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 …
31st July 2025
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 …
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 …
China Chart Pack (Jul. 25) …
A 25 basis point (bps) rate cut at August’s meeting, from 4.25% to 4.00%, is nailed on Risk of second-round effects means the MPC won’t speed up the pace of rate cuts But we still think rates will fall further than most expect, to 3.00% in 2026 The …
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 …
Judging by yesterday’s policy announcement and Chair Powell’s press conference remarks, the FOMC doesn’t look to be in a hurry to change its policy stance. That points to somewhat higher Treasury yields and a flatter yield curve. It also supports our view …
Core goods inflation running hot The above-target rise in core PCE prices in June, upward revisions to previous months’ data and the sharp rise in core goods inflation will do little to ease the Fed’s concerns about tariff-driven inflation. If these …
Not all doom and gloom The back-to-back GDP declines in April and May look slightly less concerning in light of June’s preliminary estimate showing a 0.1% m/m gain, suggesting the earlier weakness was partly a hangover from the export-led strength in 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 …
Asia Chart Pack (July 2025) …
Plunge in HIBOR boosting consumption growth Hong Kong’s GDP growth surprised to the upside, expanding by a strong 3.1% y/y in Q2, up from a downwardly revised 3.0% y/y in Q1. In q/q terms the economy expanded by 0.4%. (See Chart 1.) While that's a much …
Export boom supports rapid GDP growth Taiwan’s economy recorded another quarter of strong growth in Q2, of 3.1% q/q, on the back of a boom in exports which more than offset a further slowdown in domestic demand. This pace of growth is unlikely to be …
Oil lifts the Saudi economy Saudi Arabia’s flash estimate of Q2 GDP showed that the economy grew by 2.1% q/q, an improvement on the 1.1% expansion recorded in the first quarter, largely on the back of the unwinding of oil production cuts. Economic growth …
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 …
Donald Trump has announced on Truth Social that South Korea has agreed to a “comprehensive deal” involving a 15% tariff on all goods exported to the US, down from the previously threatened 25%, in exchange for maintaining zero tariffs on US imports. The …
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 …
Bank of Japan opening door for year-end rate hike The Bank of Japan sounded a bit more optimistic today and we’re sticking to our forecast that the Bank will resume its tightening cycle at its October. The Bank’s decision to leave policy settings …
This report was first published on Thursday 31st July, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Friday 1st August and Caixin services and composite PMIs on Tuesday 5th August. Domestic weakness weighing on growth …
Strong bounce in retail sales won’t keep RBA from cutting in August The solid pickup in retail sales in June doesn’t detract from the fact that goods spending across Q2 was rather lacklustre. That being the case, the data won’t stand in the way of the RBA …
Economy remains resilient in the face of higher US tariffs The rebound in industrial production in June confirms that Japan’s economy is shrugging off trade tensions and should prompt the Bank of Japan to revise up their forecasts for GDP growth at its …
Trump’s tariff announcement overshadows end of hiking cycle Brazil’s central bank left interest rates on hold at 15.00% as expected today, but the decision was overshadowed by President Trump’s Executive Order earlier today raising tariffs to 50% on …
30th July 2025
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 …
Dissents are the best offence for Waller and Bowman The FOMC made only one major change to its policy statement this month, acknowledging that growth moderated in the first half of the year. While Governors Christopher Waller and Michelle Bowman both …
Emerging Markets Capital Flows Monitor (Jul. 2025) …
Faster growth in earnings per share (EPS) is the main reason why equities in the US have fared better in local-currency (LC) terms than those in the euro-zone since the Global Financial Crisis (GFC). With than in mind, today’s GDP releases for the US and …
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 …
Rates unchanged but slower growth beginning to raise concern The Bank of Canada kept interest rates unchanged at 2.75% for a third consecutive meeting today as it awaits greater clarity over the country’s future trading terms with the US. The …
The 25% tariff that President Trump has announced will be applied to imports from India starting Friday would undermine India’s attractiveness as an alternative manufacturing hub to China, if it proved permanent. But bilateral negotiations are continuing, …
Swings in net trade mask slower underlying growth The 3.0% annualised gain in second-quarter GDP overstates the economy’s underlying strength, as it was largely driven by a 30% slump in imports as pre-tariff stockpiling unwound. The more worrying …
Africa Chart Pack (Jul. 2025) …
Growth rebounds despite tariffs The stronger-than-expected 0.7% q/q expansion in Mexico’s GDP suggests that the economy is weathering the tariff storm surprisingly well. While we don’t think this marks the start to a sustained pick-up in growth, the …
Falling inflation has raised prospects of another repo rate cut next week But tone of communications suggests that easing cycle is now over We expect repo rate to remain on hold at 5.50% until well into 2026 The further sharp drop in headline inflation …
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 …
Sentiment weakens, but points to robust growth The EC’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional GDP growth maintained a moderate pace, at 2.0-2.5% y/y, at the start of Q3. The prices components of the …
Economy resilient to tariffs so far, but growth will be weak in H2 The slowdown in euro-zone GDP growth in Q2 came as no surprise as the boost from tariff front-running waned. We expect growth to remain weak in the second half of the year. The 0.1% …
Euro-zone GDP to have slowed sharply in Q2 National data available so far suggests that euro-zone GDP growth slowed from 0.6% q/q in Q1 to either 0.1% or 0.0% in Q2, in part due to the reversal of tariff front-running. (Our projection was 0.2%.) GDP …
Central Europe holding up fairly well amid US tariffs The Q2 GDP data released out of Hungary and Czechia confirmed that both economies have held up reasonably well since the introduction of US tariffs in April. With the EU-US trade deal likely to deal …
Most of the recent increase in long-term bond yields appears to have been driven by higher expectations for short-term interest rates as well as reduced demand from traditional investors in long-dated JGBs. Fiscal concerns don’t seem to be playing a major …
Progress on disinflation will pave the way for an August cut With underlying inflation inching closer towards the mid-point of the RBA’s 2-3% target, the Board should have no qualms about handing down a 25bp cut next month. And with activity still weak …
MAS hold today likely to be a pause, not an end, to the easing cycle Singapore’s central bank kept monetary policy settings unchanged today but with inflation set to remain well below target and the economy likely to weaken, we continue to expect further …
This publication has been updated to reflect changes to our forecasts after the June housing transactions release on 31st July 2025 and the July Nationwide house price release on 1st August 2025. Overview – The stuttering jobs market and the softening …
29th July 2025
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 …
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 …
Our View: The EU-US trade agreement, which will impose a 15% tariff on most EU goods exports to the US, will deal only a small hit to GDP growth across Central and Eastern Europe. With inflation pressures in parts of the region likely to remain strong …
The latest data suggest that global industry has been resilient to tariffs so far this year. But global trade softened in May and the latest surveys point to further weakness to come. Consumer spending remains subdued in most advanced economies. And …
President Trump’s tariff threats this month put Latin America in the firing line, in stark contrast to Liberation Day when the region was largely unaffected. Taken together with headwinds from tight policy and lower commodity prices, growth is likely to …
House prices still struggling The second consecutive 0.3% m/m fall in house prices in May suggests that the market is still struggling to find balance under the weight of near-7% mortgages, in turn presenting a risk to our view that prices will soon …
