The Summary of Deliberations of the Bank of Canada’s September meeting emphasised upside inflation risks. Our sense is that these risks won’t be realised, and so the Bank will gradually come round to our view that the economy will benefit from another …
3rd October 2025
The dollar has weakened a little this week on the back of some softer US employment and activity data. The US government shutdown does not appear to have made much impact, consistent with previous such episodes. That said, downside risks for the greenback …
Democrats and Republicans remain at loggerheads over cuts to health care, raising the likelihood that the government shutdown drags on for some time. We discussed the economic implications here . With the release of official data for September delayed and …
Our new Global Economic Outlook has just been published – and it makes for a striking contrast. In the US, the drag from Trump’s policy agenda looks set to be outweighed by an AI-driven investment boom that may already be lifting productivity. In Europe, …
Tinubu talks up progress, but fiscal concerns linger President Tinubu marked Nigeria’s Independence Day talking up growth and balance of payment improvements, but fiscal progress must accelerate if Nigeria is to meet its economic potential. President …
Survey highlights pressure on both sides of Fed’s dual mandate The ISM services survey will provide little comfort for Fed officials, with the prices paid index edging up again despite weakness in the activity and employment indices. Nonetheless, given …
BanRep: hawks still in the majority The hawkish tone accompanying the Colombian central bank (BanRep)’s decision to keep its policy rate unchanged at 9.25% at its meeting on Tuesday supports our view that there’s much less room for easing in Colombia than …
ANO poised to come out on top in Czechia The Czech parliamentary election kicks off today, with opposition populist party ANO set to gain the most number of seats. Depending on its actual vote share, the only way it may be able to form a majority in …
This week’s announcement of the small upward revisions to real GDP growth and productivity growth was welcome news. And in Q2 itself, the shape of growth was a little more encouraging. (See here .) Even so, it was disappointing that consumer spending …
Is OPEC+ lining up another mega hike? Speculation has mounted that OPEC+ is considering a super-sized increase to output quotas at this weekend’s meeting, which has weighed heavily on oil prices. The price of Brent crude tumbled from $70 pb at the start …
When US President Trump started raising tariffs aggressively earlier this year the primary concern for other countries, including the euro-zone, was the direct hit to the economy. As we had expected, this has turned out to be limited at an aggregate …
A slow unveiling The details of the 15 th Five-Year Plan (FYP) will be finalised at the Fourth Plenum, which the Politburo this week confirmed would take place from 20 th -23 rd October. The goals set out in Plan will define the Party’s economic policy …
RBI deploys regulatory tools to aid banking sector The key event of the past week was the Reserve Bank of India’s (RBI’s) policy announcement, in which the repo rate was left unchanged at 5.50%. But Governor Sanjay Malhotra struck a fairly dovish tone …
Korea to benefit from increase in defence spending South Korea this week confirmed plans to raise defence spending by 8.2% next year – the biggest increase in nearly two decades. The decision comes as Donald Trump intensifies pressure on traditional US …
Regardless of who wins Japan’s LDP leadership election this weekend, we expect a further sell-off in long-dated JGBs over the next year or two. The presumed postponement of the US Employment Report seems set to take a bit of the spotlight off the US …
Inflation picks up, but not enough to prompt CBRT to slow easing cycle The pick up in headline inflation in Turkey last month, to 33.3% y/y, was driven in large part by another rise in food inflation and, with core inflation continuing to drop back, we …
Tankan shows limited hit from tariffs The Bank of Japan is becoming a bit less concerned about the impact of tariffs on the economy and we’re sticking to our forecast that the Bank will hike rates to 0.5% at its meeting later this month. The Summary of …
But mining’s heydays are nonetheless over Iron ore prices have barely budged in response to China’s import ban for iron ore produced by Australian mining giant BHP. While China’s iron ore inventories appear to have fallen this year (see Chart 1), market …
CBE keeps the pedal on rate cuts The Central Bank of Egypt (CBE) cut its overnight deposit rate by 100bp, to 21.00%, and we expect that policymakers will continue to loosen monetary policy over the rest of this year and into 2026 as disinflation persists. …
2nd October 2025
OPEC+: a hike for sure, but by just how much? This weekend’s OPEC+ meeting is likely to see the group agree to a further unwinding of oil production cuts in November, with some suggestions it could be one of the most aggressive moves yet. But, with many …
Brazil’s government has brought its primary budget more or less back into balance over the past year, which has helped to improve investor confidence and drive a rally in Brazilian bonds. But delivering the fiscal tightening needed to meet the budget …
A weak currency and sustained deflation mean that China’s economy is on course to shrink as a share of the global economy for a fourth consecutive year , when measured at market exchange rates. China has gone from more than three quarters the size of the …
The 2026 budgets announced in Russia and Saudi Arabia in the past week point to significant fiscal tightening following declines in oil revenues and budget blowouts this year. Pressures for fiscal tightening are particularly acute in other oil producers …
In principle, the relatively cautious fiscal policy that Giorgia Meloni’s government has followed in Italy offers a model that other right-wing populist parties could follow. But in practice, with the possible exception of France’s National Rally, it will …
The US stock market’s relentless grind higher – the S&P 500 closed at a record high on Wednesday – and its accompanying outperformance of stock markets elsewhere are both reinforcing US residents’ ‘home bias’. While a high and generally rising allocation …
Table of Key Forecasts Overview – The global economy will grow by a solid yet unspectacular 3% in 2026-27, but the sources of growth are becoming increasingly unbalanced. The US will be the best performing major advanced economy, as what appears to be an …
Chinese officials have been trying to boost global usage of the renminbi for over two decades. Some progress has been made, with new BIS data placing the currency’s share in global FX turnover at a record high. But the figures are inflated by domestic …
Switzerland’s inflation remained at just 0.2% in September and it is likely to average close to zero over the coming years. This is in part due to temporary factors, such as reductions in the mortgage reference rate, but it also reflects structurally weak …
Office rental growth in Spain’s major markets will be underpinned by rapid employment growth and relatively low rates of hybrid work. And these trends are further supported by healthy conversion activity, reinforcing our view that these markets will stay …
Note that we will be discussing the outlook for the euro-zone, the major euro-zone economies and Switzerland in an online briefing today: registration here . Inflation likely to fall to zero soon Switzerland’s headline inflation rate once again remained …
Slower consumption growth points to further rate cuts Real household spending was flat in August and real consumption growth probably slowed sharply last quarter, leaving the door open for further loosening by the RBA. According to the Monthly Household …
History suggests the US government shutdown is unlikely to make much impact on financial markets even if it drags on for some time. The bigger issue is the continued softening of the US labour market, which points to downside risks for equities, Treasury …
1st October 2025
The rise in the EM manufacturing PMI in September was primarily driven by the jump in China. China (and India) aside, the EM PMIs generally remain weak and a combination of high US tariffs, tight fiscal policy and slowing wage growth will weigh on …
The latest PMIs suggest that global industry has remained relatively resilient in the wake of US tariffs and that the outlook has improved slightly. Meanwhile, goods price pressures have softened, which supports the case for central banks to press on with …
The CMBS delinquency rate for multifamily was the second highest in August, largely reflecting relatively loose lending practices around the turn of the decade which has led to an outsized impact from the rise in interest rates on debt-service-coverage …
Rising production, easing price pressures The ISM manufacturing index has reversed the decline since April linked to the tariff disruptions, although it remains below the 50 mark and the accompanying comments from respondents suggest that tariffs on …
The latest polling ahead of the Czech parliamentary election this weekend suggests that the right-wing populist opposition party, ANO, will gain the highest share of votes and may form a coalition with more extreme anti-EU parties. That would raise …
Italy’s public finances have held up better than expected over the past two years or so despite the economy remaining sluggish. That is partly due to policies that pre-date Giorgia Meloni’s government, but its decision to abolish the “superbonus” and …
ADP sends a gloomy message about labour market Although there is only a passing correlation between monthly changes in the ADP measure of private payrolls and the official non-farm payrolls estimates, the plunge in the former in September is a concern, …
Most government shutdowns have a negligible macroeconomic impact, often lasting just a day or two, and this one might be no different. Even if it drags on, the effects should remain modest, with essential services continuing to operate and furloughed …
Euro-zone i n flation to fall in coming months The small rise in euro-zone HICP inflation in September will not shift the consensus at the ECB that rates are in a “good place” for now. However, we think inflation will fall to only 1.5% by December and …
PMIs stuck in contractionary territory The weak batch of manufacturing PMIs out of Emerging Europe in September suggest that industrial activity in the region is continuing to be held back by weak external demand. The surveys also suggests that …
The Reserve Bank of India (RBI) opted to keep the repo rate on hold at 5.50% today but has left the door open for a resumption in the easing cycle over the coming months. We still expect the repo rate to fall to 5.00%, albeit now by early next year rather …
This page has been updated with additional analysis since first publication. We’ll be discussing the outlook for UK growth, inflation, interest rates, and financial markets in 20-minute online briefing later today at 3pm BST. (Register here .) Bumper rise …
RBI opens door to further policy easing The Reserve Bank of India (RBI) opted to keep the repo rate on hold at 5.50% today but has left the door open for a resumption in the easing cycle over the coming months. We still expect the repo rate to fall 5.00%, …
The September PMI readings for most countries in Asia remained weak and we continue to expect manufacturing activity in the region to struggle in the near term. With growth set to soften and inflation likely to remain contained, we expect central banks in …
Although financial markets aren’t fully convinced, we believe the Reserve Bank of New Zealand will lower its policy rate by 50bp at its meeting ending on 8 th October. With the output gap deeply negative, the Committee will want to mitigate downside risks …
House price growth retained its strong momentum in September and our leading index suggests the rally has further to run. But with affordability still very stretched, we suspect that the housing recovery will be muted by historical standards. Australia’s …
Tankan opens door to October rate hike The latest Tankan survey confirms that Japan’s economy is shrugging off trade tensions and supports our long-held view that the Bank of Japan will resume its tightening cycle this month. The Tankan’s headline index …
Following the publication of the full 2026 Budget today, we have provided this updated analysis Saudi Arabia officially approved its 2026 Budget earlier today and, while the headline figures were unchanged from the Pre-Budget Statement, the details …
30th September 2025
