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May 09, 2025

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A Windfall with Caveats: RBI’s Likely Record Dividend
Paying Article

May 9, 2025 2:00 PM UTC

India is set to receive a record INR 3–3.5tn dividend from the RBI, offering a fiscal cushion amid softening tax revenues and rising geopolitical tensions with Pakistan. While this windfall may help the government stick to its 4.4% fiscal deficit target for FY26, it also highlights India’s growi

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Household Divergence Into the Downturn?
Paying Article

May 9, 2025 10:55 AM UTC

Overall, the shock faced by the U.S. from tariffs is a negative supply shock, which can then be followed by job losses and restrained income and consumption growth.  This 2 round can be amplified if a hard landing is seen and quickens job losses, which would really hurt low income households. Howev

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India CPI Preview: Cooling Prices, Warming Room for Rate Cuts
Paying Article

May 9, 2025 9:48 AM UTC

India’s retail inflation likely fell to 3.2% in April, its lowest since 2019, driven by a sharp decline in food prices. The benign inflation print strengthens the case for another RBI rate cut as growth momentum softens. 

May 07, 2025

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Eurozone Labor Market: Rising Supply Adding to Lower Wage Pressures
Freemium Article

May 7, 2025 9:34 AM UTC

With the EZ jobless rate nestling at record lows, it would support the ECB assessment that the EZ labor market is strong, the central bank seeing only a small rise in the jobless rate this year and on to be reversed from early next year onwards.  However, that glosses over the fact that the labor m

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China Moderate Triple Monetary Easing
Paying Article

May 7, 2025 6:31 AM UTC

•    China has announced a 10bps cut in the 7 day reverse repo rate to 1.4%; large than expected 50bps cut in the RRR rate and credit easing via Yuan1.1trn balance sheet quota expansion to counter the slowdown in growth.  Combined with the extra equity capital for state banks this will help c

May 06, 2025

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Tariff Man
Paying Article

May 6, 2025 8:45 AM UTC

  With the U.S. equity market having rebounded, President Donald Trump instinct on tariffs have seen threats of pharma tariffs and a 100% tariff on non U.S. films. Slow progress is also reported on bilateral deals, despite White House PR spin.  However, Trump will see pressure rising from three so

Indonesia’s April Inflation Hits 7-Month High on Utility Price Rebound
Paying Article

May 6, 2025 3:19 AM UTC

Headline inflation rose to 1.95% y/y in April 2025, driven mainly by higher utility costs. Food and personal care items also remained key contributors to price pressures.

May 05, 2025

U.S. April ISM Services - A correction higher within a slowing trend
Paying Article

May 5, 2025 2:15 PM UTC

April’s ISM services index of 51.6 has corrected higher from March’s 50.8 though remains quite subdued and is weaker than each index from September through February. Prices paid accelerated, to 65.1 from 60.9, reaching their highest since January 2023.

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Markets: China Truce Hopes and More Data
Paying Article

May 5, 2025 8:05 AM UTC

The direction of travel is towards a U.S./China truce followed by postponing/cancelling most reciprocal tariffs and then trade negotiations. While the markets could cheer this as good news, incoming economic data in May and June is the most critical issue.  We still see the U.S. imposing an average

May 02, 2025

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FOMC Preview for May 7: No change with future policy left data-dependent
Paying Article

May 2, 2025 3:47 PM UTC

In the current exceptionally uncertain environment, the FOMC looks set to keep rates unchanged at 4.25-4.5% at its May 7 meeting, and give little away on future policy. This meeting will not see the dots updated. Chairman Powell however at the press conference is likely to signal that future meeting

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U.S. April Employment - Suggests economy where Fed wants it, but can it persist?
Paying Article

May 2, 2025 12:57 PM UTC

April’s non-farm payroll with a 177k increase is on the firm side of expectations and shows the labor market remained solid in early April, but the upside surprise is offset by 58k in net downward revisions. Unemployment was unchanged at 4.2% as expected but a below consensus 0.2% rise in average

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EZ HICP Review: Headline Fails to Fall as Services Inflation Rises on Easter Effect?
Freemium Article

May 2, 2025 9:46 AM UTC

EZ HICP inflation failed to fall back toward the 2% target in flash April data, instead staying at 2.2%.  More notably, services inflation jumped 0.4 ppt, very probably due to the impact of the timing of Easter affecting airfares and holiday costs. As was the case when this Easter effect last happe

May 01, 2025

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U.S. Equities: Vulnerabilities Remain
Paying Article

May 1, 2025 10:25 AM UTC

 We are concerned that valuations remain high and inconsistent with nominal and real government bond yields going into a growth slowdown as tariffs hit the U.S. economy.  Our baseline is for the S&P500 to fall to 5000-5200 mid-year before recovering to 5500 by end 2025. The 10yr budget bill is lik

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BoJ Review: 2025 GDP Forecast Halved
Freemium Article

May 1, 2025 5:48 AM UTC

The BoJ kept rates unchanged at 0.5% with significant revision to economic forecast

April 30, 2025

U.S. March Personal Income, Spending and Core PCE Prices confirm Q1 totals, March Pending Home Sales rebound
Paying Article

April 30, 2025 2:33 PM UTC

March’s personal income and spending report is largely old news with Q1 totals visible in the GDP report. Despite the upside surprise in the Q1 core PCE price index, March’s data was even softer than expected at unchanged, with the upside surprise in Q1 coming from an upward revision to February

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China South China Sea Tensions
Paying Article

April 30, 2025 10:30 AM UTC

We see recent China activity as part of the normal grey warfare for long-term influence in the South China sea.  It has involved the use of China coastguard and militia fishing boats rather than China PLA Navy, though the risk of escalation between the Philippines and China remains. China likely wa

April 29, 2025

Preview: Due April 30 - U.S. March Personal Income and Spending - Core PCE Prices to match weak Core CPI
Paying Article

April 29, 2025 2:49 PM UTC

March’s personal income and spending report will be largely old news by the time of the release, with Q1 totals due with the GDP report 90 minutes earlier. We expect a subdued 0.1% increase in the core PCE price index, a subdued 0.2% rise in personal income, but a strong 0.8% increase in personal

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U.S. Treasuries: Economy v Foreign Investors
Paying Article

April 29, 2025 8:32 AM UTC

We have not revised down our baseline for 10yr yields (Figure 1) in 2025 and have pushed forecasts up 10bps in 2026.  We are concerned that foreign investors will be less willing to buy extra U.S. Treasuries.  Nevertheless, the economic slowdown, plus expectations that the CPI boost will be a temp

BoJ Preview: Between the rock and a hard place
Freemium Article

April 29, 2025 12:00 AM UTC

The BoJ will not change rate nor forward guidance in the May meeting.

April 28, 2025

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US Exit: Lessons From Brexit?
Paying Article

April 28, 2025 8:05 AM UTC

Overall, the U.S. attempt to reshape global trade is unlikely to significantly improve its trade position, but the size and influence of the U.S. may mean it does not get hit in net exports volumes like the UK.  Even so, U.S. business investment could be restrained by ongoing uncertainty from the T

April 25, 2025

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U.S/China Trade Standoff: Odds Remain Towards Truce
Paying Article

April 25, 2025 7:09 AM UTC

  On balance, our baseline still remains a U.S./China trade deal (55-60%) being reached, given Trump deal instincts; China desire for a deal and the economic disadvantage of an economic cold war to the U.S. when it is trying to reset trade with all countries.  Timeline is Q4 2025 or H1 2026. An al

April 24, 2025

U.S. March Durable Goods Orders - Aircraft surge, ex transport subdued, Initial Claims still low
Paying Article

April 24, 2025 12:51 PM UTC

March durable goods orders have risen by an exceptional 9.2%, though an unchanged ex transport figure suggests a subdued underlying picture. The transport rise was led by aircraft, though autos also increased. Initial claims rose to 222k from 216k, but remain consistent with a healthy labor market.

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EZ HICP Preview (May 2): Headline Lower Again But Mainly Energy?
Paying Article

April 24, 2025 8:39 AM UTC

EZ HICP inflation is likely to fall back to the 2% target in flash April data, this six-month low would largely reflect a fall in fuel prices, but with services largely consolidating the clear fall seen last time around (Figure 1).  All of which would mean a stable core reading of 2.4% but where th

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USD Rebalancing: Some to EM?
Paying Article

April 24, 2025 8:30 AM UTC

Some portfolios rotations towards EM assets will likely be evident, as we see the USD decline is now extending and broadening.  However, flows will likely be selective, both given underwhelming EM performance in the last 5-10 years and the uncertainty over how much Trump will reduce reciprocal tari

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BI Holds Rates as Rupiah Takes Centre Stage
Paying Article

April 24, 2025 5:34 AM UTC

Bank Indonesia kept its policy rate unchanged at 5.75% in April, prioritising currency stability over immediate growth support. Despite subdued inflation and earlier indications of easing, the central bank is holding off on rate cuts amid heightened global uncertainty and rupiah weakness following U