Brazil’s monetary tightening cycle is very close to being (or may already be) over, and attention is quickly turning to when and how far Copom will lower interest rates. Historically, the market has tended to underestimate how far rates are lowered – and …
4th June 2025
Rate cuts delayed, but still coming The Bank of Canada avoided surprising markets by keeping interest rates unchanged at 2.75% today, as it continues to wait to see what the full impact of uncertain US trade policy on the economy will be. The accompanying …
According to the measures of wage growth that we consider the most useful and the fundamentals of the recent easing in the demand for labour relative to the supply, it is only a matter of time before wage growth slows to rates that are more consistent …
Rates left on hold, but easing cycle to resume before long The National Bank of Poland (NBP) left its policy rate on hold today, at 5.25%, but this is only likely to mark a short pause in the easing cycle. We think that interest rates will be cut again at …
We'll be discussing the outlook for UK fiscal policy and the wider economy shortly after the Chancellor's Spending Review is released in a 20-minute online Drop-In at 3pm BST on Wednesday 11th June. (Register here .) The strong start to the year shouldn’t …
May’s batch of PMIs across the Gulf point to a softer Q2 for non-oil sectors and the backdrop of lower oil prices will likely result in less fiscal support and weaker confidence that add to the economic headwinds. In contrast, Egypt’s improved external …
Some positive news, but outlook still poor The rise in home purchase mortgage applications in May still leaves them just shy of where they were in January and very low by historical standards, supporting our view that homebuying activity will remain weak …
Jump in inflation to prompt CBE to stick with cautious approach to rate cuts Egypt’s headline inflation rate climbed from 13.9% y/y in April to 16.5% y/y in May, the fastest pace since January, and while we expect the Central Bank of Egypt (CBE) to …
Note: we will be discussing oil, industrial metals tariffs, and more in an online briefing on Wednesday 4th June at 3pm BST. You can register here . Pressure picks up in commodity markets OPEC+’s announcement that it will continue to add oil to the market …
While tariff risks remain, the recent improvement in demand and weaker supply pipeline suggest the Dublin office market has reached a turning point. However, we don’t expect prime rental growth to rebound by as much as most expect given the high level of …
GDP data put RBA between a rock and a hard place Although activity was off to a poor start in 2025, the persistent strength in unit labour cost growth will constrain the RBA’s ability to provide much policy support. The 0.2% q/q rise in real GDP in Q1 was …
The manufacturing PMIs remained subdued across EMs last month despite the US-China trade truce. That said, the timely hard activity data released so far has shown more resilience than the survey data. The aggregate EM manufacturing PMI fell from 50.5 in …
3rd June 2025
April’s JOLTS data suggest the labour market remained healthy at the start of the second quarter, with job openings rising and layoffs low. While there are some pockets of weakness in areas most at risk from tariffs and the recent fall in foreign …
The latest PMIs suggest that global industrial activity has weakened so far in Q2. Meanwhile, goods price pressures remain subdued in most countries apart from in the US, where tariffs already seem to be having an impact. The output component of the …
Below-target inflation in the euro-zone and deflation in Switzerland bring back memories of the 2010s, but the drivers of low inflation are fundamentally different this time and we don’t see much scope for government bond yields to fall. Data released …
We’re hosting an online drop-in on Wednesday to discuss the outcome of Korea’s election and the macro and market implications. Sign up here . Victory for Lee Jae-myung of the Democratic Party (DP) in today’s presidential election in Korea should help …
Growth slowdown strengthens case for more rate cuts South Africa’s muted 0.1% q/q growth in the first quarter of the year on the back of a downwardly revised 0.4% expansion in Q4 of last year suggests the recovery is losing momentum. That will only …
Services inflation down and further declines to come May’s steep decline in services inflation, to its lowest level in more than three years, confirms that the previous month’s jump was just an Easter-related blip and that the downward trend in services …
Downside inflation surprise re-opens the door to monetary easing The larger-than-expected fall in Turkish inflation in May, to 35.4%, will increase the CBRT’s confidence that it can restart its easing cycle soon. While we had thought the easing cycle …
While this year’s minimum wage hike will be only slightly smaller than last year’s, it is unlikely to prevent a further slowdown in wage growth over the coming quarters. That said, with capacity pressures still elevated, we continue to believe that the …
RBA still wary of adopting an expansionary policy stance Although the RBA’s easing cycle has further to run, the Bank is unlikely to cut rates as far as markets are anticipating. The minutes of the RBA’s May meeting confirmed that the Board had considered …
The existing tariffs on aluminium and steel have already raised metals prices in the US relative to elsewhere, and it is logical to assume that the announced doubling of tariff rates will only exacerbate this effect. Against this backdrop, our Metals …
2nd June 2025
To some extent, the persistent underperformance of US small-cap (SC) equities probably reflects lingering concerns about the effects of Donald Trump’s policies on the economy. But even if fears of a recession fade, we doubt US SC equities will fare better …
The suggestion that the Chancellor may be considering cutting 50,000 civil service job cuts wouldn’t weigh on employment growth much over the next few years. Only if the government were to cut public sector employment towards its post-austerity and …
Limited optimism after China-tariff-pause The surprise decline in the ISM manufacturing index in May indicates that tariffs continue to weigh significantly on the sector. While the May data is less gloomy than initially appears, as a sharp decline in …
China is mounting a push for global technological leadership by deploying industrial policy on a huge scale. Judging by how competitive many Chinese firms now are at the cutting edge, the effort is succeeding in many areas. But, according to Xi Jinping, …
We’re hosting an online drop-in on Wednesday to discuss the outcome of Korea’s election and the macro and market implications. Sign up here . The impact of the trade war on Korean exporters has so far been limited. Although exports to the US fell in May, …
Tariffs may be beginning to take their toll on CEE industry The fall in the manufacturing PMIs out of Central and Eastern Europe (CEE) last month suggest that US tariffs may be holding back the region’s industrial sectors. Elsewhere, inflation pressures …
This page has been updated with additional analysis since first publication. Further signs consumers are starting to spend a bit more freely April’s money and lending figures provided little indication that the US trade war and the deteriorating jobs …
Opposition victory will continue to block government reform drive The victory for Karol Nawrocki, the candidate of the nationalist opposition party (PiS), in Poland’s presidential election will continue to stymie the government’s efforts to push through …
This page has been updated with additional analysis since first publication. Soft patch for prices already over May’s 0.5% m/m increase in Nationwide house prices adds to the evidence that the recent soft patch for the housing market was a temporary blip …
Australian house prices edged up a notch in May, and leading indicators suggest they will gather further momentum over the coming months. However, with debt-servicing costs set to remain onerous despite the RBA’s rate cuts, the cyclical upswing is likely …
Domestic weakness weighing on growth This report was first published on Monday 2 nd June, covering the official PMIs . We added commentary on the Caixin manufacturing PMI on Tuesday 3 rd June and Caixin services and composite PMIs on Thursday 5 th June. …
After another week of twists and turns in the Trump trade policy roll-out, Stephen Brown from our US team and Jonas Goltermann from our Markets team are on the show to talk about what comes next. In their conversation with David Wilder they touch on: …
30th May 2025
The dollar has stabilised overall this week amid continued uncertainty around US trade policy and questions around the fiscal package that is still working its way through Congress. Market participants appear increasingly to be looking through the latest …
Court rulings leave trade policy in disarray Although this week’s court ruling – that President Trump doesn’t have the “unbounded authority” to impose universal tariffs on other countries – has been temporarily stayed, there is a fair chance that even …
We have consistently argued that the influence of Trump’s tariffs on the UK economy would be modest. As a result, the impact on UK GDP of the eventual outcome of the US court ruling on the legality of the 10% universal tariff will probably also be small. …
A very brief reprieve The ruling by the US Court of International Trade this week (see here ), albeit quickly put on hold, raises the possibility that the US’ 25% fentanyl-related tariffs on non-USMCA compliant imports from Canada will soon be a thing of …
Tinubu’s two-year anniversary in power It’s two years since Bola Tinubu became president of Nigeria and with support waning, he’s announced ambitious spending plans funded by foreign loans. But with borrowing costs high, we suspect these plans won’t …
Higher GDP forecasts for 2025 and 2026 Data released today confirmed that the economy got off to a strong start in 2025 – GDP growth rose to 7.4% y/y, from 6.4% y/y in Q4 2024 (revised up from 6.2%). (See here for our Data Response .) Looking ahead, it’s …
A turning point for Mexico’s judiciary Mexicans head to the polls on Sunday to elect almost 900 federal judicial positions and thousands of positions at the local level. Roughly the same number of posts will be up for grabs in 2027. This huge …
China Chart Pack (May. 25) …
All-property capital values edged up by 0.1% in Q1, marking the first increase since mid-2022. Meanwhile, appraisal-based cap rates were flat after compressing by a slight margin in Q4 2024. We still believe appraisals have further to fall given the …
The polls ahead of the second-round run off of Poland’s presidential election on Sunday point to a very tight race, with the two remaining candidates sharing virtually equal levels of support. The president of Poland has little direct input into domestic …
Drop back in imports & consumer resilience point to big Q2 GDP rebound With imports slumping after President Trump imposed his tariffs in early April and consumer spending continuing to recover after this year’s unusually severe winter, we now forecast …
The latest twists and turns in the US tariff saga once again dominated the week. We responded to the court ruling that suspended Trump’s tariffs here . The news that tariffs have now been reinstated doesn’t alter our main conclusions. The latest legal …
