The Shape of the Fractured World in 2026 Donald Trump’s tariff policies and his aggressive foreign policy approach are straining relationships with traditional US allies . One consequence that shows up in our Global Fracturing Dashboard is that voting …
12th January 2026
The opening days of 2026 have been a stunning reminder of how far geopolitics has returned as a driver of economic and market narratives. First came the US operation to seize Venezuelan president Nicolás Maduro, forcing greater alignment in Caracas to …
Uganda heads into elections next week with President Yoweri Museveni widely expected to secure a ninth successive term. Under this status quo, continued investment in the hydrocarbon industry and infrastructure should allow growth to approach 7%. But the …
We expect euro-zone GDP to increase at a moderate pace this year and next. Germany’s fiscal stimulus is likely to be smaller, slower and less effective than many expect, while growth will be stronger in the smaller economies. Meanwhile, we forecast …
We still think there are plenty of reasons to be positive on the US dollar, despite the latest threats to the Fed’s independence. The latest ramping-up of the Trump administration’s pressure on the Federal Reserve – the threat of criminal charges against …
The economy will continue to grow at a healthy pace, which should ensure that the labour market remains very tight. While energy subsidies and falling crude oil prices will weigh on headline inflation, measures of underlying inflation should hold up well. …
Surge in consumption bolsters case for rate hikes With Australian households continuing to loosen their purse strings, the case for the RBA to tighten policy is growing increasingly compelling. According to the ABS’ monthly indicator, household spending …
AI productivity miracle? The latest surge in productivity suggests the AI boom is providing lasting benefits to the US economy that go well beyond just the value of investment in data centres. Non-farm business productivity increased at a 4.9% …
9th January 2026
The first trading week of 2026 has been a whirlwind of geopolitical shocks and big economic developments. Group Chief Economist Neil Shearing is back on The Weekly Briefing to break down an historic start to the year, including: The Maduro capture: Neil …
Drill, chica, drill The heavy oil sourced from the oil sands and much of Venezuela are close substitutes, especially for US refineries. Indeed, US refineries’ preference for heavy blends explains why Canada’s oil exports to the US hit a record high in …
One of the key differences between the latter stages of the dotcom bubble and the current AI equity bubble is the state of the US labour market . This is important because, even though the unemployment rate dropped back to 4.4% last month, the labour …
African currencies make a solid start to the year The Zambian kwacha has continued its rally into the new year, but it’s not alone. The naira and the rand have also recorded gains. Disorderly devaluations are in the rear-view mirror for most, although we …
Security guarantees for Ukraine taking shape The US and Europe appeared to move closer to an agreement on providing security guarantees to post-war Ukraine at meetings in Paris this week. A joint statement published on Tuesday proposed a US-led ceasefire …
We held a drop-in on Monday to discuss events in Venezuela. An on-demand recording can be found here . In a dramatic move, the US on Saturday captured Venezuela’s President Nicolás Maduro and extradited him to stand trial for criminal charges. Ostensibly, …
A more optimistic start to the year Consumer sentiment rose to a four-month high, with an improvement to the current conditions index hinting to a labour market that remains weak, but is improving. Admittedly the level of consumer sentiment remains far …
If the Prime Minister and Chancellor were hoping that 2026 would get off to a better start after a difficult 2025, they will have been disappointed. Only one week into the new year and the government is set to u-turn on increases in business rates for the …
Rebound in unemployment rate should silence rate hike chatter The 0.3%-pt rebound in the unemployment rate to 6.8% last month was mostly due to the unwinding of temporary moves which had pulled it down the month prior. With private sector hiring also flat …
Housing starts slump to lowest level since May 2020 Although the government shutdown-delayed residential construction report covering September and October showed a further weakening in housing starts, permit issuance picked up, suggesting we may have …
Labour market not doing so badly after all The fall in the unemployment rate in December leaves the labour market looking in better health than many feared, suggesting that the Fed will be in no rush to resume interest rate cuts. The 50,000 rise in …
But H200s will accelerate China’s AI catch-up Beijing has told Chinese tech firms to stop placing orders for Nvidia’s advanced H200 AI chips, according to reports earlier this week. This comes on the back of a surge in Chinese demand for H200s after the …
The EU, US and Greenland We analysed the implications of the US administration’s comments about Greenland here . From a macroeconomic perspective, the key points are that Greenland’s economy is tiny, and while it has significant reserves of raw materials …
While Venezuela’s oil sector has understandably dominated attention of late (see here and here ), President Trump’s designs on Greenland have also put the island’s mineral riches under the spotlight. In some respects, Greenland appears to offer an answer …
January rate cut still finely balanced The easing in Brazilian inflation to 4.3% y/y in December leaves the door just about open to an interest rate cut at Copom’s meeting later this month. But whether the first cut in the cycle comes this month or in …
Philippines: fiscal policy drag will persist Philippine President Ferdinand Marcos Jnr. approved the 2026 Budget this week with the corruption scandal still looming large. Indeed, the Department of Public Works and Highways (DPWH), which has been at the …
The latest data suggest that global trade continues to expand at a healthy pace, driven by strong growth in Asia. Although the annual rate of expansion will moderate next year as the effects of tariff front-running fade, the combination of supportive …
Rising household debt not a big concern for now In what has been a relatively quiet couple of weeks on the macro front for India, the RBI’s latest Financial Stability Report made for interesting reading. Notably, the report shows that the household debt …
Good November, but big challenges still ahead The rise in output in November confirmed that conditions in German industry improved towards the end of last year. But given the significant structural headwinds facing the sector, we doubt this is the start …
China could try to strangle Japanese industry The tensions between China and Japan escalated further this week as China restricted Japan-bound exports and launched an anti-dumping investigation in dichlorosilane, an important input for semiconductors. The …
Rising food prices fuels inflation rebound, but wider deflationary pressures remain Headline CPI inflation edged up to its highest level since China’s reopening from zero-COVID, but this was due to a weather-related pickup in food prices rather than …
Inflation still running too hot for RBA’s liking Following the release of weaker than expected November CPI figures , the OIS markets only sees a one-fourth chance of a rate hike at the upcoming RBA meeting that ends on 3 rd February. The fall in the …
Investors prepare for Venezuelan oil Although Venezuela is well known for having vast oil reserves, it is likely to require a number of years and significant investment to meaningfully increase the country’s oil production. Elsewhere, precious metals and …
8th January 2026
The large institutional investors that President Trump has proposed excluding from the single-family market account for just 1% of home sales nationally, meaning barring them would not materially affect our forecasts for transactions or, assuming they are …
Saudi’s government debt to climb faster than expected Saudi Arabia’s National Debt Management Centre (NDMC) outlined its 2026 Borrowing Plan this week and the government has already got its debt issuance in motion. We expect that it may issue more than …
Gold and pharmaceuticals drag trade deficit down to two-decade low Swings in trade of gold and pharmaceuticals were behind the plunge in the trade deficit to a two-decade low in October, though higher computer imports suggest there are genuine signs of …
Trade balance flips back to deficit Export volumes fell a little and the trade balance returned to deficit in October, but the increases in imports of investment products bode well for domestic demand and there were some tentative signs of exporters …
AI boom in productivity may already have arrived The latest surge in US productivity suggests the AI boom is providing lasting benefits to the US economy that go well beyond just the value of investment in data centres. Non-farm business productivity …
The seizure of the Marinera oil tanker by the US has put the “shadow fleet” under the spotlight, with some estimates suggesting it now accounts for ~20% of global tanker capacity. While a concerted effort to upend the fleet’s operations could cause severe …
Inflation eases, but Banxico likely to stay on the sidelines in February The small fall in Mexican inflation to 3.7% y/y in December leaves the door open to a February cut but the central bank’s cautious tone, alongside still elevated core price …
A solid end to 2025 The European Commission’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional GDP growth held steady at around 2.5% y/y in December, and we think that growth will strengthen in 2026. Firms’ selling …
Moderate growth at the end of last year The EC business and consumer survey for December suggests that the euro-zone economy continued to expand at a moderate pace at the end of last year and shows that price pressures remain quite high. We expect growth …
Soft overseas demand, the past rises in interest rates and higher taxes mean that GDP will grow by only 1.0% in 2026. The weakening in the labour market last year should continue to bear down on wage growth. This and smaller rises in regulated prices this …
Zero inflation and negative rates likely in 2026 Swiss inflation edged up in December but remained close to zero and we think it will remain around that level this year. While the SNB left its policy rate at zero in December, we think policymakers will …
This page has been updated with additional analysis since first publication. Tough end to 2025 for housing, but outlook for 2026 is brighter The 0.6% m/m fall in the Halifax measure of house prices in December was the biggest monthly fall since August …
Despite its recent gains the renminbi still looks weak to us, which is partly why we think it will strengthen further against the US dollar in 2026. Amidst the dramatic news elsewhere, one market development that has gone unappreciated is the stalling of …
Wage growth will rebound next year The sharp slowdown in wage growth in November was largely due to volatile bonus payments and a rebound over the first half of next year is very likely. According to today’s preliminary estimate, labour cash earnings …
7th January 2026
In light of the acute attention on Venezuela’s oil sector, this Update answers five key questions on the potential for oil production in the country. 1) How much oil does Venezuela have? It is frequently stated that Venezuela has the world’s largest …
While commodity and equity prices often move together when demand is in the driving seat, the wild swings in the prices of many commodities over the past month can generally be chalked up to a remarkable set of idiosyncratic supply factors. We expect …
The drop in the job openings and job hires rates reported in November’s JOLTS was accompanied by a decline in the layoff rate from already depressed levels, underscoring employers’ continued caution on both hiring and firing. Job openings fell to a …
