This page has been updated with additional analysis since first publication. Upside risks to inflation continue to fade July’s flash PMIs paint a picture of the economy struggling to recover from a spring lull, a labour market that is still weakening and …
24th July 2025
Economy growing slowly, services price pressures easing July’s Composite PMI for the euro-zone was consistent with the economy doing little more than stagnate. But policymakers at the ECB will be encouraged by the evidence that services price pressures …
… How the global economy is fracturing under Trump …
22nd July 2025
Australia’s economy is struggling to gain momentum, while the recent rebound in activity in New Zealand increasingly looks like a false start. As the lull in activity lifts spare capacity, underlying price pressures should continue to ease in both …
We held an online Drop-In session yesterday (see here for a recording) to discuss the latest developments in Japan’s economy and financial markets. This Update answers several of the questions that we received . What has the economic impact of higher US …
Recent US-Japan trade deal has removed a key downside risk What’s more, inflation set to keep surpassing Board’s pessimistic forecasts We expect the Bank to hike again in October The trade deal agreed upon between the US and Japan has removed a key …
Korea’s economy rebounded in Q2, averting a technical recession, and while the worst is probably over we expect a broad-based slowdown in growth over the near term. Data released today show that GDP rose by 0.6% q/q in Q2 (following a contraction of 0.2% …
Reported trade deal suggests escalation will be avoided Media reports suggest that the EU and US are approaching an agreement which would see a baseline tariff of 15% covering most products including vehicles. If confirmed (and of course President Trump …
23rd July 2025
Uncertain trade outlook will discourage policy tweak Rebound in core inflation and economic resilience provide more scope to wait Bank to resume easing later this year but second rate cut may be pushed into 2026 The recent rebound in core inflation and …
While China’s June trade data showed a pick-up in exports of rare earth elements (REEs), shipments remain well below pre-Liberation Day levels. A further warming of relations with the US could lead to more approvals being granted in the near-term, but …
While higher tariffs will cause some Asian economies to pursue slightly looser monetary policy than otherwise, domestic factors will be the key driving force behind rate decisions in most economies in the coming months. And we think that the risk of …
Despite some question marks being cast over whether the eight OPEC+ producers unwinding voluntary are keeping pace with the increases in quotas, our assessment is that they have added supply to the market at a decent pace so far. Rather than proceeding …
Sales down despite rebound in confidence The fall in existing home sales in June comes despite the recent rebound in consumer confidence, suggesting affordability is still the main driver of homebuyer activity. With house price declines likely to soon …
US tariffs have hit South Africa’s auto sector hard, but the sector also faces deeper structural challenges, including weaker demand growth in key export markets and competition from Chinese producers. All of this reinforces the idea that structural …
Recent surveys of real estate lenders point to a continued improvement in the European commercial real estate lending environment. However, with refinancing still dominating lending activity, this is unlikely to provide a material boost to investment this …
Early signs tariffs are pushing core inflation higher Economy remains solid notwithstanding housing weakness Fed to remain cautious, unmoved by political calls for cuts Despite calls within the FOMC for a rate cut at next week’s policy meeting, we expect …
Core inflation slowdown sets the stage for more rate cuts South Africa’s headline inflation rate may have edged up to 3.0% y/y in June, but the further easing of core inflation suggests the SARB should remain unworried about underlying price pressures. …
Japan’s economy has largely shrugged off global trade tensions and the trade deal reached between the US and Japan has removed a key downside risk. With inflation set to keep overshooting the Bank of Japan’s forecasts, we expect the Bank to resume its …
The US has set a 19% tariff on Philippine imports, aligning it with rates for other Asian nations that have already agreed deals with the US. While the economic hit to the Philippines will be modest, the deal does at least help shield it from losing …
We think Japan’s equities will do well over the rest of this year, even accounting for their big rally today, and that the yen will recover in time. But, the trade announcement looks like worse news for JGBs, especially at the front end. US President …
The trade deal with the US announced today removes a key downside risk to Japan’s economy. And while the potential resignation of PM Ishiba creates political risks, our conviction that the Bank of Japan will resume its tightening cycle before the end of …
Government bond yields in the euro-zone are converging, and we expect the “peripheral” frontier to keep blurring. Fears about deteriorating public finances are mounting in many places – for instance, Gilt yields opened higher today as an early data …
US tariffs appear to have given renewed impetus to Chinese producers’ efforts to export to emerging markets, resulting in a widening trade surplus with the EM world in the first half of the year. But this is going to face growing headwinds, given the …
The rebasing exercise by Nigeria’s statistics office means that the economy is now estimated to be more than 30% larger than previously thought. While the national accounts data now better reflect the size and composition of the economy, it doesn’t change …
Underlying inflation worries prevent start of easing cycle, for now The Central Bank of Nigeria left its policy rate on hold at 27.50% today and, while Governor Cardoso emphasised that policy will need to be kept tight to get inflation down to the MPC’s …
We held an online Drop-In session last week to discuss the outlook for equity, bond and currency markets. (See a recording here .) This Update answers several of the questions that we received. Tech/AI-driven equities are pushing the US equity markets …
Above-target inflation to keep MNB on hold for some time The Hungarian central bank (MNB) left its base rate unchanged today at 6.50%, and we think that interest rates will remain at this level throughout 2025. That’s a more hawkish view than the …
We expect the divergence in performance between the best performing offices and the rest to persist through our forecast. This will see further capital value falls in average and poorer quality space, but presents an opportunity to achieve attractive …
Oil prices have fallen back in the wake of the Israel-Iran ceasefire and, with more oil supply coming online, we think that prices will decline further. Fiscal policy in the Gulf will become less supportive as a result, weighing on activity in non-oil …
The Q2 Bank Lending Survey, published this morning by the ECB, suggests that the economy is still growing at a decent pace. But this is entirely due to improving prospects for the housing sector. The survey suggests that business investment will remain …
Given the weakness of Thailand’s economy, there is no doubt that the country needs lower interest rates. But the appointment of Vitai Ratanakorn as the next Governor of the Bank of Thailand is likely to fuel concerns about central bank independence. The …
This page has been updated with additional analysis since first publication. Good start to the year over and tax rises to come Despite the £3.6bn overshoot in June, public borrowing is still in line with the OBR’s forecasts for the first three months of …
Despite its gradualist approach, RBA will cut further than most expect Although the RBA judged that leaving rates on hold was the more prudent choice at its meeting earlier this month, it did signal that there was more easing in the pipeline. Our sense is …
The result of this weekend’s Upper House election in Japan may not reverse the recent rout at the very long end of the JGB market when it re-opens after a holiday on Monday, given the possibility that fiscal policy will be loosened in due course. But …
21st July 2025
Bleak sales and spending intentions captured by the Bank of Canada’s second-quarter business and consumer surveys are consistent with a sharp downturn in GDP growth. However, the surveys were carried out at a time of peak tariff uncertainty. Since then, …
We think France’s government borrowing costs will rise above those of Italy before long. This may seem surprising in light of Italy’s higher debt burden and lower trend growth rate, but it reflects the fact that France’s debt dynamics are worse and its …
President Trump’s recent tariff threats have led to renewed impetus among Mexican and Brazilian authorities to boost trade ties between Latin America’s two largest two economies – and reduce their reliance on the US. But while the tariff threat may …
The past three administrations have all attempted and failed to reshore lost manufacturing jobs and we expect the latest effort, with Trump expanding use of tariffs in his second term, to be no different. While specific sectors like motor vehicles and …
Artificial intelligence’s share of global electricity consumption is set to at least double by 2030, to around 3% of the total, and could drive almost half of electricity consumption growth in the US over that period. Although some have suggested that a …
Tariff-driven price pressures are finally starting to show up in the US economy. June inflation data offered early evidence that President Trump's tariffs are feeding through supply chains and those pressures are only likely to build – we think core …
The US-China trade truce and rebound in US demand helped lift China’s New Three export volumes to a record high in June. Although the strength in green exports is vulnerable to renewed tariff escalation between China and the US, China’s green exports to …
While trade and overcapacity related risks remain, we see a bright outlook for China’s equities. But we expect a more challenging path for its bonds and currency over the remainder of the year. Until recently, China’s stock market had been under quite a …
With Japan’s ruling coalition losing its majority in the Upper House, fiscal policy may be loosened over the coming months. However, we think that the outlook for monetary policy will be a more important driver of long-term bond yields than perceived …
RBNZ to cut further as inflation remains subdued With underlying price pressures remaining benign, the RBNZ is likely to loosen policy a bit further than most are anticipating. The 0.5% q/q rise in consumer prices last quarter was a touch softer than the …
Renewed concerns around the Trump administration’s attacks on the Fed’s independence have meant that while the US dollar is a touch stronger over the week as a whole, it is ending the week on the backfoot . Even if the president swiftly denied reports …
18th July 2025
Counter-tariffs pushing up prices Data released this week showed that headline inflation remained below the Bank of Canada’s 2% target in June for the third consecutive month. While that may seem like good news, it is mostly due to distortions created …
Nigeria’s bumpy disinflation could delay rate cuts Nigeria’s inflation slowed for a third consecutive month in June and, while real rates are firmly positive and the naira stable, underlying inflation dynamics remain concerning and suggest the CBN will …
Low vacancy and limited new completions this year will see Rotterdam rent growth continue to outperform Amsterdam over 2025, before supply picks up substantially in 2026. That will bring rent growth rates in the two markets back into line later in the …
