Real retail sales growth came in weaker than expected, implying stagnation since April. This warrants some caution regarding the consumption outlook. Still, households have relatively strong resources which could support robust spending as the year approaches an end
Conditions in manufacturing have deteriorated for the fourth consecutive month, which can undoubtedly be viewed as a negative signal for the economy when looking ahead. Although below the expansionary threshold, the PMI is nowhere near the depressed 2023 levels. Should the hard times continue, an adverse effect on growth in 2026 is a possibility
Positive growth impulse in Europe counters tariff hit to Asia The pick-up in risk aversion at the start of this week amongst market participants has triggered a correction lower for emerging market currencies. The CLP (-1.7% vs. USD), COP (-1.2%), BRL (-1.1%), IDR (-0.9%) and THB (-0.7%) have weakened the most since the end of last week while the Central European currencies of the CZK (+0.3% vs. USD) and HUF (+0.1%) have continued to outperform.
