EU protected from higher chip and pharma tariffs President Trump this week threatened a 100% tariff on semiconductor imports produced by firms that do not plan to invest in the US. We wrote about the global implications here . But in principle, the EU has …
8th August 2025
Trump-Putin meeting in the spotlight Expectations that the touted Trump-Putin meeting could lead to a breakthrough in talks to halt fighting in Ukraine are likely to be fairly low. After all, little progress has been made towards ending the war so far. …
A week is a long time in the oil market Even with multiple twists and turns to contend with, this week was a bearish one for oil prices. As it stands, the price of Brent crude has fallen by just over 4% over the course of the week. OPEC+ hit the opening …
We still expect the dollar to recover some ground over the rest of 2025 as interest rate differentials shift back in favour of the US and some of the policy uncertainty discount evident in the dollar since the 2 nd April “Liberation Day” event continues …
Trump’s threats to pharma and chip exporters Malaysia and Taiwan are the two countries in Asia most exposed to Donald Trump’s threat to impose 100% tariffs on semiconductor imports. By our estimates, exports of these products to the US amount to 2.2% of …
50% tariff may not be the end of the story for India President Trump this week followed through on his threat to punish India for its continued economic ties with Russia: India is set to face an additional 25% tariff on top of the 25% tariff that took …
Strong case for RBNZ to provide more stimulus The Reserve Bank of New Zealand has been bemoaning the weak state of productivity growth for a while now, arguing that it is stifling the speed limit of the economy. Yet, the Bank has quietly been revising up …
Bonus payments coming back to earth The economic data released this week at the margin would support the case for keeping monetary policy unchanged for longer. For one thing, while the Bank of Japan’s consumption activity index rebounded in June, it was …
Miran a good pick for the Fed President Donald Trump’s decision to nominate Stephen Miran to replace Adriana Kugler as Fed Governor, albeit only on a temporary basis to begin with, is a welcome surprise. Miran is currently the Chair of Trump’s Council of …
7th August 2025
Banxico slows the pace of easing, but more rate cuts still likely Mexico’s central bank (Banxico) lowered its policy rate by a smaller 25bp, to 7.75%, as expected at today’s meeting and the accompanying communications suggest that cuts are likely to …
The surprisingly hawkish tone struck by the Bank of England today has increased the chances it will slow down the pace of rate cuts from one per quarter. But our view remains that Bank Rate will be cut further than investors anticipate, driving the …
German carmakers’ recent disappointing earnings reports are as much about their continued struggles in China as US tariffs. And though sales in Europe have been more encouraging recently, that is unlikely to last. Overall, the prospects for the German …
Investment in both computer hardware and software surged in the first half of this year, which could be a sign that the AI boom is now boosting economic growth. Most of that hardware is imported, however, and that capital investment has not translated …
Next week, we expect Norges Bank to leave the policy rate unchanged at 4.25% but reiterate that it is likely to loosen policy later this year. We forecast two 25bp cuts by year-end. At its last meeting, Norges Bank cut its policy rate by 25bp, to 4.25%, …
Saudi: cuts kick in, but more tightening needed The Saudi Ministry of Finance published its Quarterly Budget Performance Report for Q2 last Friday which showed that the government is on track to run a larger deficit than projected. While spending cuts …
Property valuations were unchanged in Q2, with both property and alternative asset yields steady over the quarter. We still think the 10-year gilt yield will see a gradual fall over the next couple of years. That will improve valuations and argues against …
Although the Bank of England cut interest rates today by 25 basis points (bps), from 4.25% to 4.00%, it showed some signs that it may cut rates slower and/or not as far as our forecast of a decline to 3.00% in 2026. We are sticking to our view that …
Further rate cuts unlikely this year The Czech National Bank (CNB) left its policy rate on hold again today, at 3.50%, and in contrast to most other analysts, we think that further monetary easing is unlikely this year. The decision to leave the policy …
Inflation drop seals the deal on a 25bp cut later today The drop in Mexican inflation to 3.5% y/y in July paves the way for Banxico to deliver the clearly-signalled 25bp cut, to 7.75%, at its meeting later today. The outturn was down from 4.3% in June and …
For an updated and more detailed version of this analysis, click here . Rates cut to 4.00%, but BoE appears in no rush to cut again soon Although the Bank of England cut interest rates today by 25 basis points (bps), from 4.25% to 4.00%, it showed some …
Economic growth has been fairly resilient to tariffs so far and, as long as tariffs stay around the 15% agreed in the EU-US trade deal, the hit to activity should be small. But growth will be sluggish this year as low confidence and slowing income growth …
The reciprocal tariffs that have taken effect overnight have resulted in a broad range of US tariffs on different countries. At one end sits China (effective tariff rate of 42%), and Brazil (35%), Switzerland (25%). At the other sits Mexico, Canada, and …
Swedish residential total returns have underperformed the European average over the past three years, but a bright rental outlook in particular means we think returns will slightly outperform Europe over the next five years. Residential investment has …
Revisions erase German industrial resilience The sharp drop in German industrial production in June and the big downward revision to the figures for May mean that, rather than holding up well in the face of tariffs as the data previously suggested, German …
This page has been updated with additional analysis since first publication. House prices recovering, but the rebound won’t meet consensus expectations The rise in Halifax house prices in July provides another indication that the housing market is …
Relatively high inflation will encourage Riksbank to keep rates on hold The increase in Sweden’s CPIF inflation rate to its highest level since the start of 2024 is likely to encourage the Riksbank’s officials to keep the policy rate on hold at their …
Lower interest rates to support growth in 2025 GDP growth in the Philippines picked up slightly in the second quarter of this year, and we continue to expect steady growth over the remainder of 2025 as low inflation and monetary easing support domestic …
US tariffs biting again Exports came under pressure again last month – the acceleration in headline y/y growth was simply due to base effects. With the temporary boost to demand from the US-China trade truce already fading and tariffs on shipments …
The high-beta Antipodean currencies had been the worst victims of global trade tensions but have fared better since early April, relative to their G10 peers, as global risk appetite steadily improved. Nevertheless, we think the best days for the Aussie …
If the extra 25% tariff that President Trump has announced on imports from India remains in place, India’s attractiveness as an emerging manufacturing hub will be hugely undermined. Global oil prices would probably rise if India responded by curtailing …
6th August 2025
Ahead of any possible introduction of US tariffs on imports of pharmaceuticals and semiconductors, this Update brings together key facts and figures on the scale of such tariffs and economies’ exposure to them. It seems likely that the US will soon impose …
President Trump’s firing of the Bureau of Labor Statistics (BLS) commissioner marks another troubling step in his administration’s pressure campaign against Federal institutions. Still, we think a scenario in which the White House manipulates key data …
Although there are growing concerns in some quarters about the health of the US economy, neither equity analysts nor investors seem worried. Admittedly, when it comes to equity analysts’ forward-twelve-month (FTM) projections for earnings per share (EPS), …
We expect office-based jobs growth to remain at a standstill through 2026 as the tech sector cuts back and AI fills some of the gap. At the metro level though, our expectations are broadly unchanged, with the divergence between the fast-growing South and …
With Swiss President Karin Keller-Sutter in the US trying to head off the 39% tariff, this note answers some key questions on the topic. Overall, we think Switzerland has limited room to offer concessions to the US and may well have to accept a less …
Indonesia’s current account position has improved markedly since the onset of the pandemic and we expect the deficit to stay small over the next couple of years. The rupiah will probably depreciate, but the decline is likely to gradual and the central …
Late last week, Donald Trump did what he does best: lob a grenade into the machinery of government. In this case, the target was the Bureau of Labor Statistics (BLS), the body responsible for producing much of America’s core economic data. Following the …
The Labour Force Survey (LFS) is overstating population growth and therefore almost certainly overestimating employment growth. The alternative Survey of Employment, Payrolls and Hours (SEPH) points to much weaker jobs growth, while the unemployment …
Brazil’s current account deficit has continued to widen and is likely to reach around 4.0% of GDP by year-end. Financing this should be manageable, provided the domestic policymaking backdrop doesn’t deteriorate (further) and commodity prices do not fall …
There are several headwinds to healthcare & social assistance employment that suggest it is unlikely to continue growing at its recent rapid pace, although we doubt payroll gains in the sector will collapse. The strength of non-farm payrolls in recent …
Market still struggling under higher borrowing costs The fall in home purchase mortgage applications in July still leaves them roughly in line with where they started the year, and continuing to point to a rebound in existing home sales. While some small …
Retail sales likely to remain sluggish Euro-zone retail sales edged up in June but remained slightly below the peak reached early in the pandemic and well below the pre-pandemic trend (See Chart 1). Looking forward, we expect spending growth to remain …
Côte d’Ivoire’s economic fortunes appear good, and we expect growth to accelerate, underpinned by strong cocoa, oil and gold exports. However, the country’s sizeable sovereign debt servicing costs and reliance on external financing remain key risks, …
Despite the unexpected rise in CPI inflation in June, we still think the weakness in the labour market means it’s only a matter of time before wage growth and inflation slow to rates consistent with the 2% inflation target. We think the Bank of England …
Construction activity drops to a post-COVID low The headline CIPS construction PMI dropped back in July to 44.3, the lowest since May 2020 when COVID lockdowns impacted activity. The drop was driven by the housing component, which after jumping to 50.7 in …
The Reserve Bank of India (RBI) kept the repo rate on hold at 5.50% and maintained its “neutral” policy stance today, despite India already being hit by a 25% US tariff with the potential for it to rise further if Trump follows through on his latest …
