Trump and OPEC+ cloud the outlook Commodity prices have been on a rollercoaster ride but, on net, many prices remain lower than before “Liberation Day”. In the coming months, our base case is that the 90-day pause on tariffs will be extended. That said, …
10th April 2025
Despite President Trump’s latest decision to pause the US’s “reciprocal” tariff regime for 90 days, there is still a real risk that the second-order effects of higher US tariffs on the UK economy are bigger and that UK inflation and interest rates fall …
We have updated our forecasts for Canada to account for the latest changes in US trade policy. (See Table below.) A recession should be avoided, but the harsh tariffs on the vehicle sector and uncertainty about the future of the USMCA mean GDP growth is …
The direct trade impact of US import tariffs on Africa is likely to be limited, but there could be more harmful indirect effects via weaker growth in other key trading partners, lower commodity prices and/or a more challenging external financing …
Core PCE prices on track for below-target 0.11% gain The unexpectedly small 0.06% m/m rise in the core CPI in March was partly due to steep falls in hotel prices and airline fares, which reflect both weakening domestic demand and the recent drop in …
We think the ECB will cut its deposit rate next week and again in June and July. The Trump tariff shock has heightened downside risks to inflation. But policymakers will give little forward guidance next week. Despite President Trump’s latest decision to …
The troubles at Brazilian bank Banco Master that have grabbed the headlines recently seem to be contained and, by most measures, the banking sector as a whole appears to be in good shape. But there has been a sharp run-up in lending to households over the …
Trump’s tariffs have darkened the outlook for industrial demand across Europe, but Germany looks more exposed than most. Even if the paused 20% reciprocal tariff on EU imports is not reinstated, the blanket 10% tariff and product-specific tariffs, most …
Despite the 90-day pause to the US’s “reciprocal” tariff regime, ECB policymakers will still need to assess the impact of higher US tariffs for euro-zone inflation. Some have argued that tariffs could boost euro-zone inflation in the medium term, but our …
The trade war has merely delayed rather than scuppered further policy tightening by the Bank of Japan. Accordingly, we’re sticking to our forecast that the 10-year JGB yield will rise to 1.75% by year-end. Whereas the 10-year US Treasury yield has on net …
US President Trump’s decision to pause the implementation of many of his previously announced tariffs has sent markets – especially equities – soaring, but there are some risk premia remaining that might take longer to fade. We’d flagged only on Monday …
Inflation picks up, but loosening cycle still set to begin next week Egypt’s headline inflation rate increased to 13.6% y/y in March, but we still expect policymakers at the Central Bank of Egypt (CBE) to deliver the first interest rate cut in nearly five …
Low inflation and tariff uncertainty supports case for further monetary easing The central bank in the Philippines (BSP) resumed its easing cycle today by lowering its policy rate by 25bp (to 5.50%) and in its communications highlighted the threat to …
Housing activity set to slow in the near term March’s RICS survey suggests both the weak domestic economy and the headwinds from the global tariff storm continue to increase the downside risks to our 2025 forecasts for housing demand and prices. But the …
Trade war to exacerbate deflation Deflationary pressures persisted last month and will almost certainly deepen over the coming quarters as it becomes more difficult for Chinese firms to export their excess supply. CPI deflation eased from -0.7% y/y in …
Although President Donald Trump was able to resist the stock market sell-off, once the bond market began to weaken too, it was only a matter of time before he folded on his eye-wateringly high tariffs. Trump has announced an immediate 90-day pause, during …
9th April 2025
US Treasuries are not benefitting from market turmoil, and we suspect they will keep struggling. Today, China announced that it would charge an additional 84% tariff on imports from the US starting on Thursday. Unsurprisingly, equity markets didn’t take …
The lasting fallout on oil demand from President trump’s ‘liberation day’ tariffs and subsequent retaliation, coupled with OPEC+’s plan to quicken supply increases, pose a major downside to oil prices. There are still many moving parts at this stage and …
Enter your own universal and specific tariff scenarios and see the impact on the effective tariff rate, inflation and GDP. If you have subscriber access to the data underlying this dashboard, you can download it via the menu options in the top right of …
More encouraging figures from the previously underperforming Midwest region suggest that it may be turning a corner. But while this may continue for several quarters more, there has not been enough improvement in the longer-term fundamentals to expect it …
While Canada escaped “liberation day” relatively unscathed, the imposition of US tariffs and risk of more to come will still weigh on exports, consumer confidence and investment. With immigration also plunging, we now expect GDP to expand by just 0.4% …
Some oil producers, such as the UAE and Kuwait, should be able to easily weather a period of low oil prices. But a sustained decline in prices would be a bigger challenge for Saudi Arabia, which would need to tighten fiscal policy, and producers with weak …
Oil prices have now fallen well below the level needed to balance current accounts across much of the Gulf, which may raise concerns about the sustainability of the region’s dollar pegs. And, indeed, there are some tentative signs of pressure on pegs. …
With the exception of some industrial assets, commercial property in the UK is not directly impacted by the higher tariffs announced by President Trump and property equities have performed relatively well. Nevertheless, a 5% fall in property equity prices …
While gold prices have edged down since “Liberation Day”, this is not unusual during a sudden equity market selloff. In fact, gold’s track record suggests that prices are likely to rise from here, especially if a worst-case scenario for the US economy and …
Higher US tariffs will be a substantial drag on the euro-zone economy this year. Looser fiscal policy in Germany will give a small boost in 2026, but overall we expect the euro-zone to grow fairly slowly in the coming years. We also think that the tariffs …
The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by another 25bps today to 6.00% comes as no surprise given the recent sharp drop in inflation and the headwinds from US tariffs. But the dovish tone of the communications reinforces our …
RBI’s easing cycle will run further than most expect The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by another 25bps today to 6.00% comes as no surprise given the recent sharp drop in inflation and the headwinds from US tariffs. But the …
Unless they are rolled back, the latest US tariff hikes mean that China’s shipments to the US will more than halve over the coming years, even assuming the renminbi weakens to 8.00/$. This will reduce China’s GDP by somewhere between 1.0-1.5% depending on …
Even if Japan’s attempts to negotiate a trade deal with Trump succeed quickly, concerns about the impact of escalating tensions between the US and other trading partners will force the Bank of Japan to keep interest rates unchanged for a few more months. …
RBNZ will cut further than most anticipate The RBNZ cut rates by 25bp at its meeting today, while signalling that further easing would be forthcoming in the months ahead. We think the Bank will ultimately loosen policy settings to a greater degree than …
Europe Chart Pack (April 2025) …
8th April 2025
We think the turnaround in longer-dated Treasury yields has bit further to run, if – and it’s a big if – the worst is now over for the US stock market. One reason for the volte-face in bonds is second thoughts about the prospects for Fed policy after …
President Trump’s reciprocal tariffs are particularly high on some of the lowest-income EMs, which are also among the most vulnerable to the suspension of US aid flows. That raises the risk of balance of payments strains, and also provides an opening for …
Last week we held a series of roundtable discussions with clients in our London office about how the pandemic will shape real estate into the 2030s. This note shares our answers to some of the most interesting questions raised, covering the pandemic’s …
Vietnam is pulling out all of the stops to secure concessions from Donald Trump. If the tariffs remain in place, the hit to Vietnam’s economy would be severe and would prompt a sharp cut to our GDP growth and interest rate forecasts for this year. Not …
The apartment market is on track to recover over our five-year forecast, with new supply falling back sharply, while demand remains solid. However, the size and speed of recovery will differ widely by region. The largest vacancy rate declines – around …
7th April 2025
The Bank of Canada’s quarterly business and consumer surveys were nowhere near as bad as we feared, but that may only be because the survey periods preceded the most recent tariff announcements. Either way, it’s clear that those tariffs and uncertainty …
Israel holds rates steady ahead of Trump-Netanyahu talks The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, and sounded a bit more hawkish than at its previous meeting despite highlighting possibly quite a large hit to economic …
Tariffs unlikely to bring forward rate cuts The communications accompanying the decision by the National Bank of Romania (NBR) to leave its policy rate on hold today, at 6.50%, highlighted two-sided risks to inflation and economic activity from US trade …
March’s batch of PMIs across much of the Middle East and North Africa came in softer as worries about a global trade war weighed on activity. Those concerns will have only mounted in the wake of President Trump’s tariff announcement last week. And with …
The tariff storm is far from over. President Trump and some of his key officials used the weekend to dig in their heels on his ‘Liberation day’ tariffs, and European and Asian markets have fallen heavily again on Monday while S&P 500 futures point to …
