This quarterly Financial Risk Monitor includes commentary and analysis of our latest EM risk indicators. We’ll be online on Wednesday 11th February at 10.00 ET/15.00 GMT to discuss our EM risk indicators and the outlook for EM financial markets. Register …
29th January 2026
As global financial conditions shift and growth paths diverge across emerging markets, investors face a more complex mix of currency, banking and sovereign debt risks. How are these risks changing, and what does this mean for equity, bond and FX returns? …
The January employment report will reveal significant downward revisions to payrolls in 2025 and, due to an updated methodology for the birth-death model, the initially reported payroll gains for this year will be lower than we’ve been used to. …
After a record-breaking year, we think the rally in South African assets will lose momentum, given that there is little scope for risk premia to compress much further and we expect precious metals prices to fall. What’s more, there’s a good chance that …
A dramatic late-year cut to spending helped Russia’s government meet its deficit target of 2.6% of GDP last year. This does not signal that fiscal strains are forcing President Putin to scale back the war effort. Instead, the bigger risk to Russia’s …
What does the dollar rout mean for MENA? The past week has compounded the rough start to 2026 for the US dollar, which has direct implications for the Gulf states via their currency pegs. And for Egypt, the moves in the greenback, if sustained, would …
Fresh strikes by the US on Iran would, coming in the wake of recent protests in the country, raise the chances of some form of regime change which could eventually pave the way for Iran’s possible reintegration into the global economy. More immediately, …
The RICS survey showed overall occupier and investment market sentiment held in the doldrums at the end of 2025, with prospects for the major sectors muted. However, the outlook for prime assets was still viewed favourably, while sentiment was more …
The South African Reserve Bank paused its easing cycle as we expected today, but the commentary was dovish suggesting even if positive shocks to inflation do emerge the path of interest rates will still trend downwards. That only increases our confidence …
Trade deficit re-widens The sharp swings in trade continued in November, with the trade deficit rebounding sharply to $56.8bn, from the prior month’s multi-year low of $29.2bn, a move that will lower most estimates of fourth-quarter GDP growth. The …
Some more trade diversification Exports volumes in November are not as bad as first appears, and probably would have risen if not for a plunge in volatile gold exports. Meanwhile, we continue to see tentative signs of Canada successfully diversifying its …
ECB will leave its interest rates and guidance unchanged next week… …but we still forecast two 25bp rate cuts later in the year. Christine Lagarde will offer only very limited resistance to stronger euro. Nobody is expecting the ECB to change its policy …
The Middle East and North Africa is set for the fastest pace of GDP growth (outside of the pandemic period) since 2011. Continued oil output hikes and the switch on of Qatar’s North Field will boost the Gulf economies. But lower energy prices are likely …
Questions about the future of the Keir Starmer government are swirling and, with key local elections looming, they are unlikely to fade anytime soon. But how is political dysfunction influencing the UK macro outlook and financial markets? If the Starmer …
Still-low inflation leaves door ajar for another rate cut; weak rupee not a constraint We are forecasting a 25bp cut to repo rate to 5.00% next week With interest rates some way below neutral, that should bring easing cycle to an end The weakness of …
Divergence widens at the start of 2026 The European Commission’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional GDP growth held steady at around 2.5% y/y at the start of 2026, but divergence in performance across …
Sentiment improving but labour market loosening January’s EC survey suggests that the economy got off to a fairly strong start to the year, with the services sector growing while industry continues to struggle. But the labour market has loosened further. …
Riksbank to leave policy rate on hold amid heightened uncertainty While the Riksbank left its policy rate at 1.75% and its forward guidance unchanged today, the economic data have improved significantly over the past few months and have given us greater …
We’ll be discussing the outlook for Bank of England, Fed and ECB policy in a 20-minute online Drop-In at 3pm on 5 th February. (Register here .) Concerns over wage expectations mean rates are widely expected to stay at 3.75% in February The MPC will …
Plunge in public investment limits pickup in activity GDP growth in the Philippines remained below trend in Q4, and we expect the economy to underperform consensus expectations in 2026. With growth set to remain soft and inflation low, we think the …
We continue to think that a cautious Fed will mean Treasury yields rise a little and the US dollar strengthens, despite recent developments in the latter. In the end, it was an uneventful Fed meeting from markets’ point of view. Despite sounding upbeat on …
Singapore’s central bank kept monetary policy settings unchanged today but adopted a slightly more hawkish tone. While risks to the policy outlook are now skewed modestly towards tighter policy later in the year, we think inflation will remain contained …
Shifting the asset allocation of Japan’s largest pension fund back towards domestic bonds could help stabilise the JGB market should yields start to surge again. However, it would come at a sizeable fiscal cost, particularly if the GPIF reduced its …
28th January 2026
Copom opens the door for easing Brazil’s central bank left interest rates on hold at 15.00% as expected but the communications struck a much more dovish tone, suggesting that the first interest rate cut will be delivered at the next meeting in March. We …
The change to the FOMC’s policy statement, acknowledging the recent solid pace of GDP growth and stabilisation in the unemployment rate, is another sign that the Fed is unlikely to cut interest rates again for at least a couple more meetings. Nonetheless, …
Waller makes a pitch for Chair position as FOMC keeps rates unchanged The change to the FOMC’s policy statement, acknowledging the recent solid pace of GDP growth and stabilisation in the unemployment rate, is further evidence that the Fed is unlikely to …
US equities had been struggling to make headway against those elsewhere in recent months and have now begun underperforming significantly, even as US indices climb to fresh highs. While this has echoes of the final stages of the dotcom bubble, we think …
The Bank of Canada’s largely-unchanged economic projections are similar to our own, although we think the slow pace of economic growth this year will help ease core price pressures sooner than policymakers expect. (See Chart 1.) On the whole, however, we …
We do not think that the SNB has intervened in FX markets in recent days despite the Swiss franc’s large appreciation. Instead, we think policymakers are likely to combat any disinflationary pressure from the exchange rate by cutting the policy rate …
US population growth is expected to slow to only 0.2% y/y this year, matching the record low. Yet the risks to the official forecasts arguably lie to the downside, with a modest fall in the population possible. Yesterday the Census Bureau released its …
Elections in Brazil, Colombia and Hungary have the greatest potential to deliver large financial market moves this year. A shift towards more investor-friendly policymaking and improved fiscal credibility could help to lower country risk premia, with the …
Bank’s projections largely unchanged with CUSMA renegotiation on the horizon The Bank of Canada’s largely-unchanged economic projections are similar to our own, although we think the slow pace of economic growth this year will help ease core price …
Easing cycle has a lot further to run The Bank of Ghana lowered its policy rate by 250bp to 15.50%, today and the policy statement remained dovish with the BoG keen to support to growth against the backdrop of low inflation. We remain comfortable with our …
Global commercial real estate fundraising improved last year, but the details highlight that the pick-up was mostly driven by data centers. A broader market recovery was held back by investor caution and interest rates holding at relatively high levels …
The mayhem in precious metals markets has captured the majority of headlines, but several industrial metals prices have increased by a lot too. We are sceptical that near-term fundamentals justify these rapid prices rallies, especially given the ongoing …
Our base case is that the recent bout of weakness in the US dollar will reverse. If it remains at its current level, the direct macro impact is likely to be small for most countries, especially advanced economies. But benefits will be felt in some EMs …
The slump in Indonesia’s stock market today in the wake of a threat by MSCI to downgrade the country to “frontier market” status is the latest in a long list of issues that investors are grappling with. A lot of bad news now appears to be priced in. And …
We expect the budget deficit to halve over the next three years and reach a 24-year low in 2030/31. But the risk of it overshooting our forecast over the next few years has grown. That could happen if the political pressures on Starmer/Reeves weakens …
The euro’s recent appreciation will reduce euro-zone inflation by a trivial amount, so for now the ECB is likely to do nothing to prevent it other than perhaps the mildest form of verbal intervention. Even if the euro kept rising, intervening in the FX …
RBA to hike rates by 25bp next week amid persistence in underlying inflation Both the economy and the labour market operating above capacity Cash rate will peak at 4.10% this year The ongoing persistence in underlying inflation will persuade the Reserve …
Resurgence in underlying inflation locks in RBA rate hike The sharper-than-expected rise in underlying inflation makes it all but certain that the Reserve Bank of Australia will raise interest rates at its meeting next week. The 0.6% q/q rise in consumer …
As the dollar continues to drop in the wake of intervention chatter, here are four key takeaways from an extraordinary few days. First, while the US dollar’s plunge over recent days echoes last April’s post-“Liberation Day” drop, the broader market …
27th January 2026
The £250 a year cap on ground rent charges announced by the Prime Minister on Tuesday will lower the running costs for some owner-occupiers and private landlords of leasehold homes, particularly flats, but the savings will be small. As a result, the …
By raising overall occupier demand, commercial real estate should benefit from the boost to economic growth that AI will provide. But some sectors will face challenges, particularly during the transition period. Chief among them is the office sector, …
South African financial assets have made a strong start to the year, supported by the perceived political stability of the Government of National Unity and better terms of trade. But risks to the outlook remain. The surge in metals prices may run out of …
Further price acceleration ahead The solid 0.5% rise in house prices in November builds on October’s upwardly-revised 0.4% rise, and we expect further price acceleration in the months ahead as a pick-up in demand meets nagging undersupply. Prices are on …
Rates left on hold, a cut may be just around the corner The communications accompanying the decision by the Hungarian central bank (MNB) to leave its policy rate on hold today, at 6.50%, gave no new guidance on the timing at which monetary easing may …
Africa Chart Pack (Jan. 26) …
