The Weekly Briefing from Capital Economics

In this week's episode:It's a big week for markets, with US December payrolls due and the Fed, the ECB and the Bank of England all set to deliver their first policy decisions of the year. Group Chief Economist Neil Shearing discusses what to expect, showing how the economic landscape has shifted since these institutions last voted on rates and highlighting the scope for any surprises. Also this week;Andrew Kenningham and Jack Allen-Reynolds from our euro-zone team talk through the ECB's policy challenges;And Sheana Yue and Gareth Leather on what China's reopening means for Asia. Click here to read all the research referenced in this episode.

Headlines have been dominated by talk of what follows this most recent era of globalisation, forming the basis of this year’s Davos meetings and a new IMF paper warning of a potentially major hit to the global economy. It’s a theme we’ve been discussing with clients for months, leading up to and following last October’s publication of our work on the fracturing of the global economy. Group Chief Economist Neil Shearing discusses what's missing from the debate around fracturing, what the world economy looks like in an age of fracturing, and explains which countries and sectors will be most vulnerable as geopolitics increasingly drives policy-making. Plus, Senior Economic Adviser Vicky Redwood talks to Chief Global Economist Jennifer McKeown about housing market downturns and what they mean for advanced economies and the timing of central bank pivots. Click here to read the research referenced in this episode.

This special episode is all about property markets, with Chief Property Economist Andrew Burrell leading wide-ranging discussions about what to expect in 2023 and some key sector trends. In this episode:Andrew outlines our forecasts for US, UK and European markets this year, explaining how bad things can get as recessions take hold;Kiran Raichura, head of our US Commercial Property coverage, and Property Economist Sam Hall run through our latest rankings of US metro demand, exploring the factors behind southern markets taking the top spots as most desirable among remote workers;Andrew talks with David Oxley, the head of our Climate Economics coverage, about the property sector's outsized contribution to global carbon dioxide emissions and what it can do to decarbonise, including office versus residential and how construction regulations in emerging markets need to catch up. Click here to read the reports referenced in this episode. 

China’s economy was tied down by the government’s tough zero-COVID regime. And then it wasn’t. The virus appears to have ripped through much of China’s urban population in the wake of the dramatic policy U-turn by Beijing, setting the stage for a dramatic rebound in economic activity this year. But how big will it be, and what will it mean for the global outlook in 2023? Group Chief Economist Neil Shearing talks to Mark Williams, our Chief Asia Economist, about what could be one of the year’s biggest economic curveballs. Plus, after a cheering US CPI report, Senior US Economist Andrew Hunter and Stephen Brown, who leads our Canada coverage, discuss about what lies ahead for US and Canadian inflation and what the Fed and Bank of Canada are likely to do next. Click here to get the research referenced in this episode.

It was meant to be a discussion all about the upside and downside risks that clients should keep an eye on in 2023. But a growing online debate about attempts to push the renminbi in energy trade between China and the GCC countries sidetracked it. Group Chief Economist Neil Shearing does talk about potential inflation surprises – both positive and negative – and address what post-zero-COVID China could mean for the 2023 global outlook. But his conversation with David Wilder also takes in geopolitical risk, and that brings up the faddish idea of a "petroyuan" and whether it could displace the US dollar's status as the dominant reserve currency. Also this week, Mark Williams and Julian Evans-Pritchard from our China team talk about what's really happening on the ground in China following the government's abrupt public health policy U-turn and what that means for the timing of an economic recovery. You'll find the research referenced in this episode here.

The Bank of Japan's last policy meeting of 2022 was a big one, with a surprise announcement of changes to its yield curve control policy. In this special episode, Marcel Thieliant, who leads our Japan coverage, speaks to David Wilder about out what the Bank has done, whether it is sustainable and what it means for the Japanese policy outlook. 

Say what you want about 2022, but it wasn’t a dull year. After 12 months of geopolitical upheaval, the biggest inflationary spike in decades, central bankers going full Volcker and giant swings in financial markets, what will 2023 bring? In this special end-of-2022 episode, Neil Shearing, our Group Chief Economist, and Chief Markets Economist John Higgins discuss what to expect in the coming year for economies and markets, talking recession, China and zero-COVID and why equities may have yet to bottom out. See our guide to The World in 2023 for more key calls for the coming year. 

Last week was a relatively quiet one for markets. The same won’t be said about this coming week. US inflation data and a slew of central bank decisions will give investors plenty to chew over as they scan for signs that the end of monetary tightening cycles could finally be looming into view. Will policymakers at the Fed, the ECB and/or the Bank of England give the market what it wants? Plus, the stunning political comeback of Lula in Brazil has fuelled hopes of a renewed push to curb deforestation in the Amazon. Will the incoming President do what it takes, or will other economic challenges take priority?Research referenced:Fed: Peak in rates coming into viewECB set to hike by 50bp; more to come next yearBoE: Peak is in sight, but we’re not there yetLula’s fiscal plans intensify Brazil’s public debt risks

The Ever Given made worldwide headlines when it became stuck in the Suez Canal in March 2021. The cargo ship's dilemma symbolised global supply chain disruptions that were reflected in a record surge in shipping costs. But those costs are now falling as quickly as they rose in 2020-21. What’s behind the plunge, and can this help win the battle against inflation? In this episode of The Weekly Briefing, Simon MacAdam and Leah Fahy from our Global Economics team get to grips with the rise and fall – and potential disinflationary impact – of shipping costs. Plus, Group Chief Economist Neil Shearing talks about what zero-COVID means from a global macro perspective and explains why the latest UK house price was so shocking. 

China's zero-COVID policy is under mounting strain as the economy reels and public anger grows. The government is responding but will it be enough to bring relief to China's economic outlook and its beleaguered public? And what do record infection numbers and the threat of more lockdowns mean for the global economy? On 29th November, economists from our China, Global, Commodities and Markets teams held a special online briefing with clients to take questions and explain what the latest developments mean for everything from vaccination rates to global oil demand to the renminbi. In this special edition of The Weekly Briefing, you can hear the 25-minute discussion between Chief Global Economist Jennifer McKeown, Chief Asia Economist Mark Williams, Senior Markets Economist Jonas Goltermann and Commodities Economist Ed Gardner.