We doubt this year’s rotation in US equities will be heavily influenced by today’s ruling from SCOTUS that Donald Trump’s IEEPA tariffs are illegal, even if the president now tries to raise tariff revenue by other means. Granted, the period around …
20th February 2026
SC rules that Trump’s reciprocal tariffs are illegal In a 6-3 vote, the Supreme Court ruled that President Trump was wrong to use the International Emergency Economic Powers Act (IEEPA) as a justification for imposing his far-reaching reciprocal tariffs …
New home sales hit four-year high in November New home sales remained solid in November and December, even as the downward march in mortgage rates paused for breath. Because sales are recorded at contract signing, they likely softened in January amid …
Peru: another president gone Peru’s political problems have once again come to the fore this week following the ousting of President Jerí just four months into his term. He was replaced by José Balcazar – Peru’s ninth president in less than a decade. The …
Weak goods spending a drag on fourth-quarter consumption The unchanged level of retail sales volumes in December confirms that they fell over the quarter a whole, which would have dragged down goods consumption and contributed to the likely weak result …
Government shutdown takes bigger bite out of GDP than expected The government shutdown ended up being a much bigger drag on the economy than the Treasury’s data had suggested, with fourth-quarter GDP growth slowing to 1.4% annualised. Federal expenditure …
In a busy week of data releases, the rise in the unemployment rate among 18-24 year olds to a five- year high of 14.0% in December grabbed the headlines. And the rise since the pandemic in the number of young people who are inactive (i.e. not employed nor …
Easing pay pressures This week brought further evidence of slowing wage growth in the euro-zone. The most comprehensive measure of wages – labour compensation per employee – is published with a long lag, but it grew more quickly in the first three …
Sizing up the oil risk premium (again) The price of Brent crude has firmly been in the grips of a geopolitical maelstrom this week, as tensions between the US and Iran have escalated once more. At the time of writing, the price of Brent has risen by …
Signs of life in the euro-zone economy have sparked hopes that a meaningful recovery may finally be underway. But our growth forecasts for this year and next remain below consensus. In this special online briefing, we explored whether we’re being too …
India’s economic growth won’t match the pace of 2025 over the next couple of years, but India will remain a global outperformer. Prospects have brightened further as punitive US tariffs have come down. Inflation is now on the rise, although it will take …
A big fiscal spur looks unlikely Tuesday marked the first day of the Year of the Horse, traditionally seen in China as a year of energy, independence, and bold forward momentum. China’s lunar calendar follows a sexagenary (60 year) cycle. Over the past …
Geopolitical clouds hang over BoI decision The latest data out of Israel suggest to us that an interest rate cut at the Bank of Israel (BoI) meeting next Monday has become more likely than a pause in the easing cycle, but the decision may depend on how …
This page has been updated with additional analysis since first publication. Encouraging start to the year for activity, price pressures building February’s flash PMIs provides further signs of an encouraging start to the year for economic activity and …
Germany leading modest recovery February’s flash PMIs support the view that activity in the euro-zone economy is growing at a reasonable pace, led by a pick-up in Germany, and that price pressures remain too high for the ECB to consider cutting interest …
Thailand: Q4 rebound won’t prevent rate cut The strength of Thailand’s economic rebound in Q4 – the economy expanded by an impressive 1.9% q/q – has prompted suggestions that the economy may now require less policy support, and that the Bank of Thailand …
This page has been updated with additional analysis since first publication. More evidence of a healthy start to the year, but it may not last The big reduction in public borrowing and surge in retail sales in January support other evidence that the …
The need for restrictive policy is evident If one had expected the minutes of the RBA’s February meeting to show that policymakers felt a sense of urgency to tackle inflation, they would have been sorely disappointed. Even as it admitted that “aggregate …
Don’t overlook benefits amid AI disruption fears The optics of this week’s AI Impact Summit in New Delhi were powerful, bringing together heads of state and leaders of the world’s biggest technology companies. But the timing was awkward. India’s IT stocks …
Budget was close to balanced last year The meagre 0.1% q/q rebound in GDP last quarter following the 0.7% q/q plunge in the third quarter reflected broad-based stagnation across the various demand components. What stood out though was that public demand …
Japan's economy should turn the corner this quarter With the composite PMI rising to a three-year high in February, the recent sluggishness in economic activity should be followed by a marked recovery in the first half of this year. According to the flash …
Underlying inflation to remain above target for a while With price pressures showing signs of softening, the Bank of Japan won’t be in a rush to resume its hiking cycle. However, we still believe conditions will be in place for the Bank to raise rates by …
Glittering TSX unlikely to boost consumption by much There does not appear to have been any meaningful wealth effects on consumption from the skyrocketing TSX, partly because households have faced offsetting falls in house prices. We expect the TSX to …
19th February 2026
The evidence so far shows that the inflationary effects of stronger demand from the AI buildout remain narrow, whereas the disinflationary effects of stronger productivity growth already appear to be broadening. Accordingly, unlike the experience during …
There’s a growing acknowledgement that Brazil’s 2019 pension reform didn’t go far enough to ease fiscal pressures from the social security system. Indeed, Brazil is likely to see one of the largest rises in public pension spending of any major economy …
Strong computer imports point to booming business equipment investment The usual suspects were behind the widening in the trade deficit at the end of last year: gold, pharmaceuticals and IT equipment. December’s trade figures leave our Q4 GDP growth …
Trade boosted fourth-quarter GDP The equal sized gains in export and import volumes in December confirm that net trade made a positive contribution to fourth-quarter GDP. However, looking through the volatile components that drove the headline numbers in …
We think the 10-year Australian government bond yield will reach 5% this year as the RBA hikes by more than investors anticipate. But we see less scope for yields to rise in New Zealand as the RBNZ is likely to disappoint investors’ expectations that it …
Are inflation and labour market dynamics putting expectations for more Fed easing at risk? Does cooling inflation clear the way for the Bank of England to cut again? Is the ECB still in its “good place”? Our economists hosted this briefing on what the …
While we think it will take several years before AI has a meaningful impact on Europe’s economies, Switzerland may be an exception. There is already some evidence of a positive boost from AI. And we expect Switzerland to be among the biggest beneficiaries …
Risk of US strike on Iran is growing The build-up of US military forces in the region has raised concerns about a US attack on Iran, unless Iran makes concessions to reach a new nuclear deal. We looked at the implications of a US strike on Iran on the …
There is likely to be an increase in civil engineering activity in the euro-zone this year as Germany’s government boosts infrastructure spending. However, we think that this boost will be smaller than most assume and housebuilding is likely to remain …
Carbon capture technologies are often put forward as a solution to lowering emissions from hard-to-abate sectors, but given the high costs involved, their uptake has been slow. This Update addresses five key questions about the types of carbon capture …
Positivity surrounding emerging markets appears to be at its highest in many years. While some of this is justified, we think there is a wide variation in the outlook for both growth and financial markets across countries. Outperformance is likely to be …
BI holds as it focusses on supporting the rupiah Bank Indonesia left its policy rate unchanged at 4.75% for a fifth consecutive meeting today as it maintained its focus on supporting the rupiah. But the Board retains a clear easing bias and, so long as …
BSP cuts again as corruption scandal weighs on the economy The Bangko Sentral ng Pilipinas (BSP) lowered its reverse repo rate by a further 25bp today (to 4.25%) and with the economy set to remain weak amid the ongoing corruption scandal and inflation …
The threats are mounting to US Treasuries, and we think yields will rise over the rest of the year. The US Treasury rally has gone into reverse over the past couple of days. The most recent concern has probably been a not-especially-dovish set of Fed …
Tight labour market points to more rate hikes With the January labour force survey confirming that the labour market is tightening rather than loosening as the RBA had anticipated, the RBA has more work to do. Employment growth slowed from an …
Fed in wait-and-see mode, as balance of risks shifts The minutes of the Fed’s late January policy meeting are arguably a little more hawkish than expected with “several participants indicat[ing] that they would have supported a two-sided description of …
18th February 2026
Heavy snowfall keeps market cool The housing market weakened sharply in January, with home sales and house prices both plunging. While the housing market has been struggling for some time, the record-breaking winter storm that hit eastern Canada likely …
We now think that the Bank of England will cut interest rates in March, and continue to think it will take rates lower than investors expect this cycle. So, despite politics putting some upwards pressure on yields, we expect Gilts to rally this year. UK …
This Update answers a few key questions on the upcoming joint review of the USMCA (a.k.a. CUSMA). We think the popularity of the trade agreement among domestic firms, the potential for backlash from an increasingly assertive Congress, and the likelihood …
The acceleration in Indonesian GDP growth in Q4 is hard to square with some other activity data, which suggests that the economy softened at the end of last year. Given the government’s push to get growth to 8% and signs that the national accounts figures …
Improved January data spoiled by downward revisions to earlier figures January’s stronger production data were accompanied by downward revisions to previous months, limiting the good news. However, signs of broadening strength in production last month …
Global new industrial supply has been contracting rapidly, hitting its lowest level in a decade as developers pull back. However, we expect demand to fall short of supply again this year, delaying a broader market turnaround until at least 2027. New …
An improving outlook, but it won’t last While housing starts ended the year strongly, and permit data suggest that January’s number should be even more positive, we continue to expect tightening financial conditions will pull starts back down later in the …
Business equipment investment growth picked up in Q4 The fall in durable goods orders in December reflected a drag from volatile commercial aircraft orders, whereas core orders (ex. transport) continued their recent good run, supported by the AI-buildout. …
Global growth will slow in the long run as population growth weakens and the scope for emerging market catch-up narrows, but there will be bright spots. We are increasingly confident that advances in artificial intelligence will lift productivity in …
