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The latest PMIs suggest that global industrial activity lost some momentum at the start of Q3 and will probably weaken further from here. The output component of the global manufacturing PMI fell to 49.7 in July from 51.3 in June, which at face value …
1st August 2025
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 …
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 …
24th July 2025
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 …
23rd July 2025
In this Update, we answer the key questions about what stablecoins are, whether they will become more widely used and what implications they have for the US Treasury market. What are stablecoins? Stablecoins are a type of cryptocurrency, whose value is …
8th July 2025
Vietnam has had one of the weakest hands to play in its trade negotiations with the US. If it is confirmed that it has agreed to a 20% tariff, this isn’t a template that other countries will feel they have to follow. Instead, the key lesson for other …
2nd July 2025
Given the limited progress in concluding trade negotiations since Liberation Day, there is a risk that huge tariffs will be imposed on 9 th July after the 90-day pause expires. We suspect that further last-minute concessions will be made to permit …
The latest PMIs suggest that while global industrial activity gained some momentum at the end of Q2, this will probably prove short lived. Meanwhile, the surveys continue to suggest that tariffs are contributing to strong price pressures in the US, while …
1st July 2025
A number of AI-linked redundancies have hit the headlines recently, reigniting fears that the adoption of AI will lead to a surge in unemployment. We continue to think that fears of a big long-term rise in “technological unemployment” are misplaced. While …
30th June 2025
Most major DMs need to shrink their primary budget deficits significantly and most will find it hard to do so. This will exacerbate growing worries about fiscal sustainability. The US and France have most to do. Government deficits in the major DMs remain …
26th June 2025
This Update answers five key questions about a potential “closure” of the Strait of Hormuz and the potential impacts on global energy markets from any attempt to close the waterway. As it stands, it is arguably not in Iran’s best interests to close the …
23rd June 2025
As time marches on, the once distant threat of demographic pressures for many countries, especially those in Europe, is fast becoming a reality. This adds to the other pressures on the public finances, such as higher defence spending, and increases the …
20th June 2025
Oil prices could feasibly surge to $130-150pb were hostilities between Israel and Iran to escalate in a way that resulted in major disruption to Middle Eastern energy exports and/or shipping through the Strait of Hormuz. However, so long as the conflict …
18th June 2025
This Update outlines potential outcomes of the Iran-Israel conflict and teases out the implications for the region, the global economy and commodity and financial markets. One point that emerges is that an escalation of the conflict still leaves multiple …
The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
13th June 2025
President Trump’s claim that China has agreed to supply the US with “ANY NECESSARY RARE EARTHS… UP FRONT” might seem to draw a line under concerns about supply shortages and production shutdowns. But restrictions could be dialled back up. And as we set …
12th June 2025
A deal with China is done, according to President Trump, but its scope seems to be limited to easing some recent non-tariff restrictions, including China’s rare earth export controls. The wider trade and economic issues that were supposed to be the focus …
11th June 2025
Trade policy uncertainty has damaged investment intentions in the US, Canada, Mexico and South East Asia. But intentions elsewhere have held up better and investment growth itself has yet to falter. We suspect that ongoing uncertainty will act as a drag …
4th June 2025
The latest PMIs suggest that global industrial activity has weakened so far in Q2. Meanwhile, goods price pressures remain subdued in most countries apart from in the US, where tariffs already seem to be having an impact. The output component of the …
3rd June 2025
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
29th May 2025
The latest flash PMIs point to weak activity and a softening of price pressures in advanced economies outside the US. But the surveys suggest that tariffs are already having an inflationary impact in the US. Our estimate of the weighted average of the …
22nd May 2025
The recent climbdown has left the effective US tariff rate on the rest of the world at around 15% as opposed to the 27% which was threatened at the height of this year’s trade war. While this is still the highest since the 1930s, it is unlikely to cause a …
13th May 2025
Global Trade Stress Monitor …
The US and China have each suspended for 90 days all but 10% of their Liberation Day tariffs and cancelled other retaliatory tariffs. This is a substantial de-escalation. However, the US still has much higher tariffs on China than on other countries and …
12th May 2025
Q1 GDP data showed that most of the world’s economies were still growing at a decent pace ahead of the main tariff hikes and several were boosted by front-running. Consumer and business confidence have deteriorated since then, but there is limited …
8th May 2025
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. The deal may provide more US support for Ukraine in peace talks, but Russia and Ukraine remain …
1st May 2025
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 …
26th February 2025
Note: This report was first published on 25th February following the Trump Administration's imposition of 20% fentanyl tariffs on China. As of 29th July, US tariffs on Chinese goods are now at 40%. President Trump has signalled that he is open to the …
25th 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
