The latest RICS survey showed that overall sentiment in Asia-Pacific is weaker than in other regions, but that there is significant variance within the region. Japan and Australia stood out as clear leaders, while Hong Kong remained the laggard – a view …
1st August 2025
The latest RICS survey indicated that the recovery in occupier and investor demand in the euro-zone was muted in Q2. While the reduction in tariff uncertainty should support demand further ahead, the survey is consistent with our view that euro-zone …
31st July 2025
UK spending pledges still insufficient for net-zero The UK’s seventh round of Contracts for Difference (CfD) auctions is set to open next month and, ahead of that, the government has announced increases to the maximum guaranteed price, or strike price. By …
One key driver of the rise in gold-backed ETF holdings appears to be increased demand from institutional investment managers. Given the weaker relationship between gold prices and US TIPS yields, which arguably boosts gold’s attractiveness as a portfolio …
This quarterly Financial Risk Monitor includes commentary and analysis of our latest EM risk indicators. We’ll be discussing EM risk in a 20-minute online Drop-In at 10am EST/3pm BST on Wednesday 6th August. (Register here .) Currency risks stabilise …
The South African Reserve Bank’s decision to continue with its interest easing cycle today, with a 25bp cut to 7.00% was unsurprising, and the highlight of the meeting was Governor Kganyago’s announcement that the SARB will informally target the bottom of …
While occupier market trends were mixed, the Q2 RICS survey showed a distinct downturn in investment market sentiment, with investment enquiries – and particularly those from abroad – well down from the previous survey. This highlights both the …
The RICS survey showed that occupier demand was still weak in Q2, with firms reluctant to expand in the face of higher costs and an uncertain economic outlook. In line with that, rental and capital value expectations are subdued, with the former pointing …
While the Bank of Japan turned a touch more optimistic today, it still sees trade tensions as a major headwind. However, we still believe that policymakers are too pessimistic about the inflation outlook and expect the Bank to resume its tightening cycle …
Hong Kong’s office market has long demonstrated resilience in weathering economic storms, but the current downturn is unlike any cycle since at least the 1990s. Facing simultaneous structural and cyclical headwinds, values are set to grind lower for an …
Fed Chair Jerome Powell left open the possibility of a September rate cut in his comments following the FOMC’s July meeting, but put much more emphasis on the still solid labour market and stressed that “modestly restrictive” policy remains appropriate …
30th July 2025
Emerging Markets Capital Flows Monitor (Jul. 2025) …
While the Bank of Canada kept interest rates unchanged at 2.75% for a third consecutive meeting today, the communications showed policymakers placing greater emphasis on the downside risks to growth from tariffs than the upside risks to inflation, which …
Households are still saving an unusually large share of their incomes and the latest surveys suggest that the saving rate will remain high in the near term, weighing on consumption. And while we suspect that the saving rate will decline sooner or later, …
The readout from today’s Politburo meeting strikes a less dovish tone compared with the previous meeting on economic affairs back in April and stops short of committing to any additional monetary or fiscal support. It did leave the door open to more …
The JOLTS data for June show a labour market waiting in suspense for the Trump administration to settle on a final arsenal of country-specific tariffs. While the federal layoff rate remains roughly where it was when Trump first took office, this should …
29th July 2025
The continued rise in EM sovereign FX debt sales this year suggests that EM governments have accepted the need to issue at higher yields, but are doing so at shorter maturities than in the past. And despite some high-profile issuances, there’s no clear …
We spent last week in Beijing and Shanghai visiting clients. The mood in China was not as downbeat as a year ago and our sense is that many companies and residents have adapted to the new normal of slower growth. President Trump was widely perceived as …
The recovery in euro-zone investment paused in Q2 against a backdrop of trade policy and economic uncertainty. While the trade deal means some of that uncertainty has reduced, we expect that the recovery in investment in H2 will still be gradual given …
At 1.2% q/q, second quarter returns were roughly in line with expectations. But the data support our view that appraisals don’t fully reflect the drop in values needed for assets to transact. While a reckoning can’t be put off forever, this could prove to …
28th July 2025
There have been renewed calls for a wealth tax recently as a means of narrowing budget deficits. However, experience suggests that most countries would struggle to raise more than around 0.1% of GDP from such a tax. Moreover, the countries which are most …
The recent rout in superlong JGBs mainly reflected waning demand from within Japan. Although that trend may not reverse because it is partly structural, we doubt the slump will continue for four reasons. While superlong government bonds have typically had …
The trade agreement confirmed yesterday by Presidents Trump and von der Leyen could result in the average tariff on US imports from the EU rising from 1.2% last year to about 17%. We think this will reduce EU GDP by about 0.2%. While the deal has avoided …
Changes to clean energy tax credits in the One Big Beautiful Bill Act will slow the renewable rollout in the US and make it more challenging to meet the renewed upward trend in electricity demand. However, there are some silver linings that will keep …
24th July 2025
With the euro-zone economy holding up relatively well in the face of tariff uncertainty, inflation likely to stay close to the target and President Lagarde adopting a slightly more hawkish stance at today’s press conference, we think the ECB will leave …
Although a forecast global real estate return of sub-6% p.a. over the next decade appears disappointing, compared to other assets it stacks up well. We expect sub-4% total returns for both global government bonds and equities over our 10-year forecast. …
We think Colombia’s fragile fiscal position – which could get even worse ahead of next year’s election – and a likely deterioration in the current account deficit will cause the peso to fall by more than most currently anticipate, to 4,600/$ by end-2026 …
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 …
While China’s June trade data showed a pick-up in exports of rare earth elements (REEs), shipments remain well below pre-Liberation Day levels. A further warming of relations with the US could lead to more approvals being granted in the near-term, but …
23rd 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 …
Despite some question marks being cast over whether the eight OPEC+ producers unwinding voluntary are keeping pace with the increases in quotas, our assessment is that they have added supply to the market at a decent pace so far. Rather than proceeding …
US tariffs have hit South Africa’s auto sector hard, but the sector also faces deeper structural challenges, including weaker demand growth in key export markets and competition from Chinese producers. All of this reinforces the idea that structural …
Recent surveys of real estate lenders point to a continued improvement in the European commercial real estate lending environment. However, with refinancing still dominating lending activity, this is unlikely to provide a material boost to investment this …
US tariffs appear to have given renewed impetus to Chinese producers’ efforts to export to emerging markets, resulting in a widening trade surplus with the EM world in the first half of the year. But this is going to face growing headwinds, given the …
22nd July 2025
The rebasing exercise by Nigeria’s statistics office means that the economy is now estimated to be more than 30% larger than previously thought. While the national accounts data now better reflect the size and composition of the economy, it doesn’t change …
We held an online Drop-In session last week to discuss the outlook for equity, bond and currency markets. (See a recording here .) This Update answers several of the questions that we received. Tech/AI-driven equities are pushing the US equity markets …
We expect the divergence in performance between the best performing offices and the rest to persist through our forecast. This will see further capital value falls in average and poorer quality space, but presents an opportunity to achieve attractive …
The Q2 Bank Lending Survey, published this morning by the ECB, suggests that the economy is still growing at a decent pace. But this is entirely due to improving prospects for the housing sector. The survey suggests that business investment will remain …
Bleak sales and spending intentions captured by the Bank of Canada’s second-quarter business and consumer surveys are consistent with a sharp downturn in GDP growth. However, the surveys were carried out at a time of peak tariff uncertainty. Since then, …
21st July 2025
We think France’s government borrowing costs will rise above those of Italy before long. This may seem surprising in light of Italy’s higher debt burden and lower trend growth rate, but it reflects the fact that France’s debt dynamics are worse and its …
President Trump’s recent tariff threats have led to renewed impetus among Mexican and Brazilian authorities to boost trade ties between Latin America’s two largest two economies – and reduce their reliance on the US. But while the tariff threat may …
The US-China trade truce and rebound in US demand helped lift China’s New Three export volumes to a record high in June. Although the strength in green exports is vulnerable to renewed tariff escalation between China and the US, China’s green exports to …
While trade and overcapacity related risks remain, we see a bright outlook for China’s equities. But we expect a more challenging path for its bonds and currency over the remainder of the year. Until recently, China’s stock market had been under quite a …
With Japan’s ruling coalition losing its majority in the Upper House, fiscal policy may be loosened over the coming months. However, we think that the outlook for monetary policy will be a more important driver of long-term bond yields than perceived …
Low vacancy and limited new completions this year will see Rotterdam rent growth continue to outperform Amsterdam over 2025, before supply picks up substantially in 2026. That will bring rent growth rates in the two markets back into line later in the …
18th July 2025
Regulators will be pleased with the increase in the number of takeover bids in the European banking sector over the past couple of years as they would like the EU to have fewer but larger and more competitive banks. However, interventions by several …
Taiwan’s gridlocked government could secure a legislative majority and freedom to enact its policy goals if recall votes next week go its way. The immediate implications for the economy are limited – inflation could end up a little lower. But a concerted …
The current narrow spread between property yields and financing costs, combined with bullish lender capital value expectations, might be seen as an indication that a credit cycle is brewing and capital values are about to take-off. But other market …
Indonesia’s government is cutting spending and considering new taxes as it tries to prevent the budget deficit breaching the 3% of GDP legal limit. An alternative for President Prabowo Subianto would be to ditch, or at least find a workaround for, the …
This week’s Central Urban Work Conference didn’t deliver the revival of the shantytown redevelopment scheme that helped stabilise China’s housing market a decade ago and that some had been hoping for. Policymakers appear to have concluded that any …
