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January 02, 2026
Bessent: New Fed Inflation Range and Dropping Dots?
January 2, 2026 11:30 AM UTC
U.S. Treasury Secretary Bessent over the Christmas period suggested that the Fed should shift to targeting an inflation range and drop the quarterly dots. What impact would this have? Such a change would give the Fed more flexibility on the margin, but not significant. This could make communicat
December 30, 2025
U.S. Consumption Vulnerable to Asset Market Hit
December 30, 2025 8:42 AM UTC
Overall, we see consumption growth prospects as being modest for 2026, as low to middle income households still struggle with the cost of living crisis. Additionally, the slowdown in immigration is causing less overall employment gains and in turn less absolute increase in real income and consumptio
December 23, 2025
U.S. Q3 GDP: Better Than Expected, But
December 23, 2025 1:54 PM UTC
Q3 GDP came in better than expected due to a big net export contribution to growth. Gross domestic purchases at 2.7% were more in line with expectations, with mixed performance in key expenditure sectors. We see growth slowing in Q4, with net exports unlikely to repeat the Q3 outcome and consume
December 22, 2025
December 19, 2025
EZ HICP Preview (Jan 7): Is Services Inflation Problematic?
December 19, 2025 11:10 AM UTC
HICP inflation has been range bound for the last 5-6 months between 2.0% and 2.2% with the November and October numbers in the middle of that range. But we see the headline rate falling out of that range in December to 1.9%, this preceding what may be a short-lived fall toward 1.5% in H1 2026. Som
Mexico: 25bps Cut and Now Pause
December 19, 2025 8:15 AM UTC
Banxico cut by 25bps to 7.0% as expected with a downward revision to 0.3% for 2025 GDP growth. Below trend GDP is forecast in 2026 and we see this prompting further easing in March and June 2026 by 25bps each, but MXN weakness restraining Banxico pace. We then see Banxico going on hold for the rem
December 18, 2025
ECB Review: On Hold Message to Convert to Easing on Disinflation
December 18, 2025 3:09 PM UTC
· The ECB increased its 2026 GDP and inflation forecast and appears happy with current policy rate levels. However, still tight financial conditions, plus easing wage growth, point to disinflation and growth disappointment. We see this switch the ECB from an on hold message to easin
DM FX Outlook: Scope for USD decline against JPY, AUD and NOK
December 18, 2025 2:31 PM UTC
· Bottom Line: We expect some modest USD losses across the board over the next couple of years, but there is much more scope for losses against the JPY, AUD and NOK than the other G10 currencies, as yield spreads have moved dramatically in favour of these currencies, and the currencies
U.S. November CPI - Is the tariff impact fading?
December 18, 2025 2:10 PM UTC
November’s CPI is significantly lower than expected, at 2.7% yr/yr, 2.6% ex food and energy, compared with 3.0% for both series in September (October data will not be released). November’s core CPI index is up only 0.16% from September’s, implying an average rise of less than 0.1% per month ov
EM FX Outlook: High Real Yields Still Help
December 18, 2025 12:14 PM UTC
• EM currency 2026 prospects come against a backdrop of a further but slower USD depreciation against DM currencies, but inflation differentials, domestic central bank policy and politics also matter. We forecast the Mexican Peso (MXN) will likely be more volatile, as President Donald Tru
December 17, 2025
DM Rates Outlook: 2026 Yield Curve Steepening Before 2027 Flattening
December 17, 2025 9:21 AM UTC
· Multi quarter, we still look for 50bps of further Fed easing by end 2026, which will likely initially bring 2yr yields down to 3.35%. However, once the Fed Funds rate get closer to 3.0-3.25% and the assumed slowdown turns into a soft landing, the 2yr will likely move to a premium ve
Outlook Overview: Turbulent Times
December 17, 2025 7:44 AM UTC
· The U.S. slowdown remains in focus as the lagged effects of President Trump’s tariff increases continues to feedthrough, though our baseline is for a 2026 soft-landing. The Supreme court will likely rule against part of Trump’s reciprocal tariffs, which will create short-term
December 16, 2025
U.S. October and November Employment - Unemployment rising but economy maintains some momentum
December 16, 2025 2:22 PM UTC
November’s non-non-farm payroll at 64k does not fully erase a 105k decline in October but private payrolls at 69k in November and 52k in October maintain moderate growth, though unemployment at 4.6% in November is the highest since September 2021, and average hourly earnings growth is slowing. Oct
December 15, 2025
China: Weak Growth
December 15, 2025 7:39 AM UTC
• November figures show weak growth and are a concern for momentum going into 2026. Retail sales continues to be hurt by adverse wealth effects and slow job and income growth. Though the authorities are promising to boost consumption, we see this only being modest rather than aggressive
December 12, 2025
U.S. Outlook: Consumers Vulnerable, but Recession Unlikely
December 12, 2025 4:38 PM UTC
• US GDP growth is likely to look solid in Q3 2025 supported by resilient consumer spending, but with slowing employment growth and resilient inflation weighing on real disposable income that will be difficult to sustain. However, while consumers look vulnerable, business investment looks h
Equities Outlook: Choppy Up For 2026 and Down for 2027?
December 12, 2025 8:05 AM UTC
· The U.S. equity market is underpinned by the bullish AI/tech story and a soft economic landing into 2026. However, overvaluation is clear and this leaves the market vulnerable to a 5-10% correction on moderate bad news e.g. economic data. We see the S&P500 having a choppy year a
December 11, 2025
China Outlook: Headwinds Get Stronger
December 11, 2025 10:30 AM UTC
· Private domestic demand remains modest, with consumption ranging from modest to moderate (slowed by the housing wealth hit and soft jobs/wage growth) and investment further impacted by the ongoing adverse drag of the residential property bust. China’s authorities prefer a long and
Brazil: March 50bps Cut?
December 11, 2025 8:00 AM UTC
BCB remain focused on getting inflation converging towards the centre of the inflation target range at 3% looking at the December statement. It appears that the economic weakness is not yet great enough to get the BCB to signal a January cut. Nevertheless, with headline inflation falling, the real i
December 10, 2025
Fed: Slower 2026 Easing
December 10, 2025 8:34 PM UTC
Powell in the press conference made clear that the Fed is now in a wait and see mood, with policy rates entering a broad measure of neutral policy rates. This means further weakening in labor demand and then consumption would be required to prompt an early 2026 cut. We are less upbeat than the Fed
December 09, 2025
Americas First: New National Security Strategy
December 9, 2025 8:40 AM UTC
· The new NSS at one level reads like a Trump/MAGA current list of topics and desires, that may not translate into policy or a major shift of military assets. Trump has blown hot and cold on Europe and China over the past 12 months and could shift again. Nevertheless, the NSS does r