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% …
Romania takes a (small) step in the right direction The fiscal tightening measures announced by Romania’s new government, which took office this week, are a welcome development for investors after the political turmoil last month and the alarming widening …
27th June 2025
The CPI data showed the Bank of Canada’s preferred CPI-trim and CPI-median core measures rose by an average of 0.2% m/m in May, which was lower than in the previous month but still a bit too strong for comfort. Several goods prices rose strongly, as was …
With the Fed divided between doves calling for a rate cut as early as July and hawks expecting no further easing this year, Fed Chair Jerome Powell struck a careful balance in his semi-annual testimony to Congress this week. He offered no signal that a …
GNU’s first birthday: fights holding back reform Next week marks a year in office for South Africa’s Government of National Unity (GNU). Both investor sentiment and supply conditions have improved under their watch, but persistent intra-party disputes …
The US dollar has generally lost further ground this week and the DXY index currently sits at around its lowest level since February 2022. This index has now fallen by more at this stage in the year than in any previous year since the US moved to a …
Mexico’s exports: so far, so (relatively) good Mexico’s trade figures for May released on Thursday showed that exports have continued to hold up well despite higher US import tariffs. Overall goods exports were down by a modest 0.4% y/y in dollar terms. A …
Conflicting reports cloud prospects of a trade deal President Trump on Thursday talked up the prospects of the US and India signing a “very big” trade deal ahead of the ending of the 90-day tariff reprieve on 8 th July. India has also sent a delegation of …
A ceasefire in the Middle East. A US-China deal. Relatively benign dataflow. The S&P 500 back at a record high. But are things really looking up? Group Chief Economist Neil Shearing is on The Weekly Briefing from Capital Economics to talk to David Wilder …
There were two key developments for the inflation outlook this week. First, some of the upside risk to CPI inflation posed by the conflict in the Middle East and higher energy prices has subsided. After the price of Brent oil ended the UK business day on …
Despite a sluggish economic backdrop and rising vacancy rates in the wider Paris office market, we continue to believe that prime office rental growth will be stronger than the consensus expects. This reflects the importance of the continued occupier …
China Chart Pack (June 25) …
Consumer resilience beginning to fade The rise in core PCE prices in June was partly due to a rise in core goods prices, but the early impact of the tariffs has been unexpectedly muted. Meanwhile, the contraction in real consumer spending last month, …
Oil prices and volatility come full circle Oil price volatility is within touching distance of its five-year average following the ceasefire between Iran and Israel. (See Chart 1.) While the ceasefire could well prove fragile, reported violations early on …
Manufacturing slump points to weak second quarter The worse-than-expected 0.1% m/m contraction in GDP in April and equivalent sized estimated fall in May suggests that growth was flat at best in the second quarter, with a clear risk of a contraction. This …
Euro powering ahead The catalyst for this week’s further appreciation of the euro was nothing to do with Europe: instead, it reflected President Trump’s renewed attacks on the Fed and suggestions that he will appoint the next Fed Chair earlier than …
CEE generally resilient, with some weak spots The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional economic activity has been resilient in Q2, although there remains some points of concern – …
Activity weak and some signs of tariff drag The ESI for June suggests that US tariffs may be starting to drag on euro-zone activity and that the economy remains weak. Meanwhile, Middle-east tensions do not appear to have raised perceived uncertainty. The …
Boost for Korean consumers The weakness of consumer spending in Korea has continued in recent months, with retail sales now just over 2% below their pre-pandemic levels. (See Chart 1.) However, there are good reasons to think the worst is now over. …
Although the US dollar has tumbled as President Trump has ramped up the pressure on the Fed to cut rates, we don’t think investors are that concerned about the central bank’s independence yet. But the longer the attacks go on, the greater the pressure on …
Détente is on shaky foundations The understanding reached between the US and China during talks in Geneva and London has now been formalised, with the White House revealing that a written agreement was signed off two days ago. US officials have confirmed …
Tokyo election defeat is a red herring The poor showing of the LDP in Sunday’s metropolitan election in Tokyo is probably a red herring. While the number of seats the LDP won in Tokyo fell to a record low, the share of people that intend to vote for the …
The flow of funds data suggest that Japan’s budget deficit has continued to narrow after reaching a 30-year low in 2023. And while the recent plunge in the ratio of government debt to GDP partly reflects valuation changes caused by soaring bond yields, we …
Bank will speed up the pace of easing It’s become increasingly clear that the downside risks the RBA has been worried about are starting to manifest. Our GDP Nowcast suggests that recovery is struggling to gain momentum, prompting us to revise down our …
Inflation overshoot points to year-end rate hike The slowdown in headline inflation in Tokyo in June partly reflects the resumption of energy subsidies. With underlying inflation still running well ahead of the Bank of Japan’s forecasts, we still expect …
This inaugural Asia-Pacific Commercial Real Estate Outlook presents our analysis and five-year forecasts for the region’s largest markets across the four major sectors. We’ll be discussing the main takeaways from this report and answering your questions …
Banxico cuts by 50bp, but tone slightly less dovish Mexico’s central bank (Banxico) lowered its policy rate by another 50bp, to 8.00%, at today’s meeting, but the accompanying communications were slightly less dovish and point to a slower pace of easing …
26th June 2025
This dashboard shows our latest Asia-Pacific commercial property forecasts. If you have subscriber access to the data underlying this dashboard, you can download it via the menu options in the top right of each chart or table. If you would like subscriber …
With the noise around US tariffs and war in the Middle East fading, at least for now, we think the stage is set for some further decent returns from “risky” assets – especially US equities – over the next couple of years. But we suspect commodities will …
Overview – We expect tariffs to have only a modest impact on both real economic growth and price inflation. Admittedly, we do see annualised GDP growth slowing to around 1.5% in the second half of this year, but it should gradually recover from the second …
Table of Key Forecasts Overview – EM exports have held up well this year despite higher US tariffs, but the growth outlook over the second half of the year looks more challenging. We expect a slowdown in most EMs and our forecasts generally sit below …
We forecast a smaller 130,000 gain in non-farm payrolls in June. We expect the unemployment rate to remain unchanged at 4.2%, while average hourly earnings growth likely held steady too, at 3.9% y/y. Payroll gains to remain healthy The 139,000 rise in …
The Israel-Iran conflict escalated dramatically and, even more quickly, subsided over the past week. The focus now is on whether Iran pursues diplomacy or seeks to restart its nuclear efforts. To recap, this time last week, Israel and Iran were trading …
