Relatively high inflation will encourage Riksbank to keep rates on hold The increase in Sweden’s CPIF inflation rate to its highest level since the start of 2024 is likely to encourage the Riksbank’s officials to keep the policy rate on hold at their …
7th August 2025
Lower interest rates to support growth in 2025 GDP growth in the Philippines picked up slightly in the second quarter of this year, and we continue to expect steady growth over the remainder of 2025 as low inflation and monetary easing support domestic …
US tariffs biting again Exports came under pressure again last month – the acceleration in headline y/y growth was simply due to base effects. With the temporary boost to demand from the US-China trade truce already fading and tariffs on shipments …
The high-beta Antipodean currencies had been the worst victims of global trade tensions but have fared better since early April, relative to their G10 peers, as global risk appetite steadily improved. Nevertheless, we think the best days for the Aussie …
If the extra 25% tariff that President Trump has announced on imports from India remains in place, India’s attractiveness as an emerging manufacturing hub will be hugely undermined. Global oil prices would probably rise if India responded by curtailing …
6th August 2025
Ahead of any possible introduction of US tariffs on imports of pharmaceuticals and semiconductors, this Update brings together key facts and figures on the scale of such tariffs and economies’ exposure to them. It seems likely that the US will soon impose …
President Trump’s firing of the Bureau of Labor Statistics (BLS) commissioner marks another troubling step in his administration’s pressure campaign against Federal institutions. Still, we think a scenario in which the White House manipulates key data …
Although there are growing concerns in some quarters about the health of the US economy, neither equity analysts nor investors seem worried. Admittedly, when it comes to equity analysts’ forward-twelve-month (FTM) projections for earnings per share (EPS), …
We expect office-based jobs growth to remain at a standstill through 2026 as the tech sector cuts back and AI fills some of the gap. At the metro level though, our expectations are broadly unchanged, with the divergence between the fast-growing South and …
With Swiss President Karin Keller-Sutter in the US trying to head off the 39% tariff, this note answers some key questions on the topic. Overall, we think Switzerland has limited room to offer concessions to the US and may well have to accept a less …
Indonesia’s current account position has improved markedly since the onset of the pandemic and we expect the deficit to stay small over the next couple of years. The rupiah will probably depreciate, but the decline is likely to gradual and the central …
Late last week, Donald Trump did what he does best: lob a grenade into the machinery of government. In this case, the target was the Bureau of Labor Statistics (BLS), the body responsible for producing much of America’s core economic data. Following the …
The Labour Force Survey (LFS) is overstating population growth and therefore almost certainly overestimating employment growth. The alternative Survey of Employment, Payrolls and Hours (SEPH) points to much weaker jobs growth, while the unemployment …
Brazil’s current account deficit has continued to widen and is likely to reach around 4.0% of GDP by year-end. Financing this should be manageable, provided the domestic policymaking backdrop doesn’t deteriorate (further) and commodity prices do not fall …
There are several headwinds to healthcare & social assistance employment that suggest it is unlikely to continue growing at its recent rapid pace, although we doubt payroll gains in the sector will collapse. The strength of non-farm payrolls in recent …
Market still struggling under higher borrowing costs The fall in home purchase mortgage applications in July still leaves them roughly in line with where they started the year, and continuing to point to a rebound in existing home sales. While some small …
Retail sales likely to remain sluggish Euro-zone retail sales edged up in June but remained slightly below the peak reached early in the pandemic and well below the pre-pandemic trend (See Chart 1). Looking forward, we expect spending growth to remain …
Côte d’Ivoire’s economic fortunes appear good, and we expect growth to accelerate, underpinned by strong cocoa, oil and gold exports. However, the country’s sizeable sovereign debt servicing costs and reliance on external financing remain key risks, …
Despite the unexpected rise in CPI inflation in June, we still think the weakness in the labour market means it’s only a matter of time before wage growth and inflation slow to rates consistent with the 2% inflation target. We think the Bank of England …
Construction activity drops to a post-COVID low The headline CIPS construction PMI dropped back in July to 44.3, the lowest since May 2020 when COVID lockdowns impacted activity. The drop was driven by the housing component, which after jumping to 50.7 in …
The Reserve Bank of India (RBI) kept the repo rate on hold at 5.50% and maintained its “neutral” policy stance today, despite India already being hit by a 25% US tariff with the potential for it to rise further if Trump follows through on his latest …
RBI's easing cycle at an end The Reserve Bank of India’s (RBI’s) decision to keep the repo rate on hold at 5.50% while maintaining its “neutral” policy stance reinforces our non-consensus view that the easing cycle is at an end. Today’s decision was …
Subdued wage pressures need not delay BoJ tightening Although regular earnings growth has been struggling to gain momentum, we think it will do so before long. Accordingly, the data shouldn’t stand in the way of the Bank of Japan resume its tightening …
Weak labour market bolsters the case for further easing With New Zealand’s labour market continuing to slacken in Q2, the RBNZ is all but certain push ahead with a 25bp cut at its meeting later this month. The 0.1% q/q fall in employment last quarter was …
The July Employment Report was a taste of what is to come, with payroll gains set to be much weaker in the coming quarters than has been the case in recent years. This is the new normal amid the crackdown on immigration, and there is little evidence from …
5th August 2025
Key insights into the US labour market with this new interactive dashboard; track and download all the important data. If you have subscriber access to the data underlying this dashboard, you can download it via the menu options in the top right of each …
Oil market remains unfazed by geopolitics for now Despite President Trump’s threat to enforce 100% secondary tariffs on buyers of Russian energy, which could effectively choke off up to 5% of global oil supply, oil prices are roughly where they were at …
We don’t expect the relentless march of ‘growth’ over ‘value’ in the S&P 500 to end soon, regardless of what happens to ‘risk-free’ real Treasuries. The past few months have seen growth outperform value in the S&P 500 as the 10-year TIPs yield has dropped …
Survey implies employment weakening, prices rising The ISM services survey highlights the challenges for the Fed in the coming months, with the activity and employment indicators weakening even as the prices paid index rose to a new cyclical high. The …
Consumer spending in Korea rebounded last quarter and should remain strong over the coming year as government stimulus, rate cuts, and rising wages support demand. But the ongoing downturn in the property sector and weak exports mean overall GDP growth …
The fall in world trade in Q2 was just a reversal of tariff front-running in Q1. But export orders are continuing to weaken, and with US tariff rates now about 15-25% in most economies, we expect global goods trade to slow significantly over the next two …
Deficit narrows as pharmaceutical imports normalise The narrowing of the trade deficit was mainly due to a normalisation in pharmaceutical imports and while exports appeared weak, this was primarily due to a fall in gold exports. The big picture is that, …
Trade deficit edges higher amid continued export weakness The small deterioration in Canada’s goods trade balance in June was driven by a large one-off import of a module for an offshore oil project in Newfoundland. The deterioration may have reversed in …
India could in principle find suppliers other than Russia to meet its energy needs relatively easily with little economic impact. Indeed, Indian oil refiners are reportedly reducing their purchases from Russia. But we doubt that India would make a …
A softer start to Q3 for the Gulf, but Egypt’s economy picking up July’s batch of whole economy PMIs were soft across the Gulf as fiscal policy becomes less supportive of non-oil sectors. Elsewhere, Egypt’s economic recovery has continued to strengthen, …
With inflation trending lower, RBA will cut by 25bp next week Nascent recovery and still-tight labour market will keep the Board vigilant However, as incoming data remain soft, Bank will ease further than most expect With underlying inflation within …
Growth likely to slow ahead Officials figures released today showed that Indonesia’s GDP growth stood at 5.1% y/y in Q2, but we don’t have much faith in the data – growth has been close to 5% for the past few years. Our proprietary activity tracker …
Household consumption showing signs of life The strong pickup in household spending last quarter won’t keep the RBA from handing down a 25bp cut when it meets next Tuesday. Looking ahead, however, the data do suggest upside risks to our below-consensus …
Financial markets have stabilised after Friday’s US payrolls shock and, unlike this time last year, there are few signs that large swings in government bond and currency markets are leading to a broader unravelling in risk sentiment. We continue to …
4th August 2025
We suspect that OPEC+ will have to take a break before unwinding the next layer of voluntary cuts or otherwise face a ballooning surplus in the oil market. Our base case is that the group will begin raising output again from Q2 2026, which we think is …
Morocco’s autos production has surged over the past decade and now rivals major producers in Europe, such as Poland and Hungary and output could soon surpass Italy. This growth in the manufacturing sector should support stronger GDP growth in the coming …
Disinflation paves the way for easing cycle to continue in large steps The larger-than-expected fall in Turkish inflation in July, to 33.5% y/y, will encourage the central bank to continue its easing cycle next month. For now, we maintain our forecast for …
Today’s weak US non-farm payrolls data has undone much of the dollar’s rally this week. While the DXY index is still on up the week, and ~2.5% stronger since the start of July, the increased risk of a recession in the US and the consequent drop in US …
1st August 2025
The Bank of Canada justified its decision to keep interest rates unchanged at 2.75% this week on three factors: persistent uncertainty, signs of economic resilience, and concerns about underlying inflation. In our initial reaction during an online …
Payrolls shocker The rift among the FOMC, with Governors Christopher Waller and Michelle Bowman this week voting against the decision to leave rates between 4.25% and 4.50% (see here ), will presumably have grown even wider following the July Employment …
Weak non-farm payrolls data have left investors concluding that a September Fed rate cut is almost nailed on and sparked a reassessment of risk across markets. We think this reassessment is slightly overdone, and that sentiment around AI is likely to …
The latest PMIs suggest that global industrial activity lost some momentum at the start of Q3 and will probably weaken further from here. The output component of the global manufacturing PMI fell to 49.7 in July from 51.3 in June, which at face value …
