Renewed US-China tensions cloud export outlook Exports held up last month, with headline y/y growth rising to a six-month high and shipments also picking up on a seasonally adjusted basis. While this resilience underscores the ability of Chinese …
13th October 2025
Real wages haven’t fallen as sharply as the official data released by the Ministry of Health, Labour and Welfare would suggest. Nonetheless, it is striking that workers are not benefitting much from the most pronounced labour shortages since the early …
President Trump has threatened to hit back hard if China doesn’t back away from the trade restrictions it announced last week. This latest dispute could still blow over if cool heads prevail – a planned meeting between Trump and Xi at the APEC summit …
Even after tumbling today amid US-China trade tensions, the S&P 500 remains close to its all-time high. That’s despite investors seemingly believing that the risks around US inflation are increasingly skewed to the upside and that a US recession is more …
10th October 2025
While President Trump’s return to the trade war path this afternoon has led to a drop in the dollar, it has risen, on net, this week – despite (or perhaps because of) the absence of most US economic data releases. Indeed, a key driver of the dollar’s …
Trade negotiations unlikely to bear much fruit Prime Minister Mark Carney’s second trip to Washington was disappointing, yielding little in the way of relief on sector-specific tariffs or a commitment to the future of CUSMA. Commerce Secretary Howard …
How reliant is the US economy on the AI investment boom? It’s a question Group Chief Economist Neil Shearing keeps getting in client meetings. On this episode of The Weekly Briefing, he tells David Wilder why there’s more to the story than hype around a …
There are nascent signs that the stagnant housing market is beginning to warm up following the recent fall in mortgage rates. Pending home sales rose by 4.0% m/m in August, new home sales were also strong – though the size of the gain is questionable – …
Angola & Kenya Eurobonds short term fiscal fix Recent Eurobond issuances by Kenya and Angola may stem sovereign debt pressures for now, but they will still need to implement fiscal consolidation otherwise default fears will not go away. Buoyed by a …
We estimate that the EU’s pandemic recovery scheme, Next Generation EU (NGEU), will have boosted GDP in countries such as Greece and Italy by around 1.5% over its six-year lifetime. It therefore explains only part of the recent performance of some of …
Israel and Hamas approve ceasefire deal The Israeli government today approved the first phase of a US brokered plan to end the war in Gaza. As part of the agreement with Hamas, a ceasefire is now in place and Israel has withdrawn its troops to agreed-upon …
Households concerned about future Consumer sentiment edged down to a five-month low of 55.0 in October, from 55.1, as a cocktail of labour market weakness, above-target inflation and, potentially, the ongoing government shutdown weighed on household …
We explained in our UK Economic Outlook that the Chancellor will probably need to raise about £27bn (0.8% of GDP) in the Budget on 26 th November (see our Fiscal Headroom Monitor ), mainly via higher taxes on households, and that this could lower GDP …
When will Brazil’s labour market soften? A key debate doing the rounds in Brazil this week is how long it will take for shifts in the economic cycle to feed through to a weaker labour market and give Copom room to ease monetary policy. The economy is …
Bumper employment figure gives Bank pause before easing further The broad-based jump in employment in September reversed much of the weakness in prior months and will help reassure policymakers that they can afford to focus on the upside risks to …
The decision by OPEC+ to raise its output quotas by 137,000 bpd for November extended the cautious approach that the group adopted in September after the unwinding of its first tranche of output cuts. (See Chart 1.) Recall that media speculation in the …
This week has seen more evidence that France’s fiscal position is unlikely to improve and that Germany’s reforms will be very modest. France’s fiscal troubles get worse Investors appear to be relieved that there may not be early parliamentary elections in …
Spending remains subdued despite equity rally After a tepid pick-up earlier in the year, consumption growth appears to have lost steam again recently. The services PMIs did rise over the summer, as did the services component of our China Activity Proxy …
Takaichi will probably still become PM The departure of long-standing partner Komeito from Japan’s ruling coalition means that the election of Sanae Takaichi as PM is no longer guaranteed but we still expect her to declare victory eventually. According to …
Rise in trade surplus could spell trouble Vietnam’s latest GDP data, released over the weekend, showed that growth remained robust at 8.2% y/y in Q3, underpinned by continued strength in exports. The resilience of exports is particularly notable given …
Bilateral deals would help boost competitiveness There has been a flurry of activity on bilateral trade deals this week. UK Prime Minister Keir Starmer was in India in an attempt to “turbocharge” trade between the two countries following the signing of …
RBNZ will deliver final 25bp cut in November In September 2024, we predicted that the Reserve Bank of New Zealand will lower interest rates to 2.25%. At that time, the OIS markets foresaw rates only falling to around 3%. With the RBNZ this week slashing …
Takaichi victory upends interest rate expectations The victory of Sanae Takaichi in Saturday’s LDP leadership elections sent shockwaves across financial markets as the yen plunged, bond yields climbed and the Topix surged. While opinion polls had seen …
We now think the yen will appreciate a bit more slowly against the US dollar than we’d previously forecast, but we’re revising up our projections for Japan’s stock market. The surprise victory of Sanae Takaichi, who is widely seen as a fiscal and monetary …
The return of La Niña conditions could potentially affect agricultural production in key exporting regions. However, if expectations for a weak and short episode prove accurate, the broader impact on agricultural prices is likely to be small. By way of …
9th October 2025
The gradual decline of volatility in the US Treasury market over recent months has helped underpin the buoyant mood in equity and credit markets. But, even if Treasury market volatility does not flare up again, it is unlikely to fall much further. In …
The gold price rally has inflated the Turkish central bank’s foreign assets by $30bn this year, strengthening Turkey’s external position but creating an illusion of progress in the rebalancing process underway. Higher gold prices are unlikely to …
China has substantially expanded its rare earth export controls – these now apply not only to a wider range of elements and magnets but, on paper least, any goods that contain them in meaningful amounts. The move risks complicating trade talks with the US …
A path to peace US President Trump announced overnight that Israel and Hamas had reached a provisional peace deal which, if approved by both sides, puts the region on a path to an end of the war and removes a downside risk to the economic outlook for the …
The UK’s high borrowing costs relative to those of France appears to reflect differences in monetary policy and its higher inflation rate, rather than greater fiscal concerns. As inflation in the UK is set to fall and the fiscal risk premium on French …
Easing in Brazil getting closer, Banxico to stick with 25bp cuts The small increases in inflation in Brazil and Mexico in September are unlikely to have a material impact on the next interest rate meetings in both countries. In Brazil, while an easing …
Multifamily is set to be a top-performing sector over our five-year forecast, but returns will differ significantly across the 17 metros in our coverage. Miami and D.C. are likely to struggle as persistent strong supply weighs on NOIs and values, limiting …
The introduction of the EU’s Emissions Trading System 2 will add only a small amount to headline inflation in the euro-zone in 2027, perhaps just 0.1 percentage points. So ETS2 is unlikely to be decisive in determining whether the ECB hits its inflation …
The recent corruption scandal involving flood-control projects has cast a shadow over the Philippines’ infrastructure drive. Yet despite this, the country has seen substantial improvements in roads, ports, and digital connectivity over the past decade. …
Quantitative tightening has not been the main driver of higher bond yields in recent years, but it has contributed. With the process now at or near an end in the US and Canada, the threat that further rises in yields might harm economic activity has …
Our new CE Capital Value Lead Indicator suggests that all-property capital growth may finally turn positive on an annual basis in H2 2025. But importantly , it also suggests that any growth this year will be marginal and that there is a downside risk to …
We recently held an online client briefing (watch a recording here ) to discuss the US economic outlook. Here we answer some of the most frequently asked questions, including around AI's role in shaping the outlook. Our US Economic Outlook argues that …
Dovish BSP hints at further easing The Bangko Sentral ng Pilipinas (BSP) cut its main policy rate by a further 25bps today (to 4.75%) and the relatively dovish tone of its accompanying statement suggests that more easing is likely. We expect at least …
Japan may record a rare budget surplus this year which means that the incoming PM has more fiscal leeway than is generally acknowledged. However, as that improvement won’t be confirmed until late-2026, it wouldn’t stop bond markets from baulking at the …
Budget uncertainty continues to restrain housing activity September’s RICS survey provides further evidence that the prospect of tax rises in the Budget on 26 th November has put the housing market on ice, particularly in London. If taxes on property were …
Broad support for looser policy, despite lingering inflation concerns The minutes of the Fed’s mid-September FOMC meeting confirm that “most participants observed that it was appropriate to move the target range for the federal funds rate toward a more …
8th October 2025
OPEC+ undershoots, copper goes for gold OPEC+’s decision to raise its output quota by 137,000 bpd in November confounded reports of a larger rise in the run-up to the decision and provided short-lived support to Brent crude prices. In any case, the …
NBP delivers dovish surprise, but scope for cuts close to being exhausted The decision by the National Bank of Poland (NBP) to cut its policy rate by 25bp today, to 4.50%, was a dovish surprise to most analysts (including ourselves), although we think the …
We held an online Drop-in session yesterday (see here for a recording) to discuss the US economic outlook. This Update answers several of the questions we received, including the role that AI will play. Our US Economic Outlook argues that the US is set …
Given that “FOMO” appears to be creeping into the gold market, it has become even harder to objectively value gold. In our view, gold prices seem likely to grind higher in nominal terms over the next couple of years, but the pace of the current rally will …
We're hosting a special in-person roundtable event at our London office on Wednesday 12th November to discuss if the Chancellor’s second Budget on 26th November will be as big and as bad for the economy as her first, and if it will dampen or ignite the …
NBR to stay on hold despite weak economy The National Bank of Romania (NBR) left its policy rate on hold today, at 6.50%, and despite signs that the economy is struggling in response to recent fiscal tightening, we think interest rates will be left on …
The global economy will remain relatively resilient in the face of mounting headwinds. However, growth will become increasingly unbalanced, with the US leading the way while Europe and China struggle. As we anticipated in our Q2 Global Economic Outlook , …
