While long-term government bond yields have stabilised today, political developments in France and Japan over recent days highlight how fiscal uncertainty continues to put upward pressure on long-term bond yields. We think steeper yield curves are here to …
7th October 2025
CBK’s easing cycle has further to run The Central Bank of Kenya cut interest rates today, by 25bp, to its lowest rate in more than two years at 9.25% and, with inflation likely to stay contained, we think there’s scope for rates to fall to a below …
Trade deficit widens again as additional US tariffs announced The worsening in Canada’s goods trade balance in August was for all the wrong reasons, with exports falling and imports rising. Admittedly, unwrought gold played a notable role in flows in …
The euro has had a stellar year so far, holding onto most of the gains that it made following Germany’s fiscal announcement in March and the US tariff shock in April. But we think it is more likely to weaken than strengthen over the coming quarters as the …
Upcoming EPC requirements, coupled with reduced occupier demand due to remote work, mean investors are shunning secondary offices, triggering a sharp decline in capital values. Our new dashboard on office EPCs across major cities will therefore be an …
The state election in Bihar in November will be the first since the deterioration in relations between India and the US. Bihar also happens to be one of India’s most agrarian states. A strong performance for Prime Minister Modi’s BJP (as part of the …
This page has been updated with additional analysis since first publication. Prospect of higher taxes are weighing on the housing market The fall in the Halifax measure of house prices in September was at odds with September’s 0.5% m/m rise on the …
The prolonged underperformance of New Zealand’s economy has contributed to the Kiwi dollar being the worst-performing G10 currency last month, even as the Australian dollar was the best-performer within this group. However, as the RBNZ’s aggressive easing …
An improvement in corporate governance is a key reason behind the structural pick-up in corporate profit margins over the past two decades. However, even if corporate governance was improved further, we doubt that this alone would suffice to close the …
The latest political developments in Paris underline that France is heading for some kind of fiscal crisis which in turn means the risk premium on its debt is likely to rise in the coming year or two. The fallout for the private sector should not be huge, …
6th October 2025
The slump in the yen that accompanied Sanae Takaichi’s unexpected victory in Saturday’s LDP leadership election helps to explain why the stock market in Japan soared on Monday. But there are other reasons why equities there are likely to flourish under …
The oil market has largely shrugged off the damage from Ukraine’s drone strikes on Russia’s oil infrastructure so far. That said, the damage to Russian refinery and export capacity so far, and prospect of more meaningful disruption, suggests that the …
We don’t think the AI boom in equities has run its course, despite how far it has already come. We therefore expect the US stock market, in particular, to charge ahead over the rest of this year and next, with other tech-heavy markets – such as China’s – …
With the volatility surrounding tariff front-running seemingly in the past, global goods trade appears to be slowing. But the latest official and survey data support our view that this slowdown will not morph into a slump. And while rerouting has offset …
Political protests have surged across Asia this year, fuelled by frustration with corruption, inequality, and job insecurity. While the immediate economic and market impact is likely to be limited, a greater risk lies in governments’ responses – often …
The victory for the populist eurosceptic ANO party in the Czech parliamentary election over the weekend will likely result in looser fiscal policy, which will support GDP growth and cement the central bank's recent hawkish stance. The poor showing for …
It wasn’t meant to turn out like this. Only a few months ago, when Donald Trump swept back into the White House, the story was one of fading US exceptionalism. The consensus view was that tariffs, tighter immigration rules and unpredictable policymaking …
Gulf non-oil sectors enjoyed a strong end to Q3 but Saudi Arabia’s recent Pre-Budget Statement for 2026 reinforced our view that non-oil growth in the Kingdom will slow over 2026-27. Elsewhere, Egypt’s PMI dropped back last month although easing price …
High interest rates weigh on construction activity The headline CIPS construction PMI rose for the second consecutive month in September to 46.2, from 45.5 in August. But that is still firmly in contractionary territory. At the sector level the commercial …
The resignation of yet another French prime minister, this time after just 27 days, hammers home how the fractured parliament is making it nearly impossible to pass a budget that reduces the fiscal deficit. This strengthens our conviction that with …
Vietnam’s economy remained strong in the third quarter, and we expect it to continue posting healthy growth rates ahead as the hit from US tariffs proves manageable. GDP growth remained strong in Q3, at 8.2% y/y, while the outturn for the previous quarter …
Note: We've pushed back our forecast for the next BoJ rate hike from October to January. (See here .) We doubt that incoming PM Sanae Takaichi will prevent the Bank of Japan from hiking interest rates altogether though her victory makes it less likely …
The Summary of Deliberations of the Bank of Canada’s September meeting emphasised upside inflation risks. Our sense is that these risks won’t be realised, and so the Bank will gradually come round to our view that the economy will benefit from another …
3rd October 2025
The dollar has weakened a little this week on the back of some softer US employment and activity data. The US government shutdown does not appear to have made much impact, consistent with previous such episodes. That said, downside risks for the greenback …
Democrats and Republicans remain at loggerheads over cuts to health care, raising the likelihood that the government shutdown drags on for some time. We discussed the economic implications here . With the release of official data for September delayed and …
Our new Global Economic Outlook has just been published – and it makes for a striking contrast. In the US, the drag from Trump’s policy agenda looks set to be outweighed by an AI-driven investment boom that may already be lifting productivity. In Europe, …
Tinubu talks up progress, but fiscal concerns linger President Tinubu marked Nigeria’s Independence Day talking up growth and balance of payment improvements, but fiscal progress must accelerate if Nigeria is to meet its economic potential. President …
Survey highlights pressure on both sides of Fed’s dual mandate The ISM services survey will provide little comfort for Fed officials, with the prices paid index edging up again despite weakness in the activity and employment indices. Nonetheless, given …
BanRep: hawks still in the majority The hawkish tone accompanying the Colombian central bank (BanRep)’s decision to keep its policy rate unchanged at 9.25% at its meeting on Tuesday supports our view that there’s much less room for easing in Colombia than …
ANO poised to come out on top in Czechia The Czech parliamentary election kicks off today, with opposition populist party ANO set to gain the most number of seats. Depending on its actual vote share, the only way it may be able to form a majority in …
This week’s announcement of the small upward revisions to real GDP growth and productivity growth was welcome news. And in Q2 itself, the shape of growth was a little more encouraging. (See here .) Even so, it was disappointing that consumer spending …
Is OPEC+ lining up another mega hike? Speculation has mounted that OPEC+ is considering a super-sized increase to output quotas at this weekend’s meeting, which has weighed heavily on oil prices. The price of Brent crude tumbled from $70 pb at the start …
When US President Trump started raising tariffs aggressively earlier this year the primary concern for other countries, including the euro-zone, was the direct hit to the economy. As we had expected, this has turned out to be limited at an aggregate …
A slow unveiling The details of the 15 th Five-Year Plan (FYP) will be finalised at the Fourth Plenum, which the Politburo this week confirmed would take place from 20 th -23 rd October. The goals set out in Plan will define the Party’s economic policy …
RBI deploys regulatory tools to aid banking sector The key event of the past week was the Reserve Bank of India’s (RBI’s) policy announcement, in which the repo rate was left unchanged at 5.50%. But Governor Sanjay Malhotra struck a fairly dovish tone …
Korea to benefit from increase in defence spending South Korea this week confirmed plans to raise defence spending by 8.2% next year – the biggest increase in nearly two decades. The decision comes as Donald Trump intensifies pressure on traditional US …
Regardless of who wins Japan’s LDP leadership election this weekend, we expect a further sell-off in long-dated JGBs over the next year or two. The presumed postponement of the US Employment Report seems set to take a bit of the spotlight off the US …
Inflation picks up, but not enough to prompt CBRT to slow easing cycle The pick up in headline inflation in Turkey last month, to 33.3% y/y, was driven in large part by another rise in food inflation and, with core inflation continuing to drop back, we …
Tankan shows limited hit from tariffs The Bank of Japan is becoming a bit less concerned about the impact of tariffs on the economy and we’re sticking to our forecast that the Bank will hike rates to 0.5% at its meeting later this month. The Summary of …
But mining’s heydays are nonetheless over Iron ore prices have barely budged in response to China’s import ban for iron ore produced by Australian mining giant BHP. While China’s iron ore inventories appear to have fallen this year (see Chart 1), market …
CBE keeps the pedal on rate cuts The Central Bank of Egypt (CBE) cut its overnight deposit rate by 100bp, to 21.00%, and we expect that policymakers will continue to loosen monetary policy over the rest of this year and into 2026 as disinflation persists. …
2nd October 2025
OPEC+: a hike for sure, but by just how much? This weekend’s OPEC+ meeting is likely to see the group agree to a further unwinding of oil production cuts in November, with some suggestions it could be one of the most aggressive moves yet. But, with many …
Brazil’s government has brought its primary budget more or less back into balance over the past year, which has helped to improve investor confidence and drive a rally in Brazilian bonds. But delivering the fiscal tightening needed to meet the budget …
A weak currency and sustained deflation mean that China’s economy is on course to shrink as a share of the global economy for a fourth consecutive year , when measured at market exchange rates. China has gone from more than three quarters the size of the …
The 2026 budgets announced in Russia and Saudi Arabia in the past week point to significant fiscal tightening following declines in oil revenues and budget blowouts this year. Pressures for fiscal tightening are particularly acute in other oil producers …
In principle, the relatively cautious fiscal policy that Giorgia Meloni’s government has followed in Italy offers a model that other right-wing populist parties could follow. But in practice, with the possible exception of France’s National Rally, it will …
The US stock market’s relentless grind higher – the S&P 500 closed at a record high on Wednesday – and its accompanying outperformance of stock markets elsewhere are both reinforcing US residents’ ‘home bias’. While a high and generally rising allocation …
Table of Key Forecasts Overview – The global economy will grow by a solid yet unspectacular 3% in 2026-27, but the sources of growth are becoming increasingly unbalanced. The US will be the best performing major advanced economy, as what appears to be an …
Chinese officials have been trying to boost global usage of the renminbi for over two decades. Some progress has been made, with new BIS data placing the currency’s share in global FX turnover at a record high. But the figures are inflated by domestic …
