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This Update answers several key questions on critical minerals and the economic implications. In short, there is no quick fix to securing access to minerals given the extent of China’s advantage across the value chain. And while volatile mineral prices …
30th April 2025
President Trump’s first 100 days in office have brought substantial shifts in US policy. The next 100 will start to reveal whether his presidency is causing a realignment of the global economy. There are two key questions: will most countries be able to …
29th April 2025
President Donald Trump’s first 100 days back in office has been characterised by radical changes to trade policy, immigration and the Federal government, all implemented by an unprecedented use of executive power. In the second 100 days, we expect the …
The recent reduction in equity market volatility has reversed most of the tightening in our market-based narrow Financial Conditions Indices for advanced economies. Our broad FCIs, which also incorporate information on interest rates and lending criteria …
28th April 2025
The latest flash PMIs suggest that tariffs and trade policy uncertainty weighed on activity and confidence in most DMs at the start of Q2 and boosted price pressures in the US. Our estimate of the weighted average of the flash composite output PMIs for …
23rd April 2025
The latest sell-off in equities is still a long way from the scale of those market corrections which coincided with recessions in the past. As things stand, the ~14% fall in the S&P 500 since February is unlikely to have notable negative implications for …
17th April 2025
President Trump’s trade war has created material downside risks for the global economy. Our forecasts assume that tariffs on most countries outside China will stay at 10% and retaliation by other governments will be moderate. In this scenario, global GDP …
10th April 2025
Clinton adviser James Carville famously quipped that he would like to be reincarnated as the bond market but, as President Donald Trump is now finding out, the equity market can be pretty intimidating too, with the S&P 500 down by more than 10% since his …
6th April 2025
China has responded to US tariffs with an additional 34% tariff on all US goods, the most sweeping it has ever imposed. Some US companies have also been added to China’s unreliable entities list and export controls have been expanded. This is an …
4th April 2025
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
President Donald Trump’s country-specific reciprocal tariffs turned out to be bigger than expected, with our calculations pointing to an import-weighted average tariff of 15.0%. If, as the Executive Order suggests, the 25% product-specific tariffs already …
2nd April 2025
The latest PMIs suggest that global industry is heading into Q2 on a weaker footing. Meanwhile, price pressures accelerated sharply in the US but generally eased elsewhere. The output component of the global manufacturing PMI fell to 50.5 in March from …
1st April 2025
The US would have to exert a lot of pressure to coerce most major countries into putting large tariffs on goods from China . Curtailing trade with China would have an economic cost and even countries that have closer economic ties with the US would still …
31st March 2025
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
27th March 2025
Because the concept of ‘reciprocal tariffs’ is merely a cover for the White House to impose whatever tariffs it likes, they pose a potentially considerable threat to world trade. This Update provides answers to ten questions regarding what we know, as …
25th March 2025
The latest flash PMIs suggest that while economic activity may have picked up a bit in advanced economies towards the end of Q1, the outlook remains fairly bleak. And while inflation seems to finally be receding in the euro-zone, price pressures remain …
24th March 2025
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
4th March 2025
President Donald Trump’s has claimed that there is “no room left’ for Canada and Mexico to avoid the imposition of 25% across-the-board tariffs at midnight tonight and he has reportedly signed a separate Executive Order raising the tariff rate on Chinese …
3rd March 2025
The latest PMIs suggest that global industrial activity gained some momentum in February. But with more US tariffs on manufactured goods likely to come into force in the coming months, any rebound in industrial activity could prove short-lived. Meanwhile, …
President Trump’s attempts to reset relations with Russia have led some to suggest that he may be attempting to break apart the Sino-Russian alliance as Nixon did in the early 1970s (although in Nixon’s case, by reaching out to China). But while this may …
27th February 2025
Could uncertainty weigh on the global economy? Instead of clearing up the uncertainty about the direction of US economic policy, Donald Trump’s victory in last November’s presidential election has only magnified it, with threats of massive punitive …
This Update answers some key questions on the recently agreed US-Ukraine minerals deal. In short, estimates of Ukraine’s mineral wealth seem to be overblown and the deal suggests that US support for Ukraine under Trump is likely to come with strings …
26th February 2025
If the Trump administration pursues a reciprocal tariff strategy rather than a 10% universal tariff, then it could result in a smaller rise in the overall effective tariff rate than we have assumed. But while most DMs would come out relatively unscathed, …
13th February 2025
The direct impact on the global economy of President Trump’s latest proposed tariffs would be small since steel and aluminium account for a very small share of world trade. Canada’s economy is relatively exposed and it is likely that US steel prices would …
10th February 2025
We held an online Drop-In session last week to discuss the outlook for interest rates in major advanced economies as the Fed hit the pause button while the ECB cut again. (See a recording here .) The key message was that the threat of US tariffs and the …
4th February 2025
Trump hits Canada, China & Mexico with tariffs President Donald Trump’s decision to impose 25% tariffs on Canada and Mexico and an additional 10% tariff on China from this coming Tuesday, (with the only partial exemption for Canadian energy imports that …
2nd February 2025
This Update answers some key questions about the likely implications of the US imposing 25% tariffs against Canada and Mexico. Our current forecasts are based on the assumption of a 10% universal tariff and hence growing speculation about more aggressive …
27th January 2025
At face value, the latest batch of flash PMIs suggest that economic activity remained weak in Europe at the start of the year and lost some momentum in the US. Meanwhile, price pressures seem to be increasing everywhere, meaning that most central banks …
24th January 2025
When central bankers give guidance on likely interest rates changes in the next month or two, it’s probably best to believe them. But experience shows that banks’ own interest rate forecasts are very unreliable beyond three to six months in the future. …
23rd January 2025
President Trump’s threats to retake ownership of the Panama Canal reflects its importance for US trade and the country’s strategic interests. It’s possible that these threats are simply another attempt to gain concessions, such as lower fees charged to …
The ceasefire reportedly agreed between Israel and Hamas is likely to have significant consequences for some countries in the region, notably Israel itself as well as Jordan and Egypt. But the possible disinflationary impact for the rest of the world via …
15th January 2025
If sustained, rising bond yields add to downside risks to economic growth. The potential direct effects on real activity are greatest in the US. But higher yields in other DMs could limit how far borrowing costs in the private sector fall and force the …
There is already some evidence of US importers increasing orders, at least for goods from China, before Trump’s proposed tariffs come into effect. We think this may continue in the next few months, and could broaden out to imports from other countries …
The Cold War was defined by geopolitical blocs – the Soviet or Eastern bloc against the Western bloc. Geopolitics retreated with the collapse of the Soviet Union. The period from the early-1990s to the early-2010s was instead an era of globalisation: most …
7th January 2025
The manufacturing PMIs overstated the weakness of industrial activity in 2024 but, at face value, their decline throughout most of the world in December suggests that the sector has entered 2025 on a weak footing. While price indices rose, supply chain …
2nd January 2025
Donald Trump’s policies will be a net drag on US GDP growth over the next couple of years, but we doubt that his re-election will prevent the US from remaining the world’s pre-eminent global economy over the coming decades. That said, economic strength is …
19th December 2024
The latest batch of PMIs suggests that the US economy is growing strongly while Europe is stagnating or contracting. The US economy is no doubt growing more strongly than its advanced economy peers heading into 2025, but the PMIs are probably overstating …
16th December 2024
The declaration of martial law by Korea’s president is an extraordinary step that seems likely to trigger either the suspension of Constitutional democracy in Korea or the president’s own rapid impeachment and removal. For investors the key question is …
3rd December 2024
The latest PMIs show that while China’s manufacturing sector is benefiting from a fiscal boost, industry in most of the rest of the world continues to struggle. With demand weak and little disruption on the supply side, indicators of goods price pressures …
2nd December 2024
We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. What are Trump’s motives for threatening tariffs and will he follow through? Trump has spoken about using …
29th November 2024
The economic impact of the Israel-Hezbollah ceasefire hinges on whether the deal holds and whether it sets the stage for a broader de-escalation of the regional conflict. If it does, that would allow Lebanon’s shattered economy to recover and ease fiscal …
27th November 2024
President-elect Donald Trump’s first threatened tariffs since the election are designed to extract concessions on drug trafficking and illegal border crossings, which means it may be possible for the countries targeted – Canada, Mexico and China – to head …
26th November 2024
The latest flash PMIs suggest that while industry continues to struggle across advanced economies, services activity is now slowing in Europe too. While reduced political uncertainty seems to have lifted business sentiment in the US, the PMIs suggest that …
22nd November 2024
The experience of the first Trump administration suggests that other countries will retaliate to the imposition of new US tariffs but in a way that is measured and minimises the risk of escalating tensions with Washington. The imposition of …
20th November 2024
Artificial intelligence (AI) is still not being used very widely outside of the ICT sector. But we remain confident that, in time, it has the potential to be used across all sectors and industries. Surveys of firms in the US and EU show that AI usage is …
19th November 2024
While the latest PMIs suggest that global industry started Q4 on a slightly better footing, the outlook for the manufacturing sector remains poor, especially in advanced economies. Meanwhile, although the big fall in DM goods inflation is now behind us, …
4th November 2024
We expect interest rates to be cut to around the equilibrium of 3% or so in the US, UK and Australia. But rates in the euro-zone and Canada seem likely to fall below their equilibria next year, troughing at 1.5% and 2%, respectively. This judgement …
The latest flash PMIs suggest that GDP growth got off to a weak start in Q4 in most major advanced economies. The surveys also imply a slowdown in both services activity and employment growth in October, meaning that the ECB and Bank of England may up the …
24th October 2024
We held online Drop-In sessions this week to discuss how we factor the US election into our thinking on the macro and market outlook for the US and other parts of the world. See here for a recording of the session focused on the US and here for the rest …
We may learn more about the size and structure of China’s fiscal package over the next couple of weeks, but based on what we know the impact on advanced economies will probably be small. The bigger global story is that even if the package is much bigger …
16th October 2024
