The RBA’s decision to hike rates again at its meeting today came as little surprise. In her post-meeting press conference, Governor Bullock argued that with policy settings mildly restrictive again, the Board needed to be mindful of risks on both sides of …
5th May 2026
Tech stocks have continued to power ahead despite renewed concerns around the war, but we don’t think they’re completely immune to it. Meanwhile, central bank inaction could be a threat to bond markets, at least in Japan. Tech exuberance continues to …
There are still no clear signs of a near-term reopening of the Strait of Hormuz. Even when it does reopen, uncertainty remains over how quickly physical energy supply can recover. As a result, inflation risks are rising and central banks are coming under …
Acceleration in growth raises further questions about the reliability of GDP figures Indonesia’s economy expanded by 5.6% y/y in the first quarter of the year, according to official figures reported today (up from 5.4% in Q4 last year). This marks the …
RBA will hike rates to 4.60% in Q3 Given the potential for incoming inflation data to surprise to the upside of the RBA’s expectations, we think further policy tightening remains likely. With the RBA delivering its third consecutive 25bp hike, the cash …
The government’s decision to cap gasoline prices means that inflation won’t rise far above the BoJ’s 2% target this year and we expect the BoJ to keep hiking rates roughly every six months to 2% by 2028. While our current forecast is that the Bank will …
Consumer spending still going strong With household spending holding up well in the face of the oil price shock, the RBA is unlikely to have major qualms about tightening policy further. The ABS’ monthly household spending indicator (MHSI) rose by a solid …
The surge in global oil benchmarks back above $100 set the stage for the Bank of Canada to deliver a more hawkish message with its latest interest rate hold . But we were still taken aback by the strength of the tone. The trusty line in Governor Tiff …
1st May 2026
A landmark week at the Fed Incoming Fed Chair Kevin Warsh claimed that he wanted “messier [FOMC] meetings” in his testimony before the Senate Banking Committee last week – as it stands, that is exactly what he is likely to get. It is no secret that the …
The mixed reaction to this week’s earnings releases from four US hyperscalers was a reminder of how sensitive investors have become to the firms’ plans for capital spending (CapEx), given the huge sums involved. After all, all but one of them beat …
This Weekly Roundup highlights the growing challenge facing central bankers, what the UAE's exit means for OPEC, how long Iran could hold out, why China's debt pile keeps on growing, why AI jobs panic is misplaced and more. 1. We think markets are …
The increase in European gas prices caused by the Iran war has been much smaller than in 2022 but it will make European industry less competitive compared to the US. Within Europe, it will weigh on industry in Germany more than in France or Spain. We have …
Between a baseline and a hard place The growing upside risks to inflation and downside risks to growth present the ECB with a difficult challenge of controlling price pressures and inflation expectations while limiting the hit to growth. Policymakers’ …
Is BanRep bowing to political pressure? After predictable meetings this week in Chile (no change) and Brazil (a 25bp cut), Colombia’s central bank dropped a bombshell. It left rates unchanged when it was widely expected (including by us) to deliver …
SA trade and fiscal balances set for modest strains South Africa’s March trade and fiscal data showed a mixed picture: the trade surplus widened, while the budget deficit deteriorated. The lagged effects from the war in Iran mean that, while manageable, …
We recently hosted an online Drop-In session to review the latest Fed, ECB and Bank of England decisions and what their communications imply for the future. (Recording available here .) This Update provides answers to some of the questions that we …
All of our coverage on the Middle East conflict can be found here . We are now officially swamped by scenarios! We have two scenarios (baseline and adverse) based on different outcomes for the war, energy prices and second-round inflation effects. This …
Breakin’ up with OPEC is not hard to do The unexpected oil-related news of the week came courtesy of the UAE and its decision to leave OPEC+. In case you missed it, we discussed the market, economic, and geopolitical implications of “UAExit” here as well …
Korean consumers – resilient so far Korean consumer spending has been through a prolonged period of weakness since the pandemic. Private consumption is only about 7% above its pre-COVID level, making it the second weakest component of GDP after investment …
Cost of aviation fuel has risen sharply Fuel prices in India are administered by the mostly-state-owned oil marketing companies (OMCs). Two months into the Iran war, the cost of driving has not risen: prices of petrol, diesel and compressed natural gas …
Refinancing activity likely to explain strong net lending in March Net lending to commercial property rose sharply in March, reaching £2.5bn, greater than the sum of the first two months of the year and in line with December’s figure. Given that was the …
This page has been updated with additional analysis since first publication. Consumers saving less and borrowing more March’s money and lending figures imply households may be willing to absorb some of the blow to their real incomes caused by the leap in …
All of our coverage on the Middle East conflict can be found here . Surveys seem to confound Iran war shock The strength of the survey data for April out of the region are, at face value, hard to square with the macro backdrop caused by the Iran war. Our …
But domestic imbalances remain Our updated China Overcapacity Index suggests that overcapacity in China’s manufacturing sector eased a little over the first three months of the year (See Chart 1 and explore the data here .) While China’s exit from years …
This page has been updated with additional analysis since first publication. House prices resilient to higher mortgage rates, but downside risks are growing The surprisingly strong rise in the Nationwide measure of house prices in April shows that house …
Indirect effects will take time to unfold At first glance, it would appear that the inflationary shock underway in Australia is not severe as many had feared. Although headline inflation jumped from 3.7% to 4.1% in Q1, it was a touch softer than the …
Australian house prices all but ground to a halt last month. And with affordability set to deteriorate further in the near term, we expect house prices to fall outright before long. Much to the RBA’s chagrin, however, shelter inflation is likely to remain …
30th April 2026
A day after Brent crude surged above $120 per barrel, Group Chief Economist Neil Shearing and Deputy Chief Emerging Markets Economist Jason Tuvey discuss how long the conflict in the Middle East could continue and why Iran’s collapsing economy is not a …
Our proprietary EM financial risk indicators show that economic and financial vulnerabilities in most EMs were low coming into the energy shock. Our aggregate EM currency crisis risk indicator remains near multi-decade lows, suggesting that the risk of …
Policymakers talking (and, in Japan, acting) tough may help to shore up market confidence and buy time until a resolution to the crisis in the Gulf materialises. But financial markets remain in large part at the mercy of energy prices. While investors …
The Q1 RICS survey showed surveyors don’t expect the Iran conflict to have an impact on occupier demand across any of the major sectors. That said, there was a deterioration in capital value expectations, which implies surveyors now expect yields to be …
China’s trade surplus has reached a record 1% of world GDP and looks set to rise further. It’s been driven, in part, by a surge in China’s exports – China has gained export market share across both low- and high-tech sectors, and with both advanced and …
After a volatile few months, we estimate non-farm payrolls increased by a softer 55,000 in April, with the unemployment rate ticking up to 4.4%. March’s strength unlikely to be repeated The 178,000 March surge in non-farm payroll employment largely …
The tech-led rally in the US stock market over the past month or so primarily reflects earnings expectations for semiconductor firms surging, with other firms – including other IT firms – gaining much more modestly. The earnings season so far has done …
The vote of no confidence in Romania’s Prime Minister next week looks set to usher in renewed political instability. That will make it much harder to pass the fiscal austerity needed to tackle the twin budget and current account deficits, raising the risk …
The impact of the war on balance of payments positions across the Gulf varies by country. Kuwait, Qatar and Bahrain are suffering severe blows due to the halt to their energy exports, and their current account positions may have deteriorated by up to …
While today’s decision to leave the ECB deposit rate at 2.0% was expected, President Lagarde used the press conference to signal that interest rates will rise. Unless there is a big drop-back in energy prices and/or slump in indicators of activity, it …
How are emerging market economic and financial risks evolving as the conflict in the Middle East enters its third month? With energy prices remaining elevated, investors are navigating an increasingly complex mix of currency, banking, and sovereign debt …
The Bank of England’s further hawkish tilt while leaving interest rates unchanged at 3.75% suggests the chances of near-term rate hikes are rising. If oil prices fall back to about $95pb as in our baseline scenario, our best guess is that rates will …
Africa Chart Pack (Apr. 26) …
Activity solid; inflation high and rising The rebound in first-quarter GDP growth was partly driven by the reversal of the earlier government shutdown drag, but final sales to private domestic purchasers (FSPFP) also expanded at a solid 2.5% annualised …
Solid Q1 GDP growth gives Bank clearance to seriously think about hikes GDP growth looks to have rebounded to 1.5% annualised last quarter, in line with the projection in the Bank’s updated Monetary Policy Report (MPR). With the economic backdrop notably …
Our Interactive Markets Chart Pack gives you a comprehensive and timely view of the latest developments in financial markets, and how we expect them to perform in 2026 and beyond. The Chart Pack can be downloaded in PDF form using the Download button on …
ECB on hold but chance of rate hikes rising While the ECB’s decision to leave its deposit rate unchanged at 2.0% today was expected and the monetary policy statement gives little away, the chances of rate hikes later this year appear to be rising. The …
GDP contraction increases chance of a 25bp cut next week The larger-than-expected 0.8% q/q contraction in Mexico’s GDP was driven by broad-based weakness across all main sectors and strengthens the case for a 25bp cut at Banxico’s meeting next week. The …
On hold for now, but rate hike risks are rising The Bank of England’s hawkish tilt around its decision to leave rates unchanged at 3.75% suggests the chances of near-term rate hikes are rising. If oil prices fall back to around $95pb as we expect in our …
China is now more indebted relative to its GDP than the US, euro-zone and UK and the debt burden is still rising relentlessly. The risk that runaway debt triggers a crisis in China’s state-dominated financial system remains low. But the rise in leverage …
Downside risks to growth, upside risks to inflation The euro-zone economy lost a little pace even before the Iran war began, and the business surveys point to stagnation at the start of Q2. Meanwhile, the pick-up in inflation in April reflected higher …
Strong, but better balanced growth Taiwan’s economy recorded another quarter of very strong growth in the first quarter of the year, and encouragingly there are signs that it is becoming more balanced. Although exports were very strong again, there was …
Growth held up in Q1 but downside risks mounting National data released so far suggest that GDP growth in the euro-zone probably slowed to 0.1% q/q (data due at 10.00am BST). Excluding Ireland, GDP is likely to have risen by 0.2%, which is a reasonable …
