This page has been updated with additional analysis since first publication. House prices continue to lose momentum The stagnation in Nationwide house prices in March suggests any boost from buyers rushing to complete home purchases ahead of the rise in …
1st April 2025
RBA’s easing cycle will be shallow While the RBA is becoming increasingly confident that inflation will sustainably return to target, we still expect its easing cycle to be shallow. The Bank’s decision to leave the cash rate unchanged at 4.10% was …
Consumer spending remains muted With consumers seemingly keeping spending on a tight leash, there is a risk that the RBA will loosen policy a bit more than we currently expect this cycle. The 0.2% m/m rise in retail sales values in February was a touch …
Tankan suggests economy is firing on all cylinders While business conditions were unchanged in the latest Tankan survey, the survey suggests that an increasingly overheating economy is creating strong price pressures. The Tankan’s headline measure of …
Likely fall in services inflation points to April cut National inflation figures released so far suggest that euro-zone headline inflation edged down in March. Services inflation probably also fell, which will please ECB officials. The fall in German …
31st March 2025
This page has been updated with additional analysis since first publication. Tentative signs households may be starting to spend a bit more freely February’s money and lending figures provide some green shoots of households starting to save less and spend …
Net lending to property rises to close to a 5-year high Net lending to property continued its recent run of strength in February, with total lending of £1.58bn up from £917m in January and the highest monthly figure since May 2020. As usual the rise was …
Services weakness holding back growth This report was first published on the 31 st March covering the official PMIs. We added commentary on the Caixin manufacturing PMI on 1 st April. The PMIs suggest that infrastructure spending is ramping up again and …
Solid rise in GDP not a sign of things to come The stronger-than-expected 0.4% m/m rise in GDP in January, along with an upward revision to the December outturn, shows the economy still had solid momentum at the start of this year. The weak February …
28th March 2025
Inflation too hot and spending too cold The third consecutive above-target gain in core PCE prices in February, of 0.37% m/m, reinforces our view that the Fed is unlikely to cut interest rates this year. Admittedly, officials are likely to be concerned by …
This publication has been updated with additional analysis Growth still weak, but price pressures remain The EC survey for March shows a deterioration in business and consumer sentiment in the euro-zone, consistent with GDP doing little more than stagnate …
This page has been updated with additional analysis since first publication. Bumper rise in retail sales suggests households may be spending more freely Today’s deluge of data confirmed that the economy was weak even before the full effects of higher …
Door is open for another 50bp cut in May The statement accompanying the Mexican central bank’s (Banxico’s) decision to lower its policy rate by another 50bp cut, to 9.00%, today suggests that growth concerns are rapidly overtaking inflation concerns. …
27th March 2025
Inflation rises again, more rate cuts on the cards The further rise in Brazil’s headline inflation rate to 5.3% y/y in the first half of March means that, with Copom shrugging off the weakness of the latest activity data and inflation likely to rise …
Norges Bank to cut very cautiously, if at all This morning’s decision by Norges Bank not to follow through with the rate cut that it signalled in January was no surprise. The Bank also revised its interest rate projection up. We forecast two interest rate …
Trump imposes 25% tariff on auto imports Following media reports at the start of this week that product-specific tariffs would be deferred, President Donald Trump has changed tack once again and announced that all finished motor vehicle imports will be …
26th March 2025
Easing cycle paused, and space for additional rate cuts narrows The Czech National Bank (CNB) left its policy rate on hold today, at 3.75%, and we think that the scope for further interest rate cuts this year has become more limited. We had previously …
For updated and more detailed analysis see here . Markets may be concerned about unfinished fiscal business Despite saying the “world is changing”, the Chancellor, Rachel Reeves, today just tinkered with fiscal policy. This left the impression that bigger …
Tariff effects help lift core orders Stronger orders for primary metals and fabricated metal products in February suggest that tariff effects helped to drive up core durable goods orders last month, while transportation orders also did better than we …
This page has been updated with additional analysis since first publication. Temporary dip in inflation may not help the BoE or Chancellor much The dip in CPI inflation from 3.0% in January to 2.8% in February (CE & consensus 2.9%, BoE 2.8%) is a bit of a …
Weakness in Australia’s underlying inflation points to May rate cut The weakness in underlying inflation means that the RBA will probably cut rates again 25bp in May and creates some downside risks to our forecast that the Bank will only cut rates to …
Small rebound in sales shows new home market still in good health After a large partly weather-driven fall in January, last month’s small rebound in new home sales was a little underwhelming but still illustrates that the market for new homes is in decent …
25th March 2025
House price inflation rises to five-month high The solid 0.5% m/m rise in house prices in January and accompanying pick-up in house price inflation to 4.7%, from 4.6%, confirms that the market has stopped cooling for now. While we still expect house price …
MNB on hold, high inflation to tie new governors hands The Hungarian central bank (MNB) left its base rate unchanged today, at 6.50%, and we think its easing cycle will remain on pause throughout 2025 as inflation remains stuck above target. Analysts have …
This publication has been updated with additional analysis. Sentiment improving but activity still weak still weak The Ifo Business Climate Index (BCI) and other surveys for March confirm that the prospect of fiscal stimulus is boosting sentiment in …
The further easing of core services inflation in Mexico in the first half of March combined with recent weak activity data paves the way for Banxico to deliver another 50bp cut at its meeting on Thursday. The headline rate was unchanged from the first …
24th March 2025
This page has been updated with additional analysis since first publication. Stubbornly high UK price pressures will add to BoE’s worries With the downside risks on activity shrinking and high price pressures being sustained, the Bank of England is …
Weak data to bolster calls for monetary easing The weaker-than-expected February retail sales data out of Poland suggests that the economy may have slowed a bit more sharply than we had been anticipating this quarter. While this won’t prompt the central …
This publication has been updated with additional analysis. Germany recovering but euro-zone still weak February’s Flash Composite PMI provides more evidence that, after expanding by only 0.1% in Q4, the euro-zone economy remains all but stagnant in Q1. …
Consumption outlook deteriorating The sharp drop in retail sales volumes in January is not a major concern, coming off a massive GST holiday-driven surge the month before. The worry is that it could signal what's to come, with the preliminary estimate …
21st March 2025
CBR sounds slightly less hawkish at it leaves rates on hold The decision by the Central Bank of Russia (CBR) to leave its policy rate on hold at 21.00% today was accompanied by somewhat less hawkish communications. While we doubt the CBR will cut interest …
This page has been updated with additional analysis since first publication. Gloomy news ahead of next week’s spring fiscal event Although it will have no impact on the fiscal update next week, the significant overshoot in borrowing in February highlights …
Strength in inflation suggests BoJ will hike rates again soon The strength in underlying inflation in February suggests that the Bank of Japan could hike rates at its next meeting in May but we still expect that uncertainty over the impact of US tariffs …
20th March 2025
Turkey’s central bank responds with a rate hike The decision by Turkey’s central bank (CBRT) to hike its overnight lending rate from 44% to 46% today suggests that policymakers have been spooked by the market volatility yesterday and are keen to reassure …
Unexpected rise not a sign of strength to come The small rise in existing home sales in February is unlikely to mark the start of a period of strength for buying activity given that purchase mortgage applications, which lead transactions by a month or …
For an updated and more detailed version of this analysis, click here . Committee less committed to collection of rate cuts The Bank of England was always going to continue its cut-hold-cut-hold pattern by leaving interest rates at 4.50% today but, in the …
Riksbank's next move likely to be a hike The Riksbank left both its policy rate and interest rate forecasts unchanged at today’s meeting, suggesting that monetary policy will be on hold for the foreseeable future. However, we think the Bank is likely to …
On hold throughout 2025 Taiwan’s central bank (CBC) left its main policy rate on hold today (at 2.0%), and is likely to leave rates unchanged throughout 2025. The decision to keep rates on hold came as no surprise and was correctly predicted by all 33 …
Today’s cut the last of the cycle for SNB We think today’s SNB rate cut, taking the policy rate from 0.5% to 0.25%, will be the last in this cycle. While inflation was very low in February, at just 0.3%, and may fall further in the coming months, …
This page has been updated with additional analysis since first publication. Labour market cooling rather collapsing With the labour market cooling rather than collapsing and wage growth stuck in the 5.5-6.0% range, we doubt the Bank of England will cut …
Australia’s labour market won’t loosen much further The labour market remained tight in February and we don’t expect it to loosen much further. The 52,800 fall in employment in February was much weaker than the analyst consensus of a 30,000 rise and …
New Zealand economy escapes recession As expected, the New Zealand economy came out of recession at the end of last year. As the impact of recent monetary loosening filters through, we expect the recovery to continue apace in the coming quarters. The 0.7% …
19th March 2025
Copom shrugs off growth concerns and flags another hike The Brazilian central bank made clear in the statement accompanying today’s 100bp interest rate hike (to 14.25%) that it’s far more concerned about high inflation than weakness in the economy. We now …
Fed continues to expect two rate cuts this year, while slowing QT to a crawl Although the FOMC stuck to its median projection for two interest rate cuts this year, some officials now share our view that further loosening is unlikely and we continue to …
The sharp drop in the Turkish lira on the news that the main opposition leader, Ekrem İmamoğlu, has been arrested will complicate the central bank’s task of bringing inflation down and raises big questions about the government’s ability to sustain …
Soft inflation keeps rate cut in play The weaker-than-expected South African inflation figure for February, of 3.2% y/y, keeps the door open for the Reserve Bank to lower the repo rate by 25bp (to 7.25%) at its meeting tomorrow. The outturn was unchanged …
Rates on hold, but further easing likely later in the year Bank Indonesia today left its main policy rate unchanged (at 5.75%) but hinted that further easing was likely later in the year. We are maintaining our view that the central bank will cut rates …
Bank of Japan will lift rates to 1.5% by 2027 The BoJ’s decision to leave policy settings unchanged today was widely anticipated but we still think that the Bank’s tightening cycle has much further to run. After having lifted its policy rate to 0.5% in …
Rise in output the calm before the tariff storm The rise in industrial production in February should further soothe concerns that the economy is on the cusp of recession. Nonetheless, with production supported by rebounds in motor vehicle and aerospace …
18th March 2025
Housing starts rebound but tariff concerns loom The sharp rebound in housing starts in February and healthy permit issuance shows that the housing market is still holding up well. Nonetheless, with tariff concerns continuing to weigh on homebuilders’ …
