Last Friday’s pullback in US equities, as Treasury yields soared in the wake of a strong employment report, suggests bonds might be the straw that eventually breaks the stock market’s back. This certainly seems possible given what happened at the end of …
9th June 2026
It is hard to accurately gauge the extent to which the adoption of AI is affecting payrolls, but the recent improvement in jobs growth in those industries most exposed to AI suggests any negative effects have eased. On the flip side, we are now beginning …
Better-than-expected, but risks pointed to the downside The rise in existing home sales in May was a bit stronger than we expected but, given the further increase in mortgage rates in recent weeks, we remain concerned about the downside risks to our …
Strength in exports not just an oil price story The improvement in Canada’s goods trade balance bodes well for GDP growth at the start of the second quarter. While higher oil prices continued to support energy exports, the strength was also due to a …
Trade figures bode well for second-quarter GDP growth Although the trade deficit was little changed in April, our calculations suggest that gold-adjusted export volumes far outpaced import volumes. That leaves net trade on track to make an even stronger …
Rates on hold for a prolonged period The larger-than-expected fall in Mexican inflation, to 3.9% y/y in May, will be welcomed by Banxico and means that the policy rate is likely to remain at 6.50% in the foreseeable future. The outturn was below both our …
Economy and labour market are showing signs of easing But underlying inflation is uncomfortably high and likely to accelerate further Another 25bp hike is more likely than not later this year The RBA will leave rates on hold at 4.35% at its meeting next …
GDP data shows weakness under the hood South Africa’s economy expanded by a stronger-than-expected 0.5% q/q in the first quarter but there were signs of weakness under the hood, which will make the Reserve Bank cautious about delivering aggressive …
The two-decade period of student accommodation outperformance in Europe is set to continue, supported by higher income returns, favourable structural demand drivers and still-tight supply. Within Europe, the UK, Germany as well as Austria have stronger …
BI hikes by 25bp in emergency move, but investors want broader policy shift Bank Indonesia’s decision to lift its policy rate by 25bp, to 5.50%, in an emergency meeting today reflects growing concerns about the weakness of the rupiah. But placing the …
Impact of Iran war yet to be felt The 0.4% m/m increase in Germany industrial production in April was in line with analyst expectations and a little better than we had anticipated (consensus: +0.4%; CE: 0.0%). Together with an upward revision to the March …
China’s export boom steams ahead Chinese exports gained further momentum in May, led by soaring semiconductor shipments. Meanwhile, the pickup in import growth mostly reflects favourable base effects. In US dollar terms, export growth accelerated from …
They say sequels are rarely as compelling as the original. That is not the prevailing view in Brussels, where I spent last week and where discussion was dominated by "China Shock 2.0" – the prospect of a new wave of Chinese exports that could hollow out …
8th June 2026
Inflation – and central banks’ response to it – may continue to be a thorn in the side of the bond market for a while. But, there’s still limited evidence in markets of runaway inflation expectations, which is good news for bonds. Meanwhile, we aren’t yet …
Are we moving towards Fed rate hikes? Even before the release of a strong May US employment report, Group Chief Economist Neil Shearing joined The Weekly Briefing to explain why shifting dynamics on the FOMC mean the Federal Reserve could emerge from the …
5th June 2026
Another robust US non-farm payrolls report means our central forecast is now that the Fed raises the fed funds rate later this year . In turn, that implies a further rise in US Treasury yields and the dollar may be on the cards, even if the Strait of …
US Commercial Property Chartpack (Q2 2026) …
Tariffs back on the agenda We found out this week that the Trump administration plans to impose new tariffs on countries importing products made with forced labour under Section 301 of the Trade Act. This would include a 10% tariff on Canada for “failing …
As we set out in an Update this week, the recent speeches from Fed officials suggest that the bar to the FOMC hiking interest rates is lower than we assumed a few months ago. There were still some obvious doves on the FOMC with, for example, Governor …
…but not productivity An OECD report published earlier this week suggests that, between 2005 and 2024, Chinese industrial firms received 3 to 8 times more subsidies than firms in OECD countries. (See Chart 1.) The report finds that these subsidies …
Abelardo comes out on top in Colombia The strong showing for right-wing Abelardo de la Espriella in the first round of Colombia’s presidential election last Sunday has been warmly received by local markets. He is the clear favourite in the run-off on 21 …
RBI on hold; resilient economy paves way for hikes The RBI kept the repo rate unchanged at 5.25% today and maintained a “neutral” stance. (See here .) Governor Sanjay Malhotra highlighted the downside risks to economic growth from the Middle East …
Prospects for the euro-zone economy have deteriorated due to the Iran war and related energy price shock. After declining in Q1 (due to a slump in Ireland) we forecast euro-zone GDP growth to flatline in Q2. We also forecast both headline and core …
Ghana economic recovery to bring rating upgrades Ghana’s improved fiscal position, alongside high gold and oil prices, leaves it well placed to record GDP growth of ~6% in the near-term and achieve the credit rating upgrades the president is hoping for. …
Ireland’s national accounts data have been playing havoc with euro-zone statistics for some time but the latest example is quite extreme. We learnt yesterday that Ireland’s GDP plummeted by 12.1% q/q in Q1, rather falling by 2.0% as previously thought. …
Strengthening labour market increases chance of rate hikes this year The strong rebound in employment and the fall in the unemployment rate to 6.6% will provide some relief to the Bank of Canada that the economy is not in or on the verge of recession. …
Another positive payroll surprise brings the Fed closer to a hike later this year The third consecutive consensus-beating gain in non-farm payrolls in May should further reduce concern among the FOMC about the downside risks to the labour market, thereby …
Central banks like their shiny pet rocks In its annual report on the international role of the euro, the ECB announced earlier this week that gold had overtaken US Treasuries in accounting for the largest share of foreign reserves held by central banks in …
The ECB is widely expected to hike interest rates from 2.00% to 2.25% next Thursday (see here ) and Fed officials are increasingly talking up the prospect of raising US rates from 3.50-3.75% (see here ). In some ways, the possibility of the Bank of …
May inflation data largely encouraging The inflation data across Asia for May have been a mixed bag, but on the whole will provide some encouragement for policymakers. While headline rates are now markedly above those recorded before the war in Iran …
Resilient economy reinforces case for interest rate hikes The GDP data for Q1 (Q4 of FY25/26) show that India’s economy continued to grow at a very healthy clip, and more timely indicators point to resilience in the face of the energy shock. There is …
Indonesia's recent market turmoil reflects more than a run of disappointing economic data. Investors are becoming increasingly concerned about the direction of policymaking, amid pressure on Bank Indonesia to support growth, a series of corruption …
All of our coverage on the Middle East conflict can be found here . Armenia set to cement pro-West shift Armenia’s upcoming election on 7 th June could mark a further step in the country’s shift away from Russia and towards the West, adding tensions at a …
The Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25% today as it continues to “closely monitor developments” in the Middle East. But it is clear that rupee weakness remains a concern and, with inflationary pressure also building, we think …
Fundamentals support further rate hikes In a speech on Wednesday, Bank of Japan Governor Ueda strongly suggested that the Board is preparing to resume its tightening cycle this month. While he noted that the Iran war presented both downside risks to …
Hiking cycle not over yet The Q1 GDP data out of Australia this week were something of a dog’s breakfast. On the one hand, real GDP expanded by a measly 0.3% q/q, its softest print in a year. On the other hand, private final demand rose by a solid 1.4% …
This page has been updated with additional analysis since first publication. High mortgage rates continue to weigh on house prices The modest fall in the Halifax measure of house prices in May shows that the rise in mortgage rates triggered by the Iran …
RBI keeps rates on hold, but hikes will materialise soon The Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25% today as it continues to “closely monitor developments” in the Middle East. But we think it is only a matter of time before it …
Wage pressures set to remain elevated The continued strength in wage growth gives the Bank of Japan the green light to resume its tightening cycle at its meeting on 16 th June. According to the preliminary estimate released today, growth in labour cash …
New projections will show weaker growth and higher inflation. Rate hike a near certainty, probably followed by another in July… … but unless energy prices surge again, that could be the end of the tightening cycle. A 25bp rate hike next week, taking the …
4th June 2026
Note: Since this article was published, we have shifted to forecasting interest rate hikes from the Fed this year. (See here .) Recent Fed speeches suggest that, absent a sudden surge in oil prices, the FOMC will keep interest rates unchanged over the …
All of our coverage on the Middle East conflict can be found here . Gulf downturn appears to be easing The high-frequency data published this week provide tentative signs that the slump in the Gulf economies has started to ease. Timely trade figures from …
The latest sharp falls in Indonesia’s financial markets reflect growing concerns that President Prabowo is doubling down on his populist and interventionist approach to policymaking. The central bank will probably deliver further interest rate hikes in …
Consumers cutting fuel purchases in response to higher prices The fall in euro-zone retail sales in April largely reflected a drop in fuel consumption. Non-fuel retail sales were higher in April than before petrol and diesel prices began to surge in …
Another deterioration in all the key activity sub-indices After another month-on-month decline, the headline CIPS construction PMI dropped to 38.2, its lowest level since May 2020. Aside from this period during the pandemic, the last time it was this low …
Korea’s economy is riding an extraordinary wave of global demand for its AI-related exports and, despite the drag from higher energy prices, we have raised our growth forecasts for this year. But the success is highly concentrated in electronics. The rest …
It’s increasingly clear the Bank of Japan will resume its hiking cycle this month; on its own we don’t think that’s a big threat to global bond markets even if the central bank ultimately moves more quickly than expected. At the time of writing, …
The latest batch of PMIs suggests that industry has been buoyed by precautionary stockbuilding and the AI boom, while consumer-facing services have taken a hit in many economies. At the global level, the PMIs are consistent with slightly subdued GDP …
3rd June 2026
Strong services price pressures will add to Fed’s concerns The rise in the ISM Services Index in May, together with the latest rise in the manufacturing index, suggests that the economy is enjoying some renewed momentum and supports our view that GDP …
H1 2026 GDP growth set to be slower than Bank expects Limited sign so far of higher oil prices driving broader price increases Bank will hold again but reiterate hawkish warnings The downside surprise to first-quarter GDP growth and limited passthrough of …
