The BoJ turned more upbeat when it left policy settings unchanged today and there’s a risk that the next rate hike will come earlier than our current forecast of July. And despite the recent surge in JGB yields, the Bank doesn’t seem keen to slow the …
23rd January 2026
This page has been updated with additional analysis since first publication. December’s pick-up not enough to prevent a contraction in Q4 December’s unexpected rise in retail sales volumes wasn’t enough to prevent yet another disappointing “Golden …
Bank of Japan will lift rates to 1.75% by next year The Bank of Japan sounded more optimistic when it left policy settings unchanged today and there’s a chance that it could raise rates earlier than our current forecast of July. The Bank’s decision …
RBA will put its foot on the brakes Australian labour force data released yesterday seemed to confirm what business surveys have increasingly been telling us: that labour market conditions are tightening rather than loosening. Indeed, with employment …
BoJ’s tightening cycle has further to run With underlying inflation price pressures remaining firm, we expect the Bank of Japan to resume its tightening cycle in the coming months. The plunge in headline inflation from 2.9% in November to 2.1% in December …
Inflationary pressures more benign than they seem Although headline inflation picked up further in Q4, underlying inflation remains well behaved. That being the case, we still think the RBNZ will keep rates on hold for a prolonged period, whereas markets …
22nd January 2026
The divergence between data center REIT performance and data center asset values over the last year appears to reflect the high level of uncertainty in the sector. Questions over power constraints, memory chip processing efficiency and technological …
We will be hosting a Drop-In to discuss the Bank of Canada's interest rate decision at 12pm ET/5pm GMT on Wednesday 28th. Sign up here to take part. Recent soft data quash talk of return to rate hikes this year Economy weak but not in urgent need of …
Egypt’s external position continues to improve Nearly two years on from Egypt’s dramatic shift back toward economic orthodoxy, data released this week provided further evidence that the economy’s improved external competitiveness is placing the external …
No evidence of the government shutdown weighing on spending The solid 0.3% m/m gains in real consumption in both October and November confirm that the government shutdown had very little impact on economic activity. Those gains slightly outpaced our prior …
Emerging Markets Capital Flows Monitor (Jan. 2026) …
Strains in US-Europe relations under President Trump mean that European policymakers may perceive the region’s growing dependence on the US for energy to be a strategic vulnerability. This is not as severe as Europe’s dependence on pipeline gas from …
There is no doubt that the Riksbank will keep its policy rate at 1.75% next week and continue to signal it will not adjust its policy for many months. We think that policymakers will only start to consider raising rates towards the end of the year once …
The small rise in Mexican inflation, to 3.8% y/y in the first half of January supports our view that Banxico will leave its policy rate unchanged at 7.00% at its next meeting in February. The outturn was up from 3.7% y/y in the first half of December and …
CBRT slows easing, but large cuts still lie ahead The Turkish central bank (CBRT) unexpectedly slowed the pace of its easing cycle today with a 100bp cut, to 37.00%. We think this was a response to a likely temporary rise in inflation this month and we …
US military strikes in northern Nigeria a few weeks ago refocussed attention on the country’s security challenges. Violence remains high nationwide and, while security is improving modestly in the south, it is worsening in the north. The fiscal burden of …
Frictions between the UAE and Saudi Arabia have broken out into the open in the last few weeks. But even if the situation were to escalate, the near-term economic impact would probably be limited. If anything, the larger repercussions could be in the oil …
Since December, investors’ year-end interest rate expectations have moved towards our own end-2026 policy rate forecasts for all major advanced economies. We think there is a bit further to go before markets fully reflect the rate outlook, which is being …
Latest US tariff threats not influencing Norway’s monetary policy Today’s decision to leave the policy rate at 4.0% came as no surprise and the Bank’s messaging repeated that policymakers are in no hurry to lower rates further. We are forecasting a cut in …
Although our base case is that the recovery in US markets will broadly continue, risk premia remain narrow and the chance of a larger repricing is probably high. Signs of a rapprochement over Greenland seem to have put markets back in a good mood . US …
This page has been updated with additional analysis since first publication. Some good news at last, but pace of deficit reduction slow The public finances are finally showing signs of improvement in recent months. But the pace of deficit reduction …
BNM set for prolonged hold Bank Negara Malaysia (BNM) today left its policy rate unchanged at 2.75% and signalled that it is in no hurry to adjust interest rates again. With growth set to remain firm and inflation contained, we expect rates to be left …
Economy to return to growth in Q1, but difficult year ahead Korea’s GDP contracted in the final quarter of 2025. While we expect the economy to return to growth this quarter, 2026 is likely to be a difficult year as weak domestic demand continues to weigh …
Sharp drop in unemployment clears path for RBA hike Given the renewed tightening in the labour market in December, the Reserve Bank of Australia is all but certain to pull the trigger on a rate hike at its meeting next month. The 65,000 rise in employment …
Although further weakness in JGBs might have implications for financial markets outside Japan, we doubt the global fallout would be large for four reasons. Japan’s net international assets are larger than those of any other country, owing to the …
21st January 2026
US-Europe tensions over Greenland, and renewed US policy uncertainty more broadly, has led to speculation of a return of the “sell America” narrative that dominated financial markets in the first half of 2025. While the Trump administration’s …
Soft inflation data should have eased hawks’ concerns But strong GDP growth and stabilisation in unemployment suggest no rush to cut Annual vote rotation among regional presidents a slightly dovish shift The data released since the FOMC’s December meeting …
We see recent strength in AI-related business investment as the start of a multi-year capex boom, driving GDP growth of 3.0% this year and 2.5% in 2027. Despite the economy running hot and labour market remaining tight, we expect downward progress in core …
The fortunes of Dublin’s logistics markets are improving after a post-pandemic hangover. Sentiment is currently strong, while a solid economic outlook and tight supply provide reasons to be optimistic about rental growth going forward, as long as the …
The Alternative für Deutschland’s continued rise in the polls has been accompanied by renewed calls for mainstream German parties to abandon their “firewall” policy. But as long as the AfD clings on to some of its most extreme views and members it is …
The latest batch of activity data from South Africa were soft but still pointed to the economy ending 2025 on a solid footing. Easing supply conditions, looser monetary policy and improved terms of trade will all help to push GDP growth above 2% this …
Vulnerabilities in Egypt’s banking sector look high by EM standards, but there are signs that these risks should ease and the banking sector has large capital buffers. Perhaps the bigger issue is that bank lending to the government is crowing out credit …
Given comparatively weak economic conditions, it might seem surprising that services inflation has been stickier in Europe than in the US in recent months. But much of this reflects the delayed response of wage growth to labour market normalisation in …
After a very strong 2025, economic growth in India is likely to ease in 2026 in the face of punitive US tariffs. However, India will remain a relative bright spot in the global economy, thanks to strong domestic demand. Inflation has bottomed out but a …
Inflation uptick to prompt a pause in the easing cycle The rise in South Africa’s headline inflation to 3.6% y/y in December, with core inflation picking up too, suggests that the Reserve Bank will pause its easing cycle later this month. Further out, …
BI stays on the sidelines as rupiah slides Recent falls in the rupiah prompted Bank Indonesia to leave its benchmark interest rate on hold at 4.75% for a fourth consecutive meeting today. The decision will ease fears, for now at least, that BI is …
This page has been updated with additional analysis since first publication. Rebound not much to worry about, but BoE unlikely to cut rates in February The rebound in CPI inflation from 3.2% in November to 3.4% in December (CE and BoE 3.5%, consensus …
Should JGB yields continue to surge, PM Takaichi may be forced to offset some of the expansionary fiscal measures announced recently with tightening elsewhere. However, those moves may not be seen as credible by investors and the Bank of Japan may …
Korea’s logistics looks to be turning a corner, with net absorption comfortably outpacing new supply in 2025 and over the next few years. That will underpin rent growth averaging 2.5% p.a. over the next five years, driving a solid recovery in capital …
The Republicans are likely to lose their majority in the House of Representatives in this November’s midterm elections, but that won’t slow down the President, with Donald Trump continuing to pursue most of his immigration, trade and foreign policy agenda …
20th January 2026
We expect continued divergence in both total non-farm and office-sector job growth across the largest metros over the next two years. Those in the South will continue to significantly outperform the national average while some major Western metros will …
The latest triple sell-off in US equities, Treasuries, and the dollar would probably have to become much larger before the ‘guardrails’ of the financial markets prompted Donald Trump to change his plans for Greenland . The US government bond market, in …
President Donald Trump’s first year back in the Oval Office was more disruptive than we had expected, marked by attacks on the global trading order, the domestic institutional framework and even the sovereignty of other nations. As one of the last …
Political risk has emerged as a key theme of 2026. Our analysis of EM political shocks over the last 15 years suggests that the key determinants of the size and persistence of political risk premiums are the type of event and the extent of economic …
A divergence between banks’ expectations for house and commercial real estate prices may explain why they are still keen to ramp up lending to commercial real estate even as the availability of credit to the overall corporate sector has flatlined. In any …
Sluggish growth and target-bound inflation should give central banks room to continue easing monetary policy. But the extent of easing that lies in store this year differs by country – while easing cycles in Mexico and parts of the Andes are nearing an …
The credibility of policymaking in Indonesia has been dealt a fresh blow at the start of 2026. It will take time for the more pernicious effects of populist and interventionist policies under President Prabowo to be felt, but risk premia are likely to …
