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 …
9th July 2025
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 …
With the economy facing an elevated risk of recession, we expect the Bank of Canada to do its part and cut rates further. But will the Bank deliver at its July meeting – and what will the latest guidance signal about the policy outlook? Join our North …
The continued weakness in the housing market over the first six months of this year and the cracking labour market means we now expect the recovery in house prices to start later and be slower. But bigger falls in mortgage rates than we previously thought …
While the Reserve Bank of Australia’s today defied widespread expectations of a rate cut, we still expect the Bank to resume its easing cycle at its August meeting. And with GDP growth still sluggish and inflation back at target, we expect the Bank to …
Trump has confirmed that punitive tariffs on Asian countries will take effect on 1 st August unless trade deals are agreed by the end of the month. Despite the urgency, negotiations could prove difficult if, as some reports are indicating, the US is …
RBA still likely to cut rates much further The Reserve Bank of Australia defied widespread expectations of a rate cut at today’s meeting, but we still expect the Bank to cut rates by another 100bp over the coming year. The Bank’s decision to leave the …
The Chinese authorities are seemingly on the cusp of roll ing out nationwide childbirth subsidies . While the proposed scale of the program is too small to have much near-term impact on the birth rate or consumption, it would mark a shift in mindset and …
Our base case remains that Japan will reach a deal with the US to fend off the threatened 25% US tariff. If that deal is reached soon and includes no or only a modest increase in the US tariff rate, the case for another BoJ rate hike in October remains …
President Donald Trump has now released “letters” to 14 countries today, announcing that, unless they negotiate a deal over the next few weeks, he will impose reciprocal tariffs on those countries from August 1 st . In most cases, those tariffs that would …
7th July 2025
President Donald Trump has released the first of his “letters” threatening to impose country-specific tariffs of 25% on both Japan and South Korea from August 1 st , if those countries can’t reach a deal with his administration by then. Back in April, …
This publication has been updated to reflect changes to our forecasts after the May GDP release on 11th July 2025. Overview – The falls in employment triggered by the Chancellor’s rises in National Insurance Contributions for employers and the minimum …
The makings of an oil market glut The decision by OPEC+ to accelerate the pace of output hikes in August cements our view that the downward pressure on oil prices will intensify over the next 18 months or so. Admittedly, we assume that OPEC+ will slow the …
A weaker dollar should not compound the upward pressure on goods prices from tariffs too greatly given that the greenback remains strong by historical standards and, in any case, the pass-through of exchange rate moves to final consumer prices tends to be …
Colombia’s shift from being a staunch US ally to embracing China has been one of the starkest geopolitical moves of the last few years. This may put Colombia into President Trump’s crosshairs for narcotics decertification and/or higher US import tariffs …
BoI leaves rates on hold, but cuts coming a little sooner The slightly more dovish communications accompanying the decision by the Bank of Israel (BoI) to leave its policy rate on hold today, at 4.50%, and the easing in geopolitical risks, suggest that …
The UAE’s non-oil sector has seen a strong run of growth recently and we think that robust activity in tourism and retail sectors as well as solid credit growth means that non-oil GDP growth will accelerate this year. Coming alongside rising oil output …
As the deadline for the implementation of ‘Liberation Day’ tariffs is pushed back to August, this special briefing from our senior economist team brought clients the latest on the state of play for the global economy and the risks that lie ahead. During …
Markets are starting the week braced for what happens when the 90-day reprieve on Liberation Day tariffs expires on Wednesday. But even as the next phase of Donald Trump’s tumultuous trade agenda begins to unfold, it’s increasingly clear that deeper …
Taiwan and Korea face some of the world’s worst demographic headwinds with working-age populations set to shrink by 1% a year over the next decade. Efforts to boost fertility have largely failed, and immigration on the scale needed to stabilise the size …
We think there’s a much larger negative output gap in South Africa’s economy than is widely assumed, which will keep inflation around 3%, rather than rise towards 4.5% as the Reserve Bank (SARB) and the consensus expect. That should give policymakers room …
Despite the uncertainty about tariffs, we continue to expect US markets – especially equities and the dollar – to rally over the rest of the year. There have been two key parts of the US tariff drama that have mattered for markets over the past couple of …
This page has been updated with additional analysis since first publication. House prices still struggling to regain momentum The stagnation in the Halifax house price index in June suggests that the housing market remains slow to recover from both the …
Jump in inflation will discourage Riksbank from further cuts Both headline and core inflation rose in June by much more than Riksbank officials had forecast at its meeting last month, supporting our view that the Riksbank will keep the policy rate at 2% …
Output still resilient to tariffs The better-than-expected German industrial production figures for May are partly due to continued tariff front-running in the pharmaceuticals sector, but output in other sectors is also proving more resilient to tariffs …
Vietnam’s US-bound exports have surged since the US imposed very high tariffs on imports from China. While the export figures are overstating the benefits to Vietnam’s economy due to a surge in rerouting, the country is set to remain a key beneficiary …
Wage growth should pick up across second half The slump in wage growth in May largely reflected a plunge in volatile bonus payments and we still expect base pay growth to accelerate further. According to the preliminary estimate, wage growth slowed from …
There may be little to stand in the way of further gains in the S&P 500 this summer, provided today’s enactment of the ‘One Big Beautiful Bill’ is followed next week by a market-friendly decision on tariffs and the upcoming earnings season doesn’t spring …
4th July 2025
The US dollar has stabilised to a degree this week after another solid non-farm payrolls report generated a bit of a rebound in US interest rate expectations. The bigger picture remains that the dollar is under pressure on account of both the perception …
SARB’s lower inflation target proposal looks close A backdrop of subdued price pressures and declining inflation expectations strengthen the argument that a lower inflation target could bring even deeper interest cuts onto the table. Reserve Bank Governor …
The May trade release underscored the difficulties facing exporters. On the face of it the data were positive, as exports rose by 1.1% while imports fell by 1.6% m/m. This was off the back of a grim April when the trade deficit widened to $7.6bn, however, …
Chile: communist scores surprise primary win The positive market reaction to the victory for communist candidate, Jeannette Jara, in the Chilean governing coalition’s presidential primary election seems surprising at first sight. The peso is up by c.1% …
Muddled guidance in Poland, but further cuts likely The decision by the National Bank of Poland (NBP) to cut interest rates by 25bp at its meeting on Wednesday was a dovish surprise to most analysts who had expected policy to be left unchanged, although …
On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing joins David Wilder to unpack the key developments in global macro and markets, including: What to expect as the ‘Liberation Day’ tariff pause …
A rate cut at the ECB’s meeting on 24 th July seemed off the table only a few weeks ago, as energy prices had spiked due to the Israel-Iran conflict and ECB President Lagarde had stressed after June’s meeting that the Bank was in a “good position” on …
Surfing the waves of OPEC+ supply The sharp drop back in the risk premium in oil prices in the aftermath of the Israel-Iran ceasefire means that oil market fundamentals have snapped back into focus over the past week or so, particularly with the imminent …
Today (Friday 4 th July) marks the one-year anniversary of the government’s election victory. But on Wednesday this week it looked like there was a chance that the Chancellor, Rachel Reeves, wasn’t going reach the milestone after the Prime Minister …
Key questions left unanswered The trade agreement announced this week between the US and Vietnam, which imposes tariffs of 20% on Vietnam’s exports to the US (along with 40% for re-routed goods), leaves many questions unanswered. Not least how will …
Construction activity improves on back of housing market The headline CIPS construction PMI rose for the fourth consecutive month in June to 48.8, a six-month high. The increase was driven by the housing component, which jumped from 45.1 in May to 50.7 in …