The Weekly Briefing from Capital Economics

Which countries are leading the AI race? What role is AI playing amid growing strategic competition between the US and China? Does AI spell doom for EM outsourcing industries?  Moneli Hall-Harris from our Consultancy division and Deputy Chief EM Economist Shilan Shah talk to David Wilder about our AI Economic Impact Index and what its rankings say about which economies are best positioned to develop AI, but also to diffuse and adapt to the technology.  The discussion with Moneli and Shilan includes:  The AI Economic Impact Index’s unique global view of the emergence of AI;How China’s position on the Index contrasts with Beijing’s ambitions;Whether AI will help or hinder emerging market income convergence with developed economies.This is special podcast episode is part of our 2023 Spotlight project on artificial intelligence and its implications for the global economy and markets.  Explore the project, including the AI Economic Impact Index and our report ‘AI, Economies and Markets: How artificial intelligence will transform the global economy’ by clicking here.

The surprise attack on Israel by Hamas last weekend upended a lot of geopolitical assumptions, but what will this mean for the economic and markets outlook? Liam Peach, a senior economist on our Macro team, and Chief Commodities Economist Caroline Bain join David Wilder to talk through the local and regional economic risks around the conflict and the potential knock-on effects on global energy markets. Plus, Group Chief Economist Neil Shearing introduces our major new work on equilibrium interest rates, why we’re moving to a world of structurally higher rates, and what this could mean for returns from bonds, equities and a host of other assets through the end of this decade. Click here to explore the analysis and events referenced in this episode.

That September US payrolls report has triggered renewed selling in global bond markets. With yields threatening to hit fresh multi-year highs and investors scrambling for reasons behind the sell-off, Group Chief Economist Neil Shearing and Deputy Chief Markets Economist Jonas Goltermann tell David Wilder just worried we should be and what’s likely to happen next. In this special episode of The Weekly Briefing, Neil and Jonas talk through a tumultuous few weeks in bond markets, addressing the key issues around this historic rout, including: Why bond yields have risen so far in such a short amount of time;Whether yields could rise further from here;The macro fall-out from the yield surge – not least financial stability risks.

Chief Global Economist Jennifer McKeown provides a sneak peek of our upcoming Q4 Global Economic Outlook. She tells David Wilder why “higher for longer” won’t survive economic weakness and also explains why monetary tightening hasn’t had the direct and immediate impact that had been expected. Jenny also previews our upcoming work on neutral interest rates.Plus, in an exclusive clip from our recent client briefing on the Bank of Japan, Chief Asia Economist Mark Williams, Japan lead Marcel Thieliant and Senior Markets Economist Tom Mathews discuss what a Japanese rate hike could look like and how it would affect domestic and global financial markets.  Click here to explore the analysis and events referenced in this episode.

From hope to reality to hype and hysteria. The rapid development and adoption of generative artificial intelligence may be keeping headline writers busy, but is there anything to their warnings about the technology’s roll-out leading to mass unemployment? In this special episode of The Weekly Briefing, Senior Economic Advisor Vicky Redwood and Deputy Chief UK Economist Ruth Gregory discuss AI’s potential as an economic game changer and what that could mean for labour markets.  Vicky and Ruth are two of the co-authors of our Spotlight report AI, Economies and Markets – How artificial intelligence will transform the global economy.They talk to David Wilder about some of the key takeaways from their work looking at AI’s economic and market implications, including: The size and timing of the coming AI productivity boost;How AI’s productivity boost could have economy-wide effects;Whether AI will lead to a wave of “technological unemployment”. 

The potential of artificial intelligence to reshape the global economy is more than just the breathless hype of headline writers. Paul Ashworth, our Chief North America Economist, explains why AI’s impact should be thought of in terms of previous technological developments such as railways and the desktop computer and how they transformed economies in their time.   Ahead of the 26th September launch of our major new report on what AI means for economies and markets, Paul discusses recent developments with large language models, where the technology is heading from here and why this could translate into massive productivity gains.  Plus Group Chief Economist Neil Shearing sifts through the latest central bank decisions to address client questions including: Why we think the Fed will be cutting rates more quickly and aggressively than officials are signalling Why the latest data from Europe is so worrying And why bond markets on either side of the Atlantic have been moving in different directionsFinally, Neil introduces our forthcoming work on where equilibrium interest rates are likely to settle in a post-pandemic world, and why this is something that all investors – regardless of what they’re investing in – are going to have to pay attention to. Click here to explore the analysis and events referenced in this episode. 

Discussion on the end of rate hikes and potential rate cuts. Speculation on the Bank of Japan raising rates. Analysis of hard landing fears in China. Examination of Europe's response to Chinese EV imports. Exploration of the discrepancy between US GDP and GDI.

For consumers, it’s the camera lenses on the outside that may draw them to Huawei's Mate 60 Pro. For those tracking shifts in the global macro narrative, it’s the chip inside the sanctioned Chinese firm’s newest flagship phone that’s most interesting.In the latest episode of the Weekly Briefing, Group Chief Economist Neil Shearing explains what one of the Mate 60’s key components means in the context of US controls on technology exports and the fracturing of the global economy.Neil also talks about the significance around Nvidia’s Jensen Huang going to India to meet Narendra Modi and also takes in the inflationary risks around the recent spike in energy prices.Plus, a big growth upgrade means the UK has overtaken Germany and is no longer at the back of the G7 pack. Chief Europe Economist Andrew Kenningham and Chief UK Economist Paul Dales discuss whether this matters in the grand scheme and the growth outlook for these two struggling economies.

As summer holidays draw to a close attention is quickly turning to September’s big central bank decisions. Group Chief Economist Neil Shearing and the team have been sifting through weeks of data from the US, euro-zone and UK to assess what the Fed, ECB and Bank of England are going to do when they sit down to decide their next moves on rates. He tells David Wilder what to expect from these meetings, but also what central bankers mean when they keep telling the press that intend to stay the course on policy tightening. Neil also talks about Ernie Bot, the new Chinese AI-powered chatbot, and what its release signals about the global race to dominate in this emerging General Purpose Technology.Plus, is policy paralysis over in Beijing? Chief Asia Economist Mark Williams talks about what’s in the latest stimulus announcement from the Chinese government and whether it’s enough to turn around China’s flagging economy.  Click here to explore the analysis and events referenced in this episode.

This podcast explores the growth outlook, China slowdown scares, and the hype around AI. It discusses the latest PMI readings, the problem with China stimulus hopes, and the impact of AI on the global economy. Additionally, it talks about the enthusiasm around AI affecting equities valuations, the recent market slowdown, and the forecast for the S&P 500 and Nvidia earnings.