Today’s weak US non-farm payrolls data has undone much of the dollar’s rally this week. While the DXY index is still on up the week, and ~2.5% stronger since the start of July, the increased risk of a recession in the US and the consequent drop in US …
1st August 2025
The Bank of Canada justified its decision to keep interest rates unchanged at 2.75% this week on three factors: persistent uncertainty, signs of economic resilience, and concerns about underlying inflation. In our initial reaction during an online …
Payrolls shocker The rift among the FOMC, with Governors Christopher Waller and Michelle Bowman this week voting against the decision to leave rates between 4.25% and 4.50% (see here ), will presumably have grown even wider following the July Employment …
Africa’s easing cycle continues The easing cycle in Sub-Saharan Africa was in full flow this week as central banks in Ghana, Mozambique and South Africa all delivered interest rate cuts. Nigeria will soon follow suit. Ghana moved first, slashing its …
Some reprieve on the tariff front Having found itself in Trump’s firing line a few weeks ago , this week’s tariffs announcements were better for much of Latin America than had been feared. Admittedly, that seems hard to square with President Trump’s …
Tariff agreement reduces downside risks for CEE US President Trump and EU Commission President von der Leyen closed a trade deal this week which will impose a 15% tariff on most EU goods to the US. This was broadly in line with what we had expected, and …
The surveys published this week have sent vastly different signals on the health of the economy in Q3. The backward-looking balance of the CBI’s Growth Indicator fell to a record-low in July (the series began in October 2003), barring the Global Financial …
Tariffs are now firmly back in the driver’s seat when it comes to commodity prices, with this week bringing fresh news on reciprocal, metals and energy tariffs. Arguably the most straightforward to digest was the confirmation of 50% copper tariffs. While …
Although European equities declined significantly this week, it seems unlikely that this is due to the US-EU trade agreement that was announced last Sunday and confirmed in the US Executive Order towards the end of the week. After all, the deal was in …
Trump tariffs – impact will be manageable for most Following a flurry of trade deals agreed over the past couple of weeks and a new Executive Order last night, from next Friday (US time) most countries in Asia will face tariffs of 15-25% on their exports …
25% US tariff on India may not be the endpoint President Trump’s latest executive order, issued yesterday, confirmed his threat from Wednesday that India will be hit by a 25% tariff. That puts India on a higher rate than many of its Asian peers. (See …
China wins and loses from new US tariffs Chinese exports will become more competitive in the US once the new reciprocal tariff rates on other countries come into force next Friday – duties on most other Asian economies are rising by 5-15%-pts while those …
Minimum wage set to rise the most on record The Bank of Japan sounded more optimistic about the outlook for inflation when it kept policy settings unchanged at its meeting this week. However, we still think that the Bank is underestimating the strength of …
Bank will cut further than most expect The Reserve Bank of Australia is likely to breathe a sigh of relief that its consternations about lingering price pressures in the economy didn’t come to pass. Indeed, as Deputy RBA Governor Andrew Hauser noted in a …
Electricity demand in Egypt broke records this week, shining the spotlight back on to the country’s energy landscape. A collapse in domestic gas output in recent years has increased Egypt’s reliance on imported gas and added to external strains. This …
31st July 2025
The US dollar is set to end the week lower against most other G10 currencies, with progress on US trade deals with Japan and Europe, a relatively hawkish ECB meeting, and continued headlines around Fed independence all contributing to downward pressure on …
25th July 2025
15% is the new 10% With a major tariff reset looming on August 1 st –when most countries’ rates will jump from the 10% baseline back to roughly “Liberation Day” levels – the Trump administration promised a slew of trade deals before the deadline. They now …
Here for a good deal, not a quick deal Little was divulged following the First Ministers’ meeting in Huntsville, Ontario this week, other than that officials appear to be in general agreement that Canada should prioritise a beneficial trade deal with the …
Cuts in the Andes, Copom to hold Next week will be a busy one for central banks across the region, with those in Brazil, Colombia, and Chile all set to hold meetings. In Colombia, the fall in inflation in June, to 4.8% y/y, combined with the recent …
Some (relatively) positive news on tariffs ... The tariff saga took another twist this week with the EU and US reported to be approaching an agreement which would see a US tariff of 15% applied to most EU goods. We commented on the implications for the EU …
Hydro project is a drop in the fiscal ocean A fanfare about work beginning on a huge hydropower project in Tibet sent infrastructure stocks soaring this week. The series of dams will produce 300TWh of electricity annually once complete – enough to power …
Public borrowing may have been bang in line with the Office for Budget Responsibility’s forecast for the first three months of the 2025/26 fiscal year. (See here .) But the underlying upward trend looks worrying. Having reached a cumulative total of …
The start of construction on the vast Motuo Hydropower Station in China has understandably got its fair share of media attention this week. When completed, the set of dams along the Yarlung Tsangpo river are expected to generate three times as much …
SA: subdued inflation, weak economy = rate cut The weak June inflation figure out of South Africa strengthens the case for the SARB to cut interest rates next week. And further out we think that rates will be lowered by more than the consensus and …
Reports this week suggest that the EU and US are on the brink of agreeing a trade deal with a 15% baseline tariff on US imports. ( See here. ) It’s hard to spin it as a good deal, but it would at least avoid much higher US tariffs and retaliation from the …
We will be holding an online Drop-In next week to discuss the implications of recent US trade deals for regional supply chains, global fracturing, economic growth, and financial markets across Asia. To register click here . Limited impact from …
We will be holding an online Drop-In next week to discuss the implications of recent US trade deals for regional supply chains, global fracturing, economic growth, and financial markets across Asia. To register click here . China’s hydropower project a …
Slow and steady The minutes of the RBA’s July meeting shed more light on the Bank’s surprise decision to leave rates on hold earlier this month. A majority of the Board believed it would be premature to lower the cash rate for a third time within the span …
Japan plays its hand well in US trade negotiations A turbulent week started with the loss of the ruling LDP/Komeito coalition’s majority in the House of Councillors in Sunday’s election . PM Ishiba pledged to stay on and with the Upper House election out …
Rise in Saudi public debt ratio has further to run Saudi government debt has risen sharply over the past decade and, while officials are already taking steps to tighten fiscal policy, we doubt that they will do enough to prevent it climbing further. A …
24th July 2025
Renewed concerns around the Trump administration’s attacks on the Fed’s independence have meant that while the US dollar is a touch stronger over the week as a whole, it is ending the week on the backfoot . Even if the president swiftly denied reports …
18th July 2025
Counter-tariffs pushing up prices Data released this week showed that headline inflation remained below the Bank of Canada’s 2% target in June for the third consecutive month. While that may seem like good news, it is mostly due to distortions created …
Nigeria’s bumpy disinflation could delay rate cuts Nigeria’s inflation slowed for a third consecutive month in June and, while real rates are firmly positive and the naira stable, underlying inflation dynamics remain concerning and suggest the CBN will …
We have not changed our view that inflation and interest rates will fall further than most expect. (See here and our UK Data Dashboard .) But the data released over the past week raises the chances that inflation will remain higher for longer and rates …
Signs of thaw, but risks remain A little over three weeks before the 90-day tariff pause agreed in Geneva is due to end, the US-China relationship is warming. Trump on Wednesday sounded positive about the prospects of an agreement on fentanyl – the …
CBRT may opt to tread more cautiously The big macroeconomic event in the region next week is the Turkish central bank (CBRT) meeting, at which it’s likely to resume its easing cycle. There is a wide range of forecasts as to the size of the interest rate …
Tariff impacts tangible but localised The June data released this week showed that, while tariff effects are crystallising in particular industries, broader impacts have so far been avoided. Both the CPI and PPI releases showed heightened price pressures …
301 investigation gives Brazil little wiggle room Actions and words from both the US and Brazilian governments this week make it increasingly difficult to see an off-ramp in which Brazil avoids the punitive 50% tariff that President Trump threatened last …
Attention returns to sanctions on Russia One of the key themes that developed in the oil market this week was the prospect of additional and tightening sanctions on the Russian energy sector. Indeed, the week began with President Trump threatening on …
The latest news on trade negotiations between European countries and the US are increasing concerns around future tariffs. US President Trump has said that a 200% tariff on pharmaceutical products and related goods will “probably” be announced by the 1st …
Indonesia joined Vietnam this week in securing a trade deal with the US. The deal, based on Trump’s Truth Social post, will see US imports from Indonesia subject to a 19% tariff (compared to a tariff of 32% announced on “Liberation Day” in April which was …
India wants better deal than Indonesia & Vietnam President Trump’s comment this week that a trade deal with India was “close” but that it would be along the “same line” as the one announced on Wednesday with Indonesia raises the prospect that India could …
But tariff uncertainty could still delay rate hikes The economic data released this week leave the case for tighter monetary policy firmly intact. For one thing, export volumes rebounded in June and were nearly as strong as they were in February. …
RBA can pivot back to an easing bias The ABS’ monthly labour force survey published yesterday increasingly suggests that the Australian labour market is going through something of a soft patch. Indeed, the modest rise in employment in June just barely …
IMF lays out Egypt’s path for next stage of reforms In the wake of the delay to Egypt’s latest IMF review, the Fund this week published its latest Article IV and ‘ Selected Key Issues ’ reports on the country. While the IMF reaffirmed its praise for the …
17th July 2025
The US dollar is ending the week a touch stronger as President Trump continues to ratchet up his tariff threats again and US interest rate expectations edge higher. As widely expected, the 9 th July deadline for the “pause” on the US’ reciprocal tariffs …
11th July 2025
Fiscal tightening to cause inflation spike in Romania Romania’s fiscal tightening measures will add to the country’s inflation problem in the near term, and we’ve significantly revised up our CPI forecast over the next year. While inflation may be lower …
Trump keeps South Africa in his tariff crosshairs South Africa was threatened with a 30% reciprocal tariff again and, while the economic hit should be manageable, the uneasy relationship with the US suggests that an even higher tariff rate remains a …
You've got mail Canada found itself among the unlucky recipients of a letter from President Donald Trump this week, in which a 35% tariff was threatened to come into effect from August 1 st unless more was done to stop cross-border fentanyl flows. Though …
Inflation picture becoming more benign The raft of June inflation figures released across the region this week were encouraging. Headline inflation fell in Mexico , Colombia and Chile (and by more than expected in the latter two) while inflation in Brazil …
