Strong domestic demand and inflation point to rate hold in September The Chilean economy isn’t as weak as the slowdown in GDP growth to 0.4% q/q would suggest; there was a large drag from net trade while domestic demand remained very strong. This, …
18th August 2025
Subdued growth ahead Economic growth in Thailand slowed in the second quarter of the year, and we think the economy will struggle over the coming months as weaker exports, slower government spending and weak private consumption all weigh on demand. GDP …
Weaker-than-expected growth, but strong inflation to keep BanRep hawkish The weaker-than-expected 0.5% q/q expansion in Colombia’s economy is unlikely to change the central bank’s thinking and we remain comfortable with our above-consensus interest rate …
15th August 2025
Consumers still living in fear of tariff-led price increases The slump in the University of Michigan measure of consumer sentiment to a three-month low of 58.6 in August, from 61.7, suggests that households remain very nervous about rising inflation in …
A small decline, which should reverse next month The small decline in industrial production in July was driven by the mining sector. Manufacturing output held up, and more timely survey data points to a small rebound in August. Once again, it is difficult …
Small rebound masks underlying weakness The small rebound in manufacturing sales in June will provide little relief, given that it barely offsets the weakness in April and May and the breakdown shows that US tariffs still have some sectors, namely motor …
Households shrug off tariff-induced price pressures The 0.5% m/m rise in retail sales in July, paired with the upward revision to May and June’s data, shows households continue to spend in healthy amounts despite the threat of tariffs – especially given …
This page has been updated with additional analysis. Slow growth and near-zero inflation to prompt SNB to use negative rates Growth slowed significantly in Switzerland in the second quarter as tariff front-running eased. The economy is likely to expand …
A worrying loss of momentum Q3 started on a weak note, with a broad-based slowdown across key indicators. Given cooling exports and a lack of additional policy support, we think the outlook for the rest of the year remains downbeat. Retail sales expanded …
GDP growth will slow again GDP growth rebounded more strongly last quarter than most had anticipated but we still expect a renewed slowdown over the coming quarters. The 0.3% q/q rise in Q2 GDP was stronger than the analyst consensus of 0.1% as well as …
An above-target gain in core PCE deflator, but mainly due to one component Most of the large upside surprise to core PPI in July was due to a head-scratching increase in margins for wholesalers and retailers. While the data still imply that the core PCE …
14th August 2025
This page has been updated with additional analysis since first publication. Economic growth will remain weak Data released today confirm that the euro-zone economy expanded at only a modest pace in Q2 and that the labour market is cooling. We are …
Price pressures in the Kingdom starting to ease Saudi Arabia’s headline inflation rate slowed from 2.3% y/y in June to 2.1% y/y in July, its weakest pace since February. As we flagged in a recent Focus, we think that inflation will continue to gradually …
This page has been updated with additional analysis since first publication. Strength in Q2 won’t last The unexpectedly strong 0.4% m/m rise in GDP in June (consensus and CE forecast 0.1%) and 0.3% q/q gain in Q2 are more likely to be due to a temporary …
RBA will shrug off the slight fall in the jobless rate The tick down in the unemployment rate in July is likely to keep the RBA on sidelines at its next meeting in September, but we still think the Bank will ultimately loosen policy a bit further than …
Economy continues to cool in Q2 The slowdown in GDP growth in Russia to 1.1% y/y in Q2 suggests that the economy may have narrowly avoided a technical recession, but the economy is clearly struggling amidst imbalances that have built up due to the war …
13th August 2025
Growth in government bond issuance won’t last There was a small pick-up in overall credit growth in China’s economy in July, as a result of a further surge in government borrowing. But bank loan growth has continued to slow, suggesting that private sector …
Polish economy outperforming amid tariff storms The 0.8% q/q growth in the Polish economy in Q2 was a bit weaker than consensus expectations, but still confirms that the economy maintained solid momentum last quarter and supports our view that Poland will …
BoT cuts rate, further easing to come Thailand’s central bank (BoT) cut interest rates by 25bps today to 1.50%, and its dovish commentary supports our view that further easing is likely in the coming months. The decision was anticipated by 23 of the 28 …
Wage growth will moderate towards 3% While wage growth was a touch stronger last quarter than the RBA had expected, we think it will moderate again before long and won’t prevent the Bank from easing policy much further. The 0.8% q/q rise in the wage price …
Another narrative shift for the Fed There was another narrative shift for the Fed in the July CPI data, with tariff effects once again barely perceptible but a stronger gain in services prices pointing to another above-target gain in the core PCE …
12th August 2025
Inflation falls, but rate cuts unlikely before the end of the year The fall in Brazilian inflation, to 5.2% y/y in July, won’t change the outcome of the central bank’s next meeting in September, where interest rates will be left unchanged. But it lends …
Inflation at eight-year low opens door to further rate cuts The larger-than-expected fall in India’s headline inflation rate in July, to an eight-year low, raises the prospect of the RBI cutting interest rates further this year. But with inflation set to …
This page has been updated with additional analysis since first publication. Labour demand still cooling, but at a slower pace The further falls in payroll employment and job vacancies suggest that the labour market is still cooling, albeit only …
RBA will cut rates below 3% by mid-2026 The RBA endorsed market expectations of further easing when it lowered the cash today and we think the Bank will ultimately slash rates to 2.85%. The Bank’s decision to lower the cash rate from 3.85% to 3.6% was …
Labour market weakness justifies September rate cut The Labour Force Survey has once again made a mockery of the economist consensus, with the surprise 83,000 surge in employment in June followed by a 40,800 slump last month. We are now a bit more …
8th August 2025
NBR unlikely to cut until (at least) mid-2026 The National Bank of Romania (NBR) left its policy rate on hold today, at 6.50%, as expected, and its communications suggest a restart of the easing cycle remains some way off. We expect rates to remain on …
Miran a good pick for the Fed President Donald Trump’s decision to nominate Stephen Miran to replace Adriana Kugler as Fed Governor, albeit only on a temporary basis to begin with, is a welcome surprise. Miran is currently the Chair of Trump’s Council of …
7th August 2025
Banxico slows the pace of easing, but more rate cuts still likely Mexico’s central bank (Banxico) lowered its policy rate by a smaller 25bp, to 7.75%, as expected at today’s meeting and the accompanying communications suggest that cuts are likely to …
Further rate cuts unlikely this year The Czech National Bank (CNB) left its policy rate on hold again today, at 3.50%, and in contrast to most other analysts, we think that further monetary easing is unlikely this year. The decision to leave the policy …
Inflation drop seals the deal on a 25bp cut later today The drop in Mexican inflation to 3.5% y/y in July paves the way for Banxico to deliver the clearly-signalled 25bp cut, to 7.75%, at its meeting later today. The outturn was down from 4.3% in June and …
For an updated and more detailed version of this analysis, click here . Rates cut to 4.00%, but BoE appears in no rush to cut again soon Although the Bank of England cut interest rates today by 25 basis points (bps), from 4.25% to 4.00%, it showed some …
The reciprocal tariffs that have taken effect overnight have resulted in a broad range of US tariffs on different countries. At one end sits China (effective tariff rate of 42%), and Brazil (35%), Switzerland (25%). At the other sits Mexico, Canada, and …
Revisions erase German industrial resilience The sharp drop in German industrial production in June and the big downward revision to the figures for May mean that, rather than holding up well in the face of tariffs as the data previously suggested, German …
This page has been updated with additional analysis since first publication. House prices recovering, but the rebound won’t meet consensus expectations The rise in Halifax house prices in July provides another indication that the housing market is …
Relatively high inflation will encourage Riksbank to keep rates on hold The increase in Sweden’s CPIF inflation rate to its highest level since the start of 2024 is likely to encourage the Riksbank’s officials to keep the policy rate on hold at their …
Lower interest rates to support growth in 2025 GDP growth in the Philippines picked up slightly in the second quarter of this year, and we continue to expect steady growth over the remainder of 2025 as low inflation and monetary easing support domestic …
US tariffs biting again Exports came under pressure again last month – the acceleration in headline y/y growth was simply due to base effects. With the temporary boost to demand from the US-China trade truce already fading and tariffs on shipments …
Market still struggling under higher borrowing costs The fall in home purchase mortgage applications in July still leaves them roughly in line with where they started the year, and continuing to point to a rebound in existing home sales. While some small …
6th August 2025
Retail sales likely to remain sluggish Euro-zone retail sales edged up in June but remained slightly below the peak reached early in the pandemic and well below the pre-pandemic trend (See Chart 1). Looking forward, we expect spending growth to remain …
Construction activity drops to a post-COVID low The headline CIPS construction PMI dropped back in July to 44.3, the lowest since May 2020 when COVID lockdowns impacted activity. The drop was driven by the housing component, which after jumping to 50.7 in …
RBI's easing cycle at an end The Reserve Bank of India’s (RBI’s) decision to keep the repo rate on hold at 5.50% while maintaining its “neutral” policy stance reinforces our non-consensus view that the easing cycle is at an end. Today’s decision was …
Subdued wage pressures need not delay BoJ tightening Although regular earnings growth has been struggling to gain momentum, we think it will do so before long. Accordingly, the data shouldn’t stand in the way of the Bank of Japan resume its tightening …
Weak labour market bolsters the case for further easing With New Zealand’s labour market continuing to slacken in Q2, the RBNZ is all but certain push ahead with a 25bp cut at its meeting later this month. The 0.1% q/q fall in employment last quarter was …
Survey implies employment weakening, prices rising The ISM services survey highlights the challenges for the Fed in the coming months, with the activity and employment indicators weakening even as the prices paid index rose to a new cyclical high. The …
5th August 2025
Deficit narrows as pharmaceutical imports normalise The narrowing of the trade deficit was mainly due to a normalisation in pharmaceutical imports and while exports appeared weak, this was primarily due to a fall in gold exports. The big picture is that, …
Trade deficit edges higher amid continued export weakness The small deterioration in Canada’s goods trade balance in June was driven by a large one-off import of a module for an offshore oil project in Newfoundland. The deterioration may have reversed in …
A softer start to Q3 for the Gulf, but Egypt’s economy picking up July’s batch of whole economy PMIs were soft across the Gulf as fiscal policy becomes less supportive of non-oil sectors. Elsewhere, Egypt’s economic recovery has continued to strengthen, …
Growth likely to slow ahead Officials figures released today showed that Indonesia’s GDP growth stood at 5.1% y/y in Q2, but we don’t have much faith in the data – growth has been close to 5% for the past few years. Our proprietary activity tracker …
Household consumption showing signs of life The strong pickup in household spending last quarter won’t keep the RBA from handing down a 25bp cut when it meets next Tuesday. Looking ahead, however, the data do suggest upside risks to our below-consensus …
