Housing market turning a corner The fourth consecutive rise in home sales in July means that the housing market is developing close to our expectations, with prices stabilising last month. Housing starts recorded another strong month, with multi-family …
18th August 2025
Reported simplifications to India’s Goods and Services Tax (GST) would, all else equal, result in a slightly larger fiscal deficit this year and next, as well as provide some policy-induced support to the economy in the face of high US tariffs. Reducing …
The unexpected contraction in the Israeli economy in Q2 amid the war with Iran should reverse this quarter, and so we think it is unlikely that the Bank of Israel (BoI) will cut interest rates at its meeting this Wednesday in response to weak activity. …
Weak investment will remain a drag on Korea’s economy over the coming quarters, as a prolonged downturn in the property sector continues to weigh on construction. GDP growth rebounded in the second quarter of the year, and more recent data paint a …
The euro-zone’s goods trade surplus narrowed sharply in June as exports to the US dropped. But timelier business surveys suggest that overall goods export growth will pick up in the second half of the year. The goods trade surplus fell from €15.6bn in May …
Many central banks across Sub-Saharan Africa have cut interest rates over the past year or so and Nigeria will soon join the rate-cutting club. With inflation low or falling in most countries, we generally expect more monetary easing than the consensus by …
Despite concerns that over-crowding and heatwaves might reduce tourism to southern Europe, trips to the region are growing at a faster rate than in northern Europe. Instead, tourism has been growing more quickly during the off-peak season, in part driven …
The recent slowdown in wage growth across CEE is a welcome development for central banks, but we don’t think it will ease much further, limiting how quickly services inflation continues to fall. Meanwhile, other inflation pressures in the region, …
14th August 2025
The recent slowdown in the labour market won’t stop rental demand from continuing to climb this year, given that falling labour demand and the immigration clampdown are most impacting cross-sections of the populace who do not typically occupy …
After a stellar performance in the first half of 2025, the emerging market (EM) asset rally has slowed over the past few weeks following US President Donald Trump’s new tariff announcements. While we still expect EM assets to eke out decent returns, we …
The solid pace of economic growth in Spain over the next couple of years will continue to support robust rates of industrial rental growth. However, we don’t think that will be enough to justify large yields falls given pricing is highly stretched, even …
Rents will continue to rise faster than house prices The still tight rental market and softening in housing activity recorded by the RICS survey in July implies that rents will continue to rise faster than house prices for another year or so. The fall …
The threat to India’s stock market from US tariffs is sizeable, and we suspect that it could fall a lot further if they are implemented as currently proposed. And in fact, we think there are enough headwinds for India’s equities that they’ll underperform …
Bolivians head to the polls on 17 th August with the economy at high risk of a currency crisis. Whatever the outcome, a large currency depreciation is looking likely before long. A win for one of the right-wing opposition candidates – as seems likely – …
13th August 2025
June’s activity data suggest that, after a sluggish start to the year, South Africa’s economic recovery picked up in the second quarter, with GDP likely to have expanded by 0.8-1.0% q/q. And we think tailwinds from low inflation, looser monetary policy …
Mexico’s exports of AI-related products to the US have surged and now rival its key auto exports. While there may be a degree of tariff front-running at play, the boom in US data centre investment appears to be more important. This will help to cushion …
With interest rates staying high and closed-end funds already sitting on a large volume of investors’ capital, global real estate fundraising looks set to stay in the doldrums. We think the sector still needs a pricing reset that will see buyers and …
We think the Riksbank is likely to be in wait-and-see mode when it meets next week and will keep its policy rate at 2%. While some of the economic data were underwhelming in the second quarter, they were not bad enough to justify another rate cut at this …
Very tight supply, looser lending criteria and our forecast for further falls in mortgage rates provide scope for house prices in the capital to rise by more than elsewhere over the next few years. After a period of outperformance between 2010 and 2016, …
President Trump’s tariff salvo aimed at some of the BRICS economies has led to growing efforts within the bloc to present a united front in the face of US protectionism. But divisions between the members will ultimately limit how far political and …
12th August 2025
Solid tourism flows and a pick-up in consumer spending growth mean we believe both Rome and Milan prime retail rents will continue to outpace the euro-zone average over the next couple of years. While Milan prime retail rents held steady in Q2, rents in …
While the US jobs data captured the spotlight recently, the weakening of labour markets in most advanced economies has received less attention. Softer labour demand should dampen wage and price pressures in Europe and Canada but not in the US, where the …
Decent rental growth expectations and a narrowing risk premium imply that industrial is only marginally overvalued, despite an historically narrow gap between industrial yields and alternative asset yields. In turn, that implies industrial yields can …
Our new CE UK Unemployment Proxy extracts the overall signal from a range of measures of labour market slack and suggests that the labour market has loosened further than the Labour Force Survey (LFS) unemployment rate implies. Given the well-known issues …
The Egyptian pound has strengthened so far this year against the dollar, but by most measures the currency looks competitive. This will provide a boost to GDP growth over the coming years and reduce the risks posed by the current account deficit. After …
Three years into his six-year term, President Ferdinand Marcos Jr. of the Philippines has passed key reforms to improve the country’s business environment and infrastructure. However, worries about corruption persist due to the abolition of a key national …
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 correctly anticipated by all 40 analysts …
Hopes that recent data show China starting to emerge from deflation are likely to be disappointed. The recovery in core goods inflation last month mostly reflects the impact of government subsidies for consumer goods. There is little indication that price …
11th August 2025
Weak Chinese LNG demand has been a striking feature of the LNG market in 2025, and we suspect demand will remain soft into next year. Given China is the world’s largest buyer of LNG, weaker Chinese demand will weigh significantly on the strength of global …
The announcement that Presidents Trump and Putin will meet in Alaska on Friday has increased the possibility of a scenario in which the Ukraine war ends on terms favourable to Russia. That could ultimately result in an easing of some sanctions, providing …
We are revising up our end-2025 forecast for the S&P 500, from 6,250 to 6,750. And we now project that the index will finish 2026 at 7,250, which is above our previous forecast of 7,000. After correctly predicting that the S&P 500 would soar in 2024 , we …
8th August 2025
We still expect the dollar to recover some ground over the rest of 2025 as interest rate differentials shift back in favour of the US and some of the policy uncertainty discount evident in the dollar since the 2 nd April “Liberation Day” event continues …
German carmakers’ recent disappointing earnings reports are as much about their continued struggles in China as US tariffs. And though sales in Europe have been more encouraging recently, that is unlikely to last. Overall, the prospects for the German …
7th August 2025
Investment in both computer hardware and software surged in the first half of this year, which could be a sign that the AI boom is now boosting economic growth. Most of that hardware is imported, however, and that capital investment has not translated …
Next week, we expect Norges Bank to leave the policy rate unchanged at 4.25% but reiterate that it is likely to loosen policy later this year. We forecast two 25bp cuts by year-end. At its last meeting, Norges Bank cut its policy rate by 25bp, to 4.25%, …
Although the Bank of England cut interest rates today by 25 basis points (bps), from 4.25% to 4.00%, it showed some signs that it may cut rates slower and/or not as far as our forecast of a decline to 3.00% in 2026. We are sticking to our view that …
Swedish residential total returns have underperformed the European average over the past three years, but a bright rental outlook in particular means we think returns will slightly outperform Europe over the next five years. Residential investment has …
The high-beta Antipodean currencies had been the worst victims of global trade tensions but have fared better since early April, relative to their G10 peers, as global risk appetite steadily improved. Nevertheless, we think the best days for the Aussie …
If the extra 25% tariff that President Trump has announced on imports from India remains in place, India’s attractiveness as an emerging manufacturing hub will be hugely undermined. Global oil prices would probably rise if India responded by curtailing …
6th August 2025
Ahead of any possible introduction of US tariffs on imports of pharmaceuticals and semiconductors, this Update brings together key facts and figures on the scale of such tariffs and economies’ exposure to them. It seems likely that the US will soon impose …
President Trump’s firing of the Bureau of Labor Statistics (BLS) commissioner marks another troubling step in his administration’s pressure campaign against Federal institutions. Still, we think a scenario in which the White House manipulates key data …
We expect office-based jobs growth to remain at a standstill through 2026 as the tech sector cuts back and AI fills some of the gap. At the metro level though, our expectations are broadly unchanged, with the divergence between the fast-growing South and …
With Swiss President Karin Keller-Sutter in the US trying to head off the 39% tariff, this note answers some key questions on the topic. Overall, we think Switzerland has limited room to offer concessions to the US and may well have to accept a less …
Indonesia’s current account position has improved markedly since the onset of the pandemic and we expect the deficit to stay small over the next couple of years. The rupiah will probably depreciate, but the decline is likely to gradual and the central …
The Labour Force Survey (LFS) is overstating population growth and therefore almost certainly overestimating employment growth. The alternative Survey of Employment, Payrolls and Hours (SEPH) points to much weaker jobs growth, while the unemployment …
Brazil’s current account deficit has continued to widen and is likely to reach around 4.0% of GDP by year-end. Financing this should be manageable, provided the domestic policymaking backdrop doesn’t deteriorate (further) and commodity prices do not fall …
There are several headwinds to healthcare & social assistance employment that suggest it is unlikely to continue growing at its recent rapid pace, although we doubt payroll gains in the sector will collapse. The strength of non-farm payrolls in recent …
Côte d’Ivoire’s economic fortunes appear good, and we expect growth to accelerate, underpinned by strong cocoa, oil and gold exports. However, the country’s sizeable sovereign debt servicing costs and reliance on external financing remain key risks, …
The Reserve Bank of India (RBI) kept the repo rate on hold at 5.50% and maintained its “neutral” policy stance today, despite India already being hit by a 25% US tariff with the potential for it to rise further if Trump follows through on his latest …
The July Employment Report was a taste of what is to come, with payroll gains set to be much weaker in the coming quarters than has been the case in recent years. This is the new normal amid the crackdown on immigration, and there is little evidence from …
5th August 2025
