AI and exports underpinning resilience This report was first published on Tuesday 30 th June, covering the official PMIs. We added commentary on the RatingDog manufacturing PMI on Wednesday 1 st July and the RatingDog services and composite PMIs on Friday …
30th June 2026
Bank not ruling out further tightening The RBA’s messaging shows that it retains a hiking bias. The minutes of the June meeting confirmed that the Board’s decision to leave rates on hold was unanimous. Broadly speaking, however, the minutes revealed that …
Resilient economy points to further monetary tightening The May activity data suggest that Japan’s economy is shrugging off the hit from higher energy costs. The 0.5% m/m rise in industrial production in May fell short of the analyst consensus of 1.1%. …
Overview – Growth in Sub-Saharan Africa is likely to accelerate over the coming years and most of our growth forecasts lie above the consensus. At the same time, the backdrop of low inflation (by the region’s standards) and the recent fall in global …
29th June 2026
Overview – Uncertainty over CUSMA and lower immigration will slow the recovery, with average annual GDP growth a below-consensus 0.5% this year. A return to firmer growth of 1.7% in 2027 should see core price pressures strengthen which, paired with …
Germany’s pension reforms should slow the rise in public sector pension spending a little, encourage people to remain in work for longer, and channel more savings into equities. But the benefits of these reforms will be felt over many years so this does …
The UK’s political changes have once again drawn attention to its fiscal constraints, which will limit the new PM’s room for manoeuvre. But the UK is not alone. Several other major economies face challenging fiscal positions and upcoming political events …
Sentiment remains weak, selling price expectations remain high June’s rise in the euro-zone Economic Sentiment Indicator suggests that the impact of the US-Iran war is fading, but confidence remains weak. Selling price expectations remain high in industry …
Another softer month for lending Net lending to commercial property totalled around £1.5bn in May, following a similar outturn in April. This was consistent with the rise in uncertainty and interest rates as a result of the Iran war as well as higher …
The US-Iran deal will allow the Gulf economies to begin a recovery. But it will take time for oil production and other sectors, such as tourism, to recover to pre-war levels. Most growth forecasts for the region look too optimistic. Outside the Gulf, most …
This page has been updated with additional analysis since first publication. Households continue to save less, housing market cools May’s money and lending data show that households continued to save a bit less to offset some of the hit to their real …
The continued weakness in some leading indicators of buyer sentiment suggests that the risks to our view that house prices will rise by 1.5% in the year to Q4 2026 lie to the downside. However, if interest rates and mortgage rates fall further than most …
We expect the Treasury rally to run out of steam but think bunds could gain further, weighing on the euro. The yen may eventually fare better, though. Treasuries vs. the US economy Treasury yields took another leg lower last week, amid falling oil prices …
Our flagship Global Economic Outlook is just around the corner, and in this latest episode of The Weekly Briefing , Group Chief Economist Neil Shearing previews our view of a world in which some economies are benefiting from the AI investment boom while …
26th June 2026
Restrictions helped limit China’s crude demand… China will raise its cap on refined fuel exports in July, according to a Reuters report this week. Beijing has been restricting shipments of refined petroleum products since the start of the Iran conflict in …
MPO decision not enough to offset CUSMA drag Exactly one year on from being signed into law, the “Building Canada Act” (sort of) delivered its first results this week. The federal government announced on Wednesday that its new, centralised regulator, the …
Overview – Booming exports of AI-related products have helped offset the drag from higher energy prices and should continue to be an important driver of growth in Asia in the near term. The drop in oil prices will come as a relief to central banks across …
Core inflation pressures too strong for comfort The fall in WTI to below $70pb has reduced the urgency for the Fed to raise rates, with futures shifting to pricing in a 70% chance of a 25bp hike by the September meeting, down from 95% last week. …
SA price developments mean rate hikes nearly over Producer price inflation data out of South Africa this week surprised to the upside but, with crude oil prices back to pre-war levels and domestic harvests strong, we think the odds of further SARB rate …
Solving Colombia’s fiscal woes a tall order The market reaction to Abelardo de la Espriella’s victory in Colombia’s presidential election hasn’t been as buoyant as might have been hoped. The peso has risen by ~1% against other major Latin American …
The gilt market is not worried about Andy Burnham after all. It didn’t bat an eyelid when Keir Starmer resigned as PM on Monday (see here ) and effectively cleared the path to 10 Downing Street for Burnham. (If no one else enters the leadership contest, …
Gold’s safe haven credentials nowhere to be seen Commodity prices took their cue from other risky asset markets this week, as a souring in risk sentiment towards AI-related assets spilled over, weighing on energy, industrial metals, and precious metals …
We changed our interest rate forecast for the ECB this week as we now think policymakers will leave the deposit rate at 2.25% for the rest of this year, rather than hiking once more, though we still forecast the Bank to cut rates back to 2.0% next year. …
Monsoon risks replace oil price risks This week we published our Q3 India Economic Outlook , which contains all of our latest analysis of India’s economy and financial markets. The forecasts and underlying data can also be viewed in our interactive …
We will be holding an online briefing on Wednesday 1st July at 09:00 BST, 16:00 SGT, to discuss the outlook for Asian economies. You can register by clicking here . MSCI (temporary) reprieve Indonesia received a reprieve from MSCI this week, when its …
China’s economy is growing at a slower rate than the official figures show, but growth has held steady at around 3% for the past year. Exports continue to surge on the back of strong global demand for AI and green-tech products. We expect them to remain …
Asian economies should enjoy strong growth over the next year or so, supported by robust demand for AI-related products and lower energy prices. But the outlook is likely to become more challenging if and when the AI boom fades, while uncertainty over US …
Dovish MNB gearing up for more rate cuts The move by Hungary’s central bank to cut its base rate this week, from 6.25% to 6.00%, was no surprise, but the sharp downgrade to the MNB’s inflation forecasts came as a shock. As we noted in our Update following …
As geopolitical tensions ease, investor attention is shifting back to domestic economic fundamentals and their implications for interest rates. Our latest Global Economic Outlook explores how growth, inflation and monetary policy are diverging across the …
How long can the AI roll-out continue to drive equities? What will diverging central bank policy paths mean for bond yields? And can the dollar remain strong through the second half of 2026? The economics team shared their concise look at the forces …
Despite mixed data, hike remains in play The slate of data released this week have not made the RBA’s job any easier. Although the ABS’ monthly household spending indicator (MHSI) did bounce back by 1.3% m/m in May, that merely reversed April’s decline. …
Government unveils large investment target The latest flow of funds accounts showed that the large supplementary budget announced last October resulted in a widening of the budget deficit in the year to Q1. (See Chart 1.) Chart 1: General Government …
Even if the AI boom turned into a bust the “non-tech” parts of the stock market could conceivably shrug it off for a while, as they have this week. US big-tech stocks have been under pressure so far this week, dragging down the S&P 500. But the pain has …
The June Employment Report, due a day earlier than usual (Thursday July 2 nd ), is likely to show another solid 110,000 gain in non-farm payrolls, with hiring supported by major summer events, including the FIFA World Cup and America’s upcoming 250 th …
25th June 2026
Banxico settling into a prolonged pause Mexico’s central bank (Banxico) left interest rates on hold at 6.50% as expected today and the communications continued to suggest that policymakers will opt for a prolonged pause over the coming months. Banxico cut …
After a sharp rise in the wake of last week’s FOMC meeting, the US dollar has dropped back a little today and may be due a pause in the very near term. But we think that the emerging monetary policy divergence between the US and Europe means that further …
Whereas the consensus view is that gold prices will rebound after falling to $4,000 per ounce, we are sticking to our long-held forecast for prices to fall further over the next 18 months. Having weakened in recent years, the relationships between gold …
We think the AI rally is approaching its last stage, but is probably not quite over yet. Accordingly, we expect the tech-heavy equity markets, such as those in the US, Korea, and Taiwan, to continue to outperform over the remainder of this year. But we …
All of our coverage on the Middle East conflict can be found here . Strait of Hormuz traffic slowly picking up It’s now been more than a week since the US and Iran signed a memorandum of understanding and mediators Qatar and Pakistan said that the first …
Capital outflows from EMs have eased over the past couple of weeks in light of the US-Iran peace deal and reopening of the Strait of Hormuz. Outflows could pick up again if the fragile truce falls apart and/or the US Fed embarks on a tightening cycle. But …
Overview – The economy is in the middle of an AI-related capex boom and, with some of the prior policy-related headwinds now fading, we expect average annual GDP growth to pick-up to an above-consensus 2.5% next year. A renewed tightening in the labour …
Core inflation has peaked, but downward progress will be gradual The 3.4% rate of core PCE inflation in May likely marks the peak of this cycle, as tariff effects fade and the recent plunge in oil prices weighs on several categories, including airline …
At first glance, India’s new Producer Price Index (PPI) tells us little that we did not already know. The headline PPI has tracked the rebased Wholesale Price Index (WPI), that it is going to replace, very closely over the past two years. But the new …
What does the end of the Iran conflict mean for the Gulf economies? How quickly can they restore energy production to pre-war levels? How has the fighting reshaped their longer-term outlooks? Our MENA and Commodities teams held this special briefing on …
This week we held a series of roundtable discussions with clients in our London office about the outlook for alternative real estate assets. This note shares our answers to some of the most interesting questions raised, covering the impact of demographics …
Oil markets have spent months focused on conflict and supply disruption. But as ceasefire talks progress and energy flows recover, our Commodities team doesn't think the market is fully pricing the risk that oil markets return to glut conditions over the …
Overview – The RBA has already shifted policy back to restrictive territory and we expect it to tighten settings a bit further, as it seeks to ensure that activity slows sufficiently to bring inflation under control. Meanwhile, the RBNZ is likely to begin …
Lukewarm labour market and consumption keep chances of RBA hike alive The May household spending and labour market data don’t provide a strong signal about the RBA’s next move. Taking household spending first, the 1.3% m/m rise in May barely reversed the …
Our Emerging Europe Economics Chart Pack has been updated with the latest data and our analysis of recent developments. The region has come through the energy shock relatively unscathed, and the recent fall in oil prices has improved the growth outlook in …
24th June 2026
Overview – Investors have already priced in much of the good news on the recovery in Gulf energy exports, leaving scope for some volatility in prices, and even price rises, over Q3 and Q4. Beyond this, while efforts to rebuild strategic inventories will …
