Gold continues to shine, all eyes on OPEC+ There have been several factors supporting gold prices to a record high above $3,500 per ounce, including greater expectations of Fed rate cuts and investor concern about fiscal positions. And against the …
4th September 2025
Economy doing well but inflation still a concern The solid rise in the ISM services index in August matches the generally positive mood around the economy’s growth prospects in the third quarter. The tick down in the prices paid index is a relief, but …
The increase in euro-denominated bank lending and deposits across parts of CEE in recent years – due in part to high domestic inflation and interest rates – looks like a concern on the surface, but there are reasons to think it doesn’t pose a significant …
Over the next 18 months, we expect CPI inflation and interest rates in the UK to fall closer to the euro-zone equivalents. And even though it has its own problems, the UK’s fiscal situation is not as challenging as France’s. The net result is that we …
Export rebound provides some hope The rebound in exports in July was broad-based but, with the export order indicators still weak, we suspect it reflects more of an inevitable rebound from recent weakness rather than the start of a renewed positive trend. …
Trade deficit widens as gold imports rise A resurgence in gold imports partly explains the widening of the trade deficit in July. Exports were flat, but a weaker dollar and negligible tariff retaliation abroad should support them in the coming months, …
With new supply limited and solid GDP growth prospects supporting demand, we believe that Warsaw prime office rental growth will outpace the CEE average in 2025, before converging with the region’s average over 2026-29. The latest data showed that prime …
Construction activity still contracting The headline CIPS construction PMI ticked up to 45.5 in August, from a five-year low in July. But that suggests construction activity is still contracting. Once again, a weak housing sector is weighing on the …
UK SONIA Rates …
After falling by 16% from their 2021 peak to their recent trough in March, prime central London (PCL) house prices have risen in each of the three months to June. But with prime buyers less reliant on lower interest rates and more exposed to possible …
Rates on hold, but more easing likely before year-end Bank Negara Malaysia (BNM) today left its policy rate unchanged at 2.75%, but we think this represents a pause, not an end to the central bank’s easing cycle. With the outlook for growth worsening …
Steady inflation reduces likelihood of rate cut later this month Headline inflation was unchanged in August and is still likely to remain close to, but above, zero over the coming months. While today’s data and recent comments by SNB Vice Chairman Antoine …
Consumer spending on track for further gains in Q3 With the Australian consumer springing back into action, the case for aggressive policy easing is becoming weaker. According to the ABS’ monthly indicator, household spending rose by 0.5% m/m in July, …
While the sell-off in government bond markets has abated a bit today, the UK Gilt market continues to stand out, and not in a good way. Nonetheless, we continue to think that Gilt yields will eventually fall back towards 4%. As we discussed yesterday , …
3rd September 2025
The JOLTS data for July point to a gradual easing in labour market conditions. The large decline in healthcare and social assistance job openings is another reason to think that the disproportionate payroll gains in that sector will slow. However, the …
The slowdown in world goods trade since Q1 has been largely due to the reversal of tariff front-running. But the latest data show that world trade has so far not slumped in the wake of tariffs. And while forward-looking indicators point to a slowdown, we …
NBP cuts by 25bp, easing cycle likely to proceed cautiously The National Bank of Poland (NBP) cut its policy rate by 25bp again today, to 4.75%, but we think that monetary easing over the coming year will be smaller than most anticipate. Out of the 30 …
Dip in rates supports modest rise in mortgage activity Lower borrowing costs sparked a small rebound in home purchase mortgage applications in August, lending support to our view that existing home sales will see a modest lift in the second half of what …
Electricity prices in the US have been hitting the headlines, with some laying the blame at the feet of the AI rollout and data centre construction. This Update answers key questions on what is driving the sharp rise in electricity prices in the US and …
Despite the strong rebound in Q2, Sweden’s economy has fared worse so far this year than many expected. We now forecast it to grow only moderately over the remainder of the year, before returning to its trend rate over the course of next year. While the …
Foreign investors have generally been piling into Japan’s stock market in recent months, presumably encouraged by, among other things, the country’s recent trade deal with the US, the continued weakness of the yen, an improving economy, a brighter future …
PMIs rise, but private non-oil GDP growth still soft The whole economy PMIs for August strengthened a little in the Gulf states, though the surveys still suggest that activity private non-oil sectors has softened in Q3. Elsewhere, while Egypt’s PMI fell …
The government’s post-pandemic infrastructure drive is helping to ease some of the bottlenecks that have previously constrained India’s economy, with particular success in developing port, railway and digital infrastructure. The good news is that …
Easing cycle to continue, albeit at a slower pace The continued decline in Turkish inflation last month, to 33.0% y/y, keeps the door open to large interest rate cuts at the central bank’s meeting next Thursday. That said, with inflation coming in a bit …
Strong rebound in activity could prompt fewer cuts by RBA Activity rebounded strongly in Q2, and for all the right reasons. The pickup in domestic demand raises the risks that the RBA won’t loosen policy as aggressively as we’re predicting. The 0.6% rise …
Overview – GDP growth will slow from its current above-trend rate to a more sustainable pace as external demand softens. However, with consumption growth still healthy and underlying inflation set to remain above the Bank of Japan’s 2% target, we expect …
As long-end government bond yields continue to rise, identifying the culprit for the latest sell-off becomes ever more pressing. The sell-off in core government bond markets over the past couple of days has taken 30-year yields in the UK, Germany and …
2nd September 2025
The rise in the EM manufacturing PMI in August suggests that the sector accelerated in Q3, helped by external demand. But, overall, conditions in manufacturing remain pretty weak and may deteriorate again over the rest of the year. The aggregate emerging …
The latest PMIs suggest that global industry has been fairly resilient in the wake of US tariffs so far and may already be past the worst. Meanwhile, goods price pressures remain much stronger in the US than elsewhere. The output component of the …
Contagion from France’s government bond market to the rest of the euro-zone will probably be muted and short-lived unless France’s own crisis becomes much bigger than we expect. This is partly because the conditions for a systemic crisis in the euro-zone …
In the wake of the Court of Appeals’ decision upholding a lower court finding that Trump exceeded his executive powers by imposing sweeping universal and reciprocal tariffs, this Update answers key questions on what comes next and the potential economic …
Some signs of life despite low headline index The bounce in the ISM manufacturing new orders index in August suggests that, although the manufacturing sector is still struggling, it may now be turning a corner. The modest 0.7-point rise in the headline …
The global geopolitical map could have been redrawn by the end of Donald Trump’s second term. Some form of rapprochement between the US and China is conceivable in the next few years, as is a breakdown in relations between the US and its traditional …
Slowdown in growth supports an improving inflation outlook The slowdown in Brazil’s GDP growth to 0.4% q/q in Q2 was driven in large part by a softening in domestic demand, which is likely to continue over the coming quarters. And with the inflation …
If the Chancellor, Rachel Reeves, is going to continue to meet her fiscal rule with a buffer of £9.9bn, she will probably have to raise £18-28bn in the Autumn Budget, mostly via higher taxes. We suspect households and banks will bear the brunt of higher …
Our latest estimate suggests the Chancellor will need to raise £18-28bn in the Budget to avoid breaking her fiscal rules and to maintain her £9.9bn buffer. (See our Fiscal Headroom Monitor .) With Labour MPs not amenable to spending cuts and financial …
The US criminal investigation into Fed Chair Powell h as revived a broader debate about the value of central bank independence. The strength of the evidence in favour of greater central bank autonomy lowering inflation has often been overstated, and even …
The latest bout of unrest in Indonesia is unlikely to deliver a significant blow to the economy, but it is a symptom of underlying economic weaknesses and highlights political risks that could erode the country’s appeal to foreign investors over time. The …
Stable inflation will keep ECB on hold The small increase in headline inflation to 2.1% in August makes little difference for policymakers at the ECB who look certain to leave interest rates unchanged at next week’s meeting and probably for several months …
Asia-Pacific all-property capital values showed signs of stabilisation, with a milder 2.5% y/y decline in Q2. Still, the upturn in both investment activity and capital values will be weaker than in any previous cycle, predominantly due to risk-free rates …
While the Bank of Japan is worried that trade tensions will weigh on profits, business investment and wage growth, profits have in fact held up well so far and we expect that to remain the case going forward. And with uncertainty about the US tariff …
Global equities and industrial commodities have been dancing to different tunes in recent years. We suspect that will remain the case through next year. The changing relationships between the prices of global equities and industrial commodities can be …
1st September 2025
Worries that interest rate cuts in Korea are stoking financial risks look overdone. Property prices across most of the country are either flat or falling, while household debt is declining as a share of GDP. Having cut rates by a cumulative 100bps between …
Even though the components of inflation that are directly linked to past inflation rates have played a big role in the recent rebound in CPI inflation, we think their influence will fade over the next couple of years. We expect that to be the case even if …
Net lending to property still booming Net lending to property was strong again in July, reaching £1.8bn. While this was a slightly lower outturn than June, it nevertheless drove an acceleration in the three-month total, which hit £6.0bn. July’s gain was …
This page has been updated with additional analysis since first publication. High mortgage rates and the prospect of tax hikes holding back the economy July’s money and lending data show that interest rate cuts are yet to significantly boost economic …
