March Economic Update: The great reflation story

Financial market participants and economists have been discussing one hot topic in recent weeks: the return of inflation. In our March economic update, we look at whether impending price pressures will be fleeting or something more permanent, and what that could mean for global growth and financial markets

In this bundle

United States

US: On your marks…

Firm household fundamentals, a booming housing market and a revived manufacturing sector provide a strong platform for growth as the economy re-opens…

Eurozone: The underachiever

The sluggish pace of the vaccination campaign continues to jeopardise the eurozone recovery, though stronger manufacturing and construction activity are…

United Kingdom

UK: Poised for a spring recovery

Fast vaccinations and tumbling Covid-19 cases bode well for the UK's spring reopening. We expect 6% second quarter growth, but higher unemployment and…

China

China: Two Sessions – what to expect on reforms

We recently wrote a note on what to expect from this year’s Two Session meetings. That note focused on the economic aspects of the Two Sessions.…

CEE: Reflation theme intact despite more lockdown measures

Despite prolonged lockdowns, the reflation theme is intact. CPI will be running above target, but some are more willing than others to tolerate it. The…

Asia Pacific - Held back by the lack of vaccines

Asia Pacific - Held back by the lack of vaccines

Asia may have had a better pandemic compared to the rest of the world, but it is lagging well behind in the push to roll out vaccines. With the political…

FX: Dollar bounce underwhelms

If, at the start of the year, we had been told that US bonds would sell off 50bp at a time that Europe’s slow vaccine rollout had meant lockdown…

Rates

Rates: Escape velocity

Ben Bernanke coined the phrase "escape velocity" in 2010, essentially saying that there needed to be plenty of oomph to growth, so the…

Commodity supercycle calls grow

It has been an exceptional month for commodity markets, with growing inflation expectations increasing investor interest in the complex. Meanwhile,…

United States

Savings: the two-sided wildcard for growth

In the first lockdown, surging savings rates across the Western hemisphere were mainly the result of involuntary savings. As a result, the reopening of…

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Global Central Banks Outlook

The Federal Reserve's position of no rate hike until 2024 will be increasingly difficult to reconcile with the data, the European Central Bank will…

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