The main theme running through the Bank of Canada’s latest quarterly business and consumer surveys is uncertainty, with CUSMA renegotiations on the horizon. This supports our view that exports and business investment will grow only slowly, limiting the …
20th October 2025
Given that the EU has already largely discontinued imports of Russian oil and pipeline natural gas, the acceleration of its pledge to completely shift away from Russian energy is unlikely have significant implications for global energy markets. In the LNG …
The price of gold has arguably risen so far above ‘fair’ value that it might come crashing down soon. Imagine gold had the one and only property of being a perfect store of value. In that case, its price would simply rise over time with the general level …
Overview – While slightly lower borrowing costs have boosted the near - term outlook, the decline has not been large enough to meaningfully improve housing affordability. In addition, we believe that market pricing overstates the extent to which the Fed …
The emergence of DeepSeek, and BYD’s recent advances in EVs, have elevated awareness of China’s strength in innovation. For China’s leadership, they are also encouraging signs of success for a longstanding-strategy that, unusually for an emerging economy, …
Our new CE Capital Value Lead Indicator for the euro-zone is consistent with our latest forecast view that prime all-property capital value growth will slow to below 5% y/y by year-end. We have recently introduced proprietary CE leading indicators for …
One of the more dispiriting aspects of the US–China trade war is the insistence from both Washington and Beijing that they are “winning.” The truth, of course, is that no one wins a trade war. Yet the selective – and often dubious – data used to make …
China’s green technology exports accelerated in year-on-year terms in September and were close to record high levels. Despite the risks to exports from new rare earth controls and tariffs, the former appears narrow in scope and won’t affect downstream …
We think it is just a matter of time before the SNB returns to negative policy rates as inflation is close to zero and geopolitical risks may put upward pressure on the franc. But negative rates will not make a reappearance elsewhere because inflation, …
Growth becoming even more dependent on exports Headline GDP growth fell to its lowest in a year last quarter. But we think the figures still overstate the pace of economic expansion by at least 1.0%-pts. The September activity data were mixed – they …
RBNZ will look past pickup in CPI inflation Although headline inflation rose to the top of the RBNZ’s 1-3% target band last quarter, the Bank will put more emphasis on the fact that core inflation remained well-behaved. Accordingly, we still expect the …
19th October 2025
While the Employment Report – and, in its absence, ADP’s alternative estimate – has shown private payrolls growth slowing to a crawl, surveys of firms’ hiring intentions point to an incipient turnaround. September’s NFIB Jobs Report shows firms’ hiring …
17th October 2025
Although the dramatic fall in the share prices of US regional banks has sparked memories of the 2023 mini banking crisis, the backdrop is very different this time. We don’t think these jitters are likely to prevent the stock market rallying for long. The …
Bailout with strings attached Comments from US President Trump this week that if Milei “loses, we are not going to be generous with Argentina” highlight just how much is at stake at the mid-term elections on 26 th October. (We’ll be discussing the outcome …
The slump in the CFIB Business Barometer this month leaves it consistent with a renewed decline in GDP. With firms’ inflation expectations under control, that adds weight to our view that the Bank of Canada will be forced to cut interest rates by more …
View all of our FX forecasts and related analysis on our new interactive FX dashboard . The dollar has fallen back a bit this week amid renewed US-China trade tensions and, over the past day or two, jitters around US regional banks. Risk sentiment has …
We’re hosting a special in-person roundtable event at our London office on Wednesday 12th November to discuss if the Chancellor’s second Budget on 26th November will be as big and as bad for the economy as her first, and if it will dampen or ignite the …
OPEC+ wave of supply will fully hit prices soon Oil prices came under heavy pressure this week as US-China trade tensions heated up, the IEA revised up its estimates for a market surplus, and President Trump had a “ productive ” conversation with …
In just a few days, US–China relations have taken a troubling turn. How did we go from the goodwill of the London and Madrid bilaterals to the current war of words, the threats and the counter-threats? Is this simply pre-APEC brinkmanship, or the start of …
The deadline for governments to submit their 2026 fiscal plans to the European Commission passed this week, and the data so far point to a moderate loosening of fiscal policy in the euro-zone as a whole, largely due to Germany’s spending splurge. But we …
The surge in net lending by banks to commercial property firms may in part reflect borrowers being forced to refinance loans on buildings they have been unable to sell. But in contrast to the GFC, when net lending also initially surged as loans weren’t …
Gaza ceasefire holding, but path ahead looks fragile The ceasefire between Israel and Hamas remained intact this week, but the road to a lasting peace looks fragile. Issues remain over the return of deceased hostages to Israel. Meanwhile, the full …
Death of Kenya’s political titan threatens instability The passing this week of Raila Odinga, a prominent politician in Kenya, raises important questions about the country’s political environment both now and in the run-up to the elections in 2027. …
US-China trade back in the spotlight It’s been a hectic week for US-China trade relations. To recap, late last week China announced a series of new trade restrictions on the US, including an expansion of its export controls on rare earths . While that was …
Food inflation in the euro-zone has picked up this year but we think that it will fall back in 2026. This would reinforce the disinflation that we expect from lower energy prices and slower wage growth. Food and non-alcoholic drinks have a weight of about …
Where will benefit from fresh China-US tensions Relations between the US and China have deteriorated sharply in recent weeks, with President Trump threatening to impose an additional 100% tariff on Chinese imports in response to Beijing’s move to tighten …
Don’t rush to conclusions on Russian oil purchases President Trump’s comments this week that Prime Minister Modi has pledged to stop buying oil from Russia initially led to a c.1% rise in global oil prices, which was quickly reversed after India’s …
Economy likely to cool, central bank set to loosen policy Malaysia’s economy accelerated in the third quarter but we expect growth to soften in the coming quarters which, alongside low inflation, should add to the case for further monetary easing this …
Case for further easing remains intact The messaging from the RBA this week would suggest that it is in a bit of a hawkish mood. For instance, the minutes of the September meeting put considerable emphasis on upside risks to the inflation outlook. …
Takaichi still set to become Prime Minister In its latest World Economic Outlook released this week, the IMF revised up its estimate of Japan’s budget deficit for 2024 from 2.9% of GDP to 1.5%, which brought it in line with our-long standing estimate . …
We think after a period of sustained outperformance, total returns in high-yielding EM currencies relative to funding currencies will be weaker in the next couple of years. In particular, we forecast for the yen to rebound, and there is a growing risk …
16th October 2025
This interactive dashboard presents all of our CE FX forecasts out to end-2027, including spot and total return forecasts. The dashboard also features historical performance data as well as detailed insights into yield gaps, valuations, correlations and …
The US’s recent pledge of support for Argentina raises the question of whether other EMs facing financial difficulty might receive similar assistance. Pakistan and Jordan are potential candidates, as are some countries in Central America where the US …
Toronto prices will continue to drag down the average The weakness in the MLS House Price Index in September was largely due to a decline in Toronto, where there is little sign of a turnaround in sight. That presents a risk to our view that the nationwide …
Ceasefire holds as spillovers begin to fade The Israel-Hamas ceasefire has, so far, stayed intact as hostages and prisoners have been exchanged and aid has flowed into Gaza and the West Bank. The reaction in the region’s financial markets has been muted, …
While the economy appears to be narrowly avoiding recession, we expect GDP growth to average less than 1% annualised over the second half of the year, with the unemployment rate rising toward 7.3%. Core inflation is likely to remain above target before …
As the US Q3 reporting season gets underway, here’s a sobering observation: the ‘big-tech’ sectors – information technology, communication services, and consumer discretionary – have accounted for nearly 70% of the increase in S&P 500 forward-twelve-month …
Financial repression is not a costless way to deal with public sector debt burdens, but it tends to be more politically palatable than the other options. Indeed, it is already happening and governments will increasingly turn to it. Financial repression …
The impeachment of Peru’s President Dina Boluarte has once again shone the spotlight on the country’s governability problem, and it doesn’t look like next year’s election will resolve this. Peru’s strong balance sheet means the fallout is likely to be …
EM growth has been resilient to US import tariffs, but headwinds from fiscal tightening, softer labour markets and (for some) lower commodity prices will drag growth down over the coming year. Most of our 2026 GDP growth forecasts lie below the consensus. …
The EU’s Carbon Border Adjustment Mechanism (CBAM) extends the EU’s carbon pricing mechanism to the rest of the world through what is essentially a ‘carbon tariff’. Many emerging markets have opposed CBAM given the potential loss of export revenues …
We think the outlook for US diversified banks is sunny, given the prospects for bonds and the economy. Five of the eight diversified banks in the S&P 500 are among the first firms in the index to have reported so far in the third quarter earnings season. …
We think the investment slump that has caused Hungary’s economy to underperform its Central European peers is close to bottoming out, but ongoing delays to EU funds and overcapacity in certain parts of the economy will continue to drag on growth. …
This page has been updated with additional analysis since first publication. We're hosting a special in-person roundtable event at our London office on Wednesday 12th November to discuss if the Chancellor’s second Budget on 26th November will be as big …
If we’re right that the Bank of Japan will lift its policy rate to 1.5% by 2027, its net interest income will turn negative over the next couple of years. However, its overall net income should remain positive as the Bank is still earning sizeable amounts …
Surge in unemployment makes November cut more likely The marked loosening of the labour market last month bolsters the case for the RBA to cut rates by 25bp at its meeting in November. Even so, the decision will probably come down to the wire, given the …
