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 …
24th June 2026
Overview – China’s growth should pick up over the second half of this year as fiscal support ramps up. But domestic overcapacity will remain entrenched, leaving China’s economy reliant on exports for growth. Domestic Demand – Lower fuel prices and an …
The US-Iran deal and fall in oil prices reduces the tailwind for the region’s energy producers. And together with tight fiscal policy, feeds into our view that growth will disappoint consensus expectations. Although inflation generally dipped in May, it …
Downside inflation surprise will keep Banxico on pause for now The larger-than-expected fall in Mexican inflation, to 3.6% y/y in the first half of June will further ease any pressure on Banxico to raise interest rates in the near term. And the statement …
Euro-zone governments look set to loosen fiscal policy by nearly half a percent of GDP this year, helping to cushion the blow to the economy from higher energy prices. But fiscal policy will be tightened by roughly the same amount next year. The biggest …
Gilts have not really rallied over the past week or so despite oil prices falling further. But we think they will soon, irrespective of political headwinds. The ongoing falls in oil prices mean that 1-month Brent crude prices have now fallen by ~20% over …
BCI suggests that the impact of the US-Iran war is easing The rise in the current conditions index of the German Ifo Business Climate Index in June, to its highest level in nearly two years, suggests that the impact of the US-Iran war on activity is …
On hold for this year Thailand’s central bank (BoT) left its key policy rate unchanged today at 1.00%, and the tone of the statement supports our view that interest rates will remain unchanged for the remainder of the year. Today’s decision came as no …
Underlying inflation still trending higher The continued strengthening of core price pressures in May means that the RBA can’t declare victory in the war on inflation just yet. Accordingly, we continue to believe the Bank will deliver one final 25bp hike …
Our China Activity Proxy suggests that China’s economy gained some momentum in May though, at around 3%, the economy is still expanding at a much slower pace than official figures for Q2 are likely to show. We expect growth to pick up over the rest of the …
23rd June 2026
Overview – The re-opening of the Strait of Hormuz will trigger a recovery in the Gulf economies, but the damage already inflicted means these economies will still record sharp falls in GDP over this year as a whole. And the conflict will leave a lasting …
Exports of AI goods now make up a third of growth in overall global exports and they are likely to remain a key driver of trade into 2027. Meanwhile, the move from Section 122 to Section 301 tariffs does not pose a significant headwind for world trade, …
Today’s big falls in tech stocks without any major catalyst is another illustration of rising volatility in these stocks, a result of what increasingly looks like frothy earnings expectations and/or valuations. It’s worth noting that the dramatic falls in …
Overview – Provided that the deal to re-open the Strait of Hormuz results in a sustained recovery in energy flows, the damage to economic activity in the euro-zone will prove to be mild and brief. Excluding Ireland, GDP would be likely to grow by about …
Overview – We doubt the Bank of England will follow in the footsteps of some other central banks by raising interest rates. In fact, our economic forecasts are consistent with it cutting rates from 3.75% to 3.00% next year. That’s in contrast to …
The communications that followed the Hungarian central bank’s (MNB’s) decision to cut the base rate earlier today support our view that there’s a clear path for further easing in the coming months. We expect 25bp cuts at the next three meetings, taking …
HUF rally gives MNB room to cut rate further The post-election rally in the forint and downside inflation surprises give Hungary’s central bank (MNB) a window over the next few months to ease monetary policy and we think today’s 25bp reduction will be …
Overview – The energy shock has taken a toll on India’s economy but GDP growth should still average around 6.5% in 2026-27, an enviable rate by global standards. Rising food prices on account of a weak monsoon will push headline inflation to the upper …
This page has been updated with additional analysis since first publication. Further easing in price pressures a relief for Bank of England June’s flash PMI figures show that the combination of weak activity and lower oil prices are constraining price …
Signs that price pressures are easing The flash Composite PMI for June suggests that the impact of the Iran war on activity may now be easing and, perhaps more importantly, that the worst of the Iran-related inflationary pressures may also be in the past. …
Overview – The economy will lose some momentum over the coming quarters as higher inflation weighs on real household incomes. But the Bank of Japan will be more worried about the upside risks to inflation and we expect the Bank’s policy rate to reach 2% …
Inflationary pressures remain strong despite falling crude oil prices The June flash PMI suggests that economic activity remains healthy while inflationary pressures remain strong, which is consistent with our view that the Bank of Japan will normalise …
Consumers remain downbeat Consumer confidence improved again in June but the mood among households is still very gloomy. Consumer spending growth is likely to be very weak in Q2 before staging a gradual recovery in Q3 as real incomes begin to recover. The …
22nd June 2026
The ceasefire has pushed us closer to our baseline scenario in which a return of energy flows through the Strait of Hormuz limits the economic damage from the conflict and allows global inflation to ease back. Most central banks are now under a bit less …
We have revised down our forecasts for oil and gas prices in light of developments in the Iran war and, as a result, are forecasting slightly lower inflation than we’d previously assumed. Our new base case is that the ECB leaves its deposit rate unchanged …
Core price pressures still muted on the whole The larger-than-expected rise in headline inflation in May was mostly due to higher fuel and food prices, both of which should prove temporary. With core price pressures still muted otherwise, the Bank of …
Thinking through central banks’ next moves Meetings of the world’s major central banks over the past two weeks have produced a range of responses to the inflation shock brought on by the conflict in the Middle East. The European Central Bank and the Bank …
New PM unlikely be much more successful at boosting growth than Starmer A change in leadership following Starmer’s resignation as Prime Minister may alter the size of the state. But it won’t change the fiscal realities. So while there may be talk of big …
What does Keir Starmer’s resignation mean for the UK economic and market outlook? What do we know about the policy priorities of Andy Burnham, the frontrunner to succeed him? Could a new government choose to pursue a more expansionary fiscal stance, and …
The victory for right-wing Abelardo de la Espriella in Colombia’s presidential election should pave the way for more pro-business policymaking, tighter fiscal policy and improved relations with the US, which should support Colombian assets. We think local …
Renewed US-Iran tensions have caused a bit of concern in markets at the start of the week, but as long as negotiations press ahead, global bonds could continue to diverge both from oil prices and from each other. Divergence from stocks is less guaranteed, …
A peace deal that's already showing signs of strain. Central bankers still wrestling with inflation. A new Fed chair seeking reform. And a UK local election with implications for the bond market. It’s been a busy week for macro and markets, and Group …
19th June 2026
Gilt yields have risen substantially today, but that doesn’t, primarily, appear to reflect Andy Burnham’s big win in the Makerfield by-election and presumed challenge for the Labour leadership. Indeed, judging by most market-based indicators, investors do …
A week feels like a long time for a macro forecaster right now (though perhaps not quite as long as 90 minutes does for a Qatari goalkeeper). At its most recent meeting, the Bank of Canada walked back some of its more hawkish language but still signalled …
Andy Burnham’s emphatic Makerfield by-election win this week has taken him one step closer to 10 Downing Street. It’s not clear whether he will be handed a quick coronation by current Prime Minister Starmer, or whether he will have to trigger a formal …
Many economies in Sub-Saharan Africa, particularly those in East Africa, will be key beneficiaries from the reopening of the Strait of Hormuz and the drop back in global energy prices, although the tailwind for energy exporters will fade. The memorandum …
Colombia at a turning point Colombians head to the polls on Sunday in a presidential election run-off that offers voters a choice between two very different economic policy agendas. The latest polls suggest that right-wing candidate Abelardo de la …
Russia’s refineries under growing pressure The scale and effectiveness of Ukrainian drone attacks against targets inside Russia have increased materially in the past year and the macroeconomic costs for Russia are now becoming more visible. Ukraine’s …
Falling energy prices reduce inflation risks The commitment of the US and Iran to re-open the Strait of Hormuz led to large falls in oil and natural gas prices this week. That’s good news for the ECB. Admittedly, it will probably take several months for …
MSCI decision due MSCI is set to announce next week whether it will reclassify Indonesia from “emerging market” to “frontier market” status. The decision is due on Tuesday and will be partly based on MSCI’s latest accessibility review, published on …
Tentative signs of a turnaround in consumer spending The unchanged level of retail sales volumes in April suggests that consumers may be past the worst in terms of the impacts from higher gasoline prices due to the Iran War. Indeed, the flash estimate of …
Gradual moves towards orthodox policymaking PBOC Governor Pan Gongsheng on Wednesday announced plans to shift the PBOC policymaking framework closer to the orthodoxy of other major central banks. Interest rates on the PBOC’s overnight repo operations, …
US-India relations far from being reset for now Prime Minister Modi and US President Donald Trump met in-person for the first time in 15 months this week on the sidelines of the G7 Summit in France. In that intervening period, relations between India and …
Oil market walking a tightrope in 2026… Energy prices kept falling as the US and Iran signed a memorandum of understanding (MoU) to immediately re-open the Strait of Hormuz and start negotiations on even thornier topics such as Iran’s nuclear programme. …
Overview – Emerging Europe has come through the energy shock with only a minor loss of momentum and (generally) contained inflation. We think the region will be one of the few globally where monetary easing cycles take shape this year, with interest rate …
This page has been updated with additional analysis since first publication. Borrowing overshoot a sign of things to come, better retail sales won’t last Retail sales held up surprisingly well in May, but we doubt this resilience will last. Even if the …
Plunging oil prices reduce upside risks to inflation The Bank of Japan argued that downside risks to economic activity had diminished when it lifted its policy rate to a 31-year high of 1.0% on Tuesday. One factor the Bank mentioned was the government’s …
New Zealand GDP data flash mixed signals We learnt yesterday that the New Zealand economy expanded by a solid 0.8% q/q last quarter. To be sure, that outturn was a touch weaker than the RBNZ’s forecast for a 1% rise. What’s more, headline growth was …
Inflation will surge before long While the government’s fuel price caps have so far kept a lid on consumer prices, we expect the pass-through of higher energy costs to utilities charges and other goods and services to lift inflation to around 3.5% by …
