The Fed’s proposed loosening of supplementary leverage ratio (SLR) rules for big banks might help to improve demand for Treasuries, but we’re not yet persuaded it will outweigh the other headwinds facing the world’s largest bond market. Treasuries have …
26th June 2025
Qatar Airways-Boeing deal steals headlines but underlying data positive The surge in durable goods orders in May was mostly driven by the Qatar Airways-Boeing deal announced during President Trump’s visit, but the small rise in core orders shows there …
Inflation eases, Copom’s tightening cycle over The fall in Brazil’s headline inflation rate to 5.3% y/y in the first half of June reinforces our view that the central bank won’t push through further interest rate hikes. An easing cycle is likely to begin …
India’s economy has had a strong first half of the year and is poised to grow by 7% in both 2025 and 2026, making it a global outperformer. The recent sharp drop in inflation has enabled the Reserve Bank of India to frontload its easing cycle and we think …
The US-brokered Iran-Israel ceasefire has allayed fears of the conflict spilling over into the Gulf and concerns about a closure of the Strait of Hormuz have diminished. This has eased the risks to the Gulf’s capacity to ship oil to market, but it has …
A comparatively attractive spread over risk-free rates and solid investor sentiment mean there is scope for Swiss prime property yields to fall further than in most other European markets this year. That would allow all-property capital values to rise …
Most major DMs need to shrink their primary budget deficits significantly and most will find it hard to do so. This will exacerbate growing worries about fiscal sustainability. The US and France have most to do. Government deficits in the major DMs remain …
Our View: Emerging Europe is less vulnerable than other EM regions to higher US import tariffs, but we have still recently nudged down some of our GDP growth forecasts for this year. Monetary policy will be eased slightly more quickly than we previously …
Overview – We expect GDP growth across most of Asia to soften in 2025, with many countries likely to record below-consensus growth. The risk of escalating trade tensions remains a key concern, particularly for Vietnam, which is highly dependent on US …
Overview – Australia’s economy is struggling to gain momentum, while the recent rebound in activity in New Zealand isn’t likely to be sustained. As the lull in activity lifts spare capacity, underlying price pressures should continue to ease in both …
With the S&P 500 almost back at a record-high, we take stock of the different drivers of the US stock market’s recent (mis)fortunes. We suspect that the conditions will soon be back for equities in the US to lead those in the rest of the world. Four …
25th June 2025
A downbeat view on new supply underpins our overall CRE outlook. In the short term, the risks skew firmly to the downside and recent economic disruption reinforces this, while further out tight financial conditions and ongoing cost and labor pressures …
Overview – Exports would almost certainly have weighed on China’s growth whatever happened this year, but US tariffs – even at their reduced rate – will worsen the drag. Fiscal support has been propping up domestic demand but will provide less of a …
Africa Chart Pack (Jun. 2025) …
This webpage has been updated with additional analysis since first publication. Elevated mortgage rates flatten recent momentum The large fall in new home sales in May cancels out all of the positivity of the past couple of months and serves as a valuable …
If it is implemented in full and funded through borrowing, the target for NATO members to raise defence spending to 3.5% of GDP by 2035 could push debt burdens up by 10% of GDP or more over the next decade. This would add to fiscal risks in some …
The One Canadian Economy Act (Bill C-5) is a positive step towards reducing dependency on the US in the long run. But it will do little to offset the blow to trade from tariffs given that even fast-tracked infrastructure projects would still take years to …
CNB leaves rates on hold, easing cycle at an end The Czech National Bank (CNB) left its policy rate on hold today, at 3.50%, and we think that further monetary easing is unlikely this year. That is a slightly more hawkish view than the consensus, which …
Germany’s budget plans for 2025-29 confirm that the much anticipated big fiscal stimulus is coming and leave us comfortable with our view that GDP growth will pick up significantly from next year and the deficit will rise to as much as 4% of GDP. The …
India’s goods trade deficit with China is now at a record high. This largely reflects rising goods imports from China which, while bringing economic benefits in some areas, are also raising concerns over the threat posed to domestic industry. Given …
Despite solid take-up the industrial vacancy rate has risen to a 10-year high, which reflects occupiers shifting into new buildings at the expense of the secondhand market. We expect that dynamic to continue and a further small rise in vacancy will push …
Today’s hold does not mark the end of the easing cycle Thailand’s central bank (BoT) today left interest rates unchanged at 1.75%, but the dovish commentary from the press conference supports our view that further easing is likely over the coming months. …
Sharp fall in inflation likely to reinforce RBA’s dovish pivot With price pressures easing markedly in May, the RBA may well front-load monetary easing to a greater degree than we’re predicting. According to the monthly CPI indicator, headline inflation …
The overnight announcement of a ceasefire between Israel/US and Iran has brought commodity and financial markets largely back to their pre-conflict square one. While tensions remain high and could easily re-ignite, our sense is that attention will now …
24th June 2025
Our China Activity Proxy suggests growth slowed further in May, with US tariffs weighing on industrial activity. While services growth did pick up, that seems to have been driven by a temporary boost from the consumer goods trade-in scheme. We expect …
After Israel and Iran agreed to stop fighting, Group Chief Economist Neil Shearing and Chief Climate and Commodities Economist David Oxley are on this special episode of the Weekly Briefing to discuss what follows, including why oil prices are set to …
Overview – We think the short-term outlook for capital values is poor, with valuations looking stretched across all measures. This does not appear to be reflected in other forecasts, meaning our forecasts for the next two years remain significantly below …
The latest data suggest that the boost to industry and trade from businesses front-running US tariffs is over. Manufacturing activity softened in April and May, and new orders have weakened. While consumer confidence has partially rebounded from …
Data from the first two months of US tariffs being in effect suggest that both Canadian and Mexican manufacturers were struggling to make their exports USMCA-compliant, which poses a downward risk to our GDP forecasts for those countries. The US first …
Consecutive house price declines raise risk of deeper correction After falling in March, the further 0.3% m/m decline in house prices in April raises the risk that prices are entering a sustained downturn, as the market finally buckles under the weight of …
Fed’s Powell offers no hint of near-term rate cut Fed Chair Jerome Powell’s prepared semi-annual testimony to the House today offered no hint that a rate cut is coming any time soon. Despite the recent dovish comments from Trump-appointed Governors …
Core inflation easing, but probably still too high for imminent rate cuts The Bank’s preferred CPI-trim and CPI-median core measures rose by a smaller 0.21% m/m on average in May, with the three-month annualised rate declining to 3.0%, but that is …
Rise in inflation won’t stop 50bp cut on Thursday The jump in Mexican inflation to 4.5% in the middle of this month won’t be enough to prevent Banxico from proceeding with a (clearly-signalled) 50bp interest rate cut at its meeting later this week. But …
Hawkish MNB won’t rush to restart easing cycle The Hungarian central bank (MNB) left its base rate on hold today at 6.50% and, in contrast to the consensus view that the easing cycle will resume this year, we think rates will remain unchanged throughout …
The Israel-Iran ceasefire is likely to prove fragile. But so long as both parties show themselves unwilling to attack export-related energy infrastructure and/or disrupt shipping flows through the Strait of Hormuz, we expect bearish fundamentals in the …
German economy resilient to tariffs so far, but activity still weak The rise in the Ifo BCI in June suggests that activity in Germany has not yet been meaningfully hit by US tariffs. But output remains weak and we think a proper recovery will only …
Prices of public services and rents are rising at the fastest pace in years, which supports our view that inflation will remain above the Bank of Japan’s 2% target even as the impact of the post-pandemic import cost shock fades. That underpins our view …
Overview – Although instability in the Middle East could easily push oil prices into triple-digit territory, as things stand, the oil market looks set to remain well-supplied and so we expect bearish fundamentals to reassert themselves on prices before …
23rd June 2025
Overview – The threat posed by US trade protectionism to the region, for now, appears muted. An improvement in the terms of trade for most countries should mean less downward pressure on currencies and, alongside low inflation, set the stage for more …
The Gulf economies are vulnerable if Iran decides to attack oil infrastructure in the region, or block the Strait of Hormuz, in retaliation for the strikes by Israel and the US. So long as that is avoided, the Gulf economies could stand to benefit via …
We assume that the 90-day pause on reciprocal tariffs is mostly extended, keeping tariffs at 10% for countries except China, which will face a steeper 40% levy. Tariffs will not cause a recession – provided Congress can quickly redirect the tariff revenue …
Home sales rebound slightly, but rates still a limiting factor The small rebound in existing home sales in May could be a sign of things to come, if more supply and the recent rebound in consumer sentiment draw would-be buyers back into the market. …
This Update answers five key questions about a potential “closure” of the Strait of Hormuz and the potential impacts on global energy markets from any attempt to close the waterway. As it stands, it is arguably not in Iran’s best interests to close the …
Overview – The euro-zone’s strong first-quarter growth rate was a result of tariff front-running and will be reversed in Q2 and be followed by weak growth in the second half of the year. Further ahead, we think the euro-zone will grow more slowly than …
The rapid escalation of the conflict between Iran and Israel, which has now pulled in the US, has – for the time being at least – displaced trade, tariffs and fiscal vulnerabilities at the top of a lengthening list of investor concerns. We’re covering the …
US involvement in the Israel/Iran conflict has so far prompted just some volatility in global financial markets, with most major asset classes ultimately not far away from where they were on Friday. It’s easy, though, to see growing downside risks. …
At our in-person Roundtables in London on Tuesday 1 st July, clients can discuss with our economists and their peers how the government has influenced the UK economy in its first year in office. (Register here .) This page has been updated with additional …
Economy stagnating, no sign yet of higher energy costs raising prices June’s flash PMI survey for the euro-zone was consistent with the economy flat-lining. The recent jump in energy costs has not yet fed through to output prices, but the uncertainty …
Overview – The Bank of Japan will stay on the sidelines for a few more months as GDP growth softens and trade tensions cloud the outlook. But with the labour market set to remain very tight, wages rising strongly and inflation on track to overshoot the …
