Poland’s draft budget for 2026 outlined this week suggests that fiscal policy will be a lot looser than we previously expected over the coming year. The proposed budget deficit for next year was announced at 6.5% of GDP (and the government’s projection …
29th August 2025
This week the CBO published updated projections showing that tariffs are now expected to raise $3.3 trillion over the next ten years, up from an earlier estimate of $2.5 trillion. The upwardly revised numbers suggest that tariffs will reduce the deficit …
Economy is confounding expectations Data released today confirmed that India’s economy had a very strong first half of the year. GDP growth confounded expectations and accelerated from 7.4% y/y in Q1 to 7.8% last quarter. (See here for our Data Response …
Bad news mounts for Milei Argentina’s President Milei has been faced with a growing wave of bad news in the past few weeks. For one thing, the latest activity data have come in very weak – the monthly EMAE index contracted for a second consecutive month …
The unprecedented levels of trade uncertainty brought about by US tariffs appear to have had only a limited impact on investment so far. Uncertainty has persisted and our model indicates that there may yet be some damage to investment. But we suspect that …
The still tight rental market and softening outlook for housing activity – due to weak employment, high mortgage rates and growing speculation around property tax rises in the Autumn Budget – suggests rents will continue to rise faster than house prices …
South Africa SWIFT Ban would be severe shock News emerged this week that the South African Treasury was evaluating the risk of the US excluding it from the SWIFT messaging system which is widely used in cross-border payments. These discussions appear to …
Data released on Thursday confirmed that Switzerland’s economy grew by just 0.1% q/q in Q2 as the previous tariff front running ended. This meant the economy averaged growth of 0.4% per quarter in the first half of a year, after adjusting for sporting …
Prospects look poor following second-quarter contraction The contraction in second-quarter GDP was due to a large drag from net trade, which is unlikely to be repeated, but the downward revision to monthly GDP in Jun and preliminary July estimate showing …
Services inflation the one to watch The rise in core PCE prices in July was entirely due to a rise in core services prices, and is further evidence that tariffs are having minimal impact on goods prices. Meanwhile, the rise in real consumer spending …
Higher India tariffs unlikely to shake oil market Despite the introduction of US “secondary” tariffs on India this week as a consequence of its continued purchases of Russian crude oil, the reaction in the oil market was very muted. For context, India …
Economy gathers further momentum but tariff hit still to come The surprise acceleration in India’s GDP growth in Q2 means that the economy is still on course to expand by a world-beating 7% this year, despite the upcoming hit from punitive US tariffs. GDP …
Over the past month, UK gilts have not only been embroiled in a global sell-off in very long dated debt – driven by events in the US – but they have fared worse than many others. Since the start of August, the 30-year gilt yield has risen by 22 basis …
A “China First” policy for AI chips The US Commerce Department began issuing export licences for H20 chips this month. But Nvidia revealed this week that it has assumed zero sales of the China-tailored AI chip in its forward guidance for Q3, due to …
Strong start to Q3 The final estimate of Korea’s second quarter GDP figures due next week are likely to confirm that the economy rebounded strongly last quarter, helped by a jump in consumer spending and exports. And more recent monthly data paint an …
Stable inflation will keep ECB on hold Inflation data released this morning suggest that the euro-zone headline and core inflation rates will have been little changed in August at around 2.0% and 2.3% respectively. This confirms that the ECB is likely to …
The rise in the yields of Japanese government bonds (JGBs) doesn’t seem to have diminished Japanese investors’ appetite for US Treasuries, and our base case is that will continue. But the risks are growing. JGB yields dipped a little bit today after some …
Car output slumps but labour market very tight The end-month data rush was a mixed bag. On the one hand, there are mounting signs that the economy is losing momentum in response to US tariffs. On the other hand though, the unemployment rate fell to a …
New data muddy the water for RBA The minutes of the RBA’s August meeting published this week showed that the Bank had a clear easing bias. Indeed, the Board asserted that it would need to lower the policy rate further in the coming months to meet its …
Economy will lose momentum this quarter The July activity data were a mixed bag but on balance suggest that the economy will lose momentum this quarter. Perhaps the most eye-catching development was the sharp fall in the unemployment rate, from 2.5% to a …
The US stock market is at an all-time high, thanks in part to rapid earnings growth and expectations for that to continue. But rising valuations have also played their part, to the point where US equity valuations look, at face value, increasingly …
28th August 2025
CBE resumes easing cycle with aggressive cut The Central Bank of Egypt (CBE) cut its overnight deposit rate by a larger-than-expected 200bp, to 22.00%, and given our view that inflation will decline further over the rest of the year, we think the policy …
This interactive dashboard presents all of our CE equity forecasts out to end-2027, including price and total return forecasts in a range of currency denominations. The dashboard also features historical performance data as well as detailed insights …
The slow recovery we expect in home sales over the coming years will be a key factor limiting self-storage demand from returning to pre-pandemic levels. As a result, even though completions will stabilize well below recent peaks, we expect asking rent …
If the Chancellor were to apply National Insurance (NI) tax to rental income in the Autumn Budget, it could further restrain the supply of rental properties and push up rents by more than otherwise. Last week, speculation around property tax changes in …
We suspect the AI-fuelled rally in the S&P 500 has further to run, despite the slightly adverse reaction to Nvidia’s latest results. But even if we’re wrong, we doubt there would be much fall-out beyond the big-tech sectors in the absence of a deep …
We expect non-farm payrolls to have increased by a modest 90,000 in August, as immigration curbs limit labour supply. We expect the unemployment rate to have been unchanged at 4.2%, while average hourly earnings growth likely held steady at 3.9% y/y. …
Estimates from the US International Trade Commission (USITC) suggest that Canadian exporters faced an average tariff rate of just 2.5% in June. Even if that figure understates the bill, as we suspect, firms appear to be benefitting from USMCA exemptions …
China Chart Pack (Aug 25) …
Saudi women’s growing role a reform bright spot Saudi Arabia published its second Women’s Statistics Report this week. It showed that the gender gap in the Kingdom’s labour market is narrowing in almost all sectors. As we noted in an Update this week, …
Q2 GDP growth boosted by hi-tech investment boom Second-quarter GDP growth was revised up to 3.3% annualised, from 3.0%, for all the right reasons. Growth in final sales to private domestic purchasers was revised up more significantly, to 1.9% from 1.2%, …
Our View: The economies of Central and Eastern Europe generally held up well in Q2 and, despite the higher 15% US tariff applied to the EU this month, leading indicators point to a pickup in regional growth in Q3. In contrast, Russia’s economy is clearly …
This Update was published in August when tariffs were first rumoured in a report by Bloomberg. Mexican lawmakers approved the tariffs on 10 th December and we have added newly-available information in brackets. Mexico’s plans, reported by Bloomberg, to …
Our China Activity Proxy shows that China’s economy accelerated last month, with growth picking up across all sectors. Still, the economy remains far weaker than official estimates suggest. We expect slower growth in fiscal spending as well as continued …
Sentiment points to continued resilience in CEE The European Commission’s Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally rose in August despite the higher 15% US tariff on the EU coming into force, and point to an …
August’s business and consumer survey from the European Commission adds to the impression that the damage from higher US tariffs has been limited. Nevertheless, economic growth remains sluggish. The decline in the economic sentiment indicator (ESI) from …
Solid rental growth has meant the recovery in euro-zone prime property values to date has matched the post-GFC period despite a more limited contribution from yield falls. A softer rental outlook means this is unlikely to last, though there is a risk that …
While New Zealand’s Prime Minister has indicated a desire for more aggressive policy loosening by the Reserve Bank of New Zealand, the institutional framework limits the government’s ability to influence the Bank’s decisions. We doubt that the government …
With inflation set to stay low, BSP to cut rates further The central bank in the Philippines (BSP) today cut its main policy rate by a further 25bps (to 5.00%), and the relatively dovish tone of the central bank’s statement suggests further easing is …
The Bank of Korea left interest rates unchanged today at 2.50% but made clear hints in its statement and press conference that this does not mark the end of the easing cycle. With growth set to struggle and inflation likely to remain subdued, we are …
What tensions will yet erupt as the US–China economic relationship unravels? What will the global economy look like in 2040? And what should business and government leaders be doing now to adapt to an era of economic fracturing? The Fractured Age: How the …
21st August 2025
Interest rates on hold, but BoK to resume easing cycle soon The Bank of Korea left interest rates unchanged today at 2.50% but we doubt this marks the end of the central bank’s easing cycle. The announcement was correctly predicted by 27 out of 35 …
Falling short-dated Treasury yields seem to have sparked a rotation within the US stock market in recent weeks. But we doubt this rotation will persist, given our view that Treasury yields will not keep falling and that enthusiasm for AI will pick up. We …
27th August 2025
The UK’s fiscal and balance of payments position may be far from a picture of health but speculation that it may be forced to turn to the IMF for a bailout is far-fetched. The risks are greater for France, but it is not on the brink of a bailout either – …
Capital inflows into EM bond markets appear to have surged over the past month, but outflows from EM equities picked up. Most EMs would be well-placed to cope in the event of a spike in capital outflows, with currency risks concentrated in those with …
The announcement that Turkey will end the lira-protected deposit scheme (KKM) will only have a limited impact. The scheme has largely been phased out already. But there’s still more to do to increase the share of lira deposits in the banking sector, which …
The struggling housing market is unlikely to benefit from the Fed rate cuts we have built into our outlook (four 25bp cuts through mid-2026). These cuts are already been priced in by markets, while mortgage rates – anchored to longer-term yields – may …
Africa Chart Pack (Aug. 2025) …
Increases in new supply mean Prague industrial rents are likely to hold steady over the rest of this year. But improving economic growth, a strong e-commerce market and attractive affordability compared with euro-zone neighbours should see rental growth …
