Economic Snapshot for G7 Countries
October 23, 2019
Global economic growth is seen slowing marginally in 2020
Global economic growth is seen slowing marginally next year on weaker momentum in the G7 and China, which will only be partially offset by stronger growth in other emerging markets. Rising global trade protectionism is the key downside risk to the outlook, which primarily centers around the evolution of the U.S.-China trade dispute.
Global Monetary & Financial Sector News
Global inflation remains largely subdued due to low oil prices and modest economic activity. Next year, inflation should remain broadly stable, with lower interest rates offsetting cheaper average oil prices. Major central banks have been quiet in recent weeks, following September’s round of monetary loosening which saw cuts by the Federal Reserve and ECB. Looking ahead, further easing is likely as central banks take advantage of generally mild price pressures to shore up growth prospects.
The Fed eased its stance in October, but suggested it will now remain on hold for the near term, while China’s central bank cut rates in mid-November to support activity. Looking ahead, panelists see further monetary loosening in 2020, albeit to a more limited extent than in 2019, as central banks take advantage of generally mild inflation to boost growth.
Over the last month, the Chinese yuan strengthened against the dollar on optimism over a partial trade deal with the U.S., while the pound also gained ground on a lower probability of a no-deal Brexit and the Swiss franc benefitted from still-solid safe-haven demand. The euro, Canadian dollar and Japanese yen were all fairly stable against the greenback.
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Major Economies Economic News
France: Private sector activity softens in November
December 4, 2019
The seasonally-adjusted IHS Markit Flash Composite Purchasing Managers’ Index (PMI) eased to 52.1 in November from 52.6 in October.
United Kingdom: November services and manufacturing PMIs suggest weak momentum
December 4, 2019
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) decreased from 50.0 in October to 49.3 in November, below the threshold that separates expansion from contraction in activity.
Canada: Bank of Canada leaves rates unchanged in December and rolls back dovish stance
December 4, 2019
On 4 December, the Bank of Canada (BoC) left its target for the overnight rate unchanged at 1.75%, as had been widely expected by market analysts. The Bank’s decision to stand pat was driven by close-to-target inflation levels, with inflation clocking in at 1.9% for the third consecutive month in October.
Switzerland: Consumer prices dip again in annual terms in November
December 3, 2019
Consumer prices fell by 0.1% in November, following a 0.2% dip in October.
United States: Downturn in manufacturing sector worsens in November
December 2, 2019
The Institute for Supply Management (ISM) manufacturing index sank to 48.1 in November from 48.3 in October, underwhelming market expectations of 49.4.
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