If President Trump follows through on his threat to impose secondary tariffs on buyers of Russian energy, leading to a sharp drop in Russian energy flows, it would invariably lead to higher global energy prices. The impact would probably be greater on …
14th July 2025
The Trump administration’s continued re-escalation of tariffs threats have so far made limited impact on financial markets, but one key difference in the way market participants have digested the recent flurry of threats is that the dollar has …
Although estimates of the 10-year Treasury term premium vary, most approaches suggest that it currently sits at around its highest level in a decade or so. We expect it to remain elevated over the coming years. The first and perhaps most widely used …
Mexico’s government seems confident that it can negotiate an agreement to stave off President Trump’s threat of a 30% tariff that was delivered over the weekend. And even if the tariff came into force, so long as carve-outs for USMCA-compliant goods as …
The public finances of several key advanced economies are, to put it mildly, in a mess. Recent attention has been on the United States, where the ‘One, Big, Beautiful Act’ has entrenched large federal budget deficits and reinforced concerns that the …
While the interest-rate-differential-defying strength of EUR/USD may be partly explained by increased currency hedging, it also reflects shifting expectations for economic growth. We think those will be dashed, even if the US doesn’t end up imposing a …
Saudi Arabia’s inflation rate has been remarkably soft relative to most of the emerging world in the post-pandemic era and we think it will slow further – and be weaker than most expect – over the coming years. Given the constraint of the dollar peg, this …
Larger-than-expected drop in inflation puts August rate cut back on the table The larger-than-expected fall in India’s consumer price inflation to 2.1% y/y in June raises the prospect of the RBI cutting interest rates further at its policy meeting next …
Credit growth nearing a cyclical peak The acceleration in broad credit growth last month, to a 16-month high, is a positive sign for the outlook and reduces the risk of a sharp declaration in near-term economic activity. But this tailwind looks set to …
Exports set to slow again before long Growth in export values rebounded somewhat last month, helped by the US-China trade truce. But tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand …
Singapore’s economy rebounded sharply during the second quarter, but we doubt this resilience will last. We expect a broad-based slowdown in the coming quarters and continue to expect the central bank to loosen monetary policy further. According to the …
The US dollar is ending the week a touch stronger as President Trump continues to ratchet up his tariff threats again and US interest rate expectations edge higher. As widely expected, the 9 th July deadline for the “pause” on the US’ reciprocal tariffs …
11th July 2025
Fiscal tightening to cause inflation spike in Romania Romania’s fiscal tightening measures will add to the country’s inflation problem in the near term, and we’ve significantly revised up our CPI forecast over the next year. While inflation may be lower …
Trump keeps South Africa in his tariff crosshairs South Africa was threatened with a 30% reciprocal tariff again and, while the economic hit should be manageable, the uneasy relationship with the US suggests that an even higher tariff rate remains a …
You've got mail Canada found itself among the unlucky recipients of a letter from President Donald Trump this week, in which a 35% tariff was threatened to come into effect from August 1 st unless more was done to stop cross-border fentanyl flows. Though …
Inflation picture becoming more benign The raft of June inflation figures released across the region this week were encouraging. Headline inflation fell in Mexico , Colombia and Chile (and by more than expected in the latter two) while inflation in Brazil …
Turkey’s shift back to macro orthodoxy hit a speed bump earlier in the year amid a growing crackdown on the opposition party. Join our EM team for this special briefing on the outlook for Turkey’s economy and the risks it faces. During this session, …
President Donald Trump has turned his attention back to trade policy in recent days, threatening to resurrect higher reciprocal tariffs on many countries in another few weeks. He has also indicated that product-specific tariffs on copper, pharmaceuticals …
The further fall in GDP in May provided yet another excuse to talk down the UK economy. But there is some evidence that we are past the worst and the situation will improve from here (or, at the least, become less bad). Coming after the 0.3% m/m fall in …
Strong across the board The strong 83,100 rise in employment and the dip in the unemployment rate in June suggests the labour market is in better shape than we had feared, despite ongoing uncertainty around Canada’s trade relationship with the US. While …
Oil demand will struggle to keep up with OPEC+ The week started with oil traders digesting the news that OPEC+ decided to lift output by 548k bpd in August, putting the group on track to unwind it’s 2.2mn bpd of output cuts by September, one year earlier …
Supply-side approach has its limits Policymakers are becoming increasingly concerned about overcapacity and deflation, and are signalling a stronger intent to tackle the issue. On Wednesday, the People’s Daily ran a front-page commentary criticising the …
Tariffs stormed back into the headlines this week as the pause on ‘Liberation Day’ levies expired with a flurry of warnings about steep rate hikes unless deals are struck by 1st August. Group Chief Economist Neil Shearing unpacks the implications, while …
The media focus this week has continued to be on EU-US trade negotiations as the pause on Liberation Day tariffs was extended beyond the 9 th of July deadline and President Trump threatened to send a letter raising tariffs on the EU again. But in the …
We think the outperformance of Mexican assets and the peso since “Liberation Day”, owing to large tariff exemptions for exports to the US, has largely run its course. Instead, we think the weak economic backdrop in Mexico and the risk of renewed …
Sharp fall in June inflation could spur rate cut talk The major data release next week will be the consumer price inflation data for June – the last set of inflation numbers before the RBI’s next policy announcement on Wednesday 6 th August. We think the …
A damp squib Liberation Day 2.0 was largely shrugged off by investors, with most equity markets in Asia rising over the course of the week. This could be because tariff deadlines were extended by three weeks, giving countries more time to agree deals …
We think concerns about government deficits could put further pressure on long-dated bonds. Tests of investors’ nerves have come thick and fast lately, with the latest being a hike in tariffs in Canada. But, despite some small wobbles, the big picture is …
Deadline for trade deal extended to 1 st August The looming deadline for the imposition of reciprocal tariffs earlier this week proved to be a damp squib as Trump has now given Japan and a range of other countries until 1 st August to negotiate a deal. …
This page has been updated with additional analysis since first publication. Hangover continues, but signs of a recovery building The hangover from the burst of activity in Q1 ahead of rises in US tariffs and UK stamp charges continued in May with GDP …
Rates will bottom out in mid-2026 The RBA’s decision to leave its cash rate unchanged at its meeting this Tuesday shocked not only financial markets, which had fully priced in a 25bp cut, but also the overwhelming majority of economists. Setting aside the …
Egypt’s IMF delay reinforces need for reform The IMF has postponed the latest review of Egypt’s $8bn deal but, with external strains still present, officials appear keen to get privatisation and education reforms on track to unlock financing. A statement …
10th July 2025
Overview – Activity in the housing market has been struck in a slump since 2023, with still no end in sight. As Trump’s immigration and trade policies push up inflation this year, the Fed will be forced to keep policy restrictive – preventing mortgage …
Donald Trump’s planned imposition of a 50% tariff on Brazil for seemingly political reasons may represent a new milestone, but Brazil simply isn’t a big enough trading partner of the US to rattle global markets. For that to happen, negotiations with …
The turmoil in Turkey’s financial markets earlier this year proved to be a blip, and we think the conditions are in place for the central bank to resume its easing cycle this month. But bringing inflation back to single digits and reining in the current …
Aggregate EM inflation is now at its lowest level in four years, with notable declines this year across Asia. We still think the outlook will be characterised by higher inflation in Latin America and Central Europe than in Asia, but we’ve become less …
Auto exporters in China have adapted to the EU’s tariffs on EVs by lowering export prices and focusing on vehicles that are not subject to tariffs. Even if trade restrictions were to remain in place, the extent of China’s cost advantage means that …
Tightening cycle probably over, but currency now the key risk There’s little in the Brazilian June CPI print that changes our view that last month’s hike marked the end to Copom’s tightening cycle. But a lot will now depend on how the trade dispute with …
Poor performance in the US and APAC property markets is set to drag on the global recovery over the next few years. While strong economic fundamentals argue for a material improvement in total returns in the US in the longer term, APAC won’t be as …
Markets have brushed off Trump’s latest tariff threats. Geopolitical worries have faded – for now. And the AI trade is powering back. But beneath the surface, risks remain. Are investors reading the macro signals too optimistically? Join our Markets …
There are risks to the Irish economy from potential US tax policy changes but we think they are not as large as they first appear. The country’s large pharmaceutical sector should be fairly resilient if hit with US tariffs. And the government’s fiscal …
President Trump’s threat to put a 50% tariff on imports from Brazil is less about trade disputes and more about political and policy disagreements, and so it’s harder to see an off-ramp for Brazil compared with other countries that received tariff …
We think office values have further to fall in all metros this year, but from 2026 we are expecting a recovery, with the southern markets showing the way. Led by Miami, those metros will see strong rent growth on the back of a decent recovery in …
The Bank of Korea left interest rates unchanged at its meeting today (at 2.50%), but gave strong hints that the easing cycle still had further to run. With growth set to struggle and inflation contained, we are expecting a further 50bps of cuts before the …
Big rebound in demand, but housing market unlikely to recovery quickly While June’s RICS survey suggests most of the recent weakness in the housing market was due to the temporary influence of the change in stamp duty, it doesn’t yet point to a marked …
The Bank of Korea rarely cuts interest rates at back-to-back meetings, and the decision to leave interest rates on hold today at 2.50% comes as no surprise. The announcement was correctly predicted by all 33 analysts polled by LSEG, including ourselves. …
APAC Commercial Property Chart Pack (Q2 2025) …
9th July 2025
