RBNZ hands down a dovish 25bp cut When the RBNZ slashed rates by 25bp today, it clearly signalled that there is more easing in the pipeline. Accordingly, we’re more confident than ever in our below-consensus terminal rate forecast of 2.5%. The RBNZ’s …
20th August 2025
Resilience of exports won’t last much longer The July trade statistics suggest that higher US tariffs are still not having a major impact on Japan’s overall export performance, but we expect softer external demand to result in slower export growth over …
Very long-dated government bonds (which, for the purpose of this Focus , we define as those with more than ten years of residual maturity) have been under serious pressure at times this year. Demand from traditional sources seems to have waned, and we …
19th August 2025
The Chancellor is reportedly considering replacing stamp duty land tax (SDLT) and council tax with alternative property taxes in the Autumn Budget. Even if this was revenue-neutral, it could be more progressive than the current property tax system, …
We now expect growth to average 2.0% annualised in the second half of the year, before slowing slightly in 2026. The recent slowdown in employment growth and limited pass-through of tariffs to consumer prices has opened the door for the Fed to cut …
One feature of the summer lull in markets has been a slump in ICE BofAML’s MOVE Index of expected volatility in Treasuries, to its lowest level in more than three years. But this fall doesn’t necessarily imply a big shift in bonds lies around the corner. …
US Commercial Property Valuation Monitor (Q3 2025) …
The recent strength of inflation in the UK relative to that in the euro-zone appears to be mainly due to rises in “regulated” (i.e. government-set) prices, tax rises, and rents. These upward pressures should fade next year, and we expect the UK inflation …
Sovereign debt risks across Latin America have eased in the past year or so but there are still important nuances at a country level. Public finance risks in Brazil and Colombia are most concerning given wide budget deficits and no clear willingness on …
A surprise improvement While the pick-up in housing starts in July was somewhat of a positive surprise, as we expected flooding in Texas to heavily weigh on groundbreaking, the continued loss of momentum in permit issuance supports our view that the …
This page has been updated with additional analysis since initial publication. Softer core inflation data brings September rate cut back into the fold July’s softer core price data, combined with favourable downward revisions to previous months’ figures, …
The small upward revision to the level of real GDP doesn’t mean the economy will be any stronger in the future. And the downward revisions to some measures of inflation won’t influence the Bank of England’s conundrum of when to cut interest rates next. …
Strong growth in exports from Asia in the first half of the year has fuelled talk that, with US tariffs now in place, shipments will fall sharply as tariff front-running ends. But we’re not convinced. Other factors beyond tariff front-running have …
We don’t think the relatively unusual rotations within the US stock market are a sign that the relentless march of US equities, and especially the big tech sectors leading the way, is nearly at an end. At face value, last week was a fairly uneventful one …
18th August 2025
Housing market turning a corner The fourth consecutive rise in home sales in July means that the housing market is developing close to our expectations, with prices stabilising last month. Housing starts recorded another strong month, with multi-family …
Reported simplifications to India’s Goods and Services Tax (GST) would, all else equal, result in a slightly larger fiscal deficit this year and next, as well as provide some policy-induced support to the economy in the face of high US tariffs. Reducing …
The unexpected contraction in the Israeli economy in Q2 amid the war with Iran should reverse this quarter, and so we think it is unlikely that the Bank of Israel (BoI) will cut interest rates at its meeting this Wednesday in response to weak activity. …
Weak investment will remain a drag on Korea’s economy over the coming quarters, as a prolonged downturn in the property sector continues to weigh on construction. GDP growth rebounded in the second quarter of the year, and more recent data paint a …
Europe Commercial Property Valuation Monitor (Q3 2025) …
Strong domestic demand and inflation point to rate hold in September The Chilean economy isn’t as weak as the slowdown in GDP growth to 0.4% q/q would suggest; there was a large drag from net trade while domestic demand remained very strong. This, …
President Trump likes to tell us that the United States “holds all the cards” in the ongoing trade war. Judging by the surprisingly mild inflationary impact of tariffs so far – less than most economists, including us, had anticipated – you might think …
The euro-zone’s goods trade surplus narrowed sharply in June as exports to the US dropped. But timelier business surveys suggest that overall goods export growth will pick up in the second half of the year. The goods trade surplus fell from €15.6bn in May …
Many central banks across Sub-Saharan Africa have cut interest rates over the past year or so and Nigeria will soon join the rate-cutting club. With inflation low or falling in most countries, we generally expect more monetary easing than the consensus by …
Despite concerns that over-crowding and heatwaves might reduce tourism to southern Europe, trips to the region are growing at a faster rate than in northern Europe. Instead, tourism has been growing more quickly during the off-peak season, in part driven …
Subdued growth ahead Economic growth in Thailand slowed in the second quarter of the year, and we think the economy will struggle over the coming months as weaker exports, slower government spending and weak private consumption all weigh on demand. GDP …
The decline in Q2 government bond yields boosted APAC valuation scores. But with risk-free rates still high, property yields will not see meaningful falls. Our valuation scores also suggest that the industrial sector will continue to lag other sectors, …
The dollar remains on the backfoot as expectations for a rate cut at the September FOMC meeting continue to solidify. We now expect policymakers will opt for a 25bp cut next month , and a cumulative 75bp of policy easing by the end of next year (compared …
15th August 2025
Weaker-than-expected growth, but strong inflation to keep BanRep hawkish The weaker-than-expected 0.5% q/q expansion in Colombia’s economy is unlikely to change the central bank’s thinking and we remain comfortable with our above-consensus interest rate …
After its July policy meeting, we felt the Bank of Canada had moved closer to our view that inflation risks had diminished. The Bank devoted considerable effort explaining why it expects underlying inflation to fall soon , citing the recent appreciation …
All eyes on Jackson Hole Ahead of the Fed’s annual Jackson Hole Symposium, which kicks off late next week, markets are still wholly convinced that the Fed will cut rates by 25bp at the upcoming FOMC meeting in September and follow that up with at least …
All eyes on Alaska as Trump and Putin take centre stage Trump-Putin summit in the spotlight The scheduled meeting between presidents Trump and Putin later today has understandably focused attention on whether there will be any positive news to end the …
Consumers still living in fear of tariff-led price increases The slump in the University of Michigan measure of consumer sentiment to a three-month low of 58.6 in August, from 61.7, suggests that households remain very nervous about rising inflation in …
Brazil: rate cut expectations starting to shift The latest data out of Brazil support the view that GDP growth slowed in Q2, which alongside softening inflation, has led to a shift in the debate towards interest rate cuts, perhaps by year-end. The …
A small decline, which should reverse next month The small decline in industrial production in July was driven by the mining sector. Manufacturing output held up, and more timely survey data points to a small rebound in August. Once again, it is difficult …
SA: rise in joblessness bolsters case for more easing The rise in South Africa’s unemployment rate in Q2 reinforces our view that inflation will stay subdued, further interest rate cuts are coming and local currency bond yields will continue to decline. …
Malaysia – another rate cut coming Malaysia published the final estimate of its Q2 GDP figures earlier today. Growth came in at 4.4% y/y. That was the same as the initial estimate and unchanged from Q1 but below the 5.1% pace of expansion recorded in …
Small rebound masks underlying weakness The small rebound in manufacturing sales in June will provide little relief, given that it barely offsets the weakness in April and May and the breakdown shows that US tariffs still have some sectors, namely motor …
The breakdown in the latest round of UN treaty talks aimed at cutting plastic waste can be partly attributed to the reticence of oil producing nations to countenance calls by ~100 countries to limit the production of so-called “primary” plastic. To be …
Group Chief Economist Neil Shearing tackles the week’s biggest macro and market questions, including: what could Beijing do after more weak China data? Why tariffs aren’t showing up more in the US economy? How much have the latest inflation reports …
Households shrug off tariff-induced price pressures The 0.5% m/m rise in retail sales in July, paired with the upward revision to May and June’s data, shows households continue to spend in healthy amounts despite the threat of tariffs – especially given …
…even if they don’t do much to boost consumption While it may not have a significant immediate macroeconomic impact, the Ministry of Finance’s new consumer loan subsidy scheme is a sign that the government is finally paying more than just lip service …
Coming after the bumper 0.7% q/q rise in real GDP in Q1, the better-than-expected 0.3% q/q gain in Q2 (see here ) begs the question of whether the economy is fundamentally stronger than we all thought. After all, in February the consensus forecast was for …
President Trump’s meeting with President Putin has once again raised the question of how a peace agreement between Russia and Ukraine would affect the European economy. The meeting is due to take place after this Weekly is published, but as things stand …
Alaska talks may open door to lower tariff for India With Trump and Putin set to meet later today in Alaska, a breakthrough in ceasefire talks could pave the way for the rolling back of the 25% US tariff imposed on India for its economic ties with Russia. …
This page has been updated with additional analysis. Slow growth and near-zero inflation to prompt SNB to use negative rates Growth slowed significantly in Switzerland in the second quarter as tariff front-running eased. The economy is likely to expand …
