Challenges facing US oil to escalate from here Pessimism in the US oil industry increased in the third quarter, as shown by the sharp fall in the Dallas Fed Energy Survey company outlook index. High uncertainty about both US policy and the future path of …
26th September 2025
Overview – Growth across Sub-Saharan Africa is set to pick up over the next couple of years helped by a more stable macro environment, lower inflation and looser monetary policy, with many central banks set to cut interest rates quicker and deeper than …
The economic impact will be limited China will stop seeking the “special and differential treatment” accorded to developing countries in the World Trade Organisation, Premier Li Qiang told the UN General Assembly this week. Under WTO rules, developing …
Economy sluggish but not due to US tariffs We think that economic growth in the euro-zone will pick up a bit heading into next year, but we suspect that the improvement will be more muted than most anticipate. And the data released this week show no …
RBI likely to loosen policy despite weaker rupee The Indian rupee hit another record low against the US dollar this week and remains among the worst performing emerging market currencies this year. The rupee’s depreciation against the dollar has …
Something for Indonesia to celebrate Indonesia’s announcement of a trade deal with the European Union provided respite this week for a government that has been on the defensive with investors over the direction of policy. But it’s unlikely that this will …
Inflation jitters may be overdone The release of hotter than expected Australian CPI data has put markets in a hawkish mood. They now believe that the RBA will only cut rates to 3.3% this cycle, whereas they were pricing in a terminal rate of 3.1% just …
We are re-sending this updated Rapid Response as the original version was missing some analysis. Exemptions will reduce impact of pharmaceutical tariffs The announcement by President Trump that, starting October 1 st , the US will impose 100% tariffs on …
US-bound exports plunge Detailed export data compiled by the Bank of Japan suggest that higher US tariffs have become a clear headwind to Japanese exports. US-bound export volumes were the weakest they’ve been since 2021. (See Chart 1.) That said, overall …
Banxico continues with steady rate cuts Mexico’s central bank (Banxico) delivered another 25bp interest rate cut, to 7.50%, at its meeting today and the communications were broadly unchanged, suggesting that easing will continue at the upcoming meetings. …
25th September 2025
The latest data are consistent with the world economy having recovered a bit more momentum in Q3. Industry has held up well, world trade has shrugged off tariffs, and an AI investment boom is underway in the US. That said, there are prominent pockets of …
The recent rise in interest rate expectations has not been kind to UK property equities, with the NAREIT price index currently down 18% y/y. On past form that implies commercial property capital values will also soon start falling. However, other leading …
*This Preview has been updated with additional analysis since its initial publication, prior to the shutdown* We forecast a 50,000 rise in non-farm payrolls in September, as the continued slimming of the federal workforce limits any rebound in private …
Lebanese bonds rally, but restructuring will be long Lebanon’s eurobonds have been on a tear so far this year, with spreads falling to their lowest this week since early 2021. While the new government is moving in the right direction to secure bilateral …
Flat sales growth testament to harsh buyer environment The low-and-barely changed level of existing home sales in August is yet more evidence of the quagmire the existing home market has been stuck in for a couple of years now. While the downward trend in …
Fair-value calculations which incorporate rental expectations suggest euro-zone all-property yields should hold steady in the medium term. However, the outlook differs by sector, with rises still likely for offices and retail while a stronger rental …
Overview – Asia’s economies look set for further weak growth over the rest of this year and to the end of 2026, as tighter fiscal policy and softer exports outweigh resilient consumption, which is being supported by looser monetary policy. The regional …
Economic growth remains strong despite employment slowdown The mother lode of data just released suggest the economy is still doing just fine, despite the slowdown in employment growth. Last year’s GDP growth was confirmed as strong in the annual …
Possible tax rises in the Budget on 26th November risk further restraining housing activity next year. What’s more, our new forecast for 10-year gilt yields to fall from 4.71% now to 4.25% next year (3.75% previously) suggests mortgage rates may provide a …
Yields in Switzerland and Japan may diverge even further over the next couple of years. But we don’t think Japan’s escape from zero rates will diminish the yen’s relative appeal as a safe haven. The Swiss National Bank’s hold today was unsurprising, …
SNB on hold for now, but negative rates to come While the SNB kept its policy rate at zero today and left its inflation forecast unchanged, we still expect policymakers to cut the policy rate into negative territory over the coming quarters. We think that …
Overview – The Australian economy bounced back strongly in Q2, and it increasingly appears that the recovery has legs. In contrast, the New Zealand economy remains mired in a deep slump, and we believe that it will be some time before growth returns to …
China’s stock market got a boost today, as Alibaba announced its latest plans for AI. Despite the challenges faced by China’s economy, we suspect there is more upside for MSCI’s tech-heavy China Index as the country’s own AI+ plan gets going. Admittedly, …
24th September 2025
Overview – China’s economy is much weaker than official figures suggest, but growth has held steady this year despite US tariffs. While both exports and fiscal spending will continue to support the economy over the next year, they will provide less of a …
We suspect the main reason why the long-run unemployment rate has shot up is the surge in immigration since the pandemic, as many of these migrants have struggled to find work. This suggests the equilibrium unemployment rate is a bit higher than it used …
Big budget deficits are fuelling fears about fiscal sustainability, but the potential negative effects on growth are receiving less attention. While Germany is embarking on a major fiscal expansion, the risk of crowding out private sector activity is …
Saudi Arabia’s reform push looks set to take another step forward with suggestions that it will lift foreign ownership limits on local equities before the end of this year. While such a move will help to attract fresh foreign capital inflows, we doubt …
New home sales spike to highest level since January 2022 Lower borrowing costs supported a surge in new home sales in August, and could drive further increases in the coming months, given the continued decline in mortgage rates since then. Seasonally …
US Treasury Secretary Scott Bessent’s renewed pledge to “do what is needed” to support Argentina in a post on X earlier today, including purchases of Argentinian sovereign US dollar bonds and a potential $20bn credit line, should give Argentina’s …
CNB on hold, next move could be a hike The Czech National Bank (CNB) left its policy rate on hold again today, at 3.50%, and in contrast to many analysts who still expect interest rates to be lowered further next year, we think that the risks are skewed …
Inflation edged up, but Banxico still set to cut tomorrow The small rise in Mexican inflation to 3.7% y/y in the first half of September won’t stop Banxico from delivering a clearly-signalled 25bp cut, to 7.50%, at tomorrow’s Board meeting. The outturn …
Overview – The most acute geopolitical and tariff-related distortion in commodity markets has eased, leaving fundamentals more firmly in the driver’s seat going forward. While the Russia-Ukraine war still presents risks to Russia’s energy supply and …
Ifo pours cold water on hopes of German recovery The fall in the German Ifo Business Climate Index (BCI) in September contrasts with the big improvement in the Composite PMI and casts some doubt over hopes that the German economy might be finally turning …
Despite policymakers’ renewed concern over the Thai baht’s rise, there is little evidence that the appreciation of the currency is hurting the economy. We do not expect it to be a major drag on growth over the next year. The baht has gained around 8% …
The risk of high tariffs has now materialised, while inflation remains subdued We think the RBI will cut the repo rate to mitigate downside risks to growth We expect the repo rate to reach 5.00% by the end of 2025 The hit to GDP growth from punitive …
RBA will leave policy settings unchanged in September Bank will reiterate its cautious approach now that growth is firming up Assuming inflation cools further, there will be scope to cut rates to 3.1% by early-2026 The Reserve Bank of Australia is almost …
RBA to remain cautious as inflationary pressures linger on Although the RBA won’t pay much heed to the pickup in headline inflation last month, the strength in core inflation will give it pause for thought. We expect the Bank to only cut rates twice more …
CBN begins what is likely to be an aggressive easing cycle The Central Bank of Nigeria embarked on a monetary easing cycle today with a 50bp cut to its policy rate, to 27.00%, and Governor Cardoso’s confidence that macro stability is here to stay and …
23rd September 2025
MNB in no rush to resume easing cycle The Hungarian central bank (MNB) left its base rate unchanged again today, at 6.50%, and we think that the easing cycle will remain on pause over the rest of this year. While we currently forecast 100bp of cuts in …
Note: We’ll be discussing our r* estimates in light of recent bond market moves, the AI investment surge and other developments in a Drop-In on Tuesday, 30th September at 1000 ET/1500 BST . Register here . Market pricing suggests that investors think …
This page has been updated with additional analysis since first publication. Downside risks to activity growing, but upside risks to inflation linger September’s flash PMIs suggest that the downside risks around economic activity may be growing a bit and …
Slow growth and easing price pressures September’s flash PMIs suggest that the euro-zone economy grew fairly slowly again in Q3 and that price pressures eased. At the ECB’s press conference earlier this month, Christine Lagarde cited “positive underlying …
This page has been updated with additional analysis since first publication. Riksbank cuts policy rate, loosening cycle over The Riksbank cut its policy rate by 25bp to 1.75% today but signalled that this is the end of the loosening cycle. We think rates …
Rising household debt in India should not be a major concern for now given the backdrop of falling interest rates. But it is a risk that will require close monitoring once the easing cycle turns, particularly if higher debt servicing costs lead to …
The White House’s decision to impose a $100,000 application fee for H-1B visas confirms that the Trump administration is also determined to clamp down on legal immigration, which could further reduce labour supply and raise the upside risks to wage …
22nd September 2025
Overview – Our view that capital values still need to fall by 5% at the all-property level keeps our forecasts below consensus. Based on our forecast of a long-term 10-year Treasury yield of 4.5%, appraised cap rates look too low given the outlook for …
While the Bank of Japan (BoJ) is a smaller player in equities than it is in bonds, the central bank acquired lots of shares via its ETF programme . So, it’s hardly surprising the BoJ’s announcement on Friday that it plans to unwind those holdings has …
Our China Activity Proxy suggests that growth picked up a touch last month, but the economy is still growing at less than 3.5% y/y. The services sector has been outperforming in recent months thanks to a boost from strong financial sector activity. …
The ECB’s battle against high inflation has been won and, in our view, it is more likely that inflation undershoots than overshoots the 2% target over the next few years. As a result, we think the ECB may be forced to reduce interest rates next year, so …
We'll be discussing the outlook for the UK economy and the financial markets in a 20-minute online Drop-In at 3pm BST on Wednesday 1st October. (Register here .) The historical data and forecasts contained in this analysis have been updated to reflected …
