Strong wage growth will encourage BoJ to keep tightening policy The strength in wage growth is another reason for the Bank of Japan to hike rates again at its April meeting. According to the preliminary estimate released today, annual growth in labour …
8th April 2026
While the latest polls suggest that the race for Peru’s presidency remains open, a highly fragmented legislature looks the most likely outcome whoever wins. Navigating a divided congress will be a key constraint on the next president, making fiscal …
7th April 2026
China’s economic rise has long benefited European households and firms. But the picture has turned: eurozone exports to China have plunged while imports have surged, posing an existential challenge to parts of European industry. With China signalling …
Downside risks to first-quarter business equipment investment growth The rise in core (ex. transport) durable goods orders in February shows American industry was battling on ahead of the surge in oil prices, despite the heightened uncertainty caused by …
While some of the recent slump in listed US Business Development Companies’ (BDCs) valuations may be overdone, several of the risk metrics we track suggest that stress is building beneath the surface. That said, there is little evidence so far of …
The energy shock as a result of the conflict in Iran could provide a boost to the renewable rollout, especially in parts of Asia and Africa where the risks from high fossil fuel prices are greatest. This would benefit China given its position as the …
Vietnam’s export-led growth model faces a pivotal political moment, with To Lam confirmed today as the country’s next president. His elevation consolidates the Communist Party’s leadership at a time when the authorities are seeking not only to sustain …
Asia’s reliance on energy flows through the Strait of Hormuz has left the region particularly exposed to disruptions from the Middle East conflict. Oil and gas prices may have fallen back in the wake of the US-Iran-Israel ceasefire, but they remain well …
China’s latest medium-term policy blueprint continues to elevate technological upgrading as the key to both security and growth. It acknowledges some of the negative side effects of industrial policy and the need to rebalance towards consumption. But it …
Despite recent redemption suspensions, net outflows from open-ended real estate funds in Germany have been small as a share of net asset value while cash buffers are higher than some other large markets, reducing the risk that further net outflows trigger …
The sales of electric vehicles by Japanese carmakers have skyrocketed in recent months but this offers little protection against the mounting competitive threat from Chinese firms. We’ve long been arguing that the slow rollout of electric vehicles (EVs) …
History tells us that US equities and oil won’t necessarily hit their turning points at the same time during this conflict, but we suspect they’ll nonetheless remain closely linked in the near term. Despite threats of further escalation over the weekend, …
The ongoing conflict in the Middle East has cast a spotlight on the global reliance on fossil fuels and triggered calls for a more aggressive adoption of renewable energy. For Australia, the crisis represents a long-term opportunity as the country seeks …
Sluggish consumption won’t prevent further rate hikes The recent weakness in household spending won’t stop the RBA from hiking interest rates at its upcoming meeting next month given concerns about an unanchoring of inflation expectations. The 0.3% m/m …
Strong payrolls gain not a sign of things to come The larger-than-expected rebound in non-farm payrolls in March mainly reflects a reversal of the strike and weather effects that weighed on hiring in February, rather than being a sign that the labour …
3rd April 2026
The next edition of the Capital Daily will be published on 7th April. Yet another volatile 24hours in financial markets saw Treasuries offer little protection against falls in US equities, as has been the case throughout the war. We doubt it will suddenly …
2nd April 2026
Bank unmoved (so far) by rising energy prices The Summary of Deliberations from the Bank of Canada’s March policy meetings gave no indication that policymakers are overly concerned about second ‑ round inflationary pressures stemming from the recent Iran …
Our full coverage of the Middle East conflict and the implications for the global economy and financial markets can be found on our dedicated webpage . RBI measures (eventually) shore up INR It has been an extraordinary few days for the Indian rupee. The …
Beyond their direct effects on consumer prices of fuels and piped gas, higher crude oil and natural gas prices will prompt firms to pass on higher fuel costs to consumers, boosting the prices of non-fuel items of the CPI such as electricity and food. In …
The consequences of the Iran war became even more conspicuous for consumers this week, with the national average gasoline price rising above $4 a gallon for the first time since 2022, marking an almost 40% increase from less than $3 at the start of …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. Policymakers step up intervention Governments in Central and Eastern Europe have stepped up policy support over the past week to cushion …
Hopes of a de-escalation between the US and Iran had been building from Tuesday evening following comments from Iranian President Masoud Pezeshkian. He stated that “[We] possess the necessary will to end this conflict, provided that essential conditions …
In an interview on Wednesday, Bank of England Governor Andrew Bailey said that markets are “getting ahead of themselves” when it comes to pricing in rate hikes this year given the backdrop of a “softening labour market”. We agree. Admittedly, the sharp …
Input prices surge Data released this week provide signs of the impact of the energy shock across Asia. The manufacturing PMI readings fell to a multi-month low in Indonesia and Vietnam - and a four-year low in India - as local industry has struggled to …
Tensions rising between BanRep and MoF Colombia’s central bank (BanRep) hiked its policy rate by 100bp, to 11.25%, at Tuesday’s meeting as expected by the majority of analysts (although we had expected a smaller 75bp cut). But the arguably more …
More commodities dragged into the conflict President Trump’s address to the nation arguably led to more questions than answers related to the conflict in Iran. Commodity investors perceived his remarks as escalatory with oil and natural gas prices jumping …
Spillovers from the Iran war threaten to exacerbate existing strains in Tunisia’s economy. If officials continue to maintain a tight grip on the dinar, macroeconomic imbalances are likely to build, increasing the risk of a sharp and disorderly …
SA budget position to face pressure Trade and budget data suggest that South Africa headed into the energy price shock in decent shape. But a longer war poses risks to the fiscal position and inflation and could prompt repo rate hikes. Fourth quarter …
Precious metal import surge largely behind widening trade deficit February’s further widening in the goods trade deficit is not quite as bad as it first appears, with a surge in volatile gold and other precious metal imports accounting for most of the …
End to IEEPA tariffs had little impact on deficit Large gold outflows were once again met by sizeable computer imports to keep the trade deficit largely unchanged in February and our first-quarter GDP growth estimate near to 3%. The trade deficit was …
AI diffusion gathered pace at the start of 2026 In recent weeks, Chinese-made AI models have overtaken US-made ones when it comes to token usage on OpenRouter. That’s particularly notable since less than a third of token usage on OpenRouter originates in …
Euro-zone government bond spreads edged down this week, but Italy’s 10-year spread over Bunds remains around 30bp higher than before the Iran war and 20bp above France’s spread. That is in contrast to the trend of the previous two years when the gap …
Supply/demand dynamics in long-dated sovereign debt markets are deteriorating, with demand from traditional sources waning and supply remaining strong. And now fiscal support in response to the Iran war may add further strain to public finances. This …
The impact of the surge in energy prices on the global economy will depend on the extent of any disruption to energy flows, which remains highly uncertain. Europe and Asia are more exposed than the US. As things stand, the baseline scenario is one in …
Fuel tax cuts won't do much to quell inflation The Albanese government started rolling out policy measures this week to deal with the fallout from the global energy crisis. On Monday it announced that it would slash the fuel excise tax in half for three …
Developments over the past week have strengthened our conviction that the Bank of Japan will hike interest rates at its meeting later this month. Indeed, the OIS market is now pricing in a two-thirds chance of such an outcome. For a start, the Bank has …
Energy inflation jumped in March and in our baseline scenario it increases further, adding another half a percentage point to headline inflation this year. Firms passing on higher energy costs add a further percentage point, pushing inflation up to 4% by …
1st April 2026
The rise in Brazil’s non-performing loan (NPL) ratio to its highest level in over a decade doesn’t appear to be a threat to financial stability. But it is symptomatic of very high interest rates and the slowdown in Brazil’s economy over the past year. Any …
Manufacturers uneasy amid Iran war The slight rise in the ISM Manufacturing Index in March masks the unease among firms evident in the breakdown, with new orders dropping back and supplier delivery times lengthening. The further rise in the prices paid …
Given the fast-moving nature of events in Iran and the Strait of Hormuz, this global publication brings together our updated residential and commercial property market analysis and forecasts. It introduces our updated forecasts for US and UK housing as …
Consumers in a good place heading into gasoline price shock The stronger-than-expected 0.5% m/m increase in control group retail sales in February suggests that consumption was gaining some momentum ahead of the surge in gasoline prices. Nonetheless, …
The AI hype cycle shows no sign of slowing. But how much are the hundreds of billions in investment actually boosting economies, and when will that spending translate into meaningful productivity gains? In this episode, Senior Economic Adviser Vicky …
27th March 2026
A victory for the opposition Tisza party in Hungary’s upcoming election on 12th April could open the door to the institutional reforms required to unlock frozen EU funds. But many of PM Orbán’s entrenched reforms – including changes to electoral rules, …
Australia’s supply of petroleum products will dwindle over the coming weeks, which could prompt the government to impose fuel rationing. It seems likely that any restrictions will initially target households and exports of petroleum products rather than …
Low inflation affords the RBI time to sit on sidelines, repo rate to stay at 5.25% Assuming conflict ends within the next month, prolonged rate hold most likely But FX concerns are building, and further sharp depreciation could force RBI to tighten A …
