Tariff man triumphant Following the agreement between the US and China to reverse most of the prohibitive tit-for-tat tariffs imposed a month earlier, stock markets have rallied further this week. The S&P 500 is now closing in on the high reached in …
16th May 2025
Consumers remain uneasy despite the tariff pause The weaker-than-expected May print of the University of Michigan consumer sentiment index was driven by a further increase in inflation expectations and suggests households remain wary about the tariff …
A deal is perhaps not so imminent Optimism that India was poised to seal a quick trade deal with the US has faded in the past week. Admittedly, Donald Trump still sounds positive about the negotiations – he claimed yesterday that India had offered a “no …
Copom minutes intensify debate over June meeting The minutes to the Brazilian central bank’s monetary policy meeting last week, at which the Selic rate was hiked by 50bp, have added further fuel to the debate over whether the tightening cycle is already …
Tariffs starting to weigh on residential construction The small rebound in housing starts in April is more troubling than it appears, as it barely recoups the sharp, weather-related decline seen in March and conceals renewed weakness in both single- and …
The agreement to roll back some tariffs reached by the US with both China and the UK raises the question of whether the EU will reach a similar deal before 9 th July, when the pause on the so-called “reciprocal” tariffs expires. We suspect a US-EU deal …
The implications of the government’s latest policies for the economy bring to mind the quote “what the right hand giveth, the left hand taketh away”. The right hand – EU reset In the right hand is the UK-EU reset, which will begin on Monday to much pomp …
Risks now skewed towards hikes rather than further cuts The National Bank of Romania (NBR) highlighted concerns with the uncertain political backdrop and recent pressure on the currency when leaving its policy rate on hold today, at 6.50%. We now think …
GNU will struggle to fill VAT hike-related hole South Africa’s finance minister takes his third stab at delivering the 2025 Budget on Wednesday. Disputes within the ruling GNU seem to have been resolved but this may come at the cost of slippage on …
US-Iran nuclear deal on the table Despite President Trump’s previous focus on pushing OPEC+ to loosen the taps and lower oil prices, there was surprisingly little explicit talk of oil prices during his trip to the Middle East. Instead, the biggest …
We still expect a slowdown this year The tariff de-escalation agreed at the start of this week is good news for Chinese exporters who were facing a collapse in exports to the US. But we haven’t changed our growth forecasts for China’s economy for a few …
The flurry of diplomatic activity by both the US and China this week underscores that geopolitical alliances in parts of the emerging world are fluid. We suspect that most countries in Latin America and the Middle East will try to straddle the China-US …
The polls ahead of presidential elections in Romania and Poland this Sunday point to diverging political paths for the two largest economies in Central and Eastern Europe over the coming years. We’ll be discussing the implications of Sunday’s election …
Slow progress on trade deals Monday’s agreement between the US and China to lower tariffs marks a significant de-escalation in tensions between the two countries. However, the deal addresses none of the issues that caused tensions to rise in the first …
The de-escalation in the US-China trade war gave the dollar a renewed boost against most G10 currencies this week. But, a fall back in Treasury yields has taken away some of those gains as we head into the weekend, and trade talks have been a double-edged …
Weaker growth to prompt rate cuts later this year GDP growth in Malaysia slowed in the first quarter, and we think the economy will struggle this year, opening the door for the central bank to cut interest rates. According to the second estimate published …
Inflationary pressures linger on In case you missed it, our RBA Watch explains why we expect the Bank to cut rates by 25bp, to 3.85%, at its meeting next week. However, we suspect that the cut will be a somewhat hawkish one, with the Board reluctant to …
Lower energy prices will weigh on inflation The truce reached between China and the US over the weekend is a clear positive for Japan’s economy. Even so, we suspect that weak economic activity coupled with an impending plunge in inflation will delay …
GDP growth set to remain sluggish this year With the economy already shrinking on the eve of the trade war, the Bank of Japan will probably wait even longer before resuming its tightening cycle than we had anticipated. The 0.2% q/q fall in Q1 GDP was …
Growth concerns leave the door open for another 50bp cut in June Mexico’s central bank (Banxico) lowered its policy rate by another 50bp, to 8.50%, at today’s meeting and the accompanying communications underlined that policymakers’ concerns have shifted …
15th May 2025
Explore historical relationships and compare current financial market conditions with past periods of distress. The data tend to be updated once a quarter and on an ad hoc basis. If you would like subscriber access to this dashboard contact …
One month on from the peak of the post-“Liberation Day” market turmoil, calm has largely returned and most key asset markets have recovered much, or all, of the ground lost in the days following 2 nd April. Indeed, core money markets never looked …
The Gulf’s trillion dollar shopping list Headlines have been dominated this week by US President Trump’s dealmaking in the Gulf, striking nearly $1trn of potential deals for investment and trade over the coming years. There’s a big question mark about …
Production flat but positive signs At face value, the stagnation of industrial production in April and the fall in manufacturing output suggest that tariffs are weighing on domestic production. However, some of this is due to an unwinding of tariff …
Retail sales and PPI show few signs of adverse tariff impact Despite fears raised by the slump in sentiment, retail sales edged up by 0.1% m/m in April, following a massive 1.7% m/m gain the month before. Admittedly, control group sales fell by 0.2% m/m …
The impressive progress made by Argentina’s President Javier Milei towards restoring macro stability should set the scene for stronger and less volatile growth than in the past 10-15 years. But we think the analyst consensus has turned too optimistic on …
Sharp drop in manufacturing sales volumes The sharp decline in manufacturing sales volumes in March suggests the earlier boost from US tariff front-running is now reversing. A modest rise in new orders supports our view that the watered-down tariffs that …
Nigeria’s long-running security challenges have brought obvious human costs, and they have also contributed to the economy’s woes by hurting output in the agriculture and oil sectors, weakening demand, and putting off investment. President Tinubu’s …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. European markets have had a strong start to the year, and we are …
The decision by OPEC+ to follow up May’s faster rise in oil production with a similar increase in June suggests a change in tack on oil policy towards recapturing market share. This will provide a boost to GDP growth in 2025 and 2026 via higher output in …
After an extraordinary rally in gold prices, the recent pullback naturally raises the question of where gold prices may be headed next. In our view, the rest of this year will prove more challenging for gold prices than the first few months. However, the …
Europe Commercial Property Valuation Monitor (Q2 2025) …
We think the recent “bear flattening” of the US Treasury yield curve has a bit further to run. The story in the Treasury market over the past few weeks has generally been one of bear flattening (short-end yields rising by more than long-end ones) as …
This page has been updated with additional analysis since first publication. GDP growth likely to slow again Euro-zone GDP growth was revised down to 0.3% q/q in Q1 but the underlying picture was weaker than this and we expect growth to slow again the …
Growth slows across CEE ... but Poland beats expectations The Q1 GDP data released in Central and Eastern Europe (CEE) today confirmed that growth slowed across the region ahead of the introduction of US tariffs. That said, Poland’s relatively strong …
Inflation holds steady This response has been updated with analysis of wholesale prices and content. Saudi Arabia’s headline inflation rate was unchanged at 2.3% y/y in April, its joint fastest pace in nearly two years. We think that inflation will hover …
Bumper growth suggests SNB will cut by just 25bp next month Switzerland’s GDP growth shocked to the upside in the first quarter and grew by 0.7% q/q, shaking off concerns that trade uncertainty would weigh on the economy. This means the SNB is more likely …
This page has been updated with additional analysis since first publication. A temporary burst rather than a sign of a fundamentally stronger economy The bumper 0.7% q/q rise in GDP in Q1 is unlikely to be repeated as a lot of it was due to a leap in …
On balance we suspect the US dollar will be positively correlated with the performance of the US stock market (i.e. it will have a “positive beta”) over the next year or so. But we don’t think that the greenback’s role as a “safe haven” is over for good, …
Labour market continues to fire on all cylinders With the labour market going from strength to strength, we’re more convinced than ever that the RBA will be reluctant to cut rates aggressively. Accordingly, we’re sticking to our forecast for a terminal …
The strong lead for far-right candidate George Simion in Romania’s presidential election, and the collapse of the coalition government last week, led to the largest one-week fall in the leu since 2009. We estimate that the exchange rate is still …
14th May 2025
The rolling back of tariffs has coincided with a recovery in big tech in the US and China. (See Chart 1.) Their dual rally is something new since Donald Trump returned to the White House. We think there’s a good chance it will continue, despite the US …
There is broad agreement amongst forecasters that prime rental growth will slow over the next couple of years. However, we think the slowdown could be sharper than the consensus expects, especially if affordability constraints start to bite. The May IPF …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Most euro-zone governments look set to continue running large budget …
Fiscal spending propping up credit growth Bank loan growth resumed its slowdown last month, but broad credit growth continued to accelerate on the back of a surge in government bond issuance. While monetary easing should help drive up private credit …
While sales volumes have picked up since the start of last year, we expect residential property prices in Hong Kong to continue to fall until Fed cuts resume. Even then, given the structural headwinds facing the economy, property prices are likely to …
With trimmed mean inflation entering the RBA’s target band for the first time since 2021, the Bank will almost certainly lower interest rates by another 25bp at next week’s meeting. However, amidst early signs that price pressures are strengthening again, …
Japan’s economy won’t be affected much by global trade tensions. While the Bank of Japan has signaled a pause in its tightening cycle, we think the Board is underestimating the strength of inflationary pressures. We still expect another rate hike in July …
