The Weekly Briefing from Capital Economics

It’s one of the big questions in markets after March’s banking sector turmoil but the prevailing guides to financial conditions don’t paint a very clear pictures. That’s why Simon MacAdam, our Senior Global Economist, has revamped and relaunched our Financial Conditions Indices – and he’s got a very worrying message about what they have to say about the ease of funding availability and what that means for the economic outlook.Plus, Group Chief Economist Neil Shearing talks to David Wilder about the week’s big data releases and their policy implications, as well as some potentially good economic news for Sub-Saharan Africa.Click here to read the analysis referenced in this episode.

Julian Evans-Pritchard, our Head of China Economics, talks to Steven Altman, Director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management, about what lies ahead for globalisation in an age of economic fracturing. The discussion includes the current health of globalisation, the risks of a broad reversal of trade flows and evidence so far of US-China decoupling, as well as how the DHL Global Connectedness Index drew on Capital Economics’ work in classifying the world’s economies by geopolitical alignment. Click here to read the analysis referenced in this podcast.

How will the ructions in the banking sector be reflected in the data? Tracking the credit impact of March’s events isn’t as straightforward as it appears, says Group Chief Economist Neil Shearing. He talks to David Wilder about how to cut through the noise and where to look for signs that banks are curbing lending activity – including in our proprietary Financial Conditions Indices.Plus, with the UN projecting that India is now the world’s most populous country, Deputy EM Economist Shilan Shah discusses what the country needs to do to make the most of its demographic dividend – including how to bring millions of women into the workforce.  

It may be too soon to say that the banking turmoil is definitively over, but it’s not too early to try to understand why events of the past few weeks are going to leave a painful legacy for the US economy. Chief US Economist Paul Ashworth talks to David Wilder about the coming credit crunch, what this means for the Fed's next moves, and why sentiment can shift like a dam bursting. Also this week:Leah Fahy discusses her work for our Global Economics team looking at countries whose populations are ageing rapidly and how this has shaped their labour forces. (9:41)An exclusive extract from a client briefing on the bank turmoil given by our Asia team discusses Indian NPLs, China as a safe haven, and what’s lurking in Japanese overseas lending. (17:04) (00:00) - Paul Ashworth on what bank turmoil means for the US outlook; (09:41) - Leah Fahy discusses her work for our Global Economics team looking at countries whose populations are ageing rapidly and how this has shaped their labour forces; (17:04) - An exclusive extract from a client briefing on the bank turmoil given by our Asia team discusses Indian NPLs, China as a safe haven, and what’s lurking in Japanese overseas lending.

Two weeks into the banking sector turmoil and there are few signs that the panic is ending. David Wilder speaks to Neil Shearing about why investors are still uneasy, whether central banks have made a mistake, and why there's growing focus on commercial property holdings amid the intensifying hunt for the next source of instability. Plus, wheat consumption has typically grown along with the global population. But that's set to change, according to economist Bradley Saunders. He talks to Caroline Bain about his new report which warns of an unprecedented drop in consumption in the coming years.Click here to read the analysis referenced in this podcast.   (00:20) - Neil Shearing on the banking turmoil and commercial real estate. (08:34) - Bradley Saunders on the looming fall in wheat consumption.

As the dust began settling on a hastily arranged takeover of Credit Suisse by UBS, our economists briefed clients on what’s next in this recent surge in turmoil in the banking sector. In these excerpts from the briefing, you’ll hear them discuss key issues, including: Whether the Credit Suisse deal draws a line under this crisis; What to expect from the Federal Reserve and Bank of England’s March meetings;Why, even if this is the end of the turmoil, even deeper recessions loom.Participants:Jennifer McKeown, Chief Global EconomistVicky Redwood, Senior Economic AdviserPaul Ashworth, Chief US EconomistPaul Dales, Chief UK EconomistJack Allen-Reynolds, Deputy Chief Euro-zone EconomistJonas Goltermann, Deputy Chief Markets Economist

A rushed deal for UBS to take over embattled rival Credit Suisse ahead of the start of the Monday open is the latest effort by authorities to restore market confidence and staunch a crisis in the banking sector that is now threatening to run into its third week. Has enough been done? As details of the UBS-Credit Suisse deal trickled out, Group Chief Economist Neil Shearing discusses some of the uncertainties around the weekend’s events but also points to the bigger picture macroeconomic risks associated with this crisis.Plus, ahead of the release of a key UN report on the climate crisis, David Oxley, the head of our Climate Economics coverage, explains why we think the long-held relationship between emissions and economic growth will break down and why India will become the world’s biggest polluter in the coming decades. Click here to access the analysis referenced in this episode.

Could turmoil in the US banking sector mark the end of Fed rate hikes? What are the contagion risks from the collapse of SVB and Signature Bank? What will the regulatory response look like?This is a special Capital Economics Weekly Briefing episode all about the SVB crisis. It contains some key edited excerpts from an online briefing held for clients with Group Chief Economist Neil Shearing, Chief US Economist Paul Ashworth, Chief Global Economist Jenny McKeown and Chief Markets Economist John Higgins. The briefing was held at 0900 New York/1300 London on Monday, 13th March. The full recording, and all our key coverage about this crisis, can be found on our dedicated SVB page.

Was Silicon Valley Bank's failure an isolated case of bad balance sheet management, or does it point to the start of another financial crisis? As policymakers scrambled to shore up market confidence ahead of the open, Group Chief Economist Neil Shearing discussed what SVB means for the broader economic and policy outlook. Plus:· Julian Evans-Pritchard, our Head of China Economics, on what another five-year term with Xi Jinping in charge means for China and the world.· And, Senior Global Economist Simon MacAdam explains why the big hit to economic activity from monetary tightening so far is still to come.Click here to read the analysis referenced in this episode.

It’s US payrolls week and all eyes will be on whether January’s blowout jobs growth number was just a one-off or confirmation that – despite the Fed’s actions – the labour market remains tight.Labour market conditions matter hugely for how much further central banks across advanced economies have to go to whip inflation. The challenge is in understanding how they're evolving as pandemic-era distortions take their time to fade. Group Chief Economist Neil Shearing discusses with Vicky Redwood, our Senior Economic Adviser, and Chief US Economist Paul Ashworth what’s going in labour markets and what this means for policy, with a special focus on February non-farm payrolls and how the Fed will respond. Click here to read the analysis referenced in this episode.