Contraction in Q3 paves the way for another 25bp cut The 0.3% q/q contraction in Mexico’s GDP was driven by weakness in the services and in particular the manufacturing sector and should make Banxico consider another 25bp cut in the policy rate, to 7.25%, …
30th October 2025
China Chart Pack (Oct. 25) …
The RICS survey showed that occupier demand dropped back in Q3 as concerns over the economic outlook, uncertainty around the Budget and rising interests rates all sapped confidence. That has cut rental and capital value expectations, and investment …
ESIs point to mixed performance at start of Q4 The European Commission’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that growth in the region as a whole held up relatively well at the start of Q4. But there has been a …
Growth better than expected, but far from impressive Euro-zone GDP growth remained fairly slow in Q3, and October’s economic sentiment indicator was consistent with a similar pace of growth at the start of Q4. The 0.2% increase in euro-zone GDP in the …
The Fed and the BoJ sent their respective government bond markets in different directions earlier today, but we expect yields in both places to rise over time. By contrast, while the ECB is likely to hold this afternoon (local time), we think German …
France unaffected by political turmoil, Germany still stagnant National data available so far suggests that euro-zone GDP probably grew by a slightly stronger than expected 0.2% q/q in Q3, mainly thanks to a strong performance by France and Spain. Germany …
Oil output fuels faster growth, but non-oil growth softens Saudi Arabia’s economy grew by 1.4% q/q in Q3 according to this morning flash estimate, which translated into a pick-up in the year-on-year growth rate from 3.9% in Q2 to 5.0% - the fastest pace …
Czech powering ahead with Hungary still struggling The early Q3 GDP figures out of Central Europe showed a divergence in performance with Hungary’s economy continuing to struggle, while the Czech recovery shifted up a gear. We expect growth in Hungary to …
The Bank of Japan kept policy settings unchanged today and Governor Ueda indicated that the Bank wants to gather more information on the strength of pay hikes in next year’s spring wage negotiations. That’s consistent with our view that the Bank will wait …
Update: Since publication China’s Ministry of Commerce (MOFCOM) has revealed more details about what was agreed. We have added this information in brackets while preserving the original analysis. The reversal of some US tariffs on China won’t have a big …
BoJ will only resume tightening cycle next year The Bank of Japan signaled continued concerns about the impact of higher US tariff when keeping policy settings unchanged today and we’re sticking to our forecast that the next rate hike will only come in …
The PBOC’s bond trading operations were initially envisaged as a tool to limit declines in yields. But, alongside policy rate cuts, they are likely to be used to guide yields lower over the coming quarters as economic weakness and a diminishing tailwind …
The Fed cut its policy rate by an additional 25bp today, to between 3.75% and 4.00%, but the vote was a little more balanced than we had expected, with dissents in both directions, and Chair Jerome Powell warned in his press conference that another cut in …
29th October 2025
Fed cuts with dissents on both sides and halts QT The Fed cut its policy rate by an additional 25bp today, to between 3.75% and 4.00%, but the vote was a little more balanced than we had expected. While Trump-appointee Stephen Miran again voted for a …
The market reaction to news around US-Asia trade is yet another reminder of how crucial the AI narrative is for the stock market and, accordingly, how significant big tech earnings results today and tomorrow may be. Despite growing signs of froth, we …
The Riksbank will keep the policy rate at 1.75% next week and, despite the recent strong economic data, will continue to say that the policy rate will stay at its current level “for some time to come.” At its last meeting on 23 rd September, the Riksbank …
With the Bank of Canada’s decision to cut widely anticipated, the key development today was the signal that it now thinks the policy rate is “at about the right level to keep inflation close to 2% while helping the economy through this period of …
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 15.00 GMT on Wednesday 5th November. (Register here .) EM financial markets have …
Bank cuts but signals that it anticipates no further changes from here With the Bank of Canada’s decision to cut today widely anticipated, the key development was that it signalled that it now thinks the policy rate is “at about the right level to keep …
Africa Chart Pack (Oct. 2025) …
We’ll discuss in online Drop-Ins Fed, ECB and Bank of England policy at 3pm on Thursday 30 th October (register here ) and the Bank’s rate decision at 3pm on Thursday 6 th November (register here ). Inflation worries and Budget uncertainty to prompt a …
South Korea has finalised a trade deal with the US which, based on the details released so far (from the Korean side), appears relatively favourable, with auto tariffs set to be lowered and pledges of investment in the US engineered in a way that will …
Our China Activity Proxy suggests that growth picked up last quarter, with the services sector seeing particularly strong gains on the back of strong financial sector activity. And industrial activity has continued to hold up well despite US tariffs. …
The record-breaking rally that erupted in cocoa almost two years ago appears to be over and prices have fallen back significantly. Speculative trading activity and European cocoa demand are also at historic lows. Accordingly, we think that UK chocolate …
We’re hosting a special in-person roundtable event at our London office on Wednesday 12 th November to discuss if the Chancellor’s second Budget on 26 th November will be as big and as bad for the economy as her first, and if it will dampen or ignite the …
Net lending to property shows early signs of easing Net lending to commercial property dropped to £1.65bn in September, from £2.60bn in August. That helped bring the three-month total down to £6.2bn, the first decline on that measure since March. The …
RBA to stay on hold next week as inflation surprises on the upside Bank likely to signal high bar for further loosening Assuming policy restriction brings inflation to bear, we see two more cuts in H2 2026 The RBA will leave its cash rate unchanged at …
Recent lay-off announcements from several major IT firms in response to advances in artificial intelligence (AI) offer a stark glimpse of the technology’s potential to disrupt India’s business process outsourcing (BPO) industry. But growing demand for …
Strength in underlying inflation reduces chances of further easing With inflation vastly overshooting the RBA’s forecasts, the Bank won’t cut interest rates at its November meeting and the chances that it won’t loosen policy any further are rising. The …
If the Fed does decide to call time on its quantitative tightening (QT) this week it will be responding to the Treasury’s efforts to rebuild its cash reserves after the debt ceiling was raised this summer, which has triggered a more marked decline in …
28th October 2025
The Japanese yen has rebounded a bit today on the back of US Treasury Secretary Bessent’s latest foray into verbal currency intervention (this time in favour of the yen), but it remains near its weakest point since early 2025. We think that Bessent will …
Tanzania’s presidential election tomorrow is likely to result in a win for incumbent Samia Suluhu Hassan and ongoing investments into infrastructure and the extractives sector will support strong GDP growth in the coming years. The key risk is …
Latin American economies fared poorly in Q3 and we think that headwinds ranging from lower commodity prices, softer wage growth and tight fiscal policy will keep growth below consensus expectations in the next couple of years. Weaker growth and a more …
Consumers still lack confidence amid uncertain outlook The slight decline in the Conference Board’s consumer confidence index in October leaves it at its lowest since “Liberation Day” and will help assure the Fed that another interest rate cut tomorrow is …
The latest data suggest that global GDP growth picked up to over 3% in Q3. World trade continues to shrug off US tariffs, global industry has been resilient, and lower interest rates have supported a recovery in credit growth in many cases. Meanwhile, the …
A possible turning point The 0.2% m/m rise in house prices in August follows five months of flat or falling prices. We are predicting that a modest pick-up in demand paired with nagging undersupply will support prices in the medium term, and so we expect …
China’s economy has grown faster than other EMs in aggregate every year outside of the pandemic so far this century. But that run is now coming to an end and we expect growth on our China Activity Proxy to undershoot the EM average over the coming years …
The full proposals for China’s upcoming Five-Year Plan have just been published. These make it clear that fiscal policy will play a key role in the leadership’s efforts to lift the consumption-to-GDP ratio. As a result, the share of fiscal spending …
While data centres will remain a small share of global electricity consumption, the uneven spread of their power demands means their influence on power markets will be felt much more acutely in developed markets, particularly the US. Although some have …
The ECB’s latest Bank Lending Survey, published this morning, suggested that mortgage demand in the euro-zone continues to be strong. But households remain reluctant to borrow to boost their consumption, and non-financial companies’ investment intentions …
We expect the Middle East and North Africa to record its fastest rate of GDP growth outside of the post-pandemic recovery in well over a decade over the course of 2026-27. The Gulf states will be bolstered by rising oil output, although low oil prices …
India has the world’s third-largest proven reserves of rare earths, but it accounts for a tiny share of global production due to various technical and regulatory difficulties. If these hurdles are eventually overcome, India could present itself as a …
The continued strength in food inflation is increasingly being driven by rapid growth in labour costs, not least due to strong minimum wage hikes. With wage growth set to remain strong, we expect food inflation to settle around 3% over the next couple of …
Strength of the economy leaves little room for a November cut Korea’s economy accelerated sharply in Q3 and, with the bank still worried about overheating in the property market, today’s strong data make a November rate cut even less likely. Data released …
27th October 2025
