Saudi Arabia’s economy enjoyed a relatively strong start to the year underpinned by its non-oil sector. But while GDP growth will accelerate this year as oil output rises, the coinciding slip in oil prices is already resulting in a firmer turn to fiscal …
28th April 2025
Our base case is that faster growth in household incomes will result in the recent pick-up in rent inflation broadening from major cities to the rest of the country. However, there’s a risk that population outflows from rural areas will result in rents …
Financial markets have continued to stabilise and the dollar has finally rebounded a little over the past few days. More than anything, that appears to reflect relief after the Trump administration has suggested it may dial back tariffs a bit further and …
25th April 2025
Soybeans are once again caught in the firing line of the US-China trade war. There is plenty of uncertainty around the exact ramifications for the shape of global trading patterns and prices, but the key lesson from 2018 is that the risks to US soybeans …
Both major political parties unveiled their election platforms over the past week, featuring their fiscal projections for the next four years. As expected, the Liberals have made little attempt to balance the budget. Incumbent Prime Minister Mark Carney …
SA 2025 budget closer, but fiscal slippage coming South Africa’s 2025 budget took a vital step forward after the Treasury scrapped its proposed VAT hike this week. With the DA also recommitting to the GNU, this will provide some of the certainty that the …
The US steps up its peace deal efforts The US has been pushing harder over the past week to achieve a peace deal that Russia is willing to accept. But the more concessions that are offered to Putin, the less willing Ukraine is likely to be on board with a …
The negative reaction in financial markets undoubtedly played a key role in making President Trump reconsider his eye-wateringly high tariffs on China and his ill-advised plans to fire Fed Chair Jerome Powell. But we suspect the dawning reality of what …
Mexico: growth worries points to another 50bp cut Hard and soft activity data out of Mexico over the past few weeks paint a picture of a struggling economy. Admittedly, the IGAE index rebounded by 1.0% m/m in February. But that came after contractions in …
The sharp fall in the dollar over the past three months can for the most part be explained by a rapid reassessment of the outlook for the US economy and financial markets, rather than an imminent threat to the dollar’s dominant status in global finance. …
Slump in sentiment not yet weighing heavily on spending The moderate decline in retail sales volumes in February was probably due to the unseasonably severe winter weather rather than the recent slump in sentiment, with the latest flash estimate implying …
Note: we will be discussing the future of OPEC+, oil prices, and the Gulf in an online briefing on Wednesday 7 th May at 1pm BST. You can register here . Oil relief rally hits wall of supply uncertainty The various tariff-related row-backs and carveouts …
Inflation rises but end of tightening cycle is near The further rise in Brazil’s headline inflation rate to 5.5% y/y in the first half of April means that Copom will press ahead with a 50bp hike in the Selic rate at its next meeting in early May. But …
Business surveys for April suggest that US tariffs have not done much damage in the euro-zone so far. The euro-zone Composite PMI edged down rather than collapsing and the Ifo Business Climate Index for Germany, which is the most vulnerable of the larger …
Another rollercoaster week in Trumpland wound down with markets buoyant on reports of more White House softening in its approach to tariffs and China taking steps to ease restrictions on some US imports. But are things really looking up? And, if so, why …
The fall in market interest rate expectations since ‘Liberation Day’ is striking. On 31 st March, investors were pricing in just two more 25 basis points (bps) interest rate cuts this year from 4.50% now to 4.00%. Now they are fully pricing in three more …
China continues to rebuff Trump Earlier this week, President Trump gave the clearest indication yet that he is keen to row back tariffs on China, which he said would “come down substantially”. But, for now at least, the White House has ruled out doing so …
CBR drops tightening bias, rate cuts likely in Q3 The Central Bank of Russia (CBR) left its policy rate on hold at 21.00% again today and dropped the language in its statement that further interest rate hikes are possible. With inflation nearing a peak, …
The Q1 RICS US commercial property survey reported steady investment sentiment. That is in line with our belief that the market is headed for an upturn, although the impact of new tariffs and the limited fall in interest rates mean that recovery will be …
The Q1 RICS survey showed little change from the previous quarter, with surveyors pointing to subdued levels of occupier demand and elevated availability. That points to a slowdown in rental growth this year, with only alternatives such as data centres …
Slump in Korean construction not over GDP figures published this week show that Korea’s economy remains in deep trouble. GDP contracted by 0.2% in q/q terms in the first three months of the year and was 0.3% smaller than a year ago. The outturn was much …
Trump policies may be levering India towards US US Vice President JD Vance hailed “very good progress” on a potential trade deal between Washington and New Delhi during his visit to India this week, and prospects do appear to have brightened with the two …
Leadership signals policy flexibility in the face of trade uncertainty The Politburo has just concluded its April meeting which, as usual, focused on economic affairs. The communique signalled that monetary policy easing is still on its way and that …
We suspect the US dollar will recover some lost ground over the coming months as its usual relationship with rate differentials reasserts itself. Seemingly dovish comments from Fed speakers, including Fed Governor Christopher Waller and Cleveland Fed …
This page has been updated with additional analysis since first publication. March may be as bright as it gets as confidence slides March’s rise in retail sales volumes meant sales rebounded by an impressive 1.6% q/q in Q1, rounding off a …
Case for aggressive easing remains weak Flash PMI data released this Wednesday suggest that ongoing global tensions are doing little to dent business confidence in Australia. Although firms reported a second successive decline in new export business as a …
Underlying inflation set to surpass 3% Inflation excluding fresh food and energy picked up from 2.6% to 2.9% in March. And the big jump in inflation in Tokyo in April at first glance would suggest that the Bank of Japan is starting to fall behind the …
Emerging Markets Capital Flows Monitor (Apr. 2025) …
24th April 2025
The US was the world’s largest LNG exporter in 2024 and demand for US LNG is set to increase markedly in the next few years. Demand for LNG will grow faster than US production in the near term, tightening the US domestic market. We think that this will …
Our View: The economies of Central and Eastern Europe are generally less exposed to higher US tariffs than other EM regions, but we have still become more concerned about the hit to growth this year from US trade protectionism. Alongside signs that wage …
Egypt’s draft budget points to more tightening Egypt’s Finance Minister Ahmed Kouchouk presented the draft FY2025/26 Budget to parliament this week and reaffirmed the turn to austerity, including efforts to raise taxation and cut subsidies, all of which …
You can’t buy what you can’t afford The fall in existing home sales in March serves as a good reminder that more home listings alone are not enough to revive the market. Affordability also has to meaningfully improve which, based on our view that …
The latest data suggest that the world economy got off to a weak start in 2025 even before most tariffs were implemented. While tariff front-running provided a boost to global industrial activity and exports to the US in Q1, this should soon fade. …
We forecast a healthy 150,000 gain in non-farm payrolls in April given that the drag from cuts to the federal workforce still appears minimal. Otherwise, we think the unemployment rate ticked back down to 4.1%, while average hourly earnings growth was …
Boeing demand boosts orders The jump in durable goods orders in March was driven entirely by a large rise in orders received by Boeing. Excluding transport, core goods orders flatlined. With the post-strike boost from the restart in production at Boeing …
Inflation rises, but Banxico more focussed on weak economy The rise in Mexico’s headline inflation rate in the first half of April, to 4.0% y/y, is unlikely to shift Banxico’s focus away from the weakness of the economy and we expect it to deliver another …
The RICS survey showed that the recovery in occupier and investor demand remained muted in Q1 and uncertainty about tariffs means this picture is unlikely to change in the near term. The Q1 RICS survey was conducted between 10 th March and 14 th April so …
Ifo resilient in the face of tariffs The rise in the Ifo Business Climate Index (BCI) in April suggests that US tariffs have not yet meaningfully hit economic activity in Germany, though some sentiment indicators have fallen sharply. But the economy is …
Despite further encouraging headlines on tariff reduction, a relief rally in Asian markets trading today has been notable by its absence. This reinforces our view that further gains in equity markets will become harder from here. Two stories broke on …
At first glance, Australia and New Zealand should be fairly insulated from the brunt of the US’s ongoing trade war. Both countries have small manufacturing sectors, export little to the US and haven’t been hit with high US tariffs. That said, second-round …
Korea’s economy weakened further in Q1 and we expect activity to remain weak in the near term due to headwinds from tariffs and the bleak outlook for the construction sector. Data released today show that GDP declined by 0.2% q/q in Q1 (following growth …
Board will revise down forecasts for GDP growth due to trade tensions But Bank will signal continued confidence in meeting its 2% inflation target We expect another hike in July, with the policy rate climbing to 1.5% by 2027 The Bank of Japan will …
We are assuming that the 90-day pause on reciprocal tariffs becomes permanent, keeping tariffs at 10% for most countries except China which will face a steeper 60% levy. If Congress quickly redirects the tariff revenue back into the economy, a recession …
23rd April 2025
The latest flash PMIs suggest that tariffs and trade policy uncertainty weighed on activity and confidence in most DMs at the start of Q2 and boosted price pressures in the US. Our estimate of the weighted average of the flash composite output PMIs for …
Sharp rise in sales shows market still has momentum Lower mortgage rates drove a sharp rise in new home sales in March, showing that the market still has solid momentum despite inventory creeping up in the resale segment. However, with mortgage rates …
Both US equities and government bonds have staged a relief rally over the past 24 hours, as concerns about Fed independence and the trade war have eased. But the fact that the rally was sparked largely by conciliatory remarks from US President Trump – …
UK commercial property is relatively well insulated from the direct impact of US tariffs, but a higher risk environment will drag on investment volumes. Yield compression will also be limited, and that means the recovery in all-property returns will be …
The surge in China’s green exports to a new record high in March could be the final strong showing for a while given the escalation in US tariffs on all Chinese imports. However, green tech exporters in China may be able to soften the blow from a loss of …
This page has been updated with additional analysis since first publication. Tariffs dampening activity but not yet inflation The marked fall in the composite PMI in April raises the chances that the uncertainty stemming from the US tariffs chaos will be …
