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 …
31st July 2025
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 …
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 …
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 …
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 page has been updated with additional analysis since first publication. Domestic weakness weighing on growth The official PMIs suggest that China’s economy lost some momentum in July, with slower growth across manufacturing, services and …
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
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 …
Rates unchanged but slower growth beginning to raise concern The Bank of Canada kept interest rates unchanged at 2.75% for a third consecutive meeting today as it awaits greater clarity over the country’s future trading terms with the US. The …
The 25% tariff that President Trump has announced will be applied to imports from India starting Friday would undermine India’s attractiveness as an alternative manufacturing hub to China, if it proved permanent. But bilateral negotiations are continuing, …
Swings in net trade mask slower underlying growth The 3.0% annualised gain in second-quarter GDP overstates the economy’s underlying strength, as it was largely driven by a 30% slump in imports as pre-tariff stockpiling unwound. The more worrying …
Growth rebounds despite tariffs The stronger-than-expected 0.7% q/q expansion in Mexico’s GDP suggests that the economy is weathering the tariff storm surprisingly well. While we don’t think this marks the start to a sustained pick-up in growth, the …
Sentiment weakens, but points to robust growth The EC’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional GDP growth maintained a moderate pace, at 2.0-2.5% y/y, at the start of Q3. The prices components of the …
Economy resilient to tariffs so far, but growth will be weak in H2 The slowdown in euro-zone GDP growth in Q2 came as no surprise as the boost from tariff front-running waned. We expect growth to remain weak in the second half of the year. The 0.1% …
Euro-zone GDP to have slowed sharply in Q2 National data available so far suggests that euro-zone GDP growth slowed from 0.6% q/q in Q1 to either 0.1% or 0.0% in Q2, in part due to the reversal of tariff front-running. (Our projection was 0.2%.) GDP …
Central Europe holding up fairly well amid US tariffs The Q2 GDP data released out of Hungary and Czechia confirmed that both economies have held up reasonably well since the introduction of US tariffs in April. With the EU-US trade deal likely to deal …
Progress on disinflation will pave the way for an August cut With underlying inflation inching closer towards the mid-point of the RBA’s 2-3% target, the Board should have no qualms about handing down a 25bp cut next month. And with activity still weak …
MAS hold today likely to be a pause, not an end, to the easing cycle Singapore’s central bank kept monetary policy settings unchanged today but with inflation set to remain well below target and the economy likely to weaken, we continue to expect further …
House prices still struggling The second consecutive 0.3% m/m fall in house prices in May suggests that the market is still struggling to find balance under the weight of near-7% mortgages, in turn presenting a risk to our view that prices will soon …
29th July 2025
Net lending to property rises to 17-year high Net lending to commercial property is showing no signs of slowing down, with a total of £2bn advanced in June. And in the three months to June, net lending totalled £5.6bn, the highest amount since 2008. Both …
This page has been updated with additional analysis since first publication. We’ll be discussing the outlook for Bank of England, Fed and ECB policy in a 20-minute online Drop-In at 3pm BST on Thursday 31 st July. (Register here .) Households becoming …
Signs of resilience underneath the headline weakness Ignore the large 9.3% m/m drop in durable goods orders in June, which reflects a reversal of May’s surge of aircraft orders from the Qatar Airways Boeing deal announced during President Trump's visit to …
25th July 2025
Copom to hold next week The stable Brazilian mid-month inflation reading for July (of 5.3% y/y), signs that underlying core inflation is easing, and the resilience of the real all but confirm that Copom won’t hike rates again at its meeting next week. The …
CBR steps up easing as economy slows The decision by the Central Bank of Russia (CBR) to accelerate it is monetary easing cycle today with a 200bp cut to its policy rate, to 18.00%, signals that policymakers are becoming more concerned about the slowing …
German economy resilient to tariffs, but activity still weak The Ifo survey for July confirms that the German economy has been resilient to tariffs so far but that underlying growth remains weak. With tariffs likely to weigh on activity even if a EU-US …
This page has been updated with additional analysis since first publication. We’ll be discussing the outlook for Bank of England, Fed and ECB policy in a 20-minute online Drop-In at 3pm BST on Thursday 31 st July. (Register here .) Disappointing end to Q2 …
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 …
24th July 2025
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 …
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 …
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
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 …
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. …
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 …
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 …
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 …
22nd July 2025
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 …
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 …
RBNZ to cut further as inflation remains subdued With underlying price pressures remaining benign, the RBNZ is likely to loosen policy a bit further than most are anticipating. The 0.5% q/q rise in consumer prices last quarter was a touch softer than the …
21st July 2025
Sentiment remains weak but improving The small rise in the University of Michigan consumer sentiment index in July and further drop-back in inflation expectations shows that, while overall confidence remains weak, households are less worried than they …
18th July 2025
Overall outlook remains poor The pick-up in housing starts in June is less encouraging than first appears, as it is narrowly concentrated in both the volatile multifamily sector, and in the Northeast of the country. Single-family housing starts declined …
Broad based softening in growth likely GDP growth in Malaysia picked up during the second quarter but we expect this strength to fade and continue to expect the central bank to cut interest rates later this year. According to the advanced estimate …
