With the House of Representatives today passing the Senate’s bigger version of the budget reconciliation, the Republicans appear to have met President Trump’s timeline – to have the bill reach his desk for signing by the July 4 th Independence Day …
3rd July 2025
The big 0.8% m/m fall in Nationwide house prices in June suggests that the housing market is still struggling to recover from both the stamp duty-induced lull and the weak economy. While some leading indicators suggest that a turnaround in the housing …
High income growth and immigration are likely to continue to drive increases in house prices in Spain over the coming years. Demand will be further boosted by the recent fall in mortgage interest rates. Meanwhile, investment in dwellings is likely to grow …
Another robust US payrolls report supports our view that the FOMC will remain on hold this year and, in turn, our forecast for Treasury yields and the dollar to rebound over the coming months. Today’s June US non-farm payrolls report came in stronger than …
Protests have erupted again in Kenya recently, bringing violence and instability, and highlighting that the government lacks the political capital to repair the fragile fiscal position. With international borrowing costs prohibitively high, financing …
With the House seemingly on the cusp of passing the Senate’s revised budget reconciliation bill, the House looks set to support larger fiscal deficits over the next 10 years than it originally supported. The CBO estimated that the Senate bill would add …
Saudi current account deficit widens, FDI struggles Saudi Arabia’s current account deficit widened at the start of the year and is likely to deteriorate further as oil export receipts decline. This won’t cause any major macro problems yet, but it …
Service sector not firing on all cylinders, but holding up The rebound in the ISM services index in June is broadly consistent with our view that economic growth will slow rather than collapse in the second half of the year. While the prices paid index …
Whatever transpires in EU-US trade talks next week – deal, no-deal or an extension – tensions over transatlantic trade relations are likely to persist throughout President Trump’s second administration. What will happen to the baseline tariff? With the …
The government has implemented some good policies in its first year, but it has undermined the resulting one-off boost to real GDP in the coming years with a few missteps. And the possible permanent boost to GDP growth in the medium-term is small and far …
Exports weaker than they look While the headline export number for May shows significant improvement from a grim April, this was mostly driven by volatile gold exports, where non-mineral product exports declined in the month. Exports to the US continued …
This page has been updated with additional analysis since first publication. Labour market healthy but gains again narrow The 147,000 gain in non-farm payrolls in June was reassuring after the fall in the ADP measure of employment reported yesterday. A …
After one of the most tumultuous half-years in recent memory, what risks and opportunities lie ahead for portfolio managers in global macro and markets in the second half of 2025? How will evolving US economic policy shape returns? And will the volatility …
We think Trump’s tariffs will cause real goods trade to fall by around 1% in the next two years, both by introducing frictions into the trading system and by causing global demand to weaken. But a lot of the fall in US imports from China will be offset by …
We still think gilts will rally over the rest of this year even if fiscal concerns don’t entirely abate, as the Bank of England cuts interest rates by more than investors seem to expect. But concerns about debt levels and a dovish central bank could be a …
Gulf non-oil sectors end Q2 on a stronger note, but weakness ahead June’s batch of whole economy PMIs showed a strong outturn for the Gulf’s non-oil sectors despite the coinciding escalation of the Iran-Israel conflict. Tensions have since eased, but …
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 …
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 …
