After a long winter, there were finally some encouraging signs in the local real estate board data for April. By our seasonal adjustment, home sales across Toronto, Vancouver, Montreal, Ottawa, Calgary and Edmonton rose by a combined 2.9% m/m, the first …
8th May 2026
Donald Trump travels to Beijing next week for a long-awaited summit with Xi Jinping that carries huge geopolitical significance, but one where investors should keep expectations firmly in check. Group Chief Economist Neil Shearing and Head of China …
Today’s US Employment Report painted a picture of a labour market that is neither tight enough nor loose enough to derail the stock market. To re-cap, US non-farm payroll employment rose by a solid 115,000 rise in April, despite ongoing concerns about AI …
Tinubu’s path to 2027 faces little opposition President Tinubu’s path to re-election next year is becoming clearer, driven less by his achievements than the increasing fragmentation of the opposition. Whatever happens, the president’s large in-tray of …
Bumpy road ahead for oil prices It remains to be seen whether the US and Iran will agree a memorandum of understanding (MoU) which includes a commitment to gradually reopen the Strait of Hormuz. In any case, if/when an agreement is reached, the trajectory …
Any deal will be limited in scope The delayed summit between Presidents Trump and Xi will take place in Beijing on Thursday and Friday. Unsurprisingly, Iran will loom large. The US wants China to use its leverage with Tehran to help negotiate a peace deal …
Upside risks to Brazil’s easing cycle increase Brazil appears to have started the year with strong momentum. The composite S&P Global PMI rose to a 14-month high in April and is consistent with GDP growth of ~0.8% q/q at the start of Q2. (See Chart 1.) …
As large banks have pulled back in recent years, non-bank lenders have accounted for an increasing share of CRE debt originations. While insurers’ lending has been conservative, debt funds and other private investors have tended towards riskier lending …
This page has been updated with additional analysis since initial publication. Unemployment rate jump eases rate hike expectations The rise in the unemployment rate to a six-month high of 6.9% has trimmed investors’ overly hawkish interest rate …
Weak surveys suggest pick up in underlying employment growth does not have legs The solid 115,000 rise in payroll employment in April and still-muted 4.3% unemployment rate add to the reasons for the Fed to remain on hold for now. The reduced reliance of …
All of our coverage on the Middle East conflict can be found here . Once a fuller picture of the results emerges later today and tomorrow, yesterday’s local elections could be historic for two reasons. First, a poor performance by Labour could prove to be …
Recent comments from ECB policymakers make it clear that after holding fire in March and April, it is very likely that they will raise interest rates in June. This week, Norges Bank and the Riksbank took different approaches. The former didn’t waste any …
Table 1 has been updated since publication to reflect comments by leadership hopefuls as of 18th May 2026. If Starmer/Reeves were ousted in the aftermath of what appears to be a dire performance by the government in yesterday’s local elections, we suspect …
All of our coverage on the Middle East conflict can be found here . Caution prevails amid the ongoing energy shock The communications surrounding the interest rate decisions in Poland and Czechia this week, at which rates were left on hold at 3.75% and …
Political shake-up in Tamil Nadu Results of the recent state elections were announced this week. We provided our initial take here . The big story was the victory for Prime Minister Modi’s BJP in West Bengal, for the first time ever. However, the refusal …
Thailand’s two-pronged stimulus Thailand is on the verge of passing a large fiscal stimulus package worth 400 billion baht ($12.2bn, 2% of GDP), as it aims to shield households from rising living costs and to accelerate the economy’s transition towards …
Trump tariffs on thin ice, again The narrow Court of International Trade (CIT) ruling against the Trump administration’s 10% Section 122 tariffs does not have any immediate implications for the US effective tariff rate, but it raises the risk that the …
German industry weak even as energy-intensive production proves resilient The weakness of German industrial production in March may have little to do with the Iran war as electricity prices for industry did not rise and output in energy-intensive industry …
This page has been updated with additional analysis since first publication. House price growth softens amid higher mortgage rates The small fall in the Halifax measure of house prices in April suggests the housing market has been less resilient to the …
At first glance, it would seem that developments over the Golden Week holidays have increased the risk of the Bank of Japan remaining on hold for longer than our current forecast of June. However, the picture is far from clear-cut. To start with, Tokyo …
Tax changes not the main show in town The RBA sounded ambivalent about need for further tightening when it returned the cash rate to its post-pandemic peak of 4.35% on Tuesday. If a peace deal between the US and Iran were reached, the case for additional …
Wage growth strong enough to warrant further tightening While wage growth softened a little in March, it remains strong enough to prompt the Bank of Japan to hike rates as soon as downside risks from the Iran War start to abate. According to the …
Banxico delivers its final cut in the cycle Mexico’s central bank (Banxico) made clear in its communications today that its 25bp interest rate cut, to 6.50%, marks the last in the cycle. We think this is now likely to be followed by a prolonged pause in …
7th May 2026
At face value, the dollar’s weakness over recent days is unsurprising given growing hopes of a US-Iran peace deal and the consequent drop in energy prices. But we think that the renewed outperformance of the US economy and stock market will prove …
A bill approved by Brazil’s Chamber of Deputies this week tackles some of the key impediments to (currently minimal) rare earths extraction. However, the bill gives the government significant control over foreign investment and firms’ ability to export, …
All of our coverage on the Middle East conflict can be found here . Hopes for an end to the Iran war have grown (again) in recent days, with Axios reporting that Washington and Tehran are closing in on a one-page memorandum of understanding (MOU). That …
Investment in student accommodation appears to be turning a corner after several lean years. We expect demand fundamentals to support a further recovery over the next decade, though geographic shifts are likely to tip the balance of inflows towards Asia …
If the Strait of Hormuz re-opened fully soon, the upside for global equities might appear limited given MSCI’s ACWI Index is now more than 4% higher than before the Iran war began. But its surge from a trough in late March has been fuelled by another boom …
Rates on hold, hikes not on the agenda (for now) The Czech National Bank’s decision to leave the two-week repo rate unchanged at 3.50% will be accompanied by upwards revisions to its inflation forecasts in the post-meeting communications. But as things …
Dip in inflation keeps door open for one final rate cut The small fall in Mexican inflation (both headline and core) last month, taken together with the decline in GDP in Q1, gives policymakers at the central bank room to deliver one final 25bp rate cut …
Input prices index reaches its highest level since June 2022 The headline CIPS construction PMI fell by nearly 6%-pts in April to 39.7, its lowest reading since November 2025. The sharpest deterioration was in the civil engineering index, but there was …
On their own, the recent surge in crude oil prices could lift construction costs by around 4%. However, the bigger picture is that in contrast to the previous energy shock in 2022, conditions in Australia’s housing market are not conducive for runaway …
After three years of remarkable stability in Italy, a decline in Prime Minister Giorgia Meloni’s popularity and higher energy prices mean political and fiscal risks are rising again. Political and fiscal risks in Italy have been remarkably contained in …
BNM set for prolonged hold The decision by Bank Negara Malaysia (BNM) to leave interest rates unchanged at 2.75% came as no surprise, and with the economy relatively well sheltered from the crisis in the Middle East, we are sticking with our view that …
The Philippines is going through a period of stagflation, with a combination of slowing (and very weak) GDP growth and high and rising inflation placing the central bank in an unenviable position. Even if the crisis in the Middle East ends soon, the …
Inflation will rise well above target in both Australia and New Zealand as a result of the oil price shock. The RBA will respond by moving policy further into restrictive territory, given the overheating economy and the risk of inflation expectations …
Financial markets have responded strongly to signs that the US-Iran conflict may end soon. We think government bonds have further to rally than most given how far they still are from pre-war levels. Fresh hopes that an end to the US-Iran conflict may be …
6th May 2026
If a deal materialises between the US and Iran, we think currencies of energy exporters would still hold up fairly well this year given it would take some time for the terms of trade shock to fully unwind. But if the conflict reignites, they would likely …
Brazil’s presidential election on 4th October is shaping up to be a close race between President Lula and right-wing challenger Flavio Bolsonaro. While Bolsonaro would likely take a tougher stance on crime and pivot foreign policy closer to the US, it’s …
Set for a prolonged pause The Polish MPC’s decision to leave the policy rate on hold is likely to be marked by a pause for at least the rest of this year. Despite the rise in inflation and resilience of economic activity, the bar for raising interest …
An El Niño in the second half of the year – as seems increasingly likely – would add to the upside pressures on food and energy prices stemming from the Iran war. The macroeconomic effects would be largest in emerging markets, particularly those most …
Labour market conditions remain soft in New Zealand The slight fall in the jobless rate in Q1 won’t change the RBNZ’s assessment that labour market is operating with substantial excess capacity. Accordingly, we continue to believe that the Bank won’t be …
High energy prices are leading to a surge in Turkey’s imports and have pushed up inflation sharply. While the central bank (CBRT) appears to have room to stand pat for now, a prolonged period of high energy prices would probably force it to tighten policy …
5th May 2026
Inflation pressures broadening The unchanged level of the ISM Services Prices Paid Index at 70.7 in April is not the worst outcome, given its manufacturing counterpart surged to a four-year high of 84.6 in the same month. Even so, it leaves our weighted …
The key takeaway from the results of the recent round of state elections – West Bengal in particular – is that Prime Minister Modi’s BJP is weathering the energy shock without a meaningful loss of support and, in doing so, has strengthened its hand in the …
Exports strong, but imports stronger The modest widening of the trade deficit in March, despite another solid rise in goods exports, was less about insatiable AI-driven demand for computer hardware than in recent months, and more about a broader increase …
Oil price spike and volatile gold exports push trade back into surplus The oil-price-driven improvement in Canada’s goods trade balance in March overstates the health of the export sector, with total export volumes falling despite a big rise in the …
Client visits in New York last week offered a timely, if expensive, reminder of how inflation affects economies. Before the pandemic, a beer in a Midtown bar would cost $10; now you would be lucky to see much change from $20. And the morning coffee and …
Growth surges Hong Kong’s Q1 growth surprised significantly to the upside, with the economy expanding by 5.9% y/y, up from 3.8% in Q4. In seasonally adjusted, q/q terms, the economy grew by 2.9%, the fastest pace of quarterly expansion outside of the …
