Africa’s easing cycle continues The easing cycle in Sub-Saharan Africa was in full flow this week as central banks in Ghana, Mozambique and South Africa all delivered interest rate cuts. Nigeria will soon follow suit. Ghana moved first, slashing its …
1st August 2025
Does July's grim US jobs report vindicate the Fed's dissenters who pushed for rate cuts this week? Deputy Chief North America Economist Stephen Brown and Deputy Chief Markets Economist Jonas Goltermann unpack what the latest data reveal about the health …
Manufacturing sector holding up The fall in the ISM manufacturing index in July paints a slightly bleaker picture of the sector than is the reality. The rise in the production and new orders sub-indices, along with the fall in the prices paid index, …
Some reprieve on the tariff front Having found itself in Trump’s firing line a few weeks ago , this week’s tariffs announcements were better for much of Latin America than had been feared. Admittedly, that seems hard to square with President Trump’s …
Tariff agreement reduces downside risks for CEE US President Trump and EU Commission President von der Leyen closed a trade deal this week which will impose a 15% tariff on most EU goods to the US. This was broadly in line with what we had expected, and …
The surveys published this week have sent vastly different signals on the health of the economy in Q3. The backward-looking balance of the CBI’s Growth Indicator fell to a record-low in July (the series began in October 2003), barring the Global Financial …
Tariffs are now firmly back in the driver’s seat when it comes to commodity prices, with this week bringing fresh news on reciprocal, metals and energy tariffs. Arguably the most straightforward to digest was the confirmation of 50% copper tariffs. While …
Weak report will embolden the FOMC doves The muted 73,000 rise in non-farm payrolls in July, combined with large downward revisions to May and June as well as an uptick in the unemployment rate to 4.2%, will strengthen the case for those on the FOMC …
Although European equities declined significantly this week, it seems unlikely that this is due to the US-EU trade agreement that was announced last Sunday and confirmed in the US Executive Order towards the end of the week. After all, the deal was in …
Trump tariffs – impact will be manageable for most Following a flurry of trade deals agreed over the past couple of weeks and a new Executive Order last night, from next Friday (US time) most countries in Asia will face tariffs of 15-25% on their exports …
25% US tariff on India may not be the endpoint President Trump’s latest executive order, issued yesterday, confirmed his threat from Wednesday that India will be hit by a 25% tariff. That puts India on a higher rate than many of its Asian peers. (See …
We think the surprisingly high tariff rate on Switzerland of 39% that the US announced yesterday is likely be negotiated down in future and, importantly, pharmaceutical goods still appear to be exempt for the time being. However, if this tariff were to …
China wins and loses from new US tariffs Chinese exports will become more competitive in the US once the new reciprocal tariff rates on other countries come into force next Friday – duties on most other Asian economies are rising by 5-15%-pts while those …
Inflation at the target, ECB in no rush to cut again Headline inflation remained at the target in July and core inflation was only a touch higher. Both were broadly in line with the ECB’s forecasts. So there was little in the data to suggest that the Bank …
President Trump’s latest flurry of tariffs implies that the US effective tariff rate will rise to about 17%, from 2.3% last year. That is a little higher than we assumed and so presents modest downside risks to our forecast for global GDP growth and a …
Industry continuing to struggle across Emerging Europe The weak July manufacturing PMIs out of Emerging Europe suggest that industry remains a drag on regional growth, and we expect that incoming tariffs will keep external demand conditions subdued over …
This page has been updated with additional analysis since first publication. Recovering, but not off to the races The bigger-than-expected rebound in the Nationwide measure of house prices in July shows that the recovery in the housing market after the …
Minimum wage set to rise the most on record The Bank of Japan sounded more optimistic about the outlook for inflation when it kept policy settings unchanged at its meeting this week. However, we still think that the Bank is underestimating the strength of …
Bank will cut further than most expect The Reserve Bank of Australia is likely to breathe a sigh of relief that its consternations about lingering price pressures in the economy didn’t come to pass. Indeed, as Deputy RBA Governor Andrew Hauser noted in a …
The July PMI readings for most countries in Asia were subdued and we continue to expect activity in Asia’s export-oriented manufacturing sectors to struggle in the coming months. And with inflation set to stay low, we think that most central banks in the …
The latest RICS survey showed that overall sentiment in Asia-Pacific is weaker than in other regions, but that there is significant variance within the region. Japan and Australia stood out as clear leaders, while Hong Kong remained the laggard – a view …
Australia’s housing market gained traction in June, and leading indicators suggest the housing rebound has further to run. But with affordability set to remain extremely stretched despite the RBA’s easing cycle, we think the incipient house-price rally …
The latest RICS survey indicated that the recovery in occupier and investor demand in the euro-zone was muted in Q2. While the reduction in tariff uncertainty should support demand further ahead, the survey is consistent with our view that euro-zone …
31st July 2025
UK spending pledges still insufficient for net-zero The UK’s seventh round of Contracts for Difference (CfD) auctions is set to open next month and, ahead of that, the government has announced increases to the maximum guaranteed price, or strike price. By …
One key driver of the rise in gold-backed ETF holdings appears to be increased demand from institutional investment managers. Given the weaker relationship between gold prices and US TIPS yields, which arguably boosts gold’s attractiveness as a portfolio …
Electricity demand in Egypt broke records this week, shining the spotlight back on to the country’s energy landscape. A collapse in domestic gas output in recent years has increased Egypt’s reliance on imported gas and added to external strains. This …
This quarterly Financial Risk Monitor includes commentary and analysis of our latest EM risk indicators. We’ll be discussing EM risk in a 20-minute online Drop-In at 10am EST/3pm BST on Wednesday 6th August. (Register here .) Currency risks stabilise …
China Chart Pack (Jul. 25) …
A 25 basis point (bps) rate cut at August’s meeting, from 4.25% to 4.00%, is nailed on Risk of second-round effects means the MPC won’t speed up the pace of rate cuts But we still think rates will fall further than most expect, to 3.00% in 2026 The …
The South African Reserve Bank’s decision to continue with its interest easing cycle today, with a 25bp cut to 7.00% was unsurprising, and the highlight of the meeting was Governor Kganyago’s announcement that the SARB will informally target the bottom of …
While occupier market trends were mixed, the Q2 RICS survey showed a distinct downturn in investment market sentiment, with investment enquiries – and particularly those from abroad – well down from the previous survey. This highlights both the …
Judging by yesterday’s policy announcement and Chair Powell’s press conference remarks, the FOMC doesn’t look to be in a hurry to change its policy stance. That points to somewhat higher Treasury yields and a flatter yield curve. It also supports our view …
Core goods inflation running hot The above-target rise in core PCE prices in June, upward revisions to previous months’ data and the sharp rise in core goods inflation will do little to ease the Fed’s concerns about tariff-driven inflation. If these …
Not all doom and gloom The back-to-back GDP declines in April and May look slightly less concerning in light of June’s preliminary estimate showing a 0.1% m/m gain, suggesting the earlier weakness was partly a hangover from the export-led strength in the …
The RICS survey showed that occupier demand was still weak in Q2, with firms reluctant to expand in the face of higher costs and an uncertain economic outlook. In line with that, rental and capital value expectations are subdued, with the former pointing …
Asia Chart Pack (July 2025) …
Plunge in HIBOR boosting consumption growth Hong Kong’s GDP growth surprised to the upside, expanding by a strong 3.1% y/y in Q2, up from a downwardly revised 3.0% y/y in Q1. In q/q terms the economy expanded by 0.4%. (See Chart 1.) While that's a much …
Export boom supports rapid GDP growth Taiwan’s economy recorded another quarter of strong growth in Q2, of 3.1% q/q, on the back of a boom in exports which more than offset a further slowdown in domestic demand. This pace of growth is unlikely to be …
Oil lifts the Saudi economy Saudi Arabia’s flash estimate of Q2 GDP showed that the economy grew by 2.1% q/q, an improvement on the 1.1% expansion recorded in the first quarter, largely on the back of the unwinding of oil production cuts. Economic growth …
While the Bank of Japan turned a touch more optimistic today, it still sees trade tensions as a major headwind. However, we still believe that policymakers are too pessimistic about the inflation outlook and expect the Bank to resume its tightening cycle …
Donald Trump has announced on Truth Social that South Korea has agreed to a “comprehensive deal” involving a 15% tariff on all goods exported to the US, down from the previously threatened 25%, in exchange for maintaining zero tariffs on US imports. The …
Hong Kong’s office market has long demonstrated resilience in weathering economic storms, but the current downturn is unlike any cycle since at least the 1990s. Facing simultaneous structural and cyclical headwinds, values are set to grind lower for an …
Bank of Japan opening door for year-end rate hike The Bank of Japan sounded a bit more optimistic today and we’re sticking to our forecast that the Bank will resume its tightening cycle at its October. The Bank’s decision to leave policy settings …
This report was first published on Thursday 31st July, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Friday 1st August and Caixin services and composite PMIs on Tuesday 5th August. Domestic weakness weighing on growth …
Strong bounce in retail sales won’t keep RBA from cutting in August The solid pickup in retail sales in June doesn’t detract from the fact that goods spending across Q2 was rather lacklustre. That being the case, the data won’t stand in the way of the RBA …
Economy remains resilient in the face of higher US tariffs The rebound in industrial production in June confirms that Japan’s economy is shrugging off trade tensions and should prompt the Bank of Japan to revise up their forecasts for GDP growth at its …
Trump’s tariff announcement overshadows end of hiking cycle Brazil’s central bank left interest rates on hold at 15.00% as expected today, but the decision was overshadowed by President Trump’s Executive Order earlier today raising tariffs to 50% on …
30th July 2025
Fed Chair Jerome Powell left open the possibility of a September rate cut in his comments following the FOMC’s July meeting, but put much more emphasis on the still solid labour market and stressed that “modestly restrictive” policy remains appropriate …
Dissents are the best offence for Waller and Bowman The FOMC made only one major change to its policy statement this month, acknowledging that growth moderated in the first half of the year. While Governors Christopher Waller and Michelle Bowman both …
Emerging Markets Capital Flows Monitor (Jul. 2025) …
