Hawkish dissents at the BoJ While it came as no surprise that the Bank of Japan left policy settings unchanged at this week’s meeting , what was very unusual was that two Board members voted in favour of a rate hike. While that could be a red herring, the …
19th September 2025
While the two dissents by BoJ Board members could be a red herring, we’re sticking to our long-held view that the Bank will resume its tightening cycle next month and lift rates to 1.5% by 2027. The Bank’s decision to leave its policy rate at 0.5% came as …
The flipside of pension plans’ waning demand for very long-dated bonds has been their waxing demand for equities. Indeed, in the case of US private defined contribution (DC) plans, the share of equities in total financial assets recently rose to its …
This page has been updated with additional analysis since first publication. Public finances worsen despite economy not being terribly weak Today’s releases highlight the deteriorating nature of the public finances even though the economy hasn’t been …
We still think future Bank of Japan (BoJ) rate hikes will give the yen a boost against the US dollar, despite the central bank’s cautious approach. At the time of writing, the yen had received a bit of a lift from the Bank of Japan today despite its …
Dovish BoJ may take more time before resuming tightening cycle The Bank of Japan’s decision to sell its ETF holdings doesn’t fundamentally alter its policy stance and its persistent dovishness poses risks to our forecast of a rate hike next month. The …
Bank to slash OCR to 2.25% by year-end The sharp 0.9% q/q fall in New Zealand’s real GDP last quarter was much worse than anyone had expected. Yet some analysts are arguing that a good part of the weakness is just noise. Because of the way price changes …
Price pressures stronger than they seem The Bank of Japan will probably look past the ongoing fall in headline inflation, given that underlying inflation is holding up reasonably well. Accordingly, we still think there’s a case for the Bank to resume …
We expect growth to average more than 2.0% annualised in the second half of the year. The recent slowdown in employment growth and limited pass-through of tariffs to consumer prices has opened the door for the Fed to cut interest rates further this year. …
18th September 2025
What does Fed loosening mean for the GCC? Gulf central banks followed the US Fed in cutting interest rates by 25bp which, at the margin, may help to sustain strong credit growth in parts of the region. But this impulse is likely to tempered by the …
The South African Reserve Bank (SARB) left the repo rate at 7.00%, but the decision was split with some MPC members voting for another cut. And with growth still sluggish, inflation weak, and inflation expectations coming down, it won’t be long before the …
Overview – The Middle East and North Africa is set to record its fastest GDP growth – outside of the post-pandemic recovery – in well over a decade over the course of 2026-27. Egypt and Morocco are emerging as two bright spots in North Africa as improved …
SNB policymakers have recently pushed back against the prospect of lowering interest rates below zero, so they are likely to leave the policy rate at zero next week. However, we think inflation will be lower than officials’ forecasts in the coming months …
While leaving interest rates at 4.00% today (as expected) and signalling that rates will still fall from here, the Bank of England reiterated its concerns over rising inflation. As a result, we continue to think rates won’t be cut again until February. …
Policymakers in Indonesia can make a case that more monetary and fiscal support is warranted given the economic drag from recent protests and flooding as well as US tariffs, and the backdrop of low inflation. But the way officials are pursuing this – by …
The recent resilience of euro-zone trade is expected to continue in the coming quarters, which will support demand for industrial property near key ports. However, industrial demand near the ports of Antwerp-Bruges and Bremerhaven appears the most …
For updated and more detailed analysis see here . Inflation worries to prevent more rate cuts this year While leaving interest rates at 4.00% today (as expected) and signalling that rates will still fall from here, the Bank of England reiterated its …
After an exceptionally strong first half of 2025, India’s economy faces a more challenging rest of this year and 2026 in the face of punitive US tariffs. But they could get rolled back and, even if they don’t, India will remain a relative bright spot in …
Overview – The economies of Emerging Europe will diverge over the coming year as Russia’s war economy continues to run out of steam, while growth in Central and Eastern Europe (CEE) picks up – albeit to varying degrees. Falling inflation and slower wage …
Although Europe’s natural gas supply is now more diverse than before the energy crisis, the fact that most of its gas is imported means it is still exposed to geopolitical and infrastructure-related disruptions. In theory, the establishment of a strategic …
If the sharp slowdown in fixed investment over the summer were to be sustained, China’s economy would suffer a hard landing. However, it appears mostly to reflect temporary weather-related factors and so should largely reverse over the coming months. …
CBC holds and in no rush to cut Taiwan’s central bank (CBC) left its main policy rate on hold today (at 2.00%) and, against the backdrop of rapid economic growth and low inflation, we expect policy settings to be left unchanged throughout our forecast …
A hawkish cut The dovish signal sent by Norges Bank’s decision to cut its policy rate by 25bp to 4.0% was accompanied by its more hawkish view on the interest rate outlook. We expect the Bank to leave interest rates on hold over the rest of this year, and …
Overview – Asia-Pacific property will endure a slow, uneven recovery. Elevated risk-free rates and soft regional growth will restrain capital appreciation, leaving income as the primary engine of returns. We forecast Australia to lead with 6% p.a. …
We think the post-FOMC rebound in long-dated Treasury yields will continue over the remainder of the easing cycle, as will the modest recovery in the US dollar. There was mixed news for the Treasury yield curve from the Fed on Wednesday. The updated FOMC …
Jobs data paint a mixed picture Despite the weak employment print for August, there appears to be limited spare capacity in the labour market. Accordingly, we’re sticking to our view that the RBA will only cut rates by another 50bp this cycle. The 5,400 …
Plunge in activity bolsters the case for RBNZ to cut aggressively The sharp decline in output last quarter puts a bumper 50bp cut in play for the RBNZ at its October meeting. Risks to our forecast for a terminal rate of 2.5% are also tilted to the …
Copom sticks to a hawkish message The Brazilian central bank’s statement accompanying the decision to leave the Selic rate unchanged at 15.00% remained hawkish – but a little less so than at the last meeting in July. And with growth slowing and inflation …
17th September 2025
The FOMC is now (sort of) on board with two further 25bp rate cuts this year but continues to anticipate less loosening in 2026 than markets have recently priced in, in part because it has become more upbeat about economic and labour market prospects for …
Fed cuts by 25bp and projects consecutive cuts in October and December The FOMC is now (sort of) on board with two further 25bp rate cuts this year but continues to anticipate less loosening in 2026 than markets have recently priced in, in part because it …
The immediate consequence for China’s economy of banning the import of Nvidia chips will be limited. But the move signals a strong commitment by China’s leadership to developing cutting-edge chip capabilities domestically and it serves as a reminder that …
Alongside the decision to cut its policy rate by 25p today, the Bank of Canada dropped its previous forward guidance hinting at more cuts to come. Nonetheless, Governor Tiff Macklem’s comments in the press conference support our view that the Bank will …
We still think the 10-year Gilt yield will fall by the end of 2026 as the Bank of England cuts interest rates by more than investors seem to anticipate. But with term premia likely to remain elevated on the back of lingering fiscal concerns, and a …
Rental growth has continued to defy gravity and there is early evidence of yield compression in some sectors such as offices. Nevertheless, a muted economic outlook and limited chance of a substantial fall in yields mean all-property returns will be …
25p cut but Bank unwilling to commit to further cuts yet The Bank of Canada’s decision to cut by 25bp today was of little surprise following the recent softer labour market data and easing of upside inflation risks, although the relatively neutral tone of …
EM GDP growth generally held up well in H1 but we think it will soften over the second half of the year as US tariffs, tighter fiscal policy and slowing wage growth bite. The inflation outlook is looking more benign and we’ve generally lowered our …
Weakness to continue The weakness in August housing starts was as expected, especially after July’s hard-to-explain strength. While homebuilders have recently become more optimistic about prospects for housing demand, as mortgage rates have eased, the …
July’s activity data showed that South Africa’s start to Q3 was a bumpy one, with retail sales and mining output surging at the same time that the manufacturing sector hit fresh difficulties. We suspect the economic recovery will continue, though, helped …
Weak inflation reading strengthens case for more repo rate cuts South Africa’s weaker-than-expected headline inflation reading of 3.3% y/y for August reinforces our belief that the Reserve Bank’s monetary easing cycle has longer to run. We expect an …
BI rate cut likely to fuel concerns about central bank independence Bank Indonesia’s decision today to cut its benchmark interest rate by 25bps to 4.75% came as a major surprise and is likely to further fuel concerns about the central bank’s independence. …
Japan will struggle to invest $550bn in foreign direct investment in the US. But we suspect that this sum also includes other forms of capital, which would make it feasible to meet the target and avoid further increases in US tariffs due to non-compliance …
We think China’s equities will make further gains. At the time of writing, China’s stock market was having a good day: the Hang Seng was up over 1% and onshore equities had made some ground too. Signs of progress in the US-China trade negotiations may …
This page has been updated with additional analysis since first publication. Pause in upward march doesn’t clear the path for more interest rate cuts The recent upward march in CPI inflation paused for breath in August, with CPI inflation staying at 3.8% …
Softer external demand will weigh on exports While overall exports are still holding up despite US tariffs, those to the US are plunging and we think that slower external demand will result in falling export volumes next year. The 0.1% annual decline in …
Another set of robust US activity data suggest that the US economy remains in decent shape despite the recent slowdown in employment growth. This suggests to us that the FOMC will stick to a more gradual pace of policy easing than currently discounted and …
16th September 2025
We no longer expect much of a rebound in the US dollar this year as the FOMC is about to resume rate cuts. But given the extent of Fed easing already discounted, our base case remains that the dollar will stabilise from here rather than fall much further. …
Housing market remains tepid The rise in home sales in August was a little better than expected and, while house prices did edge down, there was little in the latest housing data to make us doubt our view that house prices are stabilising. There are …
