Jobs market stuck in a rut Bank of Canada Governor Tiff Macklem reaffirmed his cautious optimism about the growth outlook while appearing before the House of Commons Finance Committee on Tuesday, following last week’s decision to raise the policy rate …
6th November 2026
Blue tsunami to bring tighter AI regulation On the whole, the Democrat sweep in the midterm elections should have a limited impact on the near-term policy outlook. While the Democrats will probably try to leverage the annual appropriations process and …
It’s tempting to think that continued strength in the labour market in the US would cushion any further downside in the S&P 500. But that would hinge on whether it prompted the Fed to tighten policy by more than investors are currently assuming. Today’s …
Europe Chart Pack (November 2026) …
Korea and Taiwan AI fears Korea and Taiwan bore the brunt of a sharp sell-off in Asian equities today. The immediate trigger appears to be concerns that US Democrats, following their midterm successes, could tighten regulation of the AI industry and …
The African National Congress’s (ANC) heavy losses in South Africa’s local elections are unlikely to threaten the Government of National Unity’s (GNU) stability in the near-term. The bigger risk lies in the ANC leadership contest next year, which could …
Equity surge could lay ground for outperformance In stark contrast to elsewhere, it has been a very good week for Indian equities, which have rallied by 7% to take the Sensex to its highest since February. (See Chart 1.) Chart 1: Sensex Equity Index …
Will central banks do their governments’ bidding? Events this week have raised concerns about monetary policy credibility in the region’s two largest economies, Brazil and Mexico, which could point to weaker currencies and steeper yield curves. These …
Oil: near-term relief, longer-term uncertainty Optimism that the war in Iran could come to an end following the US midterm elections has resulted in Brent crude oil prices tumbling below $100pb. Prices have since recovered somewhat, but remain more than …
It was clear from the tone of the Bank of England’s communications on Thursday that the Monetary Policy Committee (MPC) as a whole viewed the rise in Bank Rate from 3.75% to 4.00% as necessary, rather than precautionary, due to the scale and duration of …
Surge in payrolls makes December hike likely despite equity market weakness The strong rise in payrolls and tick down in the unemployment rate in October will give the Fed further reassurance that the employment side of its mandate is being met, meaning …
Further employment weakness The further contraction in employment in October and rise in the unemployment rate to a six-month high of 6.7% sit awkwardly with Macklem’s comments before MPs this week that the economy is “showing impressive resilience”. This …
The sell-off in global equity markets since the US midterms is alarming, but European policymakers will have welcomed the results, not least because they reduce the risk of future tariff increases and arguably lower policy uncertainty more generally. …
Sharp falls in equities in Korea and Taiwan will not in themselves have a big impact on either economy. Evidence that global tech firms were scaling back investment plans would be of much greater concern. Today’s sell-offs leave stock markets in Korea and …
There was an extraordinary swing to the Democrats in the US midterm elections, setting the scene for the final two years of the Trump presidency. Will it mean a greater focus on foreign policy for the president? What could it mean for the debt ceiling at …
We remain positive about the potential for AI to boost productivity but are less confident that AI revenues will grow rapidly enough to sustain the current pace of investment. While it is difficult to predict exactly when the boom in capital expenditure …
The large share of French government bonds held outside the euro-zone arguably makes France more vulnerable than Italy or Spain to a sharp rise in yields if its fiscal woes worsen. But we think demand from euro-zone investors would probably still prove …
Whether the US stock market’s performance remains reminiscent of its fate after the dotcom bubble burst will depend not only on whether a bigger AI bust is in the making but also on whether one is followed by a recession and/or other developments that sap …
Washington’s top China dove has been weakened The Democrats’ sweeping victories in the US midterms have changed the balance of power in Washington. (See our initial response here .) The implications for China are far from clear-cut. But Beijing has little …
Eisenkot edges closer to government in Israel Momentum now appears to be with Gadi Eisenkot to become Israel’s next prime minister. Coalition talks remain very uncertain at this stage, but on current trends we see them as a net positive for the economy. …
Weak retail sales add to downside risks to consumption The large fall in euro-zone retail sales in September suggests that household consumption was weak in Q3. It also implies that there are downside risks to our forecast that consumption will increase …
This page has been updated with additional analysis since first publication. High mortgage rates hitting house prices harder The big 0.6% m/m fall in the Lloyds measure of house prices in October (CE forecast -0.1%, consensus forecast -0.1%) lays bare …
German Industrial Production (September) This page has been updated with additional analysis since first publication. Industrial sector still sluggish While there was a further increase in industrial production in September, the less volatile quarterly …
RBA signals tightening cycle is nearing its end The RBA lifted the cash rate to an 18-year high of 4.85% this week as widely expected, but policymakers signalled that they are done tightening for now. For one thing, the Bank argued that monetary policy …
Bond market shrugs off higher defence spending Amidst a global sell-off in equity markets, it’s no surprise that investors have shrugged off reports that Japan’s government will lift military spending from the cumulative ¥43tn allocated in the five years …
The federal government’s decision to spend nearly all of its newly projected windfall revenues gives the Bank of Canada even more free rein to focus on the upside risks to inflation. We therefore remain content with our forecast for two more rate hikes in …
Wage growth is genuinely accelerating The strongest rise in wages in three decades was mostly due to an unusually large jump in volatile bonus payments, but there are signs that regular earnings growth is accelerating, too. The 4.6% annual rise in overall …
5th November 2026
Dovish Banxico surprise leaves the peso on shakier ground The Mexican central bank’s board made clear that today’s 25bp cut to the policy rate (to 6.25%) is a one-off. But even so, it’s hard to square this decision with the recent sharp fall in the peso, …
Trillions of dollars have been knocked off the value of global tech firms. It comes amid growing fears about the sustainability of the AI boom following the major shift in US politics in the midterms. Could that political shock turn out to be the catalyst …
Growing fears about the sustainability of the AI buildout in the context of the major shift in US politics have led to another bruising day for tech stocks. Whether the mid-terms shock turns out to be the catalyst that derails the AI equity boom remains …
South Africa’s municipal election results show that the power of the African National Congress (ANC) has further diminished, giving the centre-right Democratic Alliance (DA) greater power to push for market-friendly policies. This should support market …
The experience from the two most recent El Niños is that the current one is unlikely to cause a major shock to EM growth, but that it could add to inflation and worsen trade balances, particularly in India and South East Asia. The Philippines looks most …
Higher risk-free interest rates are putting upward pressure on property yields, although all-property yields have seen a relatively small 7bps rise in the year to Q3. Nevertheless, capital values are now falling. We expect a decline of around 1.5% in 2026 …
Threat of renewed strikes diminishes Developments this week, including the fallout from the US mid-terms, have reduced the threat of a renewed escalation in the war and also raised hopes that a political solution to the conflict may be nearing. But there …
Euro-zone prime office rents have risen sharply in real terms since 2019. However, after allowing for the decline in space per worker since the pandemic, affordability remains below past peaks, suggesting room for further rental growth. We have therefore …
The rise in interest rates from 3.75% to 4.00% announced by the Bank of England today is more likely to mark the start of small and short-lived rise in rates rather than the large and long-lasting rise investors appear to expect. That’s especially the …
CNB to hike again amidst stubborn inflation The Czech National Bank’s 25bp hike today, to 4.00%, is likely to be followed by one more increase in the cycle next year. Market pricing has shifted down towards our view in recent days but still looks a bit …
Indonesia’s Q3 GDP data show that economic growth picked up to 5.5% y/y and signs that the statistics office has stopped smoothing the data have partly restored our faith in the official figures. But it remains to be seen whether this is a genuine …
For more detailed and updated analysis, see here . BoE hiking cycle more likely to be small and short rather than large and long The rise in interest rates from 3.75% to 4.00% announced by the Bank of England today is more likely to be part of a small …
The forthcoming COP31 climate conference risks being overshadowed by the fallout from the US midterms. In any case, the more consequential developments for the green transition are continuing to take place away from COP events, not least the flood of …
We expect France to be forced into a substantial fiscal consolidation in the coming years. This would be a drag on economic growth, but the scale of that drag would depend, among other things, on whether the adjustment is voluntary, imposed by markets, …
Construction activity takes a step back Having improved in September, the headline construction PMI fell back in October. At 43.6, the level was the lowest since June. Both the commercial and housing activity balances worsened over the month. At 46.3, the …
Despite the disappointing Q3 GDP figures, we still think that Hungary’s economic outlook has fundamentally improved since Tisza’s election victory in April. We expect growth to strengthen to 2.5% next year. But fiscal tightening and lingering weakness in …
India’s new Index of Services Production has some notable limitations including a short back series and a lack of coverage in key areas such as health, education and defence. But it is another positive step in the overhaul of India’s economic …
BNM set for prolonged hold Bank Negara Malaysia’s (BNM) decision to keep its policy rate at 2.75% was widely expected, and with inflation set to stay subdued, we think borrowing costs will remain unchanged over 2026–27. The decision was in line with the …
Copom needs fiscal tightening to resume rate cuts The statement accompanying the Brazilian central bank’s decision to keep the Selic rate unchanged at 13.75% signalled that further easing isn’t imminent. A resumption of the cycle is plausible next year, …
4th November 2026
While the equity market has, in aggregate, reacted positively to the US mid-term election results, the extraordinary gains for the Democratic party poses another potential headwind to the AI trade over the coming months. We see three key takeaways for US …
PMIs imply robust growth and strong price pressures The small fall in the ISM services index suggests activity in the sector lost some momentum at the start of the fourth quarter. Together with the increase in its manufacturing counterpart, this leaves …
While the economy has been remarkably resilient to higher interest rates and borrowing costs, the coming rise in CPI inflation is likely to dampen real GDP growth from 1.5% this year as a whole to 1.0% in 2027. And if we’re right that the labour market …
Rise in trade surplus not as good as it looks The further widening of the goods trade surplus to a more than four-year high in September was not quite as positive as it looks, as it was almost entirely due to a price-driven rise in energy exports. By …
