Underlying inflation worries prevent start of easing cycle, for now The Central Bank of Nigeria left its policy rate on hold at 27.50% today and, while Governor Cardoso emphasised that policy will need to be kept tight to get inflation down to the MPC’s …
22nd July 2025
We held an online Drop-In session last week to discuss the outlook for equity, bond and currency markets. (See a recording here .) This Update answers several of the questions that we received. Tech/AI-driven equities are pushing the US equity markets …
Above-target inflation to keep MNB on hold for some time The Hungarian central bank (MNB) left its base rate unchanged today at 6.50%, and we think that interest rates will remain at this level throughout 2025. That’s a more hawkish view than the …
We expect the divergence in performance between the best performing offices and the rest to persist through our forecast. This will see further capital value falls in average and poorer quality space, but presents an opportunity to achieve attractive …
Oil prices have fallen back in the wake of the Israel-Iran ceasefire and, with more oil supply coming online, we think that prices will decline further. Fiscal policy in the Gulf will become less supportive as a result, weighing on activity in non-oil …
The Q2 Bank Lending Survey, published this morning by the ECB, suggests that the economy is still growing at a decent pace. But this is entirely due to improving prospects for the housing sector. The survey suggests that business investment will remain …
Given the weakness of Thailand’s economy, there is no doubt that the country needs lower interest rates. But the appointment of Vitai Ratanakorn as the next Governor of the Bank of Thailand is likely to fuel concerns about central bank independence. The …
This page has been updated with additional analysis since first publication. Good start to the year over and tax rises to come Despite the £3.6bn overshoot in June, public borrowing is still in line with the OBR’s forecasts for the first three months of …
Despite its gradualist approach, RBA will cut further than most expect Although the RBA judged that leaving rates on hold was the more prudent choice at its meeting earlier this month, it did signal that there was more easing in the pipeline. Our sense is …
The result of this weekend’s Upper House election in Japan may not reverse the recent rout at the very long end of the JGB market when it re-opens after a holiday on Monday, given the possibility that fiscal policy will be loosened in due course. But …
21st July 2025
Bleak sales and spending intentions captured by the Bank of Canada’s second-quarter business and consumer surveys are consistent with a sharp downturn in GDP growth. However, the surveys were carried out at a time of peak tariff uncertainty. Since then, …
We think France’s government borrowing costs will rise above those of Italy before long. This may seem surprising in light of Italy’s higher debt burden and lower trend growth rate, but it reflects the fact that France’s debt dynamics are worse and its …
President Trump’s recent tariff threats have led to renewed impetus among Mexican and Brazilian authorities to boost trade ties between Latin America’s two largest two economies – and reduce their reliance on the US. But while the tariff threat may …
The past three administrations have all attempted and failed to reshore lost manufacturing jobs and we expect the latest effort, with Trump expanding use of tariffs in his second term, to be no different. While specific sectors like motor vehicles and …
Artificial intelligence’s share of global electricity consumption is set to at least double by 2030, to around 3% of the total, and could drive almost half of electricity consumption growth in the US over that period. Although some have suggested that a …
Tariff-driven price pressures are finally starting to show up in the US economy. June inflation data offered early evidence that President Trump's tariffs are feeding through supply chains and those pressures are only likely to build – we think core …
The US-China trade truce and rebound in US demand helped lift China’s New Three export volumes to a record high in June. Although the strength in green exports is vulnerable to renewed tariff escalation between China and the US, China’s green exports to …
While trade and overcapacity related risks remain, we see a bright outlook for China’s equities. But we expect a more challenging path for its bonds and currency over the remainder of the year. Until recently, China’s stock market had been under quite a …
With Japan’s ruling coalition losing its majority in the Upper House, fiscal policy may be loosened over the coming months. However, we think that the outlook for monetary policy will be a more important driver of long-term bond yields than perceived …
RBNZ to cut further as inflation remains subdued With underlying price pressures remaining benign, the RBNZ is likely to loosen policy a bit further than most are anticipating. The 0.5% q/q rise in consumer prices last quarter was a touch softer than the …
Renewed concerns around the Trump administration’s attacks on the Fed’s independence have meant that while the US dollar is a touch stronger over the week as a whole, it is ending the week on the backfoot . Even if the president swiftly denied reports …
18th July 2025
Counter-tariffs pushing up prices Data released this week showed that headline inflation remained below the Bank of Canada’s 2% target in June for the third consecutive month. While that may seem like good news, it is mostly due to distortions created …
Nigeria’s bumpy disinflation could delay rate cuts Nigeria’s inflation slowed for a third consecutive month in June and, while real rates are firmly positive and the naira stable, underlying inflation dynamics remain concerning and suggest the CBN will …
Low vacancy and limited new completions this year will see Rotterdam rent growth continue to outperform Amsterdam over 2025, before supply picks up substantially in 2026. That will bring rent growth rates in the two markets back into line later in the …
We have not changed our view that inflation and interest rates will fall further than most expect. (See here and our UK Data Dashboard .) But the data released over the past week raises the chances that inflation will remain higher for longer and rates …
Signs of thaw, but risks remain A little over three weeks before the 90-day tariff pause agreed in Geneva is due to end, the US-China relationship is warming. Trump on Wednesday sounded positive about the prospects of an agreement on fentanyl – the …
Sentiment remains weak but improving The small rise in the University of Michigan consumer sentiment index in July and further drop-back in inflation expectations shows that, while overall confidence remains weak, households are less worried than they …
Regulators will be pleased with the increase in the number of takeover bids in the European banking sector over the past couple of years as they would like the EU to have fewer but larger and more competitive banks. However, interventions by several …
CBRT may opt to tread more cautiously The big macroeconomic event in the region next week is the Turkish central bank (CBRT) meeting, at which it’s likely to resume its easing cycle. There is a wide range of forecasts as to the size of the interest rate …
Tariff impacts tangible but localised The June data released this week showed that, while tariff effects are crystallising in particular industries, broader impacts have so far been avoided. Both the CPI and PPI releases showed heightened price pressures …
301 investigation gives Brazil little wiggle room Actions and words from both the US and Brazilian governments this week make it increasingly difficult to see an off-ramp in which Brazil avoids the punitive 50% tariff that President Trump threatened last …
Group Chief Economist Neil Shearing sifts through a deluge of DM inflation data to highlight where tariff effects are coming through, where price pressures look too hot and which central banks are best positioned to press on with policy easing. He also …
Attention returns to sanctions on Russia One of the key themes that developed in the oil market this week was the prospect of additional and tightening sanctions on the Russian energy sector. Indeed, the week began with President Trump threatening on …
Overall outlook remains poor The pick-up in housing starts in June is less encouraging than first appears, as it is narrowly concentrated in both the volatile multifamily sector, and in the Northeast of the country. Single-family housing starts declined …
The latest news on trade negotiations between European countries and the US are increasing concerns around future tariffs. US President Trump has said that a 200% tariff on pharmaceutical products and related goods will “probably” be announced by the 1st …
Indonesia joined Vietnam this week in securing a trade deal with the US. The deal, based on Trump’s Truth Social post, will see US imports from Indonesia subject to a 19% tariff (compared to a tariff of 32% announced on “Liberation Day” in April which was …
India wants better deal than Indonesia & Vietnam President Trump’s comment this week that a trade deal with India was “close” but that it would be along the “same line” as the one announced on Wednesday with Indonesia raises the prospect that India could …
Taiwan’s gridlocked government could secure a legislative majority and freedom to enact its policy goals if recall votes next week go its way. The immediate implications for the economy are limited – inflation could end up a little lower. But a concerted …
The current narrow spread between property yields and financing costs, combined with bullish lender capital value expectations, might be seen as an indication that a credit cycle is brewing and capital values are about to take-off. But other market …
We don’t think worries about Japan’s fiscal position are too severe, and expect the country’s equities and exchange rate, at least, to recover by the end of the year. At face value, concerns about Japan seem to be building again. The yen, for example, has …
Broad based softening in growth likely GDP growth in Malaysia picked up during the second quarter but we expect this strength to fade and continue to expect the central bank to cut interest rates later this year. According to the advanced estimate …
Indonesia’s government is cutting spending and considering new taxes as it tries to prevent the budget deficit breaching the 3% of GDP legal limit. An alternative for President Prabowo Subianto would be to ditch, or at least find a workaround for, the …
This week’s Central Urban Work Conference didn’t deliver the revival of the shantytown redevelopment scheme that helped stabilise China’s housing market a decade ago and that some had been hoping for. Policymakers appear to have concluded that any …
But tariff uncertainty could still delay rate hikes The economic data released this week leave the case for tighter monetary policy firmly intact. For one thing, export volumes rebounded in June and were nearly as strong as they were in February. …
RBA can pivot back to an easing bias The ABS’ monthly labour force survey published yesterday increasingly suggests that the Australian labour market is going through something of a soft patch. Indeed, the modest rise in employment in June just barely …
Price pressures remain firm, but tariff uncertainties could still delay next rate hike Underlying inflation remains elevated and is almost certain to overshoot the Bank of Japan’s forecasts. However, with trade tensions looming large over the economy, the …
Yesterday’s reports that President Trump is considering firing Fed Chair Powell imminently were quickly denied and most key market prices have reverted to roughly where they were before the news broke. But the sharp price swings in the hour or so between …
17th July 2025
Tariff negotiations rumble on, but our base case remains that the tariffs ultimately imposed will not cause a recession – though we expect growth to slow. We forecast GDP growth of 1.6% this year and 1.5% in 2026. Price effects have been limited so far, …
IMF lays out Egypt’s path for next stage of reforms In the wake of the delay to Egypt’s latest IMF review, the Fund this week published its latest Article IV and ‘ Selected Key Issues ’ reports on the country. While the IMF reaffirmed its praise for the …
The ECB looks set to leave its deposit rate at 2.0% next week. We are forecasting a 25bp rate cut in September, but a prolonged pause is possible. Tariffs will dominate the conversation but not yet affect ECB policy. The ECB looks set to leave rates …
