Supply-side approach has its limits Policymakers are becoming increasingly concerned about overcapacity and deflation, and are signalling a stronger intent to tackle the issue. On Wednesday, the People’s Daily ran a front-page commentary criticising the …
11th July 2025
Tariffs stormed back into the headlines this week as the pause on ‘Liberation Day’ levies expired with a flurry of warnings about steep rate hikes unless deals are struck by 1st August. Group Chief Economist Neil Shearing unpacks the implications, while …
The media focus this week has continued to be on EU-US trade negotiations as the pause on Liberation Day tariffs was extended beyond the 9 th of July deadline and President Trump threatened to send a letter raising tariffs on the EU again. But in the …
We think the outperformance of Mexican assets and the peso since “Liberation Day”, owing to large tariff exemptions for exports to the US, has largely run its course. Instead, we think the weak economic backdrop in Mexico and the risk of renewed …
Sharp fall in June inflation could spur rate cut talk The major data release next week will be the consumer price inflation data for June – the last set of inflation numbers before the RBI’s next policy announcement on Wednesday 6 th August. We think the …
A damp squib Liberation Day 2.0 was largely shrugged off by investors, with most equity markets in Asia rising over the course of the week. This could be because tariff deadlines were extended by three weeks, giving countries more time to agree deals …
We think concerns about government deficits could put further pressure on long-dated bonds. Tests of investors’ nerves have come thick and fast lately, with the latest being a hike in tariffs in Canada. But, despite some small wobbles, the big picture is …
Deadline for trade deal extended to 1 st August The looming deadline for the imposition of reciprocal tariffs earlier this week proved to be a damp squib as Trump has now given Japan and a range of other countries until 1 st August to negotiate a deal. …
This page has been updated with additional analysis since first publication. Hangover continues, but signs of a recovery building The hangover from the burst of activity in Q1 ahead of rises in US tariffs and UK stamp charges continued in May with GDP …
Rates will bottom out in mid-2026 The RBA’s decision to leave its cash rate unchanged at its meeting this Tuesday shocked not only financial markets, which had fully priced in a 25bp cut, but also the overwhelming majority of economists. Setting aside the …
Egypt’s IMF delay reinforces need for reform The IMF has postponed the latest review of Egypt’s $8bn deal but, with external strains still present, officials appear keen to get privatisation and education reforms on track to unlock financing. A statement …
10th July 2025
Overview – Activity in the housing market has been struck in a slump since 2023, with still no end in sight. As Trump’s immigration and trade policies push up inflation this year, the Fed will be forced to keep policy restrictive – preventing mortgage …
Donald Trump’s planned imposition of a 50% tariff on Brazil for seemingly political reasons may represent a new milestone, but Brazil simply isn’t a big enough trading partner of the US to rattle global markets. For that to happen, negotiations with …
The turmoil in Turkey’s financial markets earlier this year proved to be a blip, and we think the conditions are in place for the central bank to resume its easing cycle this month. But bringing inflation back to single digits and reining in the current …
Aggregate EM inflation is now at its lowest level in four years, with notable declines this year across Asia. We still think the outlook will be characterised by higher inflation in Latin America and Central Europe than in Asia, but we’ve become less …
Auto exporters in China have adapted to the EU’s tariffs on EVs by lowering export prices and focusing on vehicles that are not subject to tariffs. Even if trade restrictions were to remain in place, the extent of China’s cost advantage means that …
Tightening cycle probably over, but currency now the key risk There’s little in the Brazilian June CPI print that changes our view that last month’s hike marked the end to Copom’s tightening cycle. But a lot will now depend on how the trade dispute with …
Poor performance in the US and APAC property markets is set to drag on the global recovery over the next few years. While strong economic fundamentals argue for a material improvement in total returns in the US in the longer term, APAC won’t be as …
Markets have brushed off Trump’s latest tariff threats. Geopolitical worries have faded – for now. And the AI trade is powering back. But beneath the surface, risks remain. Are investors reading the macro signals too optimistically? Our Markets …
There are risks to the Irish economy from potential US tax policy changes but we think they are not as large as they first appear. The country’s large pharmaceutical sector should be fairly resilient if hit with US tariffs. And the government’s fiscal …
President Trump’s threat to put a 50% tariff on imports from Brazil is less about trade disputes and more about political and policy disagreements, and so it’s harder to see an off-ramp for Brazil compared with other countries that received tariff …
We think office values have further to fall in all metros this year, but from 2026 we are expecting a recovery, with the southern markets showing the way. Led by Miami, those metros will see strong rent growth on the back of a decent recovery in …
The Bank of Korea left interest rates unchanged at its meeting today (at 2.50%), but gave strong hints that the easing cycle still had further to run. With growth set to struggle and inflation contained, we are expecting a further 50bps of cuts before the …
Big rebound in demand, but housing market unlikely to recovery quickly While June’s RICS survey suggests most of the recent weakness in the housing market was due to the temporary influence of the change in stamp duty, it doesn’t yet point to a marked …
The Bank of Korea rarely cuts interest rates at back-to-back meetings, and the decision to leave interest rates on hold today at 2.50% comes as no surprise. The announcement was correctly predicted by all 33 analysts polled by LSEG, including ourselves. …
APAC Commercial Property Chart Pack (Q2 2025) …
9th July 2025
Fed in wait-and-see mode The minutes of the mid-June FOMC meeting show most Fed officials content to wait and see what impact tariffs and other government policies had on inflation and the labour market before committing to either holding rates or cutting …
Even if tariffs on US imports don’t rise substantially more next month for many countries after yet another delay, who is ‘paying’ for the increases in tariffs that have already occurred and appear likely to remain in place? The Q2 earnings season, which …
We anticipate further yield falls for prime Portugal retail assets over the rest of the year. And with robust economic fundamentals and a solid rental outlook, we forecast Portugal to be one of the best retail performers in the euro-zone over 2025-29, …
Chile’s economy is the most exposed globally to US copper import tariffs. But while the impact would probably be small, it would add to deep-seated problems facing the copper sector. Our commodities covered the implications of a 50% tariff on the copper …
The looming imposition of tariffs on copper by the US will continue to support prices in the US. But for all the attention on the surge in prices there, it won’t be long before fundamentals snap back into focus in markets outside of the US, which in our …
From OPEC+ pumping in ever-greater volumes to Donald Trump threatening 50% tariffs on copper, the near-term commodity outlook is being reshaped by both supply moves and political risk. In this online briefing, our Commodities team will examine the forces …
The combination of exposure to retaliatory tariffs, upward pressure on input costs, and heavy reliance on “unauthorised” labour means that the outlook for the US farming sector is highly uncertain. But to the extent to which pain is offset by higher …
After stemming the inflow of unauthorised immigration over the Southwest border, the Trump administration now appears to be gradually ramping up the number of detentions and removals. This crackdown is beginning to have a more marked impact on labour …
More rate cuts coming, but in smaller steps The fall in Mexico’s headline inflation rate, to 4.3% y/y in June gives Banxico room to continue its easing cycle in the coming months. But with inflation still above target and core inflation rising, we think …
Outside of China, there is no immediate threat of any other country in Asia falling into a prolonged period of deflation. That said, persistently weak price pressures are likely to remain a worry for central banks and will tip the balance towards more …
Disinflation resumes and paves the way for CBE to continue loosening cycle Egypt’s headline inflation rate slowed from 16.8% y/y in May to 14.9% y/y in June amid a broad-based easing of price pressures and supports our non-consensus view that the Central …
Activity (very slowly) on the mend The rise in purchase mortgage applications in June supports our view that transactions will pick up in the second half of the year, even if they remain depressed by historical standards. Seasonally-adjusted mortgage …
First cut of the cycle – more to come Bank Negara Malaysia (BNM) today cut its policy rate by 25bps, to 2.75%. With growth likely to slow and inflation set to remain contained, we think further easing lies in store. Today’s cut was predicted by just over …
RBNZ pauses easing cycle, but signals more cuts are coming While the RBNZ predictably left rates on hold today, it signalled that it was likely to loosen policy further as long as capacity pressures continued to ease. The RBNZ’s decision to leave the …
This page has been updated with additional analysis since first publication. Rebound in core inflation likely to be short-lived Headline inflation came out of negative territory last month, with core inflation rising to its highest level in over a year, …
One of the most striking calls in our new Asia-Pacific commercial property coverage is the scale of the downturn we still expect for Hong Kong, with all-property capital values set to fall by more than 50% in total before any recovery takes hold. In this …
8th July 2025
The size and speed of the apartment market recovery will vary widely across the 17 metros we cover over our five-year forecast. Southern markets are generally set to outperform, backed by strong demand fundamentals and solid rental growth. Houston stands …
Market participants have largely shrugged off President Trump’s latest set of threats to raise tariffs on a range of countries, focusing on the fact that today’s “deadline” for re-imposing the “reciprocal tariffs” from 2 nd April has, as widely expected, …
NBR leaves rates on hold with inflation poised to rebound The communications accompanying the decision by the National Bank of Romania (NBR) to leave its policy rate on hold, at 6.50%, suggest policymakers are concerned about the inflationary impacts of …
Downside inflation surprise paves the way for rate cut later this month The larger-than-expected fall in Chilean inflation, to 4.1% y/y, in June supports our view that policymakers will resume its easing cycle with a 25bp cut, to 4.75%, later this month. …
We think the euro-zone economy will not grow at all in Q2 and Q3 as the first-quarter boost from tariff front-running will not be repeated. Looking through the tariff disruption, growth will be sluggish as consumer confidence is low and investment likely …
In this Update, we answer the key questions about what stablecoins are, whether they will become more widely used and what implications they have for the US Treasury market. What are stablecoins? Stablecoins are a type of cryptocurrency, whose value is …
