The dollar remains on the backfoot as expectations for a rate cut at the September FOMC meeting continue to solidify. We now expect policymakers will opt for a 25bp cut next month , and a cumulative 75bp of policy easing by the end of next year (compared …
15th August 2025
After its July policy meeting, we felt the Bank of Canada had moved closer to our view that inflation risks had diminished. The Bank devoted considerable effort explaining why it expects underlying inflation to fall soon , citing the recent appreciation …
All eyes on Jackson Hole Ahead of the Fed’s annual Jackson Hole Symposium, which kicks off late next week, markets are still wholly convinced that the Fed will cut rates by 25bp at the upcoming FOMC meeting in September and follow that up with at least …
All eyes on Alaska as Trump and Putin take centre stage Trump-Putin summit in the spotlight The scheduled meeting between presidents Trump and Putin later today has understandably focused attention on whether there will be any positive news to end the …
Brazil: rate cut expectations starting to shift The latest data out of Brazil support the view that GDP growth slowed in Q2, which alongside softening inflation, has led to a shift in the debate towards interest rate cuts, perhaps by year-end. The …
SA: rise in joblessness bolsters case for more easing The rise in South Africa’s unemployment rate in Q2 reinforces our view that inflation will stay subdued, further interest rate cuts are coming and local currency bond yields will continue to decline. …
Malaysia – another rate cut coming Malaysia published the final estimate of its Q2 GDP figures earlier today. Growth came in at 4.4% y/y. That was the same as the initial estimate and unchanged from Q1 but below the 5.1% pace of expansion recorded in …
The breakdown in the latest round of UN treaty talks aimed at cutting plastic waste can be partly attributed to the reticence of oil producing nations to countenance calls by ~100 countries to limit the production of so-called “primary” plastic. To be …
…even if they don’t do much to boost consumption While it may not have a significant immediate macroeconomic impact, the Ministry of Finance’s new consumer loan subsidy scheme is a sign that the government is finally paying more than just lip service …
Coming after the bumper 0.7% q/q rise in real GDP in Q1, the better-than-expected 0.3% q/q gain in Q2 (see here ) begs the question of whether the economy is fundamentally stronger than we all thought. After all, in February the consensus forecast was for …
President Trump’s meeting with President Putin has once again raised the question of how a peace agreement between Russia and Ukraine would affect the European economy. The meeting is due to take place after this Weekly is published, but as things stand …
Alaska talks may open door to lower tariff for India With Trump and Putin set to meet later today in Alaska, a breakthrough in ceasefire talks could pave the way for the rolling back of the 25% US tariff imposed on India for its economic ties with Russia. …
Economy shrugging off higher US tariffs The 0.3% q/q rise in Q2 GDP was stronger than most had anticipated and probably came as a positive surprise to the Bank of Japan as well. After all, Board members’ median forecast for GDP growth for FY2025 in the …
Capacity pressures remain at bay The RBA’s decision to lower its cash rate by 25bp, to 3.60%, at its meeting this Tuesday was widely anticipated. Broadly speaking, the Board’s messaging was little changed from the July meeting. However, there were …
Egypt: reforms key regardless of CBE governor The term of the incumbent Central Bank of Egypt (CBE) governor, Hassan Abdalla, is due to expire next week and, while it is not yet clear if Mr. Abdalla will be kept on or a successor appointed, it will be key …
14th August 2025
Housing market on steadier footing Beginning with the good news, local real estate board data show that sales in four of Canada’s “early releaser” cities rose by 9% m/m in July, including a bumper 13% rise in Toronto. That gain points to a 6% rise in …
8th August 2025
The dollar has continued to edge lower in the wake of last week’s payrolls shock and a weak ISM reading this week as US interest expectations adjust lower. Given the extent of that adjustment – money markets now discount ~125bp of rate cuts over the …
Exporting carries on The trade deficit narrowed to $60.2bn in June, from $71.5bn. This was the smallest deficit in almost two years, with a normalisation in pharmaceutical goods imports causing total imports to decline by 3.7% m/m. While total exports …
The Bank of England’s hawkish tone at its policy meeting on Thursday has inevitably led to questions about whether interest rates will be cut again this year and whether the Bank’s rate-cutting cycle will soon end. (See here .) In some ways, the Bank’s …
US migration policies hit remittances The more than 16% y/y drop in remittances to Mexico (in dollar terms) in June suggests that the Trump administration’s crackdown on undocumented migrants is starting to have an impact south of the border. The decline …
Zambia should fix the roof while sun is shining Zambia secured another disbursement from the IMF this week, though it’s unclear whether it will try to extend its programme. We see little room for hesitation; fiscal strains remain severe, and continued …
Consumer electronics could be hit too President Trump’s tariffs on semiconductors and pharmaceuticals, threatened at 100% and 250% respectively, could have bigger implications for China than the modest scale of its chip and pharma exports to the US might …
EU protected from higher chip and pharma tariffs President Trump this week threatened a 100% tariff on semiconductor imports produced by firms that do not plan to invest in the US. We wrote about the global implications here . But in principle, the EU has …
Trump-Putin meeting in the spotlight Expectations that the touted Trump-Putin meeting could lead to a breakthrough in talks to halt fighting in Ukraine are likely to be fairly low. After all, little progress has been made towards ending the war so far. …
A week is a long time in the oil market Even with multiple twists and turns to contend with, this week was a bearish one for oil prices. As it stands, the price of Brent crude has fallen by just over 4% over the course of the week. OPEC+ hit the opening …
Trump’s threats to pharma and chip exporters Malaysia and Taiwan are the two countries in Asia most exposed to Donald Trump’s threat to impose 100% tariffs on semiconductor imports. By our estimates, exports of these products to the US amount to 2.2% of …
50% tariff may not be the end of the story for India President Trump this week followed through on his threat to punish India for its continued economic ties with Russia: India is set to face an additional 25% tariff on top of the 25% tariff that took …
Strong case for RBNZ to provide more stimulus The Reserve Bank of New Zealand has been bemoaning the weak state of productivity growth for a while now, arguing that it is stifling the speed limit of the economy. Yet, the Bank has quietly been revising up …
Bonus payments coming back to earth The economic data released this week at the margin would support the case for keeping monetary policy unchanged for longer. For one thing, while the Bank of Japan’s consumption activity index rebounded in June, it was …
Saudi: cuts kick in, but more tightening needed The Saudi Ministry of Finance published its Quarterly Budget Performance Report for Q2 last Friday which showed that the government is on track to run a larger deficit than projected. While spending cuts …
7th August 2025
Today’s weak US non-farm payrolls data has undone much of the dollar’s rally this week. While the DXY index is still on up the week, and ~2.5% stronger since the start of July, the increased risk of a recession in the US and the consequent drop in US …
1st August 2025
The Bank of Canada justified its decision to keep interest rates unchanged at 2.75% this week on three factors: persistent uncertainty, signs of economic resilience, and concerns about underlying inflation. In our initial reaction during an online …
Payrolls shocker The rift among the FOMC, with Governors Christopher Waller and Michelle Bowman this week voting against the decision to leave rates between 4.25% and 4.50% (see here ), will presumably have grown even wider following the July Employment …
Africa’s easing cycle continues The easing cycle in Sub-Saharan Africa was in full flow this week as central banks in Ghana, Mozambique and South Africa all delivered interest rate cuts. Nigeria will soon follow suit. Ghana moved first, slashing its …
Some reprieve on the tariff front Having found itself in Trump’s firing line a few weeks ago , this week’s tariffs announcements were better for much of Latin America than had been feared. Admittedly, that seems hard to square with President Trump’s …
Tariff agreement reduces downside risks for CEE US President Trump and EU Commission President von der Leyen closed a trade deal this week which will impose a 15% tariff on most EU goods to the US. This was broadly in line with what we had expected, and …
The surveys published this week have sent vastly different signals on the health of the economy in Q3. The backward-looking balance of the CBI’s Growth Indicator fell to a record-low in July (the series began in October 2003), barring the Global Financial …
Tariffs are now firmly back in the driver’s seat when it comes to commodity prices, with this week bringing fresh news on reciprocal, metals and energy tariffs. Arguably the most straightforward to digest was the confirmation of 50% copper tariffs. While …
Although European equities declined significantly this week, it seems unlikely that this is due to the US-EU trade agreement that was announced last Sunday and confirmed in the US Executive Order towards the end of the week. After all, the deal was in …
Trump tariffs – impact will be manageable for most Following a flurry of trade deals agreed over the past couple of weeks and a new Executive Order last night, from next Friday (US time) most countries in Asia will face tariffs of 15-25% on their exports …
25% US tariff on India may not be the endpoint President Trump’s latest executive order, issued yesterday, confirmed his threat from Wednesday that India will be hit by a 25% tariff. That puts India on a higher rate than many of its Asian peers. (See …
China wins and loses from new US tariffs Chinese exports will become more competitive in the US once the new reciprocal tariff rates on other countries come into force next Friday – duties on most other Asian economies are rising by 5-15%-pts while those …
Minimum wage set to rise the most on record The Bank of Japan sounded more optimistic about the outlook for inflation when it kept policy settings unchanged at its meeting this week. However, we still think that the Bank is underestimating the strength of …
Bank will cut further than most expect The Reserve Bank of Australia is likely to breathe a sigh of relief that its consternations about lingering price pressures in the economy didn’t come to pass. Indeed, as Deputy RBA Governor Andrew Hauser noted in a …
Electricity demand in Egypt broke records this week, shining the spotlight back on to the country’s energy landscape. A collapse in domestic gas output in recent years has increased Egypt’s reliance on imported gas and added to external strains. This …
31st July 2025
The US dollar is set to end the week lower against most other G10 currencies, with progress on US trade deals with Japan and Europe, a relatively hawkish ECB meeting, and continued headlines around Fed independence all contributing to downward pressure on …
25th July 2025
15% is the new 10% With a major tariff reset looming on August 1 st –when most countries’ rates will jump from the 10% baseline back to roughly “Liberation Day” levels – the Trump administration promised a slew of trade deals before the deadline. They now …
Here for a good deal, not a quick deal Little was divulged following the First Ministers’ meeting in Huntsville, Ontario this week, other than that officials appear to be in general agreement that Canada should prioritise a beneficial trade deal with the …
Cuts in the Andes, Copom to hold Next week will be a busy one for central banks across the region, with those in Brazil, Colombia, and Chile all set to hold meetings. In Colombia, the fall in inflation in June, to 4.8% y/y, combined with the recent …
Some (relatively) positive news on tariffs ... The tariff saga took another twist this week with the EU and US reported to be approaching an agreement which would see a US tariff of 15% applied to most EU goods. We commented on the implications for the EU …
