The economic fallout from events in the Middle East is developing broadly in line with our baseline scenario, leaving WTI on track to average $80/barrel in the second half of the year. The reduced risk of second-round effects, combined with an economy set …
22nd April 2026
Ceasefire allows CBRT to refrain from tightening Easing pressure on Turkey’s balance of payments since the US-Iran ceasefire was announced earlier this month gave the central bank (CBRT) space to leave policy settings unchanged today (with the one-week …
US high yield (HY) corporate bond spreads have narrowed, on net, since the Iran conflict began, and look extremely tight by past standards. We don’t think they will narrow much further over the rest of the year, even though we think the US economy will …
Soft inflation in March, but set to jump in April South Africa’s Reserve Bank will welcome last month’s soft inflation outturn of 3.1% y/y but adjustments to administered fuel prices will cause inflation to jump in April. Even so, the headline rate should …
Rupiah weakness tempers central bank’s dovishness Bank Indonesia left its policy rate unchanged at 4.75% today as officials’ concerns about the weakness of the rupiah countered its desire to support economic growth. So long as the rupiah doesn’t come …
This page has been updated with additional analysis since first publication. All of our coverage of the macro and market implications of the Middle East conflict can be found here . First leg up that ends with inflation of about 4.0% in November The rise …
March trade data show that higher oil prices have already driven up demand for China’s green tech exports. And our analysis suggests that stronger NEV demand could see the auto sector alone add at least 1%-pt to China’s export growth in 2026. As a result, …
21st April 2026
Asia Chart Pack (April 2026) …
The Iran war will result in sharp falls in GDP in the Gulf. The closure of the Strait of Hormuz has forced oil wells to be shut which, alongside damage to energy infrastructure, means that it will take time for output to return to pre-war levels. Non-oil …
While investors are trying to pull funds away from private credit, there is little sign yet of any spillovers that might be forcing traditional lenders to tighten their credit standards. Global private credit loans are heavily skewed toward the US, but …
Large gain not only due to higher gasoline prices The sharp rise in retail sales in March mainly reflects the surge in gasoline prices, but control group sales were also stronger than we anticipated. That leaves us to estimate that real consumption rose …
A soft consumer spending outlook and subdued business demand, reinforced by the effects of the Iran war, will weigh on global hotel demand in the coming years. Longer term, hotel performance will be supported by the structural rise in spending on …
China’s green technology exports reached a record high in March on the back of the sharp rise in global fossil fuel prices, and we think that the energy shock will continue to boost foreign demand for Chinese-made green tech over the coming months. …
While financial markets have swung on the apparent de-escalation and re-escalation of the Iran war, the bigger structural story is quietly reasserting itself: global imbalances are back, and were a major focus of the IMF’s Spring Meetings last week. But …
If the Iran war eases and energy prices fall back further, we expect LatAm bonds to outperform, as monetary policy would be eased substantially in Brazil and, to a lesser extent, in Mexico. By contrast, if the war drags on, bonds in parts of EM Asia may …
War and the associated economic hit couldn’t put a dent in S&P 500 earnings expectations but, given how concentrated and optimistic expectations now look, any sign of weakness in tech earnings next week would exact a heavy toll on the index. US earnings …
India Chart Pack (April 2026) …
The energy shock presents a headwind to most of Emerging Europe by worsening terms of trade and raising inflation. We’ve lowered our growth forecasts in most countries by 0.3-0.5%-pts this year. Turkey is one of the most vulnerable. Strains in the …
This page has been updated with additional analysis since first publication. Businesses appear to reduce hiring in response to Iran war While the fall in the unemployment rate in February suggests the labour market was stabilising around the turn of the …
Softer underlying inflation points to RBNZ keeping policy loose for longer While headline inflation remains well above the midpoint of the RBNZ’s target, the continued softening of underlying inflation means that the Bank won’t be in a rush to tighten …
While the Bank of Japan will keep policy settings unchanged next week, we suspect it will judge that risks to economic activity are tilted to the downside for now. While that would normally point to a prolonged pause in its tightening cycle, upside risks …
20th April 2026
The Bank of Canada’s latest quarterly surveys show that easing concern among firms and households regarding trade tensions have been swiftly replaced by fresh anxieties about falling activity and rising prices in response to the Iran war. The latest …
Reports that the UAE is seeking a currency swap line from the US have sparked concerns about the damage to country’s external position from the war. Lower energy exports, disruption to travel and tourism as well as the likelihood of capital flight are …
This Weekly Roundup highlights the latest on the Middle East conflict, China's trade imbalance, the overstated economic impact of defence spending, alternative property sectors and more. 1. The reclosure of the Strait of Hormuz has swiftly stalled the …
17th April 2026
A sustained re-opening of the Strait of Hormuz would probably mean euro-zone bond spreads narrow a bit further this year. What’s more, our base case is that spreads in Italy and France will remain contained despite their high debt levels, even if renewed …
Core price pressures contained for now The broadly target-consistent gain in an average of the Bank of Canada’s preferred CPI-trim and CPI-median core measures in March will persuade policymakers to look through the jump in the all-items CPI at next …
The re-closure of the Strait of Hormuz has taken the wind out of markets’ sails at the start of the week, but investors are still very optimistic – arguably surprisingly so. Meanwhile, if the situation does improve again, the “tech” sectors of the stock …
Strait of Hormuz open for business Iran’s announcement that the Strait of Hormuz is open to commercial vessels for the duration of the Israel-Lebanon ceasefire has led to a slump in oil prices and offers a path to the resumption of energy flows consistent …
The announcement that the Strait of Hormuz will be reopened has extended this month's dual rally in stocks and bonds. We think both rallies have further to run if things progress broadly in line with our baseline scenario, as they now seem to be. The …
Manufacturing faces near-term challenges Nothing in Thursday’s March manufacturing production figures screams that the US factory sector is undergoing a tariff-driven renaissance. Output edged down by 0.1% m/m, with sharp falls in the motor vehicles and …
Kganyago’s comments raise odds of rate hikes The SARB’s concerns about a potential policy misstep in the face of higher inflation suggests that the odds of a rate hike are narrower than we previously thought. Still, with oil prices having fallen back, …
After nine years of minority Liberal governments, Prime Minister Mark Carney secured a majority in Parliament following three successful by-election results on Monday (and several earlier defections). The Liberals now hold 174 seats, a majority of two. …
All of our coverage on the Middle East conflict can be found here . The reported reopening of the Strait of Hormuz this afternoon is clearly good news, although there are still question marks over how much quickly, and how much, trade can start flowing …
The Monetary Authority of Singapore tightened its policy stance this week, but we doubt that central banks in Indonesia and the Philippines will follow suit next week – both are likely to keep rates on hold. MAS conducts monetary policy via the exchange …
Global imbalances are back. But how serious is the threat this time, and could they trigger the next phase of global economic instability? Group Chief Economist Neil Shearing joins David Wilder to unpack what is driving balance of payments positions to …
All of our coverage on the Middle East conflict can be found here . Quantifying the increased cost of energy imports European Commission president Ursula von der Leyen noted this week that the EU’s fossil fuel import bill has risen by €22bn since the Iran …
Q1 growth lent heavily on exports The official GDP data published yesterday showed an acceleration in headline growth, from 4.5% y/y in Q4 to 5.0% last quarter. We think the figures should be treated with a degree of scepticism – our China Activity Proxy …
All of our coverage on the Middle East conflict can be found here . Peru: a highly contested vote The chaos surrounding Sunday’s congressional and presidential elections in Peru is symptomatic of the state of the country’s politics. After logistical …
Shipments from Gulf slump, exports weaken too Data released this week show that India’s good trade deficit narrowed from US$27.1bn in February to US$20.7bn in March, the smallest monthly deficit since June 2025. A complete breakdown of bilateral trade and …
All of our coverage on the Middle East conflict can be found here . Turning point in Hungary as Orbán defeated The landslide victory for the opposition Tisza party in Hungary’s election has driven a broad-based rally in local markets, but we suspect that …
GDP growth in Malaysia slowed in the first quarter of the year, but the slowdown cannot be attributed to the conflict in the Middle East. The country is better placed than most in the region to deal with the consequences of higher global energy prices. …
Changes to the way the IMF measures Japan’s government debt mean that the net debt position now looks less favourable. But we still expect it to decline faster than the IMF is anticipating. In its latest World Economic Outlook, the IMF made several …
Further policy tightening still on the cards The NAB’s latest survey of businesses showed that sentiment has plummeted in the wake of the Iran War. Indeed, business confidence plunged by 29pts in March, its second-largest monthly decline in the history of …
All of our coverage on the Middle East conflict can be found here . Press reports this week indicate that the Bank of Japan’s Board will revise up their inflation forecasts “sharply” in the Outlook report due at the upcoming meeting in a couple of weeks. …
The housing market continued to struggle in March and the recent rebound in fixed mortgage rates, driven by the spike in oil prices, suggests that house prices will fall further in the coming months. The 0.1% m/m decline in seasonally adjusted home sales …
16th April 2026
Outside of fuel and utilities, the prices of flights, other forms of transport, flowers and food are likely to rise the most in response to the Iran war. In our baseline scenario, food price inflation rises from 3.3% in February to 6.0% in the middle of …
Our Emerging Markets Chart Pack has been updated to focus on the implications for EMs of the latest developments in the Iran war. The war in Iran will lead to sharp falls in GDP in the Gulf economies and weigh on energy importers, especially in Asia. …
All of our coverage on the Middle East conflict can be found here . The ceasefire between the US/Israel and Iran has largely held over the past week and there are growing hopes that it will be extended. Saturday’s talks between the US and Iran failed to …
The latest IMF analysis broadly corroborates the conclusion we reached a year ago that higher defence spending will not turbocharge economic growth. The near-term boost to output will be smaller than headline targets suggest given fiscal constraints, …
