Supreme Court creates more uncertainty Recent tariff changes, which saw the IEEPA tariffs replaced with a universal 10% Section 122 tariff will reduce the tariff burden on Asian countries more than on other parts of the world. China emerges as the largest …
27th February 2026
I will return with my usual note on Monday. In the meantime, given the volume of client enquiries prompted by Citrini’s paper on the consequences of an AI-driven “abundance of intelligence” - and the market volatility that has accompanied it - a brief …
Tariff saga highlights unreliability of US as a partner We’ve covered the changes to US tariffs – with a new universal 10% Section 122 tariff replacing the IEEPA tariffs that were deemed illegal by the US Supreme Court – across various publications (see …
Tensions with China continuing to escalate The tensions between China and Japan show no signs of abating. China’s government this week prohibited exports of “dual-use items” to 20 Japanese firms, with an additional 20 firms placed on a “watch-list”. …
Investment surge to prop up private demand Australian CPI data showed that trimmed mean inflation rose from 3.3% to 3.4% in January. Moreover, if monthly price increases continue at their current pace, underlying inflation will accelerate further still. …
Encouraging data strengthen case for further BoJ tightening On balance, the January activity and inflation figures suggest that the BoJ won’t wait much longer before hiking rates again. Taking industrial production first, the 2.2% m/m rise in January was …
The average tariff rate will decline following the Supreme Court’s IEEPA ruling, but not by enough to materially change the near-term outlook for the economy. That hinges on AI-related investment and the resulting productivity gains, which we expect to …
26th February 2026
We estimate that non-farm payrolls rose by 80,000 in February, but that the unemployment rate will nonetheless rebound to 4.4%. Stronger momentum mainly a health care story The 130,000 jump in payrolls in January was due to a 124,000 surge in health care …
US-Iran talks back underway The US and Iran resumed talks in Geneva today. Discussions are set to focus on a proposal put forward by Tehran regarding its nuclear programme. It remains to be seen how the US will view the proposal, but the build-up of US …
Asia Chart Pack (February 2026) …
The Nigerian naira has been one of the strongest performing EM currencies since the start of the year, helped by an improved balance of payments position. But the naira’s rally is starting to hurt Nigeria’s external competitiveness and, taken together …
Emerging Markets Capital Flows Monitor (Feb. 2026) …
The past week’s shifts in US tariffs have put a large number of Chinese manufacturers back on a level playing field in the US market with other non-US producers. These lower rates look likely to remain in place for an extended period. But the average US …
Assessing the impact of Trump’s climate pushback The Trump’s administration’s repeal of the “endangerment finding” appears to be another blow to climate policy in the US. For context, the endangerment finding declared that greenhouse gas emissions were …
ESI points to decent growth, but labour market still loosening February’s EC survey suggests that the economy is expanding at a decent pace and that price pressures in the services sectors are still fairly strong. But the labour market is still …
After a weak start to the year, we expect Chinese equities to regain their footing over the coming months, partly because their valuations aren’t especially stretched. Moreover, we expect the AI rally to continue this year, providing a further tailwind …
The key development from today’s meeting of the Bank of Korea was not the widely expected decision to keep the policy rate at 2.50%, but the shift to a new six-month forward-guidance “dot plot”. While the median projection points to rates being on hold …
Strong profit growth, as emphasised by recent earnings reports, is one reason to think that the S&P 500 will do well over the rest of this year. In fact, we think there are at least three reasons. First, the latest earnings results make it clear that 2025 …
Asia-Pacific all-property capital value declines eased further in Q4 to minus 0.8% y/y, reinforcing signs that the market is bottoming out. Looking ahead, however, elevated risk-free rates and muted rental growth will likely keep the recovery subdued. …
Rates on hold, but BoK to resume easing in H2 The Bank of Korea kept its policy rate on hold today at 2.50%, and we expect the central bank to maintain this stance until at least mid-year, before eventually restarting its easing cycle around the middle …
Further efforts from the Takaichi government to influence the BoJ threatens another round of turmoil in Japan’s bond and currency markets. But we think the underlying fundamentals point towards continued stabilisation in the JGB market and a rebound in …
25th February 2026
In this Update , we answer some of the questions we have received on how the new US tariff regime (see here ) will impact Canada and Mexico. The big picture is that Canada and Mexico’s weighted-average tariff rates have declined only a little, and will …
Fiscal tightening has helped to narrow budget deficits markedly in a number of EMs, notably Argentina, South Africa and Turkey. But elsewhere adjustment has been limited – particularly in Brazil. And in some EMs, budget deficits are large and widening (in …
The fertility rate in Korea increased in 2025 for the second year in a row, offering a rare glimmer of relief given the country’s terrible demographics. But the fertility rate remains very low and we think the recent rise was mainly due to temporary …
South Africa’s finance minister used today’s Budget speech to, once again offer more fiscal giveaways, mainly in the form of putting off previously mooted tax rises, rather than save the revenue windfall afforded to him by high metals prices. Fiscal …
As the conflict in the Middle East continues to unfold, we hosted another online briefing on Wednesday 4th March to examine how risks to energy and financial markets and to regional and global economies are evolving. …
We think metals prices will fall back from current high levels, which will weigh on Latin American currencies. But prices will remain high by historical standards, which should keep external positions strong in the major Andean producers – Peru and Chile …
All-property valuation scores worsened slightly in Q4 2025, but remained in the fair value zone, despite property cap rates inching lower once again. Looking ahead, we think appraised cap rates still need to rise further to return some assets to fair …
The green shoots of a recovery in the housing market at the start of 2026 support other evidence that suggests the economy has strengthened. We think further falls in mortgage rates and looser lending standards will allow house prices to rise by 3.5% in …
BoT cut rates, more easing to come Thailand's central bank (BoT) cut its policy rate by a further 25bp today, taking it to 1.00%, and we do not think this marks the end of the easing cycle. With growth likely to struggle and inflation pressures …
The continued acceleration in Australia’s underlying inflation at the start of the year vindicates the RBA’s decision to tighten policy at its February meeting. With the economy and labour market operating above sustainable levels, we expect the Bank to …
Above-target inflation will require further tightening Trimmed mean inflation climbed to a fresh high in January, consistent with our view that the Reserve Bank of Australia will keep tightening monetary policy. Headline inflation was unchanged in January …
Today’s rally leaves major US equity indices stuck in a range just shy of their all-time high. We think the next move that sticks will be higher, not lower. Most major US equity have recovered from the sell-of yesterday and have returned back within a …
24th February 2026
With Germany’s fiscal stimulus now beginning to show up in the data, we think the increase in defence and infrastructure spending may be even slower and smaller than we had assumed – but that may be offset by a significant rise in other spending, …
Africa Chart Pack (Feb. 26) …
Inflation across Central and Eastern Europe (CEE) has surprised to the downside in recent months and is now below central banks’ targets. While we expect inflation to rise by year-end, it will follow a lower path than we had previously thought. In …
Signs of strength but also reasons to be cautious The marked reacceleration in house price growth in December, to 5.8% on a three-month annualised basis from negative territory only four months prior, reflects strengthening housing demand as mortgage …
CBN restarts its easing cycle The Central Bank of Nigeria’s decision to restart its easing cycle with a 50bp cut, to 26.50%, today and Governor Cardoso’s view that inflation risks are balanced suggests there is plenty of room for further cuts. We expect a …
MNB resumes easing as inflation falls below target The decision by the Hungarian central bank (MNB) to cut its base rate by 25bp today, to 6.25%, will likely be followed by further interest rate cuts over the coming months. We will firm up our new …
Inflation rises, but March cut still on the table The small rise in Mexican inflation, to 3.9% y/y, in the first half of February was driven largely by higher non-core inflation and leaves an interest rate cut at Banxico’s next meeting in March in play. …
Europe Commercial Property Chart Pack (Q1 2026) …
A pick-up in investment activity, coming alongside strength in the tourism sector, is likely to sustain rapid growth of 4-5% y/y in Qatar’s non-hydrocarbon economy. And once production at the North Field gas project comes online, Qatar’s overall GDP …
PM Takaichi is misdiagnosing what’s holding back Japan’s economy. This means that rather than boosting Japan’s long-term growth potential, her policies may instead unleash a wave of wasteful public spending that would lift inflation and put upward …
The immediate impact of the outburst of violence in Mexico following the killing of drug kingpin “El Mencho” is likely to be a hit to tourism. But the longer the unrest drags on, the bigger the risk that it disrupts manufacturing too, especially of …
23rd February 2026
