It’s possible that the recent blackout on the Iberian peninsula goes down in history as a catalyst for widescale electricity grid upgrades which ultimately help to bolster the pace of the renewable rollout. But at least in developed economies, it’s …
1st May 2025
Headwinds are gathering for the Swedish economy, and we expect the Riksbank to strike a dovish tone in its statement next week. But it will probably stop short of cutting the policy rate as it waits for some of the economic uncertainty to fade. Meanwhile, …
Oil prices have now fallen by about 18% since ‘Liberation Day’, and one could make the case for them being in oversold territory – particularly if US tariffs are rowed back further, as we expect. But further signs that Saudi Arabia is willing to push oil …
Saudi pushing for a more aggressive OPEC oil hike It already looked like next week’s OPEC+ meeting could see another plan outlined to hike to oil output from the group in June. But if anything, supply could be raised further given signals from Saudi …
Manufacturing activity holding up The small fall in the ISM manufacturing index in April suggests that, while tariffs are weighing on the economy, they are not crushing it. And although the prices paid index is still some way below its pandemic peak, it …
The prospect of a flood of low-cost Chinese exports to African shores may help those economies suffering from high inflation but it risks undermining the growth of domestic industry. Governments in the likes of Nigeria, with a history of employing …
Overview – While the more uncertain global backdrop due to the new US tariffs regime means we have become more confident in our below-consensus UK GDP forecast, the prospect of falling mortgage rates suggests UK housing demand is well insulated from US …
This Update answers some key questions on the recently agreed US-Ukraine minerals deal. In short, estimates of Ukraine’s mineral wealth seem to be overblown. The deal may provide more US support for Ukraine in peace talks, but Russia and Ukraine remain …
A soft start to 2025 Saudi Arabia’s flash estimate of Q1 GDP showed that the Kingdom’s economy grew by 0.9% q/q , translating into a year-on-year increase of just 2.7% to kick off the year. But with revisions and rebases to the data, it suggests the Saudi …
Despite the Bank of Japan’s dovish tone today we think it won’t be long before JGB yields start to rise again. And even though concerns about Japanese capital repatriation have seemingly been back on investors’ minds lately, we don’t think higher JGB …
Net lending to property falls back Net lending to property weakened to a one year low in March, with total lending of £514m down from £1.59bn in February. The drop was driven by lending to standing investments, which fell to £530m from £1.49bn. Debt …
This page has been updated with additional analysis since first publication. Households tighten their purse strings March’s money and lending data suggest households were starting to spend more cautiously even before the full hit to consumer confidence …
The Bank of Japan revised down its growth forecasts and sounded more dovish when it left policy settings unchanged today. However, we believe that the Bank has become far too downbeat about the outlook for inflation and we’re sticking to our forecast of …
Data published for Korea from the past few days suggests the economy remains weak, but that the trade war so far appears to be having a minimal impact. While exports to the US fell in April, the declines were relatively small and were more than made up …
Bank of Japan will hike rates again in July The Bank of Japan revised down its growth forecasts and sounded more dovish when it left policy settings unchanged today. However, we believe that the trade war won’t be as damaging as feared and we’re sticking …
Stretched housing affordability continues to keep a lid on house price growth. And if we’re right that the RBA will only lower rates by another 50bp, it will remain a headwind. But with the housing market no longer creating upside risks to inflation, …
We think the recent outperformance of euro-zone equities over US ones has run its course. The eight-day winning streak in the S&P 500 may break today, after the market opened down over 1% on news that the US economy unexpectedly contracted in Q1 , on …
30th April 2025
Contraction in first-quarter GDP not a worry Core inflation yet to capture tariff impacts Fed will remain in “wait-and-see” mode for some time A contraction in GDP and near-flatlining in core PCE prices would usually be more than enough to persuade …
This is a revamped version of our quarterly Financial Risk Monitor to include commentary and analysis of our latest EM risk indicators. Currency vulnerabilities remain near multi-year lows, large deficits leave the public finances in poor shape Higher US …
Demand from Amazon has been a key driver of industrial fortunes over recent years, so the announcement of a new $15bn injection in the US was greeted warmly by market watchers. But, while this should help boost the sector longer term, a weak economic …
What do Trump tariffs mean for green tech? Much ink has been spilled over the macro and market impacts of various US tariff announcements over the past month. (See here .) From a climate perspective, these tariffs will only add to existing trade barriers …
Inflation slows, but worst yet to come The almost unchanged level of core PCE prices in March is welcome news but, given the data precede the implementation of broad-based tariffs, core inflation will inevitably rebound sharply in the coming months. …
This Update answers several key questions on critical minerals and the economic implications. In short, there is no quick fix to securing access to minerals given the extent of China’s advantage across the value chain. And while volatile mineral prices …
GDP dragged down by pre-tariff import surge & DOGE cuts The 0.3% annualised decline in first-quarter GDP was entirely due to a pre-tariff 41.3% annualised surge in imports, with net exports subtracting a massive 4.8% points from GDP. This surge now …
Bad but not awful Although the 0.2% m/m contraction in GDP in February was worse than expected, the preliminary estimate of a partial rebound in March should soothe fears that the economy is rapidly falling into recession. We expect GDP growth to slow …
Euro-zone inflation probably unchanged in April, but will fall further this year National data published so far suggest that euro-zone inflation remained at 2.2% in April, and that core inflation probably rose from 2.4% to 2.6%. (Euro-zone data due on …
Weak economy argues in favour of another 50bp cut The 0.2% q/q expansion in Mexico’s GDP means that the economy dodged a technical recession last quarter. But growth was driven by a rebound in agriculture and the rest of the economy – and the …
Asia Chart Pack (April 2025) …
A robust monsoon this year – as predicted by experts – wouldn’t have as big an impact on India’s economy as it would have had a couple of decades ago. But it could boost employment and energy production. What’s more, it would anchor prices of key crops …
Strong start to the year but tariff-induced slowdown ahead The acceleration in euro-zone GDP growth in Q1, to 0.4% q/q, suggests the economy started the year on a stronger footing than we expected and activity surveys suggested. Nevertheless, we still …
This Rapid Response has been amended from our original response to correct the food CPI figure. Fall in inflation paves the way for May rate cut The larger-than-expected fall in Polish inflation, to 4.2% y/y, in April, is probably enough to tip the …
Strong exports to support growth despite tariff risks Economic growth in Taiwan picked up strongly in the first quarter of the year, helped by very strong exports and robust investment. Although Trump’s tariffs pose a downside threat to the economy, we …
Hungary contracts ahead of tariff impact The Q1 GDP data released out of Hungary and Czechia showed that momentum in both economies slowed at the start of this year, with Hungary suffering a renewed contraction. The risks to our below consensus full-year …
Dovish BoT and rising downside risks prompts forecast change Thailand’s central bank (BoT) today cut interest rates by a further 25bps (to 1.75%) and the poor prospects for the economy mean more easing is likely soon. The decision was correctly …
This page has been updated with additional analysis since first publication. House price growth slows as stamp duty relief ends April’s bigger-than-expected 0.6% m/m fall in Nationwide house prices (consensus forecast 0.0% m/m, Capital Economics -0.1% …
This page has been updated with additional analysis since first publication . Impact of tariffs starting to show up in survey data The drop in the PMIs likely overstates the impact of tariffs due to negative sentiment effects, but it still suggests that …
CPI data don’t support the case for below-neutral rates Although trimmed mean CPI gained a bit of momentum in q/q terms last quarter, it probably won’t keep the RBA from cutting rates by another 25bp at its May meeting. However, given lingering price …
Japanese banks are the one sector benefitting from the BoJ’s tightening cycle as higher interest rates lift their income by more than their expenses. And although they’ve struggled more recently amid the “Liberation Day” fallout, we think their …
Manufacturing sector shrugging off trade tensions Japan’s economy approached Liberation Day with solid momentum and firms’ production forecasts suggest that the manufacturing sector won’t be affected much by higher US tariffs. The 1.1% m/m fall in …
China Chart Pack (Apr. 25) …
29th April 2025
While higher lumber tariffs will not significantly impact GDP growth in the US or Canada, they will drive up costs for US homebuilders. As affordability is already stretched, it is unlikely that homebuilders will be able to pass these costs onto buyers in …
The JOLTS data again showed the labour market stabilising at a healthy level in March. While there were for the first time some signs of the DOGE purge of the federal workforce in the survey, the picture still appears far rosier than that painted by …
This Update answers five key questions on Romania’s rescheduled presidential election, the first round of which takes place on Sunday 4 th May. A victory for far-right frontrunner George Simion would likely raise concerns about the country veering away …
The US stock market and the dollar have fared worse over the last hundred days than they fared during the first hundred days of all other presidential terms since 1980. What’s more, there has been an intervening rout in the Treasury market. It is hard to …
Stockholm was one of the worst performing industrial markets in western Europe last year. And despite our relatively upbeat outlook for the Swedish economy, we think the coming years will herald more of the same as high vacancy and a strong supply …
