Kenya: rate hikes will eventually be needed The Central Bank of Kenya left its policy rate on hold at 8.75% this week and, while contained inflation and an improved FX reserve buffer provide breathing space, we still think the shilling will eventually …
9th October 2026
Strong economic growth has boosted Malaysia’s government revenues, giving policymakers some room to lift spending ahead of a possible general election next year. But the budget still targets a further reduction in the fiscal deficit, signalling a …
This week we participated in an Emerging Markets Forum in Monaco, with a special focus on Central Asia. The key takeaway is that the growth outlook in Kazakhstan and Uzbekistan remains strong and falling inflation gives central banks scope to ease …
This report is part of our China Shock 2.0 series. Explore the latest publications on this dedicated page . Even a sharp escalation in EU trade restrictions would have only a small impact on China’s economy. We estimate that an additional 20%-pt tariff on …
Vietnam – strong growth but risks rise Figures released earlier in the week show GDP growth in Vietnam surged to just under the government’s target of 10% (achieving growth of 9.95%). Ordinarily, such a strong outturn would be cause for celebration. But …
Term premium levelling off Following a relentless surge in recent months, the 10-year JGB yield has been little changed over the last couple of weeks even as yields elsewhere have reached fresh multi-year highs. Academic estimates show that the term …
We don’t expect most major government yield curves to steepen much further in the medium term, despite the apparent recent rise in term premia. We noted earlier this week that term premia had taken over as the key driver of the bond sell-off, with the …
RBNZ won’t hike as far as markets expect New Zealand’s national income data released yesterday paint a mixed picture. Households’ disposable income growth slowed sharply, from 6.3% in Q1 to 3.8% in Q2. And with price pressures picking up, real income …
The surge in refined petroleum product prices has amplified the inflationary impact of this year’s energy shock, pushing fuel inflation above levels implied by crude oil prices alone. While we expect these pressures to fade as oil markets rebalance and …
8th October 2026
Hungary’s government will announce its long-awaited fiscal review this month, and we expect a budget deficit projection around 5.5% of GDP for 2027, down from a shortfall of more than 7.0% this year. We think this is roughly the minimum adjustment needed …
A drop back in energy prices and progress on fiscal consolidation should allow South African bond yields to fall next year, whereas the outlook for the rand and equities is less encouraging. The South African rand has only depreciated a touch since the …
Despite near-term headwinds from El Niño and tight fiscal policy, Peru’s economy is set to record robust growth of 2.8-3.0% in the next few years and outperform most other Latin American economies. Combined with above-target inflation, that’s likely to …
Inflation set to rise further in the coming months The rise in Mexico’s headline inflation to 3.5% y/y last month is likely to be followed by further increases. While this is partly a result of a rebound in food inflation, sticky services inflation …
Global Commercial Property Chart Pack (October 2026) …
Finance Minister Enoch Godongwana will deliver South Africa’s latest Medium Term Budget Policy Statement (MTBPS) against the backdrop of the energy shock, higher global bond yields, and upcoming local elections. Our Africa and Markets teams looked ahead …
By helping to limit heating demand and natural gas consumption in late-autumn and early-winter, an El Niño-driven warm start to the winter in Europe could reduce the extent to which European gas-users bid up prices for limited global LNG supplies over the …
Iraq: hit to oil revenues starts to bite Iraq’s devaluation of the dinar this week, by almost 15% against the dollar, underscores how hard the economy has been hit by the Iran war. This was only the second devaluation since the current currency was …
Nigeria’s economy picked up over the first half of the year and we think growth will accelerate into 2027-28, supported by rising oil production, recovering real incomes, and increasingly supportive monetary and fiscal policy. We expect above-consensus …
We’re hosting an in-person roundtable event at our London office on Wednesday 14th October to discuss what Chancellor Healey could announce in his first Budget on 28th October, which taxes may rise and the implications for the economy and financial …
The yen has, surprisingly, been one of the best performers this year amid the rise in bond yields; we think it will fare even better once they fall back. The yen has been quiet this month, despite the ongoing bond sell-off and, more recently, hawkish Fed …
Minutes signal more tightening to follow The minutes of the FOMC meeting that concluded on 16th September confirm broad support for raising the target range at that meeting, as well as further tightening down the line. However, given the softer data …
7th October 2026
Qatar’s economy has been dealt a much larger blow from the Iran war than many of its Gulf neighbours. So long as traffic through the Strait of Hormuz flows more freely from early next year, as we assume, the economy will recover and the expansion of the …
Rising bond yields are tightening financial conditions which, if sustained, will weigh on economic activity. This has given rise to suggestions that tighter conditions are doing central banks’ job for them. However, France and Italy aside, tighter …
Turmoil in France’s bond market has added more pain to an already miserable year for equities there, and we doubt a big recovery is likely anytime soon. Having stabilised somewhat yesterday, OAT-bund spreads have resumed their rise today. (See Chart 1.) …
All eyes on MPC communications for hawkish signals Today’s decision by the National Bank of Poland to keep the policy rate unchanged at 3.75% was not in doubt, but pressure to hike rates is building. While the MPC leans dovish, we’ll be tracking the …
Recent data raise the possibility that the AI-related boost to the economy’s sustainable growth rate that we have been forecasting for the 2030s happens sooner. Our analysis earlier this year revealed that while AI was influencing activity in some …
Europe Chart Pack (October 2026) …
The Reserve Bank of India kicked off its tightening cycle with a 25bp hike to the repo rate today (to 5.50%), vindicating our long-held view that policy would need to be tightened even as most analysts had initially expected the Bank to remain on hold. …
We’re hosting an in-person roundtable event at our London office on Wednesday 14 th October to discuss what Chancellor Healey could announce in his first Budget on 28 th October, which taxes may rise and the implications for the economy and financial …
RBI tightening cycle gets a hawkish start The Reserve Bank of India kicked off its tightening cycle with a 25bp hike today, vindicating our long-held view that policy would need to be tightened even as most analysts had initially expected the Bank to …
Strong wage growth strengthens case for further tightening The continued strength of wage growth even after the end of the summer bonus will encourage the Bank of Japan to lift its policy rate to neutral levels sooner rather than later. According to the …
Overview – Higher gilt yields mean we now expect all-property equivalent yields to rise from 6.6% at end-2025 to 6.9% by end-2030, with half of that rise occurring in 2026. As a result, we now expect all-property capital values to fall by just over 1% …
6th October 2026
The strong performance of the IT sector has helped to drag the S&P 500 index to a new all-time high today. But this stock market rally looks narrow even by recent standards – the average firm in the IT sector is over 20% below its all-time high, with mega …
This report is part of our new series on China Shock 2.0. Explore the series and follow the latest publications on this dedicated page . Even though the renminbi is at its strongest level against the US dollar since 2022, in real trade-weighted terms …
Surge in imports causes trade deficit to widen sharply The widening of the trade deficit in August on the back of a sharp rise in imports suggests third quarter GDP growth will be well below our current forecast of 4.0%. The trade deficit widened to a …
Higher oil prices and tariff frontrunning drive surplus rebound The rebound in the goods trade surplus in August, to its joint-highest since the start of 2025, owes a fair bit to higher oil prices and frontrunning ahead of Section 338 tariffs. While it …
The reintroduction of fuel price caps in Poland has eased immediate pressure on policymakers to hike interest rates, which had looked like a close call for the November rate setting meeting. Given the dovish tilt on the MPC, we think there is a case for …
Small rise in sales points to spending slowdown in Q3 The small rise in euro-zone retail sales in August suggests that consumption growth slowed in the third quarter compared to Q2. August’s 0.1% m/m rise in euro-zone retail sales was weaker than the …
Short-term improvement, but measures of future activity look weak The headline construction PMI rose in September to its highest level since January. At 46.1 though, it remained consistent with a contracting construction sector. The commercial activity …
This report is part of our China Shock 2.0 series. Explore the latest publications on this dedicated page . The precarious fiscal situation means the next administration will be in no rush to remove the tariffs that are in place at the end of President …
5th October 2026
PMIs point to above-trend growth and renewed inflation pressures The small fall in the ISM services index leaves our activity-weighted composite index consistent with GDP growth of around 2.5% in the third quarter, while its S&P Global counterpart points …
The whole economy PMIs for September show that the Gulf’s recovery is taking shape but is uneven. Saudi Arabia and the UAE are faring strongly. But recoveries in Kuwait and particularly Qatar appear to be much weaker which, in the latter, may reflect …
China’s rise up the manufacturing value chain is putting increasing pressure on Korean producers. The impact has been particularly pronounced in batteries, petrochemicals and shipbuilding, where Korean firms have lost significant global market share. And …
The main risks for financial markets from the midterms are a contested election outcome, emboldened Democrats pushing for Trump’s impeachment, and concerns about a leftward shift by the Democratic Party. A Democratic victory in both chambers of Congress …
The outcome of Spain’s snap election on 29 th November is uncertain, but opinion polls suggest that the centre-right People’s Party and far-right Vox are well placed to form a coalition. That would mean tax cuts and stricter immigration controls. But …
Major moves in financial markets tend to send investors in search of a single narrative to explain them. But the rise in bond yields over the past few months has no such single explanation. Indeed, one of the more important features of the sell-off – …
Flávio Bolsonaro’s better-than-expected performance in the first round of Brazil’s presidential election is likely to boost the real and equities, perhaps by 3-5%, and lead to a drop in local currency bond yields. If Flávio wins the second-round, his …
Fall in inflation keeps CBRT on course to begin an easing cycle The larger-than-expected drop in Turkish inflation last month, to 29.7% y/y, supports our view that the central bank (CBRT) will begin cutting the one-week repo rate at the MPC meeting later …
