Weekly Economic Insights - 26 November 2018

Macro Highlights - 11/29/2018

Highlights of the week

Economist insights: US residential investment continues to slow, further drop in eurozone PMIs

United States:

  • Slowdown in residential investment due notably to the rise in mortgage rates
  • Weak supply and the increase in the number of new households could contribute to avoiding a drop


  • Further decrease of PMI lead business activity indicators…
  • … confirming our scenario of a slowdown in economic growth in 2018

Focus Japan: What can we expect from the Japanese economy in the upcoming quarters after a rollercoaster year 2018? 

  • Following eight quarters  in  a  row  of  expansion  in 2016  and 2017, GDP  oscillated between contraction and expansion during the first three quarters in 2018
  • Economic growth should slow in 2018, then accelerate slightly in 2019 despite the negative impact of the rise in VAT from 8% to 10% that is scheduled for October 2019
  • Investment, notably in equipment, should remain one of the main pillars of the acceleration in GDP growth next year
  • In a context of moderate inflationary pressure on wages and prices, the Bank of Japan should maintain its ultra-accommodative monetary policy over the next few quarters