This page has been updated with additional analysis since first publication. High energy prices keep inflationary pressures elevated August’s flash PMI figures suggest that the economy shrugged off the latest rebound in energy prices despite inflationary …
21st August 2026
Activity growth unchanged, price pressures continue to fall The euro-zone’s Composite PMI was broadly unchanged in August and, together with the continued fall in the input and output price indices, suggests that the euro-zone economy is continuing to …
Further small steps towards FDI liberalisation The government is reportedly considering raising the threshold above which foreign direct investment requires approval from the Cabinet Committee on Economic Affairs (CCEA) from INR50bn (US$480mn) to …
This page has been updated with additional analysis since first publication. Weakening retail sales and higher public borrowing a sign of things to come July’s public finances figures continued the recent run of bad news on the fiscal position and …
Next move will be down, not up At a fireside chat on Wednesday, RBA Deputy Governor Hauser echoed the Bank’s hawkish messaging from last week. He noted that the Board remains worried about the upside risks to inflation and that it stands ready to raise …
Case for tighter policy remains compelling The 0.3% q/q rise in the preliminary estimate of Q2 GDP may have been a bit weaker than most (including ourselves) had anticipated. But it’s unlikely to dissuade the Bank of Japan from hiking rates again next …
PMI strengthens case for further BoJ tightening The strength in the August PMI adds to the case for the BoJ to hike interest rates as soon as next month. According to the flash estimate released today, the composite PMI picked up from 52.7 to 53.4 in …
Pickup in inflation clears the way for September BoJ hike With underlying price pressures intensifying, we’re growing more confident in our view that the Bank of Japan will hike rates again at its meeting next month . The pickup in headline inflation from …
The dollar has come under renewed pressure, in part due to a resurgent “debasement” narrative. While we continue to think such concerns are somewhat overblown, and that the economic backdrop overall will point to a stronger dollar over the coming months, …
20th August 2026
A significant divergence in sector weightings means a large performance gap has opened between REITs and the appraisal-based indices over the last two years. We have therefore created a re-weighted REITs measure to feed into our Capital Value Lead …
Despite some softness in recent months, we expect a continuation of the AI capex boom and a broadening of investment to drive above-consensus GDP growth, which should rise to 2.6% next year. That should, in turn, help to drive the unemployment rate below …
Rates on hold, easing cycle to restart before the end of the year The Central Bank of Egypt left its policy rate unchanged at 19.00% for a fourth consecutive meeting today but, so long as oil prices drop back as we anticipate, we think officials will be …
While the economy gained momentum in the second quarter, we expect GDP growth to slow again in the second half of the year amid ongoing uncertainty around CUSMA negotiations. The combination of soft underlying activity and target-consistent core inflation …
A growing number of Brazilian companies are seeking to restructure their debts, and the backdrop of slowing growth and high interest rates will probably cause a further rise in corporate defaults. While this is unlikely to pose a threat to financial …
Saudi tightens oversight of UAE transactions The past week has brought further evidence that tensions between Saudi Arabia and the UAE have moved into the economic sphere. Reuters reported that the Kingdom has increased regulatory oversight over financial …
The euro-zone’s exports of cars have fallen dramatically since 2017. This loss is driven by internal combustion engine vehicles, whereas exports of electric vehicles (EVs) are rising rapidly. Even if EV exports continue to increase in the medium term, we …
Recently released data support our view that emerging markets will – the Gulf economies aside – ride out the energy shock pretty well. At the same time, inflation pressures look contained and are likely to remain so, despite upside risks from heatwaves …
Europe Commercial Property Chart Pack (Q3 2026) …
The economy has weathered the energy shock well as Japan has been able to secure sufficient crude oil supplies outside the Middle East. However, Japan is paying a large premium for those supplies, which is adding to inflationary pressures. Indeed, the …
Rise in unemployment will keep RBA on the sidelines With the labour market continuing to cool, we doubt that the RBA will tighten policy any further despite its recent hawkish messaging. The 16,000 fall in employment in July was much weaker than the …
Japan paying a large price for stable crude oil supply Japan’s crude oil import volumes returned to normal in July, but the country seems to be paying a large premium to secure supplies from sources outside the Middle East. The 23.2% annual rise in export …
Soft data since July negates hawkish minutes The minutes of the Fed’s July meeting confirmed that the rate-setting committee had become more hawkish since the June meeting but, with the inflation, labour market and activity data since then all on the soft …
19th August 2026
Today’s big retreat in long-dated Treasury yields, triggered by the news of a doubling of liquidity support , gave the S&P 500 a fillip after a prior slump in bonds had begun to take a toll on the stock market. Stepping back, though, the big picture is …
The Q2 RICS survey suggests that while Iran War-related uncertainty isn’t derailing the recovery, it is dampening its pace. But the office sector appears to be emerging from the clouds that have surrounded it, with demand up, inducements down and rent and …
The global economy proved surprisingly resilient to the Iran war in Q2. While higher energy prices have hit consumer spending in parts of Asia, consumption has held up well elsewhere and AI exports and investment have been a powerful offset. Based on our …
The BRICS summit in Delhi in September will be billed by India as an effort to give the expanded grouping a more practical and constructive role in the global economy. But differences over the Iran war and China’s export prowess – among other things – …
The bursting of the AI bubble that we suspect will happen next year, and the resulting pick-up in safe-haven demand, would most likely cause the franc to appreciate against the euro. Although the franc strengthened against the euro during the early …
The poor performance of Chile’s economy in Q2 has prompted us to revise down our already below-consensus growth forecast to just 0.5% this year. And while we expect a modest pick-up in growth over 2027-28, to 2.0-2.3%, that still implies Chile will fare …
It is likely that the participation rate will rebound slightly in the next few months, but the big picture is that population ageing and the crackdown on immigration will continue to hold back labour force growth. The unusual combination of a decline …
The latest batch of activity data from South Africa point to GDP growth softening to around 0.3% q/q in the second quarter. That said, we remain confident in our above-consensus forecast for the economy to grow by 1.5% over this year as a whole and for …
Higher risk-free interest rates and uncertainty from the war in Iran are now beginning to push up property yields and all-property capital value growth has fallen to zero. But we still think the 10-year gilt yield will fall back over the remainder of the …
The Q2 RICS survey suggests surveyors are now less pessimistic about the Iran war’s impact on European commercial property markets. And while credit conditions deteriorated further, other survey evidence points to an improvement in H2, which we expect …
The indirect effects of higher energy prices on core inflation in the euro-zone have been close to non-existent so far, but they are likely to build in the second half of the year. If energy prices remain around their current levels, we think headline …
A temporary inflation dip The large fall in South African inflation in July, to 4.3% y/y, will likely prove a blip and the headline rate is likely to rise into early 2027. That should keep the SARB on the sidelines in the near term, but we see scope for …
Falls in food prices in Central and Eastern Europe (CEE) this year have helped to keep headline inflation rates in check during the energy shock, but this will reverse before long. Global agricultural prices are already rising due to higher input costs …
Malaysia is emerging as one of the biggest beneficiaries of the global AI boom. Rapid growth in data-centre investment and information-service exports should provide a powerful boost to GDP over the next couple of years. We have raised our 2026 and 2027 …
Rupiah stability allows Destry to keep rates on hold in first meeting Bank Indonesia left its policy rate on hold at 5.75% today in Destry Damayanti’s first meeting as (acting) governor and, so long as the rupiah remains stable, interest rates will …
This page has been updated with additional analysis since first publication. Underlying inflation still contained CPI inflation rose from 2.6% in June to 2.9% in July (consensus forecast 2.9%, BoE & CE 2.8%) and the lagged effect from high energy prices …
Wage growth will remain elevated for now Wage growth was weaker last quarter than the RBA had expected and supports our view that the Bank is done tightening. The 0.8% q/q rise in total hourly wages excluding bonuses in Q2 was in line with the analyst …
While there’s a risk that the tax changes announced in the Budget will result in a more pronounced downturn, for now we’re comfortable with our forecast of a 6% peak-to-trough fall in house prices. We explained here why the tax changes announced in the …
While long-term government bond yields have dropped back a little today, their recent surge suggests investors are losing patience with fiscal profligacy. But unless the sell-off intensifies, equities can probably weather higher yields, at least in the …
18th August 2026
The renewed rise in mortgage rates in July squeezed would-be home buyers’ budgets, causing pending home sales and purchase mortgage applications both to fall. This points to further downward pressure on existing home sales in the coming months, while the …
Q2 GDP surge increases the chances of September rate hike The strong 1.3% q/q expansion in Colombian GDP in Q2, alongside continued above-target inflation, means that BanRep is likely to deliver an interest rate hike in September (having paused in July). …
The recent bond market sell-off appears to reflect investors demanding greater compensation for fiscal, geopolitical and policy uncertainty. We expect this shift to prove relatively persistent. The direct macroeconomic impact should remain limited absent …
The latest data provide a bit more reassurance that the housing market is past the worst, but the renewed rise in five-year bond yields suggests that higher mortgage rates will soon temper the recovery. The 0.5% m/m seasonally adjusted rise in home sales …
The Burnham economy …
The latest activity data suggest that India’s economy is slowing, but we think GDP growth should average 6.5% in 2026-27 – an enviable rate by global standards. Headline inflation nudged up to a 19-month high in July and if monsoon rainfall remains weak, …
