Soft inflation print points to July rate cut The larger-than-expected fall in Turkish inflation in June, to 35.0%, supports our view that the central bank will restart its easing later this month. We maintain our forecast for the one-week repo rate to be …
3rd July 2025
This page had been updated with additional analysis. Inflation rises, but will remain very weak this year Headline inflation rose slightly in Switzerland in June, but we expect it will remain around zero, or just below, for the rest of the year. …
The fact that the RBA isn’t cutting interest rates during a housing downturn won’t limit the rebound in house prices, but the extremely stretched level of affordability will do so. Even though we expect interest rates to fall by more than most expect, the …
Vietnam has had one of the weakest hands to play in its trade negotiations with the US. If it is confirmed that it has agreed to a 20% tariff, this isn’t a template that other countries will feel they have to follow. Instead, the key lesson for other …
2nd July 2025
Will tariffs-induced inflation emerge to shape the Fed’s next move? Could softening euro-zone inflation data slow the ECB’s easing cycle? Will the Bank of England resume cutting in August? Join us for our latest Central Bank Drop-In, a rapid reaction to …
This note is the latest publication from our newly launched coverage of Asia-Pacific commercial real estate. We’ll be discussing the outlook for the region, including the key calls in this report, in a Drop-In on Thursday, 3rd July. Register here . We are …
Real household disposable income growth is now slowing, but we still expect household consumption will accelerate to around 1.8% y/y on average over 2025-27 as households start to run down the savings they have built up. That will help all-retail rents …
NBP cuts by 25bp, with two further cuts likely this year The decision by the National Bank of Poland (NBP) to cut its policy rate by 25bp today, to 5.00%, was a dovish surprise to most analysts (although not ourselves). With inflation likely to fall back …
The Taiwan dollar has appreciated sharply against the US dollar in recent months but, for a host of reasons, the central bank seems now to be less tolerant of further currency strength. Even without intervention, we think that the currency will give up …
Given the limited progress in concluding trade negotiations since Liberation Day, there is a risk that huge tariffs will be imposed on 9 th July after the 90-day pause expires. We suspect that further last-minute concessions will be made to permit …
Overview – The economy faces a period of weak growth as US tariffs and uncertainty over the future of the USMCA weigh on exports and investment. We forecast quarterly GDP growth of less than 1% annualised on average for the rest of 2025. Tariff effects …
Our views on the outlook for monetary policy in Latin America have been on the hawkish side for some time, but we now think that there’s scope for interest rates in many countries in the region to come down by more than most expect. The key exception to …
The gradual recovery in property values underway in Europe is unlikely to be pushed off track by tariff developments this year, but we think values still have further to fall in the US and APAC as they adjust to the higher interest rate environment. …
We expect Treasuries to struggle over the rest of the year, despite their recent strong run. At the time of writing, Treasuries’ weeks-long rally seemed to have hit pause . One trigger seemed to be Fed Chair Powell’s comments at the ECB’s Sintra …
With activity having rebounded strongly in Q1 and headline inflation firming up, the RBNZ is likely to leave rates unchanged at 3.25% next week. However, we’re not convinced that the economy has turned the corner. And with the output gap set to remain …
The latest batch of monthly activity and inflation data for Korea support the case for further monetary policy easing by the central bank. We are expecting another 50bps of cuts before the end of the year. The monthly activity data for May, which were …
RBA to cut by 25bp next week, as recovery stumbles and price pressures ease Although labour market remains tight, it is not standing in the way of disinflation Bank will cut rates further than most analysts are anticipating We expect the RBA to cut rates …
Weak retail sales print locks in July cut for RBA With consumer spending remaining in the doldrums, there is a strong case for the RBA to cut rates faster and further than most are predicting. The 0.2% m/m rise in retail sales in May was markedly weaker …
PBOC turns less dovish despite deflation concerns One might have thought that fading concern about the exchange rate and growing concern about deflation would provide the perfect moment for the PBOC to step up monetary easing. But the Bank’s latest …
The JOLTS data suggest the labour market remained healthy in May, with job openings and private sector hiring rising, and layoffs low. However, the sharp rise in accommodation and food services job openings, despite a fall in tourism, is a little …
1st July 2025
The EM manufacturing PMI recovered in June, led by China, which regained some momentum, and India, which continued to outperform. That said, the surveys remained at subdued levels in most EMs. And the second half of the year will prove difficult for EM …
The latest PMIs suggest that while global industrial activity gained some momentum at the end of Q2, this will probably prove short lived. Meanwhile, the surveys continue to suggest that tariffs are contributing to strong price pressures in the US, while …
The weakness in the dollar in June was easier to explain than its slide in April and May since – unlike in those months – it was accompanied by a shift in bond yields that might have been expected to weigh on the greenback. Even so, there is still a lot …
Tariff cost pressures are still working their way through supply chains The modest rebound in the ISM headline index to 49.0 in June, from 48.5, should temper concerns of a factory sector collapse driven by tariffs and lingering trade uncertainty. While …
Somewhat paradoxically, climate-driven shifts in tourist patterns could help to smooth the seasonal peaks seen in summer destinations, and some countries – particularly in northern Europe – will become more attractive places to visit. However, there is a …
Thailand faces renewed political uncertainty after Prime Minister Paetongtarn Shinawatra was today suspended. This will undermine consumer and business sentiment and complicate efforts to agree a free-trade deal with the US. Thailand’s Constitutional …
Inflation at the target and likely to remain quite stable The small increase in headline inflation in the euro-zone in June will not change the debate among ECB policymakers about whether there should be one more interest rate cut in the current cycle. …
Warning signs for industry at the end of Q2 The weak batch of June manufacturing PMIs out of Emerging Europe – and in particular some of the forward-looking components of the surveys – paint a downbeat view for industrial activity across the region. That …
China is moving toward ending its decades-old system of “presales” for newly-built residential property. This would reduce risks for homebuyers. But hopes that the change would provide a material boost to home prices are likely to prove misplaced. …
We’ll be discussing how the government has influenced the UK economy in its first year in office in a 20-minute online Drop-In on at 3pm BST Thursday 3 rd July. (Register here . ) This page has been updated with additional analysis since first …
The June PMI readings for most countries in Asia were subdued. With worries about growth having taken precedence over those about inflation, we think most central banks in the region will continue to loosen monetary policy and by more than most analyst …
House prices rose the most since last year in June and with the RBA set to cut interest rates much further, the housing market will continue to gain momentum. However, affordability will remain quite stretched by historical standards so we doubt that …
Firms are shrugging off trade tensions The Q2 Tankan survey showed that the economy is holding up well despite trade tensions, which supports our view that the Bank of Japan will resume its tightening cycle before the end of the year. The Tankan’s …
With the S&P 500 at a new all-time high, its fall of more than 20% earlier this year already seems like a distant memory. However, we don’t think it’s really back to square one for US equities. For a start, equity indices tend to follow an upward trend. …
30th June 2025
Table of Key Forecasts Global Overview – We expect global GDP growth to slow a touch in the next couple of years, as President Trump’s policies weigh on US activity and fiscal policy provides less of a prop to growth in China. India will be a relative …
Capital inflows into EMs held up well in June despite the escalation of conflict in the Middle East. Were higher US tariffs to come into force after President Trump’s 90-day reciprocal tariff reprieve ends, that could spur a bigger move in outflows. But …
Housing is struggling under the weight of high borrowing costs – a problem unlikely to ease if, as we expect, the Fed holds rates steady this year due to tariff-driven inflation, followed by only a modest 50bp of loosening in 2026. We expect existing home …
Investment trends are not consistent with net zero The IEA published the latest edition of its World Energy Investment report in early June, which revealed that clean energy investment is expected to rise by a healthy 6% y/y in 2025. (See Chart 1.) What’s …
Asia Chart Pack (June 2025) …
‘Chart of the week’ has to go to our China team, whose effort below was a centrepiece of discussions in our latest client roundtables. It shows exports from China to the US, Europe and the rest of the world up to May. (See Chart 1.) Two key shifts stand …
Recent house price declines suggest a shift toward a more buyer-friendly market, as rising home listings increase choice and temper seller expectations. Nonetheless, leading indicators and solid market fundamentals indicate that any decline in prices will …
June inflation figures will please ECB National data published so far suggest that both euro-zone headline and core inflation were little changed and close to 2% in June. That will please ECB officials, who we expect to cut rates one more time in this …
Net lending to property gains momentum Net lending to property had another strong month in May, with the total of £2.15bn the largest amount in five years. That was primarily due to a rise in lending to standing developments, which surged to £2bn from …
This page has been updated with additional analysis since first publication. We’ll be discussing how the government has influenced the UK economy in its first year in office. Register for in-person Roundtables at our London office on Tuesday 1 st July …
A number of AI-linked redundancies have hit the headlines recently, reigniting fears that the adoption of AI will lead to a surge in unemployment. We continue to think that fears of a big long-term rise in “technological unemployment” are misplaced. While …
Rate cut still on the cards on Wednesday The small rise in Polish inflation, to 4.1% y/y, in June is likely to be followed by a fall back within the central bank’s target range over the second half of this year. We think this will give the National Bank …
Momentum rebounds, but headwinds persist This report was first published on Monday 30th June, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Tuesday 1st July and Caixin services and composite PMIs on Thursday 3 rd …
Japanese firms not benefitting from trade war after all The subdued rise in industrial production in May means that firms were not benefitting from sky-high US tariffs on Chinese imports and their production forecasts point to continued weakness. The 0.5% …
