GBP: Brexit impact is yet to be seen

Summary

Apart from the Brexit risk the UK economy is doing very well. Potential impact of Brexit is net yet reflected in the data.

 

 Central Bank and rates

"The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 1 February 2017, the Committee voted unanimously to maintain Bank Rate at 0.25%. The Committee voted unanimously to continue with the programme of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, totalling up to £10 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion."

Economic Activity

Inflation

Labour Market

Unemployment rate is well bellow the pre-crisis level and still declining. 

  

Consumer

Retail sales data is one of the strongest in the developed word, but the last few readings suggested some weakness.

AUD: inflation and labor market cast doubts

Summary

 

Central Bank and rates

RBA expects the return to reasonable GDP growth in Australia expected in q4 2017. RBA says CPI expecting to pick up over 2017 to be above 2pc, but it expected to remain low for some time.

Economic Activity

Australian GDP growth rate has been one of the highest in the developed word.

Although, private capital expenditure q/q is still in the negative territory. 

Inflation

 Annualized inflation is around 1.50% and doesn't exhibit upticks what we see elsewhere. 

Labor Market

Unemployment is way above the pre-crisis level and was increasing int the last few readings. 

 Consumer

 Retail sales trend is one of the strongest in the developed word.

JPY: inflation is still a problem

Summary

 

  

Central Bank and rates

BOJ short-term interest rate target is at -0.1 pct and 0-year JGB yield target around zero pct. BOJ leaves unchanged pledge to buy JGBs more or less at current pace so its holdings increase at annual pace of around 80 trln yen (USD 700Bn).

Economic Activity

The Japanese GDP growth rate is the slowest in the developed world.

 The manufacturing PMI is at the highest level since 2014.

Inflation

Inflation is still struggling to break out from deflationary area.

Labor Market

Unemployment is way bellow the pre-crisis level, the economy is at full employment.

Consumer

Confidence indicates a healthy state.