Filtered by Region: G10 Use setting G10
Visa approvals for temporary residents have picked up, which suggests that, rather than contracting as the government previously outlined, the population will continue to grow this year. This will keep upward pressure on labour force growth and we now …
5th June 2025
Trade deficit narrows dramatically, as tariffs end import surge The huge narrowing of the trade deficit in April was largely driven by a steep drop in pharmaceutical product and gold bullion imports, reversing their earlier surge as tariff front-running …
Reversal of tariff front-running sends deficit to record high The jump in the trade deficit to a record high in April was larger than expected as tariff front-running reversed with “Liberation Day” and Canadian exporters paused to make more of their …
Wage pressures showing signs of strengthening With base pay growth on a new upswing, we think the Bank of Japan will restart its hiking cycle before long. According to today’s preliminary estimate, growth in labour cash earnings remained unchanged at 2.3% …
The Bank of Canada avoided surprising markets by keeping its policy rate at 2.75% today, as it continues to wait to see the full impact of US trade policy on the economy. Nonetheless, the Bank confirmed that its bias remains toward loosening policy …
4th June 2025
We doubt Section 899 of the One Big Beautiful Bill that passed the House of Representatives in May will have the big negative effects on US asset markets that some seem to fear, even if it remains largely untouched in the Senate. To re-cap, Section 899 …
Tariffs causing problems for the service sector The surprise fall in the ISM services index for May suggests that tariff effects are weighing on activity outside of the manufacturing sector, but the Fed is likely to be more concerned by the further rise …
Rate cuts delayed, but still coming The Bank of Canada avoided surprising markets by keeping interest rates unchanged at 2.75% today, as it continues to wait to see what the full impact of uncertain US trade policy on the economy will be. The accompanying …
According to the measures of wage growth that we consider the most useful and the fundamentals of the recent easing in the demand for labour relative to the supply, it is only a matter of time before wage growth slows to rates that are more consistent …
We'll be discussing the outlook for UK fiscal policy and the wider economy shortly after the Chancellor's Spending Review is released in a 20-minute online Drop-In at 3pm BST on Wednesday 11th June. (Register here .) The strong start to the year shouldn’t …
GDP data put RBA between a rock and a hard place Although activity was off to a poor start in 2025, the persistent strength in unit labour cost growth will constrain the RBA’s ability to provide much policy support. The 0.2% q/q rise in real GDP in Q1 was …
The latest PMIs suggest that global industrial activity has weakened so far in Q2. Meanwhile, goods price pressures remain subdued in most countries apart from in the US, where tariffs already seem to be having an impact. The output component of the …
3rd June 2025
While this year’s minimum wage hike will be only slightly smaller than last year’s, it is unlikely to prevent a further slowdown in wage growth over the coming quarters. That said, with capacity pressures still elevated, we continue to believe that the …
RBA still wary of adopting an expansionary policy stance Although the RBA’s easing cycle has further to run, the Bank is unlikely to cut rates as far as markets are anticipating. The minutes of the RBA’s May meeting confirmed that the Board had considered …
To some extent, the persistent underperformance of US small-cap (SC) equities probably reflects lingering concerns about the effects of Donald Trump’s policies on the economy. But even if fears of a recession fade, we doubt US SC equities will fare better …
2nd June 2025
The suggestion that the Chancellor may be considering cutting 50,000 civil service job cuts wouldn’t weigh on employment growth much over the next few years. Only if the government were to cut public sector employment towards its post-austerity and …
This page has been updated with additional analysis since first publication. Further signs consumers are starting to spend a bit more freely April’s money and lending figures provided little indication that the US trade war and the deteriorating jobs …
This page has been updated with additional analysis since first publication. Soft patch for prices already over May’s 0.5% m/m increase in Nationwide house prices adds to the evidence that the recent soft patch for the housing market was a temporary blip …
Australian house prices edged up a notch in May, and leading indicators suggest they will gather further momentum over the coming months. However, with debt-servicing costs set to remain onerous despite the RBA’s rate cuts, the cyclical upswing is likely …
Court rulings leave trade policy in disarray Although this week’s court ruling – that President Trump doesn’t have the “unbounded authority” to impose universal tariffs on other countries – has been temporarily stayed, there is a fair chance that even …
30th May 2025
We have consistently argued that the influence of Trump’s tariffs on the UK economy would be modest. As a result, the impact on UK GDP of the eventual outcome of the US court ruling on the legality of the 10% universal tariff will probably also be small. …
A very brief reprieve The ruling by the US Court of International Trade this week (see here ), albeit quickly put on hold, raises the possibility that the US’ 25% fentanyl-related tariffs on non-USMCA compliant imports from Canada will soon be a thing of …
All-property capital values edged up by 0.1% in Q1, marking the first increase since mid-2022. Meanwhile, appraisal-based cap rates were flat after compressing by a slight margin in Q4 2024. We still believe appraisals have further to fall given the …
Fall in domestic demand could still persuade the Bank to cut Despite the upside surprise to first-quarter GDP growth, the contraction in domestic demand means we are sticking to our view that the Bank of Canada will cut interest rates again next week. The …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Europe is being buffeted by geopolitical and geoeconomic shifts but, …
Firms upbeat about production outlook The latest activity data suggest that if anything, Japan is benefitting from trade tensions. To be sure, industrial production declined in April, but output of motor vehicles rose despite the 25% US tariff on auto …
RBNZ will loosen policy further still As virtually everyone had expected, the RBNZ cut its Official Cash Rate from 3.5% to 3.25% at its meeting this Wednesday. However, the revelation that one member voted to leave rates unchanged came as a surprise to …
Pullback in retail sales complicates matters for the RBA Despite the ongoing slump in consumer spending, we’re not convinced the RBA will cut rates as aggressively as markets are anticipating. The 0.1% m/m fall in retail sales was a much weaker outturn …
Japan’s economy shrugging off trade tensions If anything, the April activity data suggest that Japan’s economy is benefitting from trade tensions, which bodes well for our view that the Bank of Japan will hike rates again soon. Taking industrial …
Strong inflation opens up chance of July rate hike The Tokyo CPI showed a further broad-based acceleration in inflation in inflation, which suggests that the Bank of Japan may hike even earlier than our current forecast of October. Headline inflation held …
The latest data confirm that the world economy got off to a weak start this year. World trade has been one bright spot, as firms attempt to front-run tariffs. But business surveys have softened, and falling consumer confidence bodes ill for domestic …
29th May 2025
U-turns on benefit and welfare spending, increased pressure to ramp up defence spending and higher borrowing costs have left the Chancellor, Rachel Reeves, in a sticky position. If she wishes to avoid a political backlash and/or an adverse reaction in the …
Despite a positive initial reaction in global stock markets to yesterday’s ruling by the US Court of International Trade (CIT), there is still plenty of uncertainty about future tariffs on US imports. So a really big boost to equities may not be on the …
Leading indicators suggest most of the recent weakness in housing demand and prices is due to the temporary influence of the change in stamp duty rather than any longer-lasting influence of the softer outlook for the UK economy. This lends support to our …
Although continued trade tensions have heightened economic uncertainty, they have had only a modest impact on consumer and business sentiment in the Antipodes. Indeed, we think the Australian economy will grow at around its trend rate over the coming …
We suspect most of the recent weakness in housing demand and prices is due to the temporary influence of the rise in stamp duty on 1st April rather than any longer-lasting influence from the softer outlook for the UK economy. This supports our view that a …
The recent substantial volatility in global sovereign bond markets hasn’t altered our view that in most cases 10-year government bond yields will end this year near, or below, their current levels. We also think corporate bonds will continue to do quite …
Court ruling adds another layer of uncertainty on Trump’s tariffs The ruling by the three-judge panel of the Federal Court of International Trade blocking President Trump’s reciprocal tariffs will presumably be appealed by the administration all the way …
Officials worried that tariff inflation boost could become persistent The minutes of the Fed’s early-May policy meeting were, on balance, slightly hawkish. In particular, “almost all participants commented on the risk that inflation could prove to be more …
28th May 2025
Summary of Deliberations from April meeting struck a dovish note despite Bank’s pause Labour market is weakening while upside risks to inflation have eased Bank set to cut policy rate to 2.5% despite market pricing to the contrary We suspect the Bank …
Muted PPI suggests core PCE inflation still on downward trend The March PPI data show the folly of relying too much on the CPI data. Our calculations suggest that, based on the combined inputs from PPI and CPI, core PCE prices increased by a more muted …
As was widely expected, the RBNZ cut its Official Cash rate by 25bp, to 3.25%, today. The revelation that the decision to cut was not a unanimous one has been interpreted as a hawkish signal by financial markets. However, we would put more emphasis on the …
RBNZ cuts by 25bp, signals further easing is likely With the RBNZ clearly concerned about the health of the economy, we continue to believe that its easing cycle has much further to run. The RBNZ’s decision to cut rates by 25bp, to 3.25%, at its meeting …
Hot CPI print will give the RBA pause for thought With underlying price pressures proving somewhat persistent, we're sticking to our view that the RBA won't cut rates as far as markets are anticipating. According to the monthly CPI indicator, headline …
The 10-year Treasury term premium, as estimated by ACM , rose to a more-than-decade high of ~0.9% last week amid renewed concerns about US fiscal policy. But while the premium remains far below the ~4% it topped in the early 1990s, for example, we doubt …
27th May 2025
Resilience of core orders likely to be temporary The rebound in core durable goods orders in April wraps up a month of solid activity data, underscoring that tariffs have yet to inflict the severe damage on the economy some had feared. Nonetheless, the …
The well-known quality issues with the UK’s labour market data might well extend to some of the other UK economic data. This matters as it could have a critical bearing on policy decisions and lead to economic growth and inflation that is either too high …
The bulk of the evidence suggests that the recent sharp slowdown in regular earnings growth is a statistical anomaly rather than genuine. With this year’s spring wage negotiations resulting in the fastest pay hikes in decades, we still expect the Bank of …
Although the détente in the trade war may provide some respite to the Chinese economy in the near term, we remain pessimistic about its longer run prospects. The slowdown in China will undoubtedly have negative spillovers for Australia’s mining sector, …
How concerning is underlying inflation? The removal of the carbon tax pushed headline inflation down to 1.7% in April, comfortably in the bottom half of the Bank of Canada’s 1% to 3% target range. Nonetheless, the acceleration of the Bank’s preferred …
23rd May 2025
