We’re hosting a 20-minute online briefing at 3pm GMT today on the outlook for policy at the Bank of England, Fed and ECB. (Register here .) While leaving interest rates at 3.75% today, as widely expected, the Bank of England sounded more dovish than we …
5th February 2026
CNB leaves rates on hold, but odds of another cut rise The decision by the Czech National Bank (CNB) to leave its policy rate on hold today, at 3.50%, was widely expected, but a dovish shift seems likely in the post-meeting communications. The risks to …
Policy will be on hold for several more months Today’s decision to leave the ECB’s deposit rate unchanged at 2.0% was never in doubt. While the press release puts a positive spin on recent developments we suspect that policymakers will leave their policy …
BoE appears more open to more interest rate cuts While leaving interest rates at 3.75% today (as widely expected), the Bank of England sounded more dovish than we expected, which supports our long-held view that interest rates will be reduced to 3.00% …
US-Iran set for crunch talks Negotiations between the US and Iran are due to take place tomorrow. But relations are fragile and the risk of talks breaking down, and the US launching fresh strikes on Iran, remains high. Eyes have been trained on the Strait …
The upcoming election on 12 th February will be pivotal for Bangladesh as the country seeks to restore stability following the 2024 political crisis and place the economy on a more sustainable footing. While we have concerns about both major parties, the …
Construction activity may be turning a corner The headline CIPS construction PMI leapt to 46.4 in January, a level broadly in line with September 2025 after three particularly weak months at the end of 2025. Nevertheless, that kept the index in …
We think conditions for the long-awaited revival in private corporate investment in India are now largely in place. As a result, we now expect real GDP growth in India to average 6.5% per year from 2026 to 2035, up from our previous forecast of 6.0%. …
Japan’s government holds more financial assets than governments elsewhere. While the value of the government’s domestic asset holdings could plunge during a crisis, a large share is invested overseas and the value of those assets should hold up much …
Growth close to 5% yet again, desire for faster growth to prompt more rate cuts Official figures released today showed that Indonesia’s GDP growth stood at 5.4% y/y in Q4, but we have little faith in the quality of the data – growth has been close to 5% …
Asia-Pacific valuation scores worsened in Q4 as bond yields rose across markets while property yields held flat. As we expect risk-free rates to remain high, all-property valuations are likely to stay stretched throughout this …
We don't think the falls suffered by software stocks in recent days are indicative of waning enthusiasm for AI. We think investors will continue to judge that the benefits accruing from AI will outweigh the costs, driving the stock market higher this …
4th February 2026
Warming US-India relations, centred around an agreement for India to purchase less Russian oil, risks tightening the global oil market. However, we aren’t convinced that India will curtail imports from Russia completely so suspect the upward pressure on …
This weekend’s election in Japan could be bad news for JGBs if the LDP emerges victorious and this prompts expectations of even more fiscal stimulus. That might not be good for the yen either. But it would help to underpin Japan’s stock market. As it …
The latest data out of Turkey have reinforced our view that the rebalancing process is becoming more challenging. At the heart of the problem is excessively strong domestic demand and the tension between deploying an exchange rate strategy intended to …
The balance of probabilities is tilted towards Brazil avoiding major additional pre-election fiscal loosening (and the resulting backlash in financial markets). As a result, we think the Selic rate can fall a bit further this year than is currently …
Inflation is subdued or falling across Sub-Saharan Africa, a trend which we think has further to run over the course of 2026. Monetary stances are generally tight, which provides policymakers with plenty of scope to ease policy. Indeed, we think rates …
Survey-based activity indicators point to solid growth continuing While not as eye-catching as last month’s rise in the ISM manufacturing index to a three-year high, the ISM services index remained at a healthy 53.8 in January, hinting at the potential …
The newly-planned rise in defence expenditure marks a much-needed shift from the Trudeau era but is still too small to sufficiently lift spending above 2% of GDP or generate significant multiplier effects. The first budget of Prime Minister Mark Carney’s …
Rates left on hold, easing cycle nearing an end The decision by the National Bank of Poland (NBP) to leave its policy rate on hold today, at 4.00%, is likely to be followed by an interest rate cut at the next meeting in March. But the easing cycle is near …
By allowing mortgage lenders to lend more for any given level of borrowers’ income, the relaxation of the cap on high loan-to-income (LTI) lending last year suggests gross mortgage lending will rise faster in 2026 and 2027 than our forecast for a gradual …
Housing market heating up heading into the spring The large 8% rise in home purchase mortgage applications in January lifted them to their highest level in three years and is consistent with existing home sales rising to around 4.5m annualised over the …
Our China Labour Market Indicator has climbed back above its long-run average recently, signalling an improving employment backdrop. A key driver has been stronger labour demand among exporters, who have become more willing to hire and raise wages as the …
The potential for Venezuelan oil to be used, albeit indirectly, to refill the US Strategic Petroleum Reserve over the coming years gives us even more confidence in our view that a boost to US imports of Venezuelan oil will not displace imports from …
Inflation likely to fall further January’s declines in headline and core inflation left both below the ECB’s forecasts for Q1. This is consistent with our view that inflation will be lower than the central bank expects in 2026, but January’s data were not …
Survey data point to an improving commercial real estate lending environment in H1 this year. This will support investment activity, though our updated estimates suggest refinancing challenges will still be significant this year. The recent release of the …
Taiwan’s economy for a long time grew at the same pace as Korea, but is now surging ahead. Taiwan’s central role in AI-related electronics supply chains has driven a powerful post-pandemic expansion, while Korea’s more diversified and cyclically weaker …
The recent pick-up in economic activity and inflation suggests that the neutral rate of interest may now be closer to 4% instead of the RBA’s estimate of around 3.5%. Given that the RBA believes that a sustained period of below-trend GDP growth will be …
RBNZ will look past rise in unemployment The modest rise in New Zealand’s jobless rate in Q4 masks the fact that underlying labour market conditions have started to improve. That said, we still think policy tightening won’t be on the Bank’s agenda this …
3rd February 2026
Overview – Global inflation looks set to undershoot consensus forecasts, amid falling commodity prices, cooling labour markets, and an absence of inflationary spillovers from tariffs. In the US, we expect core inflation to ease later this year once the …
This weekend’s Japanese election is shaping up to be one of the most consequential in years. As Sanae Takaichi, newly installed leader of the ruling Liberal Democratic Party, seeks to cement her mandate, government bond yields and the yen have been moving …
We recently hosted a Drop-In on the sell-off in gold and other precious metals. This Update answers six key questions on topics such as the role of leverage in driving prices, the macroeconomic and market risks from falling prices, and our view on where …
Among the largest euro-zone countries, public debt looks most worrying in France because it is on an upward trajectory and Italy because it is likely to remain very high. Government debt is also set to increase in Germany, but it will remain low by …
The ECB’s Q4 Bank Lending Survey, published this morning, suggests that banks have become more cautious about lending to companies while consumers remain reluctant to spend. It also showed that the growth in mortgage demand has slowed sharply, implying …
Gulf’s non-oil sectors start the year on softer footing January’s PMIs from the Gulf were a mixed bag, though, non-oil sectors appear to have lost some momentum against the backdrop of low oil prices and heightened tensions in the region due to the …
Korea’s equity boom is unlikely to deliver a major boost to Korean consumers or the broader economy. But it is sending a clear signal about the external outlook. The rally reflects Korea’s central role in the global AI cycle and points to strong export …
Australian bonds have been battered lately, and its currency boosted, by the prospect of the country’s central bank reversing course on monetary easing. But even though it’s now followed through with a rate hike we don’t expect many, if any, other bond …
The Reserve Bank of Australia struck an unambiguously hawkish tone when it raised rates by 25bp at its meeting today. Our base case is that the Bank will deliver only one more 25bp hike this year, but the balance of risks is arguably tilted towards …
RBA hands down a hawkish 25bp hike The RBA continued to sound concerned about rising capacity pressures when it lifted its cash rate by 25bp today. There is a growing risk that rates will need to be taken above the 4.10% peak we have pencilled into our …
The 18% tariff that President Trump has announced will be applied to imports from India – down from 50% – would significantly boost India’s attractiveness as an alternative manufacturing hub to China. And there could be geopolitical ramifications too; …
2nd February 2026
We doubt that any other major EM central bank will imminently follow Colombia in kicking off hiking cycles, although a strengthening of inflation pressures in parts of Central Europe (Czechia and Poland) and domestic demand in Taiwan could prompt their …
The recently signed EU-India trade deal promises big tariff reductions which should support EU export growth. However, the starting level of exports is low, the phase-in will be gradual, and imports from India will also keep rising. So while euro-zone …
The Trump administration has announced a flurry of measures aimed at making US housing more affordable, from proposed bans on institutional investors to the resumption of bond purchases by GSEs. But how workable are these proposals – and will they fix the …
Finally turning a corner? The surge in the ISM Manufacturing Index in January suggests that after years of malaise, perhaps the manufacturing sector might be turning a corner. While the headline index is still at a level that historically has been …
The data published since the start of the year suggest economic activity and price pressures have strengthened. But we still expect annual GDP growth to slow and the weak labour market to weigh on price pressures. This and the smaller rises in regulated …
Saudi Arabia’s economy strengthened over the course of 2025 as the resumption of oil output hikes fuelled growth. But as that boost starts to fade and fiscal consolidation is ramped up against the backdrop of falling oil prices, we think that overall GDP …
The idea that the Fed could pave the way for much lower policy rates by shrinking its balance sheet is unconvincing. Balance sheet reduction is a blunt tool for tightening financial conditions, and pushing it too far risks disrupting short-term funding …
