With the euro-zone economy holding up relatively well in the face of tariff uncertainty, inflation likely to stay close to the target and President Lagarde adopting a slightly more hawkish stance at today’s press conference, we think the ECB will leave …
24th July 2025
Although a forecast global real estate return of sub-6% p.a. over the next decade appears disappointing, compared to other assets it stacks up well. We expect sub-4% total returns for both global government bonds and equities over our 10-year forecast. …
We think Colombia’s fragile fiscal position – which could get even worse ahead of next year’s election – and a likely deterioration in the current account deficit will cause the peso to fall by more than most currently anticipate, to 4,600/$ by end-2026 …
Drop in sales reflects end of tariff front-running rather than marked downturn The flash estimate showing a solid rise in retail sales in June, paired with the recent rebound in consumer confidence, suggests the decline in sales in May was more a …
Our China Activity Proxy shows that China’s activity growth remains well below what official figures suggest. While industrial activity has held up surprisingly well in the face of US tariffs, the services sector has weakened substantially since the start …
Chances of further rate cut diminishing The ECB’s decision to leave its deposit rate unchanged at 2.0% today and offer no guidance on future rate decisions was in line with expectations. While we are currently forecasting one more 25bp rate cut in this …
Sharp fall in inflation paves the way for further easing The drop in Mexican inflation to 3.5% y/y in the first half of July means that Banxico is all but certain to deliver the clearly-signalled 25bp cut next month. It also lends support to our …
CBRT delivers dovish surprise, but easing likely to slow down from here The decision by Turkish central bank to cut its one-week repo rate by 300bp today, to 43.00%, was a slight dovish surprise, but the accompanying communications remained hawkish and we …
India’s economy has had a strong first half of the year and is poised to grow by 7% in both 2025 and 2026, making it a global outperformer. While inflation has continued to fall sharply, we expect it will rise steadily towards the RBI’s 4% target over the …
Rise in Saudi public debt ratio has further to run Saudi government debt has risen sharply over the past decade and, while officials are already taking steps to tighten fiscal policy, we doubt that they will do enough to prevent it climbing further. A …
Yields for the main commercial property sectors have been remarkably stable over past 18 months, and we expect that stability will continue. That means capital value growth will average under 3% p.a. over 2025-29. Thanks to stronger rental growth the …
This page has been updated with additional analysis since first publication. Upside risks to inflation continue to fade July’s flash PMIs paint a picture of the economy struggling to recover from a spring lull, a labour market that is still weakening and …
Economy growing slowly, services price pressures easing July’s Composite PMI for the euro-zone was consistent with the economy doing little more than stagnate. But policymakers at the ECB will be encouraged by the evidence that services price pressures …
… How the global economy is fracturing under Trump …
22nd July 2025
Australia’s economy is struggling to gain momentum, while the recent rebound in activity in New Zealand increasingly looks like a false start. As the lull in activity lifts spare capacity, underlying price pressures should continue to ease in both …
We held an online Drop-In session yesterday (see here for a recording) to discuss the latest developments in Japan’s economy and financial markets. This Update answers several of the questions that we received . What has the economic impact of higher US …
Recent US-Japan trade deal has removed a key downside risk What’s more, inflation set to keep surpassing Board’s pessimistic forecasts We expect the Bank to hike again in October The trade deal agreed upon between the US and Japan has removed a key …
Korea’s economy rebounded in Q2, averting a technical recession, and while the worst is probably over we expect a broad-based slowdown in growth over the near term. Data released today show that GDP rose by 0.6% q/q in Q2 (following a contraction of 0.2% …
Reported trade deal suggests escalation will be avoided Media reports suggest that the EU and US are approaching an agreement which would see a baseline tariff of 15% covering most products including vehicles. If confirmed (and of course President Trump …
23rd July 2025
Uncertain trade outlook will discourage policy tweak Rebound in core inflation and economic resilience provide more scope to wait Bank to resume easing later this year but second rate cut may be pushed into 2026 The recent rebound in core inflation and …
While China’s June trade data showed a pick-up in exports of rare earth elements (REEs), shipments remain well below pre-Liberation Day levels. A further warming of relations with the US could lead to more approvals being granted in the near-term, but …
While higher tariffs will cause some Asian economies to pursue slightly looser monetary policy than otherwise, domestic factors will be the key driving force behind rate decisions in most economies in the coming months. And we think that the risk of …
Despite some question marks being cast over whether the eight OPEC+ producers unwinding voluntary are keeping pace with the increases in quotas, our assessment is that they have added supply to the market at a decent pace so far. Rather than proceeding …
Sales down despite rebound in confidence The fall in existing home sales in June comes despite the recent rebound in consumer confidence, suggesting affordability is still the main driver of homebuyer activity. With house price declines likely to soon …
US tariffs have hit South Africa’s auto sector hard, but the sector also faces deeper structural challenges, including weaker demand growth in key export markets and competition from Chinese producers. All of this reinforces the idea that structural …
Recent surveys of real estate lenders point to a continued improvement in the European commercial real estate lending environment. However, with refinancing still dominating lending activity, this is unlikely to provide a material boost to investment this …
Early signs tariffs are pushing core inflation higher Economy remains solid notwithstanding housing weakness Fed to remain cautious, unmoved by political calls for cuts Despite calls within the FOMC for a rate cut at next week’s policy meeting, we expect …
Core inflation slowdown sets the stage for more rate cuts South Africa’s headline inflation rate may have edged up to 3.0% y/y in June, but the further easing of core inflation suggests the SARB should remain unworried about underlying price pressures. …
Japan’s economy has largely shrugged off global trade tensions and the trade deal reached between the US and Japan has removed a key downside risk. With inflation set to keep overshooting the Bank of Japan’s forecasts, we expect the Bank to resume its …
The US has set a 19% tariff on Philippine imports, aligning it with rates for other Asian nations that have already agreed deals with the US. While the economic hit to the Philippines will be modest, the deal does at least help shield it from losing …
We think Japan’s equities will do well over the rest of this year, even accounting for their big rally today, and that the yen will recover in time. But, the trade announcement looks like worse news for JGBs, especially at the front end. US President …
The trade deal with the US announced today removes a key downside risk to Japan’s economy. And while the potential resignation of PM Ishiba creates political risks, our conviction that the Bank of Japan will resume its tightening cycle before the end of …
Government bond yields in the euro-zone are converging, and we expect the “peripheral” frontier to keep blurring. Fears about deteriorating public finances are mounting in many places – for instance, Gilt yields opened higher today as an early data …
US tariffs appear to have given renewed impetus to Chinese producers’ efforts to export to emerging markets, resulting in a widening trade surplus with the EM world in the first half of the year. But this is going to face growing headwinds, given the …
The rebasing exercise by Nigeria’s statistics office means that the economy is now estimated to be more than 30% larger than previously thought. While the national accounts data now better reflect the size and composition of the economy, it doesn’t change …
Underlying inflation worries prevent start of easing cycle, for now The Central Bank of Nigeria left its policy rate on hold at 27.50% today and, while Governor Cardoso emphasised that policy will need to be kept tight to get inflation down to the MPC’s …
We held an online Drop-In session last week to discuss the outlook for equity, bond and currency markets. (See a recording here .) This Update answers several of the questions that we received. Tech/AI-driven equities are pushing the US equity markets …
Above-target inflation to keep MNB on hold for some time The Hungarian central bank (MNB) left its base rate unchanged today at 6.50%, and we think that interest rates will remain at this level throughout 2025. That’s a more hawkish view than the …
We expect the divergence in performance between the best performing offices and the rest to persist through our forecast. This will see further capital value falls in average and poorer quality space, but presents an opportunity to achieve attractive …
Oil prices have fallen back in the wake of the Israel-Iran ceasefire and, with more oil supply coming online, we think that prices will decline further. Fiscal policy in the Gulf will become less supportive as a result, weighing on activity in non-oil …
The Q2 Bank Lending Survey, published this morning by the ECB, suggests that the economy is still growing at a decent pace. But this is entirely due to improving prospects for the housing sector. The survey suggests that business investment will remain …
Given the weakness of Thailand’s economy, there is no doubt that the country needs lower interest rates. But the appointment of Vitai Ratanakorn as the next Governor of the Bank of Thailand is likely to fuel concerns about central bank independence. The …
This page has been updated with additional analysis since first publication. Good start to the year over and tax rises to come Despite the £3.6bn overshoot in June, public borrowing is still in line with the OBR’s forecasts for the first three months of …
Despite its gradualist approach, RBA will cut further than most expect Although the RBA judged that leaving rates on hold was the more prudent choice at its meeting earlier this month, it did signal that there was more easing in the pipeline. Our sense is …
The result of this weekend’s Upper House election in Japan may not reverse the recent rout at the very long end of the JGB market when it re-opens after a holiday on Monday, given the possibility that fiscal policy will be loosened in due course. But …
21st July 2025
Bleak sales and spending intentions captured by the Bank of Canada’s second-quarter business and consumer surveys are consistent with a sharp downturn in GDP growth. However, the surveys were carried out at a time of peak tariff uncertainty. Since then, …
We think France’s government borrowing costs will rise above those of Italy before long. This may seem surprising in light of Italy’s higher debt burden and lower trend growth rate, but it reflects the fact that France’s debt dynamics are worse and its …
President Trump’s recent tariff threats have led to renewed impetus among Mexican and Brazilian authorities to boost trade ties between Latin America’s two largest two economies – and reduce their reliance on the US. But while the tariff threat may …
