Given comparatively weak economic conditions, it might seem surprising that services inflation has been stickier in Europe than in the US in recent months. But much of this reflects the delayed response of wage growth to labour market normalisation in …
21st January 2026
After a very strong 2025, economic growth in India is likely to ease in 2026 in the face of punitive US tariffs. However, India will remain a relative bright spot in the global economy, thanks to strong domestic demand. Inflation has bottomed out but a …
Inflation uptick to prompt a pause in the easing cycle The rise in South Africa’s headline inflation to 3.6% y/y in December, with core inflation picking up too, suggests that the Reserve Bank will pause its easing cycle later this month. Further out, …
BI stays on the sidelines as rupiah slides Recent falls in the rupiah prompted Bank Indonesia to leave its benchmark interest rate on hold at 4.75% for a fourth consecutive meeting today. The decision will ease fears, for now at least, that BI is …
This page has been updated with additional analysis since first publication. Rebound not much to worry about, but BoE unlikely to cut rates in February The rebound in CPI inflation from 3.2% in November to 3.4% in December (CE and BoE 3.5%, consensus …
Should JGB yields continue to surge, PM Takaichi may be forced to offset some of the expansionary fiscal measures announced recently with tightening elsewhere. However, those moves may not be seen as credible by investors and the Bank of Japan may …
Korea’s logistics looks to be turning a corner, with net absorption comfortably outpacing new supply in 2025 and over the next few years. That will underpin rent growth averaging 2.5% p.a. over the next five years, driving a solid recovery in capital …
The Republicans are likely to lose their majority in the House of Representatives in this November’s midterm elections, but that won’t slow down the President, with Donald Trump continuing to pursue most of his immigration, trade and foreign policy agenda …
20th January 2026
We expect continued divergence in both total non-farm and office-sector job growth across the largest metros over the next two years. Those in the South will continue to significantly outperform the national average while some major Western metros will …
The latest triple sell-off in US equities, Treasuries, and the dollar would probably have to become much larger before the ‘guardrails’ of the financial markets prompted Donald Trump to change his plans for Greenland . The US government bond market, in …
President Donald Trump’s first year back in the Oval Office was more disruptive than we had expected, marked by attacks on the global trading order, the domestic institutional framework and even the sovereignty of other nations. As one of the last …
Political risk has emerged as a key theme of 2026. Our analysis of EM political shocks over the last 15 years suggests that the key determinants of the size and persistence of political risk premiums are the type of event and the extent of economic …
A divergence between banks’ expectations for house and commercial real estate prices may explain why they are still keen to ramp up lending to commercial real estate even as the availability of credit to the overall corporate sector has flatlined. In any …
Sluggish growth and target-bound inflation should give central banks room to continue easing monetary policy. But the extent of easing that lies in store this year differs by country – while easing cycles in Mexico and parts of the Andes are nearing an …
The credibility of policymaking in Indonesia has been dealt a fresh blow at the start of 2026. It will take time for the more pernicious effects of populist and interventionist policies under President Prabowo to be felt, but risk premia are likely to …
Coffee prices have fallen back from their record highs, and overall, we think that they will edge lower over the course of the year. That said, several risks could keep coffee prices elevated by historical standards. Not least, the geopolitical tensions …
The latest polls suggest that Viktor Orbán’s long-ruling Fidesz party could lose power in Hungary’s parliamentary election on 12 th April. This Update answers five key questions on the implications of the vote. The short point is that a change of …
Finance Minister Nirmala Sitharaman will be keen to demonstrate continued fiscal restraint when she delivers her ninth Union Budget on Sunday 1 st February. But the current political backdrop is not very forgiving. The most likely outcome is that some …
This page has been updated with additional analysis since first publication. Jobs market still weak, but stubborn wage growth will concern the BoE While the labour market remains soft, the stability of overall pay growth in November diminishes the chances …
We hosted an online Drop-In session today to discuss escalating tensions over Greenland and their economic implications. (Recording available here .) This Update provides answers to some of the questions that we received and highlights a range of relevant …
19th January 2026
There were some signs of life in the Bank of Canada’s latest quarterly surveys, with the pick-up in the indicator of future sales suggesting that the outlook for GDP growth is much better than the recent data would suggest. That said, the further decline …
Another below-target monthly gain in core prices The second-consecutive below-target monthly gain in CPI-trim and CPI-median should further reduce speculation that the Bank of Canada will hike interest rates this year. If anything, coupled with the data …
Rate cuts unlikely until H2 The decision by the National Bank of Romania (NBR) to leave its policy rate on hold again today, at 6.50%, was widely expected by analysts, and we think that high inflation will continue to prevent interest rate cuts until the …
December’s inflation data add weight to our view that the pick-up in services inflation towards the end of last year was, to coin a phrase, transitory. We expect it to decline in January and trend down throughout 2026, bringing core inflation below 2% …
The Greenland crisis …
The aphorism “where you stand depends on where you sit” is well applied to the global economy. Beyond the value of reconnecting with clients, my trip to the Middle East and Asia last week was a reminder that debates around global macro can be too narrowly …
If implemented and sustained for a long period, the new tariffs that President Trump has threatened over the Greenland dispute could cost the euro-zone economy something between 0.2% and 0.5% of GDP, with a bigger hit for Germany. In practice though, we …
We are hosting a 20-minute online briefing to discuss the "Greenland Crisis" at 11am GMT today. (Register here .) If President Trump’s latest tariff threats were actually implemented, they would add to the existing pain for UK car and pharmaceutical …
While the rhetoric around the Trump administration’s interest in Greenland is escalating rapidly, financial markets have taken the return of US-Europe trade tensions over recent days largely in their stride. The risk of a re-run of last year’s tariff …
Official figures likely overstate the strength of the economy Although full- year growth came in at 5.0 % y/y, in line with the government’s target , we estimate that the actual pace of economic expansion was at least 1.5%-pts weaker. The December …
Our base case remains that Japan will avoid a fiscal crisis as its public debt dynamics are more favourable than is widely understood. However, there are mounting risks that PM Takaichi will only rein in her reflationary tendencies once bond markets start …
It remains unclear whether President Trump’s threat to impose tariffs on eight European countries unless a deal is reached to acquire Greenland will ever materialise. But if it does, the economic impact would be modest: at face value, the tariffs would …
18th January 2026
Although the yen has recovered a bit of ground against the dollar in the past few days, its prior weakness remains something of a puzzle. One explanation is that the weakness has reflected a relative rise in expected inflation in Japan. But while expected …
16th January 2026
The large falls in manufacturing and wholesale sales volumes (see here ) are downside risks to the flash estimate that GDP rose by 0.1% m/m in November, after October’s 0.3% drop. If GDP were unchanged in November, it would leave it on track for a …
Construction still bucking weakness elsewhere The housing market ended the year on a weak footing, with both sales and house prices continuing to fall. The outlook for this year is a little brighter, with tightening supply of new listings likely to …
Wait for the SCOTUS tariff ruling continues The wait continues for the Supreme Court’s judgement on the legality of President Trump’s IEEPA-invoked tariffs. Speculation had mounted that the Court would release its ruling this Wednesday. The Court does not …
Inflation falls sharply, but set to rise again this month The further sharp fall in Russian inflation, to 5.6% y/y in December, will be welcomed by the central bank but this is likely to be temporary as a result of the VAT hike that came into force this …
The ECB does not face the same imminent threat to its independence as the US Fed, but it could come under more pressure from politicians in future. However, it would be much harder for governments to influence monetary policy in the euro-zone than in …
Can you pitch yourself as a responsible global stakeholder at the same time as running a $1.2 trillion trade surplus? That’s China’s big global macro play, and it’s one that Neil Shearing thinks China is going to struggle to pull off. The Group Chief …
Angola aggressive cuts despite growing imbalances Angola’s central bank cut interest rates by more than we expected this week in response to struggling growth. But with macroeconomic imbalances building, we worry that the kwanza looks vulnerable to falls. …
This interactive dashboard presents all of our CE bond forecasts out to end-2027, including yield and total return forecasts denominated in a range of currencies. The dashboard also features analysis of interest rate expectations and US Treasury term …
This interactive dashboard presents all of our financial market forecasts out to end-2027, including equities, bonds, commodities, REITs and FX. Forecasts are provided for both prices/yields and total returns, and are offered in a range of currency …
Baby steps towards US-Venezuela rapprochement Developments over the past week or so suggest a tentative rapprochement between the US and Venezuela under interim President Delcy Rodríguez. The Venezuelan government released “an important number” of …
Iran protests take centre stage It’s highly uncertain how the protests in Iran – which caught global attention this week – will play out from here. We published an Update on the potential macro implications here and dug further into the possible effect on …
Improved December caps off another bleak year for manufacturers While December’s industrial production figures were generally more positive than previous months’, the key takeaway when looking back on last year is that tariffs have not triggered any …
Exporters are expanding into new markets Trade data released earlier this week show that China’s goods trade surplus continued to climb last year, hitting a record $1.2trn. (See Chart 1.) Relative to global GDP it is the largest trade surplus that any …
February may be too soon for another rate cut With almost every major data release suggesting disinflationary pressure is building we had thought the Bank of England would cut interest rates again from 3.75% now to 3.50% at its February meeting. But …
We learnt this week that the euro-zone’s household saving rate remained very high in Q3 last year. It fell a little, but only from 15.4% in Q3 to 15.1%, which left it at a high level by historical standards. For example, the average level during the 2010s …
EU natural gas prices fire up Developments in Iran were a key driver of rising energy prices at the start of the week. (See here and here .) But while oil prices fell back after President Trump opted against taking military action in Iran, EU natural gas …
US exports resilient, Russian oil imports elevated The December trade data released on Thursday showed that India’s goods deficit widened marginally to $25bn, from $24.5 in November. Export growth slowed to just 1.9% y/y, down from 19.4% in November. That …
