Strong growth in exports from Asia in the first half of the year has fuelled talk that, with US tariffs now in place, shipments will fall sharply as tariff front-running ends. But we’re not convinced. Other factors beyond tariff front-running have …
19th August 2025
We don’t think the relatively unusual rotations within the US stock market are a sign that the relentless march of US equities, and especially the big tech sectors leading the way, is nearly at an end. At face value, last week was a fairly uneventful one …
18th August 2025
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 …
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 …
Europe Commercial Property Valuation Monitor (Q3 2025) …
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, …
President Trump likes to tell us that the United States “holds all the cards” in the ongoing trade war. Judging by the surprisingly mild inflationary impact of tariffs so far – less than most economists, including us, had anticipated – you might think …
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 …
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 …
The decline in Q2 government bond yields boosted APAC valuation scores. But with risk-free rates still high, property yields will not see meaningful falls. Our valuation scores also suggest that the industrial sector will continue to lag other sectors, …
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
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 …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
Group Chief Economist Neil Shearing tackles the week’s biggest macro and market questions, including: what could Beijing do after more weak China data? Why tariffs aren’t showing up more in the US economy? How much have the latest inflation reports …
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 …
…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. …
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 …
We still think the Japanese yen will stage a sustained rally against the US dollar. The yen got a bit of a boost earlier today from Japan’s stronger-than-expected preliminary Q2 GDP data , which seems to have raised the perceived chance of a BoJ rate hike …
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 …
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 …
For the time being, there is little sign of either US equities or bonds being undermined by faltering trust in key economic data. But that might not last. One reason for a potential loss of trust in economic data is scepticism about their accuracy . This …
14th August 2025
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, …
The Q2 GDP figures out so far point to robust growth across much of the emerging world, but we think growth will soften over the second half of the year. While growth across much of Asia will exceed consensus expectations, we think growth will disappoint …
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 …
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 …
The economy has mostly held up against US tariffs so far, thanks largely to resilient consumer spending. But exports have weakened, and investment is showing signs of slowing. With the upcoming USMCA renegotiation set to prolong trade uncertainty, both …
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 …
America or China? As the global economy fractures, the rest of the world is going to have to throw its economic lot behind one or the other, writes Neil Shearing. Much ink has been spilled on the supposed death of globalisation. But the story, as always …
13th August 2025
