The rebound in energy prices this week is a reminder of how unpredictable the global environment. While the Middle East and President Trump’s foreign policy were the main causes of the rise in crude oil and natural gas prices, other factors have also …
10th July 2026
Model controls will reinforce the US-China divide China’s Ministry of Commerce (Mofcom) has held a series of meetings over the past month to discuss whether and how to restrict foreign access to top Chinese AI models, according to a Reuters report earlier …
Given the housing market tends respond quicker to changes in sentiment and interest rates than other parts of the economy, tentative signs of a turnaround in June may be an indication that activity in the wider economy could start to recover later this …
Middle East flare up a reminder of INR vulnerability The renewal of hostilities between the US and Iran this week has had an impact on India’s financial markets. Bond yields have risen, the nascent recovery in the stock market has been stopped in its …
A combination of above-target inflation, buoyant growth, a struggling currency, and rising property prices in Seoul all point to the Bank of Korea (BoK) hiking rates by 25bp to 2.75% next week. A key worry for the BoK is the recent jump in inflation, with …
Government offers temporary relief The JGB market has been on something of a roller-coaster ride this week. 10-year JGB yields hit a three-decade high of 2.9% earlier this week, partly reflecting investor concerns that jawboning by the Takaichi …
One Nation wants to protect Australia’s way of life The right wing One Nation party is edging closer to Labor and the Coalition in opinion polls for the Victorian state election, which will be held on 28 th November. And the party led by Pauline Hanson …
Upside inflation risks have moderated since the June meeting Comments from Macklem suggest he is comfortable with the current policy stance Policy normalisation to begin next year, once economy gathers momentum Lower oil prices reduce the pressure on …
9th July 2026
Market participants have taken the return to warfare between the US and Iran in their stride. Government bond markets are likely to remain most vulnerable to a renewed surge in energy prices, even if they may be in a somewhat better position to weather …
Rates on hold as pound rebounds and inflation dips The Central Bank of Egypt left interest rates unchanged at 19.00% for a third consecutive meeting today and, so long as the US-Iran ceasefire holds and a fresh spike in energy prices is avoided, we think …
Higher mortgage rates weighing on homebuying The fall in existing home sales in June, together with the further rise in mortgage rates in recent months, continues to point to downside risks to our forecast for a modest pickup in sales over the rest of the …
Argentina’s rebalancing process has entered a more challenging phase and the government now faces the tricky trade-off between maintaining a strong exchange rate to bring down inflation or loosening its grip on the currency to improve external …
Easing inflation to keep Banxico on the sidelines, for now The larger-than-expected fall in Mexican inflation, to 3.4% y/y in June, will be welcomed by Banxico and means that interest rates will remain on hold in the near term. That said, we think June …
All of our coverage on the Middle East conflict can be found here . US-Iran ceasefire under severe strain The US-Iran memorandum of understanding has come under further strain this week, with the two sides trading strikes and President Trump warning that …
Recent EU initiatives aimed at slowing the rise in imports from China are unlikely to result in a radical change in approach. We think the EU will step up its trade defence measures gradually while European manufacturers remain under intense pressure from …
Above-average employment growth and continued demand for high-quality space mean we expect prime office rents in Lisbon will grow at a faster pace than most expect, as well as most other euro-zone markets, over the next few years even as new completions …
BNM set for prolonged hold The decision by Bank Negara Malaysia (BNM) to leave interest rates unchanged at 2.75% today comes as no surprise and we are comfortable with our view that rates will be left on hold throughout 2026-27. Today’s decision was …
Recovery in buyer sentiment another sign of upturn in housing market The modest rebound in buyer sentiment in June chimes with other evidence that suggests a turnaround in the housing market is underway and the downside risks to our forecast for house …
Inflation risks still skewed to the downside The uptick in Chinese inflation caused by the Iran War continued to unwind in June, amid lower prices for oil and many other commodities. The latest escalation in US-Iran tensions could deliver some renewed …
Committee sounding more hawkish but still deeply divided The minutes of the Fed's mid-June meeting confirm a hawkish shift across the entire rate-setting committee relative to April. While the committee still remains deeply split over the policy outlook, …
8th July 2026
Today’s surge in oil prices , prompted by Donald Trump’s declaration that the Memorandum of Understanding (MoU) between the US and Iran is “over”, has taken a toll on the S&P 500. Our sense, though, is that oil prices will generally exert a much smaller …
The sharp decline in the balance of lenders who see commercial property prices as a positive for the availability of credit could be a sign that higher interest rates caused by the Iran war will lead to a fall in capital values. However, we continue to …
The diminished spread between cap rates and the 10-year Treasury yield poses a challenge for real estate pricing. Looking ahead, in a world in which we expect the Treasury yield to stay near its current levels, and rent growth to be only steady, a …
The latest exchange of military strikes in the Middle East supports our view that oil prices will be volatile over the coming months, and will face bouts of upward pressure. That said, under the assumption that some form of a ceasefire ends up holding and …
Long pause now expected Poland’s central bank (NBP) decided to keep its policy rate on hold at 3.75% today following recent downside inflation surprises. But with core inflation still uncomfortably high, we doubt that policymakers will be in a position to …
The RBNZ’s decision to kick off its tightening cycle with a 25bp hike today came as little surprise. While the Bank made clear that further increases are likely, its emphasis on returning policy only gradually towards neutral supports our view that the …
Bank signals gradual approach to further tightening As expected, the RBNZ kicked off its tightening cycle with a 25bp hike today. Its messaging broadly comports with our view that rates will rise gradually to a peak of 3.25% next year. The decision by the …
Another tough day for shares in the semiconductor sector highlights just how far the bar for a successful earnings announcement has been raised, and how reliant the overall tech equity boom remains on the fortunes of a handful of companies. Unlike some …
7th July 2026
Despite a slump in business and consumer surveys since the start of the Iran war, economic activity seems to have held up quite well. The risks to our forecast that growth stalls in Q2 are firmly on the upside. Moreover, the drop-back in oil prices over …
Sliding gold price pushes deficit to five-month high The sharp widening in the trade deficit in May was largely down to price effects and can therefore be looked through. That said, the surprise, large fall in computer imports poses a downside risk to our …
Surge in trade surplus entirely down to price effects The further improvement in Canada’s goods trade balance to a four-year high was not as good as it looks, as total export volumes were essentially unchanged. The only positive, therefore, is that the …
Saudi Arabia’s government debt has been on an upwards path over the past decade and, with the windfall from the energy shock fading fast, we think it will rise from just over 30% of GDP last year to over 50% of GDP over the next few years and could …
The fallout from the energy shock will delay but not derail a cyclical recovery in South Africa. Growth is likely to accelerate more than most expect in 2027-28 and this will be accompanied by a much lower path for interest rates than is priced into …
Much of the discourse on the impact of artificial intelligence (AI) on India’s economy is framed around the disruption to the services sector , but AI also requires a large amount of investment in physical infrastructure. In that regard, India is seeing a …
Despite easing energy-driven inflation pressures, central banks in Asia are unlikely to rush to unwind recent rate hikes given the growing upside risks to food inflation from El Niño. The US National Oceanic and Atmospheric Administration (NOAA) has …
Weathering the Iran war The rise in industrial production in May follows strong retail sales data released last week and suggests that the German economy may have expanded a little in Q2. However, long run prospects for German industry remain very poor …
This page has been updated with additional analysis since first publication. Weak housing market may be starting to turn a corner The modest rise in the Lloyds measure of house prices (rebranded from Halifax) in June suggests that the weak housing market …
Rate hikes remain on the table The slowdown in wage growth in May is unlikely to deter the Bank of Japan from tightening policy further in the months ahead. According to the preliminary estimate released today, labour cash earnings growth slowed from 3.6% …
The Bank of Canada’s latest quarterly surveys point to an economy tarnished by the oil price shock, with improvements in activity isolated to the oil sector. Activity in the non-oil economy should fare better this quarter given that WTI has fallen back …
6th July 2026
Inflation pressures softening, albeit slowly The fall in both the ISM services and manufacturing prices paid indices in June brings our weighted index across the two sectors to a four-month low of 69.1 Based on past form, this is consistent with all-items …
A series of tax, pension and labour market reforms has raised hopes that Germany's new government is finally tackling the structural problems holding back the economy. The key questions are whether these measures will do enough to lift growth and how long …
Strong GDP growth and rising inflation have raised the bar for further interest rate cuts in Brazil, and we expect a pause in the cycle later this year, with just one or two more 25bp cuts over the remaining four meetings of the year. But with real …
Easing cycle not over yet The Bank of Israel (BoI) cut its policy rate by 25bp today to 3.50%, as widely expected, and the backdrop of an improved inflation outlook and strong shekel means that at least a couple more interest rate cuts are likely over the …
AI is starting to influence the economy, but so far this has been confined to a few sectors and been too small to show up in overall GDP, investment, employment or productivity. But if we’re right in expecting the UK to benefit from AI by more than …
Commercial construction activity past its worst The construction sector appears to have stabilised in June as, after three straight months of falls, the headline CIPS construction PMI rose marginally, from 38.2 to 38.4. While that remains an exceptionally …
Retail sales held up well despite higher inflation May’s increase in euro-zone retail sales volumes shows that consumers kept on spending despite the drop in confidence and real incomes in Q2. It also reinforces our view that the impact of the jump in …
The latest available data are consistent with our long-held view that Japan’s budget deficit has narrowed far more rapidly than many thought. Nonetheless, with the BoJ set to lift interest rates to 2%, we expect the 10-year JGB yield to climb further over …
We don’t think the AI rally has run out of steam, despite the mixed performance of tech stocks lately. But if tech’s troubles do resume in earnest, we think the chances of a sustained “positive rotation” in the S&P 500 are low. Air trickling back into the …
For the past three years, our Markets team has been more optimistic than most about the AI-driven rally in global equities. That view has been borne out by events. Now they believe the rally has entered its final phase and that a sharp downturn will …
3rd July 2026
