BofAML _ Global core inflation

Redacción - Viernes, 24 de Marzo

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Global Economic Weekly: Global core inflation - still expected to move higher • Recent behaviour of oil and uncertainty over fiscal impulse in the US could throw the recovery of inflation into doubt. • But the progressive closure of the output gap should ensure a modest pick-up in global core inflation. •  This means inflation should continue to recover once any potential temporary shock fades.

Global Letter: global core inflation - still expected to move higher

The recent behaviour of oil prices and uncertainty over fiscal impulse in the US could throw the recovery of inflation into doubt. But the progressive closure of the output gap should ensure a modest pick-up in global core inflation, i.e. inflation should continue to recover once any potential temporary shock fades.

United States: where is the post-election boom in credit?

Tighter lending standards likely weighed on bank lending over the turn of the year, contrasting with the strong gains in business and consumer confidence. Our test of the data shows that loan growth responds to sentiment with a roughly 3-quarter lag, supporting a recovery in C&I lending. However, auto and CRE could still be challenged.

Euro Area: the deposit rate itch

We think rates will stay put in 2017. If outlook risks fully balance the ECB could drop the "lower" already in June. By September when discussing QE ECB would need to signal the possibility of a reversal, which would materialize in 2018.

Asia: ASEAN - not missing the export party

We a take a closer look at the common factors that are driving the export recovery in the ASEAN region, which we believe will be sustained in the near term. We also highlight some of the country-specific factors that are likely to be important

Emerging EMEA: Russia - recovery should still be on track

Weak February data do not undermine our expectation of a renewed economic recovery from early 2017, as we forecast positive real GDP growth from 1Q17. Profit-driven investment will propel the recovery.

Latin America: Brazil - trip notes

We visited government officials, economic/political consultants and investors in London. Overall view is positive Brazil. There is consensus that the government is committed to fiscal adjustment and focused on completing social security reform. Investors in London remain constructive but have relatively light exposure.

UK: inflation surprise means more hawkish BoE

We raised our inflation forecast 10bp to 3.2% peak in October. We also changed our BoE call: now expect no change in rates instead of cut.

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