While a handful of EM central banks (India, Czechia, Mexico) are likely to hike interest rates in the coming months, they will be doing so for domestic reasons not because of the Fed. More broadly, EM central bank decisions don’t track those in the US as …
21st September 2026
This report is part of our new series on China Shock 2.0. Explore the series and follow the latest publications on this dedicated page . A key difference between the first China Shock in the mid-2000s and the China Shock today is that China now stands as …
We don’t think the fall in tech stocks’ relative valuations means the AI bubble has burst yet, and the rally may have a bit further to go. Meanwhile, there’s potential for market-moving news at the US-China meetings, but our best bet is that progress, and …
Overview – Japan’s economy has coped with the energy shock well and we expect GDP growth to remain solid. While next year’s sales tax cut could result in inflation falling to very low levels, underlying inflationary pressures will remain strong. …
Angola’s monetary easing cycle probably over Angola’s central bank (BNA) cut its policy rate by 100bp to 14.75% this week but, with growth likely to exceed 6% this year, we think this will mark the final interest rate cut in the BNA’s easing cycle. The …
18th September 2026
Ottawa sent a clear message this week that it will not engage in further escalation of the trade war with the US, looking past the recently announced import ban to instead focus on opportunities elsewhere. Supercalifragilisticexpiali-duction This began …
Warsh walks the walk As was widely expected, the Fed hiked interest rates by 25bp this week to bring the fed funds target range to between 3.75% and 4.00%. (See here .) The more interesting message was contained within the updated Summary of Economic …
All-property valuation scores saw little movement in Q2, as property and alternative asset yields held steady. But the sharp rise in Treasury yields since then points to a worsening in valuations in Q3, and appraised cap rates will need to rise to correct …
BCB keeps door open for cuts The main takeaway from the Brazilian central bank’s statement after this week’s meeting – at which the Selic rate was cut by 25bp to 13.75% – was that the door remains open for further monetary easing. (Our take here .) We and …
Manufacturing stumbles after months of growth The broad-based decline in manufacturing output in August suggests the factory sector may be on a weaker footing than we had previously thought, particularly as this does not capture the latest rise in oil …
Those hoping that the Bank of Japan’s (BoJ) latest meeting would help deliver a stronger yen were, once again, left disappointed. At this point, any yen rally will likely need to be driven by a shift in the US outlook – and that looks unlikely to happen …
Turkey’s market stress puts monetary easing at risk The stress experienced by some Turkish investment funds this week appears to have been contained, but they have exposed Turkey’s sensitivity to a reversal in foreign capital. With inflows slowing, FX …
At Thursday’s policy meeting, the Bank of England sent the strongest signal yet that it will soon raise interest rates in response to higher energy prices. With a swift resolution to the Iran war looking unlikely, we now expect the Bank to raise rates …
State of the European Union This week, Ursula von der Leyen’s State of the Union speech, and June’s goods trade data, highlighted two of the biggest challenges facing Europe’s economy. The first, and most immediate, is the energy shock. By our …
Neil Shearing and Jennifer McKeown unpack a pivotal week for the world's major central banks. They discuss the Federal Reserve's latest rate hike and what it says about the independence of central banks in an era of political pressure. They then talk …
Legacy of pipeline attack could lift oil exports Recent developments suggest that the hit to oil flows from the closure of the East-West pipeline (see here ) will probably be limited. Indeed, media reports suggest that Saudi Arabia will be able to restart …
Six issues to watch at the meeting The Trump-Xi meeting in Washington next Thursday is unlikely to break much new ground. But here are six key areas that are worth keeping an eye on. Tariffs. China’s effective tariff rate fell sharply after the Supreme …
Indonesia: Fin Min. sacking brings new uncertainty President Prabowo’s decision to replace Finance Minister Purbaya Yudhi Sadewa with his deputy, Suahasil Nazara, initially looked like an encouraging shift back towards more orthodox economic policymaking. …
Weaning off Russian oil would be harder now The US House of Representatives this week passed legislation giving President Trump the power to impose tariffs of up to 100% on countries that continue to buy Russian oil and gas. To be sure, the legislation …
The Bank of Japan accelerated its tightening cycle by lifting interest rates to a 31-year high of 1.25% today and we think it will tighten policy more rapidly than most anticipate over the coming months . The outcome of today’s meeting was widely …
This page has been updated with additional analysis since first publication. Retail remains resilient to higher energy prices The 0.5% m/m rise in retail sales volumes in August shows that the economy is still proving resilient to higher energy prices and …
A funding crunch appears unlikely According to news reports, the government is mulling lifting defence spending to as much as 3.5% of GDP over the coming decade. If adopted, that would require a large ramp-up in expenditure over the coming years. For …
BoJ’s policy rate will reach neutral levels by mid-2027 The Bank of Japan lifted interest rates to a 31-year high of 1.25% today and we think it will tighten policy more rapidly than most anticipate over the coming months. The outcome of today’s meeting …
Markets price in too much tightening With crude oil prices approaching $110pb this week, the financial markets are now pricing in almost three 25bp rate hikes by the RBA by mid-2027. We have some sympathy with this view as we now expect the price of Brent …
Inflation won’t remain muted much longer Inflation was little changed in August but there are mounting signs that higher energy costs are feeding through and we expect it to rise above the BoJ’s 2% target before long. Both headline inflation as well as …
While much of the drop in long-term government bond yields over the past couple of days reflects relief from lower oil prices, policy news from the Fed and the BoE (which has slowed its QT programme) have also played a part. Our sense is that the Warsh …
17th September 2026
We'll be discussing Brazil’s upcoming election in an online Drop-In on Thursday, 24th September. Register here. The cyclical factors that drove Brazil’s strong post-pandemic growth have now been exhausted, and we think there will be a much sharper …
30-year fixed mortgage rates nearly hit 7% in the week ending 11 th September and are likely to have risen further since, with the 10-year Treasury yield – their closely correlated benchmark – briefly trading above 5%, its highest level in 19 years. We …
The Bank of Canada’s communications suggest it is unlikely to hike in October unless the September CPI data deliver a large upside surprise, or oil prices rise much further. More generally, despite higher oil prices being a net positive for Canada, market …
We think that the SNB will leave its policy rate unchanged at next week’s meeting. While higher energy prices have pushed inflation higher, underlying price pressures are weak and inflation is set to remain well within the SNB’s target range. With …
We have revised up our Bank of England forecasts and now expect interest rates to be raised from 3.75% to 4.00% at the next policy meeting in November and to 4.25% in February. Our previous forecast was that the Bank wouldn’t raise rates at all. That …
Single-family rebound to prove short-lived in high-rate environment While single-family housing starts rebounded in August, the fall in the number of building permits issued last month suggests this strength will be short-lived. The big picture remains …
On hold, but tightening cycle to resume before long The decision by the Czech National Bank to leave the policy rate at 3.75% is likely to be followed by a resumption of the tightening cycle in November (with a 25bp move) and we think one further hike is …
BoE signals a rate hike is coming The Bank of England left interest rates at 3.75% today and announced that it will reduce its holding of gilts by £368bn over the next eight years, but most importantly it suggested it is close to no longer being able to …
We forecast headline inflation in the euro-zone to jump from 3.2% in August to 3.8% in September. And we think that increases in energy, food and core inflation will push it up to 4% by December. But if energy prices fall back next year, as we assume, …
Pipeline damage adds to risks to the oil market and Saudi economy The attack on Saudi Arabia’s East-West oil pipeline has created major upside risks to our oil price forecast and downside risk to our growth forecast for Saudi Arabia. We looked at the …
CBC to stay on the sidelines Taiwan’s central bank left its policy rate on hold today at 2.00% and, if we’re right in expecting inflation to remain contained despite the backdrop of rapid economic growth, rates are likely to remain unchanged for the …
New Zealand economy holding up better than expected The upside surprise in today’s GDP data leaves the door open for the RBNZ to deliver a third consecutive rate hike at its October meeting. The 0.2% q/q rise in real production GDP last quarter was a …
We'll be discussing Brazil’s election in an online Drop-In on Thursday, 24th September. Register here. Door remains open for further rate cuts Brazil’s central bank (BCB) delivered another 25bp interest rate cut today, to 13.75%, but the absence of …
16th September 2026
The Fed’s interest rate hike today is likely to be followed by at least one more later this year, probably in December. While the new Summary of Economic Projections (SEP) implies that the Fed may be content with just two hikes in total, we judge that …
SEP suggests limited appetite for further hikes The Fed appears to be on board with our view that its hike today will be followed by one more later this year. While the latest Summary of Economic Projections implies that the Fed may be content with just …
Global oil demand has been surprisingly resilient so far given the scale of the supply shock. But if that resilience persists and supply from the Middle East remains constrained, a sustained period of high fuel prices may ultimately be needed to push the …
We expect Gilt yields to fall over the next year as the Bank of England doesn’t deliver on the amount of tightening that is priced into money markets. But given the potential for oil prices to rise further and the government’s tricky task of keeping …
Russians head to the polls from Friday in the country’s first parliamentary election since the invasion of Ukraine. While the outcome is not in doubt, the result will offer clues about public sentiment, the strength of Putin’s regime and the future …
China Shock 2.0 will be a structural drag on euro-zone growth for the rest of this decade. Consumers will benefit from cheaper and increasingly sophisticated Chinese imports but manufacturers are losing market share both at home and abroad. The net …
Household spending comes hurtling back The broad-based strength in retail sales in August brightens the picture on the US consumer after an underwhelming couple of months, and leaves our third-quarter GDP growth estimate just shy of 4% annualised. This …
Overview – After a very strong first half of the year, India’s economy is set to cool but annual GDP growth should still average 7% from 2026-2028, an enviable rate by global standards. Rising food prices on account of a weak monsoon will push headline …
Rising energy prices will weigh on industrial production After euro-zone industrial production edged down in July, we expect the sector to continue to struggle as the increase in EU natural gas prices gradually feeds through to industrial gas and …
