We still think the Japanese yen will stage a sustained rally against the US dollar. The yen got a bit of a boost earlier today from Japan’s stronger-than-expected preliminary Q2 GDP data , which seems to have raised the perceived chance of a BoJ rate hike …
15th August 2025
Economy shrugging off higher US tariffs The 0.3% q/q rise in Q2 GDP was stronger than most had anticipated and probably came as a positive surprise to the Bank of Japan as well. After all, Board members’ median forecast for GDP growth for FY2025 in the …
Capacity pressures remain at bay The RBA’s decision to lower its cash rate by 25bp, to 3.60%, at its meeting this Tuesday was widely anticipated. Broadly speaking, the Board’s messaging was little changed from the July meeting. However, there were …
A worrying loss of momentum Q3 started on a weak note, with a broad-based slowdown across key indicators. Given cooling exports and a lack of additional policy support, we think the outlook for the rest of the year remains downbeat. Retail sales expanded …
GDP growth will slow again GDP growth rebounded more strongly last quarter than most had anticipated but we still expect a renewed slowdown over the coming quarters. The 0.3% q/q rise in Q2 GDP was stronger than the analyst consensus of 0.1% as well as …
For the time being, there is little sign of either US equities or bonds being undermined by faltering trust in key economic data. But that might not last. One reason for a potential loss of trust in economic data is scepticism about their accuracy . This …
14th August 2025
The recent slowdown in wage growth across CEE is a welcome development for central banks, but we don’t think it will ease much further, limiting how quickly services inflation continues to fall. Meanwhile, other inflation pressures in the region, …
The Q2 GDP figures out so far point to robust growth across much of the emerging world, but we think growth will soften over the second half of the year. While growth across much of Asia will exceed consensus expectations, we think growth will disappoint …
Egypt: reforms key regardless of CBE governor The term of the incumbent Central Bank of Egypt (CBE) governor, Hassan Abdalla, is due to expire next week and, while it is not yet clear if Mr. Abdalla will be kept on or a successor appointed, it will be key …
The recent slowdown in the labour market won’t stop rental demand from continuing to climb this year, given that falling labour demand and the immigration clampdown are most impacting cross-sections of the populace who do not typically occupy …
The economy has mostly held up against US tariffs so far, thanks largely to resilient consumer spending. But exports have weakened, and investment is showing signs of slowing. With the upcoming USMCA renegotiation set to prolong trade uncertainty, both …
An above-target gain in core PCE deflator, but mainly due to one component Most of the large upside surprise to core PPI in July was due to a head-scratching increase in margins for wholesalers and retailers. While the data still imply that the core PCE …
Seemingly endless commentary has been devoted to the supposed death of globalisation. But as ever in economics, the story is not quite so simple. The popular narrative goes like this: tariffs first introduced by Trump, maintained by Biden, and now …
13th August 2025
After a stellar performance in the first half of 2025, the emerging market (EM) asset rally has slowed over the past few weeks following US President Donald Trump’s new tariff announcements. While we still expect EM assets to eke out decent returns, we …
The solid pace of economic growth in Spain over the next couple of years will continue to support robust rates of industrial rental growth. However, we don’t think that will be enough to justify large yields falls given pricing is highly stretched, even …
This page has been updated with additional analysis since first publication. Economic growth will remain weak Data released today confirm that the euro-zone economy expanded at only a modest pace in Q2 and that the labour market is cooling. We are …
Price pressures in the Kingdom starting to ease Saudi Arabia’s headline inflation rate slowed from 2.3% y/y in June to 2.1% y/y in July, its weakest pace since February. As we flagged in a recent Focus, we think that inflation will continue to gradually …
This page has been updated with additional analysis since first publication. Strength in Q2 won’t last The unexpectedly strong 0.4% m/m rise in GDP in June (consensus and CE forecast 0.1%) and 0.3% q/q gain in Q2 are more likely to be due to a temporary …
Rents will continue to rise faster than house prices The still tight rental market and softening in housing activity recorded by the RICS survey in July implies that rents will continue to rise faster than house prices for another year or so. The fall …
The threat to India’s stock market from US tariffs is sizeable, and we suspect that it could fall a lot further if they are implemented as currently proposed. And in fact, we think there are enough headwinds for India’s equities that they’ll underperform …
RBA will shrug off the slight fall in the jobless rate The tick down in the unemployment rate in July is likely to keep the RBA on sidelines at its next meeting in September, but we still think the Bank will ultimately loosen policy a bit further than …
Overview – Tariffs have had a limited impact on inflation so far, but we still expect the impact to gradually build. In the US, combined with the crackdown on immigration, tariffs should keep core inflation above 3% well into 2026. In the rest of the …
Economy continues to cool in Q2 The slowdown in GDP growth in Russia to 1.1% y/y in Q2 suggests that the economy may have narrowly avoided a technical recession, but the economy is clearly struggling amidst imbalances that have built up due to the war …
Bolivians head to the polls on 17 th August with the economy at high risk of a currency crisis. Whatever the outcome, a large currency depreciation is looking likely before long. A win for one of the right-wing opposition candidates – as seems likely – …
June’s activity data suggest that, after a sluggish start to the year, South Africa’s economic recovery picked up in the second quarter, with GDP likely to have expanded by 0.8-1.0% q/q. And we think tailwinds from low inflation, looser monetary policy …
Mexico’s exports of AI-related products to the US have surged and now rival its key auto exports. While there may be a degree of tariff front-running at play, the boom in US data centre investment appears to be more important. This will help to cushion …
With interest rates staying high and closed-end funds already sitting on a large volume of investors’ capital, global real estate fundraising looks set to stay in the doldrums. We think the sector still needs a pricing reset that will see buyers and …
We think the Riksbank is likely to be in wait-and-see mode when it meets next week and will keep its policy rate at 2%. While some of the economic data were underwhelming in the second quarter, they were not bad enough to justify another rate cut at this …
Growth in government bond issuance won’t last There was a small pick-up in overall credit growth in China’s economy in July, as a result of a further surge in government borrowing. But bank loan growth has continued to slow, suggesting that private sector …
The near-term outlook for China’s equities could be quite positive, despite the apparent headwinds. Today was a good day for China’s stocks, especially offshore, with the Hang Seng up over 2% and outperforming most others. But, the market still has a lot …
Polish economy outperforming amid tariff storms The 0.8% q/q growth in the Polish economy in Q2 was a bit weaker than consensus expectations, but still confirms that the economy maintained solid momentum last quarter and supports our view that Poland will …
Very tight supply, looser lending criteria and our forecast for further falls in mortgage rates provide scope for house prices in the capital to rise by more than elsewhere over the next few years. After a period of outperformance between 2010 and 2016, …
BoT cuts rate, further easing to come Thailand’s central bank (BoT) cut interest rates by 25bps today to 1.50%, and its dovish commentary supports our view that further easing is likely in the coming months. The decision was anticipated by 23 of the 28 …
The RBNZ is all but certain to cut rates by 25bp at its meeting ending on August 20 th . Although inflation is set to remain in the upper half of the Bank’s 1-3% target band in the near-term, we suspect the Committee will be more concerned about timely …
Wage growth will moderate towards 3% While wage growth was a touch stronger last quarter than the RBA had expected, we think it will moderate again before long and won’t prevent the Bank from easing policy much further. The 0.8% q/q rise in the wage price …
Today’s July US CPI data came in broadly in line with consensus expectations, so have done little to shift the prevailing market narrative that the FOMC is on track to resume cutting its policy rate in September. However, the “twist steepening” of the US …
12th August 2025
President Trump’s tariff salvo aimed at some of the BRICS economies has led to growing efforts within the bloc to present a united front in the face of US protectionism. But divisions between the members will ultimately limit how far political and …
Policymakers’ hopes of creating a new euro “safe asset” are likely to be unfulfilled for many years to come. The supply of safe bonds issued by national governments and EU institutions will rise in the coming years, but increased issuance by …
Solid tourism flows and a pick-up in consumer spending growth mean we believe both Rome and Milan prime retail rents will continue to outpace the euro-zone average over the next couple of years. While Milan prime retail rents held steady in Q2, rents in …
While the US jobs data captured the spotlight recently, the weakening of labour markets in most advanced economies has received less attention. Softer labour demand should dampen wage and price pressures in Europe and Canada but not in the US, where the …
Decent rental growth expectations and a narrowing risk premium imply that industrial is only marginally overvalued, despite an historically narrow gap between industrial yields and alternative asset yields. In turn, that implies industrial yields can …
Our new CE UK Unemployment Proxy extracts the overall signal from a range of measures of labour market slack and suggests that the labour market has loosened further than the Labour Force Survey (LFS) unemployment rate implies. Given the well-known issues …
Our UK Labour Market Indicators extract the overall signal from a range of measures of employment growth, unemployment and labour market slack. This dashboard was last updated on 8th December 2025. If you have subscriber access to the data underlying …
Another narrative shift for the Fed There was another narrative shift for the Fed in the July CPI data, with tariff effects once again barely perceptible but a stronger gain in services prices pointing to another above-target gain in the core PCE …
Inflation falls, but rate cuts unlikely before the end of the year The fall in Brazilian inflation, to 5.2% y/y in July, won’t change the outcome of the central bank’s next meeting in September, where interest rates will be left unchanged. But it lends …
The Egyptian pound has strengthened so far this year against the dollar, but by most measures the currency looks competitive. This will provide a boost to GDP growth over the coming years and reduce the risks posed by the current account deficit. After …
We expect the Switzerland-Germany 10-year government bond yield spread to widen a little further, even though it’s already the largest it has been in about three decades. Long-dated Swiss and German government bonds, once seemingly tightly linked, have …
Three years into his six-year term, President Ferdinand Marcos Jr. of the Philippines has passed key reforms to improve the country’s business environment and infrastructure. However, worries about corruption persist due to the abolition of a key national …
Inflation at eight-year low opens door to further rate cuts The larger-than-expected fall in India’s headline inflation rate in July, to an eight-year low, raises the prospect of the RBI cutting interest rates further this year. But with inflation set to …
