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Strong across the board The strong 83,100 rise in employment and the dip in the unemployment rate in June suggests the labour market is in better shape than we had feared, despite ongoing uncertainty around Canada’s trade relationship with the US. While …
11th July 2025
This page has been updated with additional analysis since first publication. Hangover continues, but signs of a recovery building The hangover from the burst of activity in Q1 ahead of rises in US tariffs and UK stamp charges continued in May with GDP …
Fed in wait-and-see mode The minutes of the mid-June FOMC meeting show most Fed officials content to wait and see what impact tariffs and other government policies had on inflation and the labour market before committing to either holding rates or cutting …
9th July 2025
Activity (very slowly) on the mend The rise in purchase mortgage applications in June supports our view that transactions will pick up in the second half of the year, even if they remain depressed by historical standards. Seasonally-adjusted mortgage …
RBNZ pauses easing cycle, but signals more cuts are coming While the RBNZ predictably left rates on hold today, it signalled that it was likely to loosen policy further as long as capacity pressures continued to ease. The RBNZ’s decision to leave the …
RBA still likely to cut rates much further The Reserve Bank of Australia defied widespread expectations of a rate cut at today’s meeting, but we still expect the Bank to cut rates by another 100bp over the coming year. The Bank’s decision to leave the …
8th July 2025
President Donald Trump has now released “letters” to 14 countries today, announcing that, unless they negotiate a deal over the next few weeks, he will impose reciprocal tariffs on those countries from August 1 st . In most cases, those tariffs that would …
7th July 2025
This page has been updated with additional analysis since first publication. House prices still struggling to regain momentum The stagnation in the Halifax house price index in June suggests that the housing market remains slow to recover from both the …
Lift in household spending not as strong as it seems The strong pickup in household spending in May is likely overstating the momentum behind private consumption. As a result, we don’t think it will stand in the way of the RBA loosening policy settings …
4th July 2025
Service sector not firing on all cylinders, but holding up The rebound in the ISM services index in June is broadly consistent with our view that economic growth will slow rather than collapse in the second half of the year. While the prices paid index …
3rd July 2025
Exports weaker than they look While the headline export number for May shows significant improvement from a grim April, this was mostly driven by volatile gold exports, where non-mineral product exports declined in the month. Exports to the US continued …
This page has been updated with additional analysis since first publication. Labour market healthy but gains again narrow The 147,000 gain in non-farm payrolls in June was reassuring after the fall in the ADP measure of employment reported yesterday. A …
Weak retail sales print locks in July cut for RBA With consumer spending remaining in the doldrums, there is a strong case for the RBA to cut rates faster and further than most are predicting. The 0.2% m/m rise in retail sales in May was markedly weaker …
2nd July 2025
Tariff cost pressures are still working their way through supply chains The modest rebound in the ISM headline index to 49.0 in June, from 48.5, should temper concerns of a factory sector collapse driven by tariffs and lingering trade uncertainty. While …
1st July 2025
We’ll be discussing how the government has influenced the UK economy in its first year in office in a 20-minute online Drop-In on at 3pm BST Thursday 3 rd July. (Register here . ) This page has been updated with additional analysis since first …
Firms are shrugging off trade tensions The Q2 Tankan survey showed that the economy is holding up well despite trade tensions, which supports our view that the Bank of Japan will resume its tightening cycle before the end of the year. The Tankan’s …
This page has been updated with additional analysis since first publication. We’ll be discussing how the government has influenced the UK economy in its first year in office. Register for in-person Roundtables at our London office on Tuesday 1 st July …
30th June 2025
Japanese firms not benefitting from trade war after all The subdued rise in industrial production in May means that firms were not benefitting from sky-high US tariffs on Chinese imports and their production forecasts point to continued weakness. The 0.5% …
Manufacturing slump points to weak second quarter The worse-than-expected 0.1% m/m contraction in GDP in April and equivalent sized estimated fall in May suggests that growth was flat at best in the second quarter, with a clear risk of a contraction. This …
27th June 2025
Inflation overshoot points to year-end rate hike The slowdown in headline inflation in Tokyo in June partly reflects the resumption of energy subsidies. With underlying inflation still running well ahead of the Bank of Japan’s forecasts, we still expect …
Qatar Airways-Boeing deal steals headlines but underlying data positive The surge in durable goods orders in May was mostly driven by the Qatar Airways-Boeing deal announced during President Trump’s visit, but the small rise in core orders shows there …
26th June 2025
This webpage has been updated with additional analysis since first publication. Elevated mortgage rates flatten recent momentum The large fall in new home sales in May cancels out all of the positivity of the past couple of months and serves as a valuable …
25th June 2025
Sharp fall in inflation likely to reinforce RBA’s dovish pivot With price pressures easing markedly in May, the RBA may well front-load monetary easing to a greater degree than we’re predicting. According to the monthly CPI indicator, headline inflation …
Consecutive house price declines raise risk of deeper correction After falling in March, the further 0.3% m/m decline in house prices in April raises the risk that prices are entering a sustained downturn, as the market finally buckles under the weight of …
24th June 2025
Fed’s Powell offers no hint of near-term rate cut Fed Chair Jerome Powell’s prepared semi-annual testimony to the House today offered no hint that a rate cut is coming any time soon. Despite the recent dovish comments from Trump-appointed Governors …
Core inflation easing, but probably still too high for imminent rate cuts The Bank’s preferred CPI-trim and CPI-median core measures rose by a smaller 0.21% m/m on average in May, with the three-month annualised rate declining to 3.0%, but that is …
At our in-person Roundtables in London on Tuesday 1 st July, clients can discuss with our economists and their peers how the government has influenced the UK economy in its first year in office. (Register here .) This page has been updated with additional …
23rd June 2025
PMIs bolster the case for BoJ to resume hiking before long With output expanding at a healthy pace and price pressures set to remain relatively firm, we continue to believe the Bank of Japan will deliver its next rate hike sooner than most anticipate. …
Consumers remain resilient to tariffs for now The rise in retail sales in April showed consumer spending remained resilient to tariffs at the start of the second quarter. That said, the grisly flash estimate for May suggests the economy will slow over the …
20th June 2025
We’re hosting in-person Roundtables in London on Tuesday 1st July, where clients can discuss with our economists and their peers how the government has influenced the economy in its first year in office. (Register here .) This page has been updated with …
At our in-person Roundtables in London on Tuesday 1 st July, clients can discuss with our economists and their peers how the government has influenced the economy in its first year in office. (Register here .) This page has been updated with additional …
Inflation overshoot will prompt October rate hike Inflation is set to overshoot the Bank of Japan’s forecasts by a wide margin and we expect the Bank to resume its tightening cycle before the end of the year. Headline inflation dropped from 3.6% to 3.5% …
Dovish hold supports our view of August cut and rates falling to 3.50% or below next year The Bank of England sounded a bit more dovish while leaving interest rates at 4.25% today, despite the extra upside risks to inflation from events in the Middle …
19th June 2025
RBA’s easing cycle has further to run Labour market and population data published today are sending mixed signals about capacity pressures in the Australian economy. Either way, they probably won’t prevent the RBA from cutting rates further in the months …
Despite strong bounce in Q1, economy not out of the woods yet Although New Zealand’s recovery gained traction last quarter, there are signs that the upshift in momentum will prove short-lived. Accordingly, we still think there’s a strong case for the RBNZ …
Fed splitting into two camps The Fed’s new interest rate projections still just about show a median of 50bp of cuts to its policy rate for this year, but it was very close. Back in March, 11 of 19 officials anticipated two 25bp cuts this year, with four …
18th June 2025
Clouds gathering over homebuilding The sharp drop in housing starts in May is not as bad as it looks, as it was entirely due to a steep decline in groundbreaking in the volatile multi-family sector, while unseasonably wet weather in the East seemed to …
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 19 th June. (Register here .) We're hosting in-person …
Japan's exports may well fall in earnest soon While US-bound exports kept falling in May, Japan’s overall exports were little changed and we estimate that net exports will be only be a small drag on Q2 GDP growth. The 1.7% annual fall in export values in …
Modest improvement in manufacturing output The modest decline in industrial production in May was driven by the volatile utilities sector; manufacturing and mining both increased, although admittedly only by a little. It is difficult to see a clear impact …
17th June 2025
Temporary drags mask underlying health The weakness in retail sales in May was mostly due to temporary drags from the end of tariff front-running and the unseasonably wet weather in the east of the country, so should reverse in June. Control group retail …
Bank of Japan will hike rates again before year-end The Bank of Japan decided to reduce its bond purchases at a slower speed from next year but gave little away in terms of the outlook for interest rates. With inflation set to surpass the Board’s …
Tariff and inflation fears ease substantially The stronger-than-expected June University of Michigan consumer sentiment index suggests that, despite ongoing policy uncertainty, consumers have become much less worried about both tariffs and inflation. …
13th June 2025
Add manufacturing to list of weak areas in the economy Manufacturing sales volumes plunged in April as the temporary boost to exports from tariff front-running unwound. Prospects for a meaningful rebound over the coming months look slim, with new orders …
A third target-consistent gain in core PCE deflator The softer-than-expected PPI data mean we now estimate that core PCE prices rose by 0.16% m/m in May, marking the third consecutive target-consistent gain. Much like for the CPI, there was only limited …
12th June 2025
This page has been updated with additional analysis since first publication. Economy coming back down to earth The fall in GDP in April supports our view that the strength of the economy in Q1 was a red herring and that GDP growth will be more subdued …
Trump 1 - 0 Economists The muted 0.1% m/m rise in the core CPI in May is not quite as good as it looks, with our preliminary estimate pointing to a 0.20% rise in the Fed’s preferred core PCE deflator ahead of the PPI data tomorrow. Nonetheless, the data …
11th June 2025
This page has been updated with additional analysis since first publication. Looser labour market driving softer wage pressures With payrolls plunging, the unemployment rate climbing and wage growth easing, today’s labour market release leaves us more …
10th June 2025
Labour market continuing to struggle The rise in employment in May was better than expected but, paired with recent data, still shows that the labour market is struggling. We are therefore sticking to our view that the Bank of Canada will cut interest …
6th June 2025
