June 2020, when international trade and travel were hit by Covid-19 restrictions.

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Research Briefing | Aug 26, 2021

MENA | Saudi oil exports; GCC travel; Kuwait spending cuts

Saudi oil exports; GCC travel; Kuwait spending cuts

Oil exports from Saudi Arabia soared to SAR61.5bn in June, a 123% increase from a year earlier, as oil output started to rise and oil prices strengthened. Non-oil exports rose 41%, taking total exports 92% higher than June 2020, when international trade and travel were hit by Covid-19 restrictions.

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Research Briefing | Aug 26, 2021

Norway | We expect growth in H2 will be driven by services

Norway | We expect growth in H2 will be driven by services

The mainland economy advanced 1.4% q/q in Q2, lower than our 1.9%
prediction. The final reopening of the economy has been further delayed amid concerns surrounding the Delta variant, but we still see the economy
recovering above its pre-pandemic level in Q3 2021. We have lowered our 2021 mainland GDP growth forecast to 4.1% from 4.3% previously.

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Research Briefing | Aug 26, 2021

Norway | We expect growth in H2 will be driven by services

Norway | We expect growth in H2 will be driven by services

The mainland economy advanced 1.4% q/q in Q2, lower than our 1.9%
prediction. The final reopening of the economy has been further delayed amid concerns surrounding the Delta variant, but we still see the economy
recovering above its pre-pandemic level in Q3 2021. We have lowered our 2021 mainland GDP growth forecast to 4.1% from 4.3% previously.

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Blog|25 August 2021

Construction’s productivity problem requires technology-based solutions

Toby Whittington
Toby Whittington
Lead Economist
Construction’s productivity problem requires technology-based solutions

The construction sector has been one of the most resilient areas of the economy during the pandemic. As many other areas of the economy had to suspend operations, the construction sector benefitted from the fact that most work takes place outside (meaning less onerous distancing restrictions) and because much construction work is viewed as essential for a functioning economy.

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Research Briefing | Aug 25, 2021

Germany | Push for carbon neutrality to get limited fiscal support

Ipad Frame - Germany-Push-for-carbon-neutrality-to-get-limited-fiscal-support

The race to succeed long-term Chancellor Merkel and lead Europe’s largest economy is wide open. But we think Germany will continue its reactive, consensual, and inward-looking policy approach irrespective of the coalition. Major progress on key European or domestic policy needs isn’t likely, with a modestly accelerated greening of the economy the most probable outcome.

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Research Briefing | Aug 25, 2021

Germany | Push for carbon neutrality to get limited fiscal support

Ipad Frame - Germany-Push-for-carbon-neutrality-to-get-limited-fiscal-support

The race to succeed long-term Chancellor Merkel and lead Europe’s largest economy is wide open. But we think Germany will continue its reactive, consensual, and inward-looking policy approach irrespective of the coalition. Major progress on key European or domestic policy needs isn’t likely, with a modestly accelerated greening of the economy the most probable outcome.

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Research Briefing | Aug 25, 2021

South Korea | Rising trade momentum bodes well for growth

South Korea | Rising trade momentum bodes well for growth

South Korea’s trade has remained resilient despite rising global Covid cases, with export and import momentum gaining further traction. We expect exports will be supported by strong imports from advanced economies, memory chip demand, and seasonal demand for certain key items, which will help cushion near-term headwinds from softer regional demand and Covid-related supply disruptions. Rising vaccination rates could allow domestic restrictions to ease in Q4, which will also provide impetus for import growth.

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Research Briefing | Aug 25, 2021

South Korea | Rising trade momentum bodes well for growth

South Korea | Rising trade momentum bodes well for growth

South Korea’s trade has remained resilient despite rising global Covid cases, with export and import momentum gaining further traction. We expect exports will be supported by strong imports from advanced economies, memory chip demand, and seasonal demand for certain key items, which will help cushion near-term headwinds from softer regional demand and Covid-related supply disruptions. Rising vaccination rates could allow domestic restrictions to ease in Q4, which will also provide impetus for import growth.

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Research Briefing | Aug 24, 2021

Global | Coronavirus Watch: Transitioning to 2022

We have cut our near-term growth forecasts, in part due to the spread of Delta, and are likely to fine-tune them further in September. But we don’t see Delta as a cause for major panic. Rather than pushing economies back into recession, the most likely outcome is that it pushes back the recovery in the shorter term.

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Research Briefing | Aug 24, 2021

Global | Coronavirus Watch: Transitioning to 2022

We have cut our near-term growth forecasts, in part due to the spread of Delta, and are likely to fine-tune them further in September. But we don’t see Delta as a cause for major panic. Rather than pushing economies back into recession, the most likely outcome is that it pushes back the recovery in the shorter term.

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Research Briefing | Aug 23, 2021

US | President Biden’s climate goals: states with the greatest challenges

President Biden’s climate goals states with the greatest challenges - iPad

President Biden has set a target of reducing net greenhouse gas emissions in the US by 50-52 percent below 2005 levels, by 2030. For some states that looks likely to be very difficult. Our forecasts for US states are instead based on largely ‘business as usual’ assumptions.

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Research Briefing | Aug 23, 2021

US | President Biden’s climate goals: states with the greatest challenges

President Biden’s climate goals states with the greatest challenges - iPad

President Biden has set a target of reducing net greenhouse gas emissions in the US by 50-52 percent below 2005 levels, by 2030. For some states that looks likely to be very difficult. Our forecasts for US states are instead based on largely ‘business as usual’ assumptions.

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Research Briefing | Aug 23, 2021

APAC | To what extent can domestic travel support the tourism recovery in APAC?

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Domestic travel is the key factor that will support the near-term tourism recovery in Asia-Pacific (APAC). While international travel in the region will not recover to 2019 levels until at least 2024 in our current baseline forecast, domestic visitors are projected to exceed pre-pandemic levels next year.

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Research Briefing | Aug 23, 2021

APAC | To what extent can domestic travel support the tourism recovery in APAC?

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Domestic travel is the key factor that will support the near-term tourism recovery in Asia-Pacific (APAC). While international travel in the region will not recover to 2019 levels until at least 2024 in our current baseline forecast, domestic visitors are projected to exceed pre-pandemic levels next year.

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Blog|20 August 2021

Addressing climate change in Europe means taking a hyperlocal approach

Daniel Nandwani
Daniel Nandwani
Senior Economist, Cities & Regions
Addressing climate change in Europe means taking a hyperlocal approach

The rising threat of climate change is challenging governments around the world. Previous research by colleagues at Oxford Economics concludes that global warming will reduce global GDP in 2050 by up to 7.5% of world GDP unless there are vastly more effective mitigation measures. That research also shows that these effects will vary dramatically across regions, and even within countries.

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Research Briefing | Aug 20, 2021

UK | Staying bullish on the consumer outlook

UK | Staying bullish on the consumer outlook

Retail sales fell sharply in July, but we don’t see this as a reason to turn bearish on the consumer outlook. The slide was partly due to one-off factors and partly a reflection of spending patterns continuing to normalise as Covid restrictions, which had been limiting social consumption, are lifted.

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Research Briefing | Aug 20, 2021

UK | Staying bullish on the consumer outlook

UK | Staying bullish on the consumer outlook

Retail sales fell sharply in July, but we don’t see this as a reason to turn bearish on the consumer outlook. The slide was partly due to one-off factors and partly a reflection of spending patterns continuing to normalise as Covid restrictions, which had been limiting social consumption, are lifted.

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Research Briefing | Aug 20, 2021

MENA | Coronavirus tracker for the GCC – August update

Coronavirus tracker for the GCC – August update

The Delta variant is causing concern globally and is becoming significant in the Middle East. It now accounts for most of the cases in Bahrain, Kuwait, Israel and Qatar (where data Covid-19 by type are published) and cases have also been reported in Oman and the UAE. With the Delta variant seemingly more resistant to vaccines (and effectiveness of vaccines seeming to diminish over time) and more transmissible, this may pose a risk to the continued re-opening of economies in the region.

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Research Briefing | Aug 20, 2021

MENA | Coronavirus tracker for the GCC – August update

Coronavirus tracker for the GCC – August update

The Delta variant is causing concern globally and is becoming significant in the Middle East. It now accounts for most of the cases in Bahrain, Kuwait, Israel and Qatar (where data Covid-19 by type are published) and cases have also been reported in Oman and the UAE. With the Delta variant seemingly more resistant to vaccines (and effectiveness of vaccines seeming to diminish over time) and more transmissible, this may pose a risk to the continued re-opening of economies in the region.

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Research Briefing | Aug 20, 2021

How the pandemic is reshaping the US trade outlook

How the pandemic is reshaping the trade outlook page1

The fiscal and monetary response to the pandemic will leave a lasting mark on the net trade position of the US. The trade deficit is at record levels and is expected to widen by $248bn in 2021, to 3.7% of GDP in 2021, driven by a flood of imported goods while the economic struggles of our trading partners has led to a dampening of demand for exports.

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Research Briefing | Aug 20, 2021

How the pandemic is reshaping the US trade outlook

How the pandemic is reshaping the trade outlook page1

The fiscal and monetary response to the pandemic will leave a lasting mark on the net trade position of the US. The trade deficit is at record levels and is expected to widen by $248bn in 2021, to 3.7% of GDP in 2021, driven by a flood of imported goods while the economic struggles of our trading partners has led to a dampening of demand for exports.

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Research Briefing | Aug 19, 2021

US | Recovery Tracker falters as the Delta variant spreads

US Recovery Tracker falters as the Delta variant spreads - iPad

The US Recovery Tracker carried the stalled progress we saw in the month of July into August, falling 0.3ppts to 96.4 in the week ended August 6. Economic momentum remains strong, but contractions in five of the six subcomponents signal that gains will be harder to come by as we move past peak growth.

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Research Briefing | Aug 19, 2021

US | Recovery Tracker falters as the Delta variant spreads

US Recovery Tracker falters as the Delta variant spreads - iPad

The US Recovery Tracker carried the stalled progress we saw in the month of July into August, falling 0.3ppts to 96.4 in the week ended August 6. Economic momentum remains strong, but contractions in five of the six subcomponents signal that gains will be harder to come by as we move past peak growth.

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Blog|19 August 2021

Don’t fear the robots—but do prepare for them

Don’t fear the robots—but do prepare for them

Automation and robotization are rapidly transforming industries across the world: The global stock of robots has more than doubled since 2010. This surge has been driven by lower cost, better accessibility, and higher productivity of robots, and further accelerated by the COVID-19 pandemic and its fallout. During the pandemic, small and large companies alike significantly expanded their use of robots to continue operating under tight labor conditions—reports suggest that orders for robots increased by 20% year-on-year in the first quarter of 2021 alone.

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Research Briefing | Aug 19, 2021

Europe | Is the EU on track to be “Fit for 55” by 2030?

Ipad Frame - Is the EU on track to be Fit for 55 by 2030

Earlier in July, the European Commission put forward a concrete set of proposals aimed at providing substance to the EU’s commitment to cut greenhouse gas emissions to “at least 55%” below 1990 levels by 2030 and to reach “climate neutrality” (i.e., net-zero greenhouse gas emissions) by 2050.

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Research Briefing | Aug 19, 2021

Europe | Is the EU on track to be “Fit for 55” by 2030?

Ipad Frame - Is the EU on track to be Fit for 55 by 2030

Earlier in July, the European Commission put forward a concrete set of proposals aimed at providing substance to the EU’s commitment to cut greenhouse gas emissions to “at least 55%” below 1990 levels by 2030 and to reach “climate neutrality” (i.e., net-zero greenhouse gas emissions) by 2050.

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Research Briefing | Aug 18, 2021

UK | Inflation set to rebound sharply after July lull

UK | Inflation set to rebound sharply after July lull

July’s fall in inflation is likely to represent only brief respite for consumers. After a larger than expected rise in the energy price cap, we now expect CPI inflation to reach 3.5% before the end of the year.

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Research Briefing | Aug 18, 2021

UK | Inflation set to rebound sharply after July lull

UK | Inflation set to rebound sharply after July lull

July’s fall in inflation is likely to represent only brief respite for consumers. After a larger than expected rise in the energy price cap, we now expect CPI inflation to reach 3.5% before the end of the year.

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