Straits of Hormuz Scenarios

May 7, 2026 6:25 AM UTC

·       Our new baseline (70% probability) is for the Straits of Hormuz to start to partially reopen by June/July based on a framework deal between Iran and the U.S.  This means more elevated oil prices in Q2, but then a gradual reduction in WTI to USD85 end-2026 and USD75 end 2027.  The al

U.S. April ISM Services, March Job Openings, New Home Sales - Economy growing moderately

May 5, 2026 2:25 PM UTC

The latest round of data provides no major net surprises, with a modest decline in job openings, two straight moderate increases in new home sales and a modest slowing in the ISM services index. The data is consistent with an economy still showing moderate growth.

U.S. Labour: In Praise of Older Workers

May 5, 2026 8:32 AM UTC

·       While financial pressures are prompting U.S. workers to delay retirement and work longer, this is not being realized due to deteriorating health/labour market skills mismatches and other issues. More work from older workers is unlikely to be the solution to shrinking net immigration.

RBA Review: Last Hike for Now?

May 5, 2026 5:14 AM UTC

The RBA March meeting hike rates to 4.35% on a 8-1 vote
Forward guidance seems to signal last hike for now

ECB Review: ECB Mixed Communications

April 30, 2026 2:01 PM UTC

·       Overall, the June and July meetings have live risks that the ECB could undertake a modest 25bps hike.  If a partial reopening of the Straits of Hormuz occurs then the ECB will likely keep hawkish, but not actually hike.  We feel that the ECB is overestimating natural gas prices, whi

Eurozone GDP & HICP Review: Fragile Resilience?

April 30, 2026 9:30 AM UTC

We continue to be critical of the ECB assertion (at least before the Iran War) that the EZ economy was in a ‘good place’.  This to us was too backward looking and amid some signs in both hard, soft and monetary data, that the economy going into the last quarter was soft and fragile.  Indeed, f

FOMC - Easing call moved to December from September

April 29, 2026 7:58 PM UTC

The Fed is now entering a transition from Chairman Powell to Chairman Warsh, who looks set to be in place at the next meeting on June 17. The final meeting of Powell’s term saw three hawkish dissents on the language and Powell announce he will continue as Governor after his term as Chair ends. We

FOMC keeps rates on hold but three of four dissents are hawkish

April 29, 2026 6:23 PM UTC

The main surprise in the FOMC statement was the number of dissents, one dovish, Miran continuing to call for a 25bps easing, and three hawkish, with Hammack, Kashkari and Logan in agreement with the decision to leave rates unchanged but objecting to the inclusion of an easing bias.

Preview: Due April 30 - U.S. March Personal Income and Spending - Core PCE Prices to outperform core CPI

April 29, 2026 1:26 PM UTC

March’s personal income and spending data may be overshadowed by the Q1 GDP report due at the same  time and to which it will contribute.  We expect a 0.9% rise in personal spending, to exceed both a 0.2% rise in personal income and a 0.7% rise in PCE prices. For core PCE prices, we expect an in

Big EM: Diverging Fiscal Trends

April 28, 2026 12:35 PM UTC

·       EM government bond spreads are controlled as 2nd round inflation effects are likely to be less than 2022, due to less buoyant domestic demand/slacker labour markets and less global supply chain pressure ex oil/oil products.  Brazil is expected to cut rates and others will likely not

Eurozone: Even Tighter Corporate Credit Standards Continues and More Loans Applications Rejected

April 28, 2026 8:51 AM UTC

Given the ever clearer fall-out from the conflict in the Gulf, it was hardly a surprise of even tighter credit standards (Figure 1), thereby merely accentuating trends in the four previous Bank Lending Surveys (BLS).  At least as far as firms and especially consumers seeking credit are concerned, t

BoJ Review: Hawkish Hold

April 28, 2026 4:53 AM UTC

The BoJ kept rates unchanged at 0.75% in the April meeting with a 6-3 vote

Straits of Hormuz Standoff and Mixed Markets

April 27, 2026 9:02 AM UTC

•    Equities longer time horizon means that they are hoping for a reopening of the Straits of Hormuz (though also being helped by renewed AI optimism), whereas government bond markets actually want to see tangible progress and an associated tempering of DM central banks posturing.  This dive

ECB Preview (Apr 30): Real Economy Buckling Already!

April 23, 2026 12:21 PM UTC

We again expect no change from the ECB on Apr 30, but President Lagarde will probably have to admit in the Q&A that unlike last time the decision was not unanimous.  Overall, the communication will again suggest upside risks for inflation and downside risks for economic growth the extent and durati

FOMC Preview for April 29: Uncertainty keeping the Fed on hold

April 22, 2026 2:29 PM UTC

The FOMC meets on April 29 and there is little risk of a change in rates from the current target range of 3.5-3.75%. High uncertainty, both on the geopolitical situation and the future of the Fed, suggests there will be little forward guidance, and the dots will not be updated until the next meeting

Iran Conflict – Who Has the ‘Trump’ Card

April 22, 2026 9:17 AM UTC

When Trump aspires to reaching a deal, he thinks in either black or white.  But whether it be political, economic or military the reality is that the world is always various shades of grey.  This is very much evident in the way the Iran conflict was planned by the U.S. – the expected clear and r

Preview: Due April 30 - U.S. March Personal Income and Spending - Core PCE Prices to outperform core CPI

April 21, 2026 2:38 PM UTC

March’s personal income and spending data may be overshadowed by the Q1 GDP report due at the same  time and to which it will contribute.  We expect a 0.9% rise in personal spending, to exceed both a 0.2% rise in personal income and a 0.7% rise in PCE prices. For core PCE prices, we expect an in

U.S. March Retail Sales - Underlying resilience, lower taxes may be helping

April 21, 2026 1:02 PM UTC

March retail sales with a 1.7% rise, 1.9% ex autos are stronger than expected. Most of the rise is on the surging price of gasoline, though sales ex auto and gasoline with a 0.6% increase are on the firm side of expectations, with February revised up to 0.6% from 0.4% and January to 0.4% from 0.2%.

EZ HICP Preview (Apr 30): Headline Surges Again as Core Stabilises?

April 21, 2026 9:29 AM UTC

The first of the Iran War induced rise in prices arrived with the final March HICP data in line with expectations, as the headline rate spiked higher to 2.6% from February’s 1.9%, but with the core rate falling back (Figure 1) underscoring that this March surge was purely energy-led.  Indeed, thi

Eurozone Flash GDP Preview (Apr 30): Softer Even Before Iran Conflict?

April 20, 2026 1:20 PM UTC

We have been critical of the ECB assertion (at least before the Iran War) that the EZ economy was in a ‘good place’.  This to us was too backward looking and amid some signs in both hard, soft and monetary data, that the economy going into the last quarter was slowing.  Indeed, part of a broad

Equities: Still a Rocky Road in 2026

April 17, 2026 12:49 PM UTC

·       Any deal between the U.S. and Iran would still be seen as a positive win in equities, as it would raise hopes that it could be followed by a multi-year settlement that could include more Iran oil and gas into the global energy markets and lower energy prices. No deal is also feasible,

Eurozone; ECB Tone More Neutral Than Suggested by March Meeting Market Reaction?

April 16, 2026 12:18 PM UTC

Little new can be taken from the minutes to the March ECB Council 19 meeting, save that at least to us the ECB was too optimistic about growth and too pessimistic about inflation. In regard to the latter, while acknowledging tighter financial conditions, the ECB still seemed to be downplaying what a

China: GDP Beat, But Domestic Demand Weak

April 16, 2026 6:39 AM UTC

•    Q1 GDP beat expectations helped by Industrial production, but the domestic demand picture remains weak with soft consumption and the ongoing negative drag from the residential property sector. We still feel that the economy remains too dependent on high tech manufacturing and modest consu