Kevin Warsh has been named Donald Trump’s pick to succeed Jerome Powell as Chair of the Federal Reserve. Group Chief Economist Neil Shearing, Deputy Chief North America Economist Stephen Brown, and Deputy Chief Markets Economist Jonas Goltermann come …
30th January 2026
GDP rebound rules out rate cut next week The stronger-than-expected Mexican Q4 GDP figure, of 0.8% q/q, adds to reasons to think that Banxico will pause the easing cycle when it meets next week. But in spite of what looks like a relatively healthy GDP …
Security guarantees in return for territory? We highlighted earlier this month that the US and Europe seemed to be moving closer to an agreement on providing security guarantees to post-war Ukraine (see here ), but reports this week suggest the Trump …
Weaker dollar – not yet of macro significance The US dollar has regained a little bit of ground today, but the DXY index (which measures the value of the US dollar relative to a basket of major foreign currencies) is still down by nearly 2% since the …
Growth continues at a moderate pace Euro-zone GDP growth remained around its trend rate in Q4 and we expect it to maintain that pace in 2026. The 0.3% increase in euro-zone GDP in the fourth quarter was a touch higher than expected (consensus & ECB: …
Robust December data point to a healthy debt market Net lending secured against commercial property was strong again in December, reaching £2.47bn. That took the three-month rolling total to £6.69bn, its highest since May 2020, when repayments of existing …
It’s notoriously hard to objectively value gold, and it’s plausible that the rapid ascent in gold prices could reflect a paradigm shift in demand. In fact, if gold prices were to follow the trajectory of the 1970s rallies in real terms, that would imply a …
This page has been updated with additional analysis since first publication. Little evidence of a post-Budget rebound December’s money and lending data suggest that households’ caution with their borrowing and saving hasn’t gone away, reinforcing our view …
Benefits of EU trade deal shouldn’t be underplayed After being heavily signposted by policymakers in the run-up, the India-EU trade deal was announced this week almost 20 years after talks first began. We provided our thoughts on the trade deal here . …
Poland continues to outperform GDP figures out of Central Europe this morning show that Poland’s recovery gathered pace, while Hungary lagged behind. We think that growth will pick up across the region this year, although Poland seems likely to remain an …
Euro-zone economy resilient with Spain still star performer National data published this morning suggest that euro-zone GDP grew by a slightly stronger-than-expected 0.3% q/q in Q4. Spain remained the star performer, while Germany, France and Italy also …
Falling interest rates boost growth Hong Kong’s economy ended the year on a strong note, with GDP expanding by 3.8% y/y in Q4, up from a downwardly-revised 3.7% y/y in Q3. That brought growth for 2025 as a whole to 3.5% y/y, in-line with our forecast and …
Warsh a relatively safe choice If officially announced later today, President Trump’s apparent pick of Kevin Warsh for the next Fed Chair would arguably be one of the better outcomes for investors compared to the other contenders that had been in the …
Export boom continues Taiwan’s economy recorded another quarter of super-charged growth in Q4, with very strong export demand once again offsetting subdued domestic demand. The pace of expansion is likely to slow in 2026, but Taiwan is still set to record …
Markets will hold Takaichi to account Prime Minister Sanae Takaichi marked her first 100 days in office this Wednesday on a high note, with her cabinet enjoying broad popularity. (See Chart 1.) Granted, the cabinet’s approval rating has edged down …
BoJ won’t fret recent weakness in activity Although activity indicators for December were relatively soft, they won’t have prevented the economy from bouncing back across Q4 as a whole. Moreover, there are still reasons to be cautiously optimistic about …
Policy tightening is on the way The Q4 CPI figures released this week made for ugly reading as far as the RBA is concerned. Indeed, nearly half of the items in the CPI basket are now recording price increases that are too strong to be consistent with the …
29th January 2026
Households’ annual tax refunds should be about $100bn larger this year, a windfall equivalent to 0.5% of annualised consumption. Although temporary, this boost gives us further reason to expect that consumption growth will remain solid at around 2% in …
This quarterly Financial Risk Monitor includes commentary and analysis of our latest EM risk indicators. We’ll be online on Wednesday 11th February at 10.00 ET/15.00 GMT to discuss our EM risk indicators and the outlook for EM financial markets. Register …
As global financial conditions shift and growth paths diverge across emerging markets, investors face a more complex mix of currency, banking and sovereign debt risks. How are these risks changing, and what does this mean for equity, bond and FX returns? …
The January employment report will reveal significant downward revisions to payrolls in 2025 and, due to an updated methodology for the birth-death model, the initially reported payroll gains for this year will be lower than we’ve been used to. …
After a record-breaking year, we think the rally in South African assets will lose momentum, given that there is little scope for risk premia to compress much further and we expect precious metals prices to fall. What’s more, there’s a good chance that …
A dramatic late-year cut to spending helped Russia’s government meet its deficit target of 2.6% of GDP last year. This does not signal that fiscal strains are forcing President Putin to scale back the war effort. Instead, the bigger risk to Russia’s …
What does the dollar rout mean for MENA? The past week has compounded the rough start to 2026 for the US dollar, which has direct implications for the Gulf states via their currency pegs. And for Egypt, the moves in the greenback, if sustained, would …
Fresh strikes by the US on Iran would, coming in the wake of recent protests in the country, raise the chances of some form of regime change which could eventually pave the way for Iran’s possible reintegration into the global economy. More immediately, …
The RICS survey showed overall occupier and investment market sentiment held in the doldrums at the end of 2025, with prospects for the major sectors muted. However, the outlook for prime assets was still viewed favourably, while sentiment was more …
The South African Reserve Bank paused its easing cycle as we expected today, but the commentary was dovish suggesting even if positive shocks to inflation do emerge the path of interest rates will still trend downwards. That only increases our confidence …
Trade deficit re-widens The sharp swings in trade continued in November, with the trade deficit rebounding sharply to $56.8bn, from the prior month’s multi-year low of $29.2bn, a move that will lower most estimates of fourth-quarter GDP growth. The …
Some more trade diversification Exports volumes in November are not as bad as first appears, and probably would have risen if not for a plunge in volatile gold exports. Meanwhile, we continue to see tentative signs of Canada successfully diversifying its …
ECB will leave its interest rates and guidance unchanged next week… …but we still forecast two 25bp rate cuts later in the year. Christine Lagarde will offer only very limited resistance to stronger euro. Nobody is expecting the ECB to change its policy …
The Middle East and North Africa is set for the fastest pace of GDP growth (outside of the pandemic period) since 2011. Continued oil output hikes and the switch on of Qatar’s North Field will boost the Gulf economies. But lower energy prices are likely …
Still-low inflation leaves door ajar for another rate cut; weak rupee not a constraint We are forecasting a 25bp cut to repo rate to 5.00% next week With interest rates some way below neutral, that should bring easing cycle to an end The weakness of …
Divergence widens at the start of 2026 The European Commission’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional GDP growth held steady at around 2.5% y/y at the start of 2026, but divergence in performance across …
Sentiment improving but labour market loosening January’s EC survey suggests that the economy got off to a fairly strong start to the year, with the services sector growing while industry continues to struggle. But the labour market has loosened further. …
Riksbank to leave policy rate on hold amid heightened uncertainty While the Riksbank left its policy rate at 1.75% and its forward guidance unchanged today, the economic data have improved significantly over the past few months and have given us greater …
We’ll be discussing the outlook for Bank of England, Fed and ECB policy in a 20-minute online Drop-In at 3pm on 5 th February. (Register here .) Concerns over wage expectations mean rates are widely expected to stay at 3.75% in February The MPC will …
Plunge in public investment limits pickup in activity GDP growth in the Philippines remained below trend in Q4, and we expect the economy to underperform consensus expectations in 2026. With growth set to remain soft and inflation low, we think the …
We continue to think that a cautious Fed will mean Treasury yields rise a little and the US dollar strengthens, despite recent developments in the latter. In the end, it was an uneventful Fed meeting from markets’ point of view. Despite sounding upbeat on …
Singapore’s central bank kept monetary policy settings unchanged today but adopted a slightly more hawkish tone. While risks to the policy outlook are now skewed modestly towards tighter policy later in the year, we think inflation will remain contained …
Shifting the asset allocation of Japan’s largest pension fund back towards domestic bonds could help stabilise the JGB market should yields start to surge again. However, it would come at a sizeable fiscal cost, particularly if the GPIF reduced its …
28th January 2026
Copom opens the door for easing Brazil’s central bank left interest rates on hold at 15.00% as expected but the communications struck a much more dovish tone, suggesting that the first interest rate cut will be delivered at the next meeting in March. We …
The change to the FOMC’s policy statement, acknowledging the recent solid pace of GDP growth and stabilisation in the unemployment rate, is another sign that the Fed is unlikely to cut interest rates again for at least a couple more meetings. Nonetheless, …
Waller makes a pitch for Chair position as FOMC keeps rates unchanged The change to the FOMC’s policy statement, acknowledging the recent solid pace of GDP growth and stabilisation in the unemployment rate, is further evidence that the Fed is unlikely to …
US equities had been struggling to make headway against those elsewhere in recent months and have now begun underperforming significantly, even as US indices climb to fresh highs. While this has echoes of the final stages of the dotcom bubble, we think …
The Bank of Canada’s largely-unchanged economic projections are similar to our own, although we think the slow pace of economic growth this year will help ease core price pressures sooner than policymakers expect. (See Chart 1.) On the whole, however, we …
We do not think that the SNB has intervened in FX markets in recent days despite the Swiss franc’s large appreciation. Instead, we think policymakers are likely to combat any disinflationary pressure from the exchange rate by cutting the policy rate …
US population growth is expected to slow to only 0.2% y/y this year, matching the record low. Yet the risks to the official forecasts arguably lie to the downside, with a modest fall in the population possible. Yesterday the Census Bureau released its …
Elections in Brazil, Colombia and Hungary have the greatest potential to deliver large financial market moves this year. A shift towards more investor-friendly policymaking and improved fiscal credibility could help to lower country risk premia, with the …
