U.S-China Trade Tensions May Escalate Further Before Eventually Fading

October 13, 2025 3:19 PM UTC

Trump’s more conciliatory words after announcing a 100% tariff on China starting November 1 have eased market worries, though the issue is far from resolved. It is still possible that Trump will follow through with his threat on November 1, but unlikely that tariffs would remain elevated for very

Eurozone: Data Disappointments Off the ECB Radar

October 10, 2025 12:35 PM UTC

Although not fully high-profile,and mostly off the radar that the Council focuses on. the last few days have brought a series of data releases that will disappoint the ECB, certainly the hawks.  These range from weak services production data, further signs of a loosening in the labor market and mor

ECB Council Meeting Account Review: Complacency Rules the Day as Financial Conditions Tighten!

October 9, 2025 12:52 PM UTC

Unsurprisingly there was little in the account of the ECB Council Meeting of 10-11 September to suggest any rush to change policy with it clear that members on both sides of the hawks vs doves debate wanted more data amid what was considered to be great uncertainty.  Thus, the ECB offered little in

France:  Prime Minister – Another One Bites the Dust

October 6, 2025 9:01 AM UTC

Either side of the English Channel, politicians are competing to see whether France or the UK can provide a prime minister with the shortest time in power.  In the UK that was Liz Truss whose 49 days at the helm of the government in 2022 has now been surpassed by French PM Lecornu who has resigned

Japan: A New Page?

October 6, 2025 4:13 AM UTC

Sanae Takaichi has been elected as the LDP party leader in October 4th and will become the next prime minister of Japan. While it may mean a new page for Japanese politics, it may well be a step backward for the BoJ monetary policy.

U.S. September ISM Services - Back to neutral, prices still firm

October 3, 2025 2:22 PM UTC

September’s ISM services index has slipped back to a neutral 50.0 after a bounce to 52.0 in August from July’s near neutral 50.1 . We had suspected that August data had been flattered by seasonal adjustments but seasonal adjustments do not fully explain the recent moves.

DM Central Banks: Wider-Ranging Conditions More Than Neutral Rates

October 2, 2025 6:55 AM UTC

·        Neutral policy rate estimates and forward guidance provide some help at the start of easing cycles, but less so at mid to mature stages.  For the Fed, ECB and BOE we look at a wider array of economic and financial conditions, alongside our own projections over the next 2 years to m

RBI Holds Rates, Balances Growth Optimism with Global Risks

October 2, 2025 6:09 AM UTC

The RBI held the repo rate at 5.5% in its October review, keeping policy neutral after 100 bps of cuts earlier this year. Inflation was sharply revised down to 2.6% in FY26, while growth was upgraded to 6.8%, reflecting resilient domestic demand. The decision reflects a strategy of stability—pausi

EZ HICP Review: Headline Inflation Moves Higher as Services Ticks Up From Cycle-low

October 1, 2025 10:28 AM UTC

A second successive upside surprise is unlikely to make inflation any more of an issue for the ECB at present.  Instead, moderate concerns whether the apparent resilience of the real economy may yet falter should remain the order of the day, this possibly a result of a still somewhat unresponsive t

AI/Humanoid Robots and Disinflation?

October 1, 2025 9:40 AM UTC

·       Overall, a number of forces from the AI wave will impact inflation.  Power demand could push up power prices, but productivity enhancements and product innovation could be disinflationary like Information and Communications technology (ICT).  One other key uncertainty on a 1-5 year

RBA Review: Data Dependency Continues

September 30, 2025 8:17 AM UTC

The RBA meeting on September 30th keep rates at 3.6% and continue to point toward data dependency

Trump Tariffs: China, Mexico and Semiconductors

September 30, 2025 8:00 AM UTC

  ·       Our baseline (60% probability) remains that a U.S./China trade deal will be agreed in Q4/Q1 2026 and it is possible though unlikely that this could be announced at the Trump/Xi meeting at the October 31 APEC summit – China requests that the U.S. changes policy on Taiwan could slo

U.S. Government Shutdown Expected Starting October 1

September 29, 2025 3:54 PM UTC

While a last minute deal is not to be ruled out, the US government looks set to shut down on October 1. Once a shutdown starts, the standoff could last for a few weeks, probably not as far as the next FOMC meeting on October 29, though that cannot be ruled out. As long as the government remains shut

DM Government Bond Saints v U.S.

September 29, 2025 7:35 AM UTC

·       Overall, although the fiscal saints (Australia/Canada/Germany/Sweden) have merits over the U.S. in the scenario where Fed independence is undermined and more Fed rate cuts occur than warranted by the economics, the 10yr area of other government bond markets may not outperform. 10yr go

RBI Likely to Hold Rates, Watchful of Tariffs and Festive Demand

September 29, 2025 6:57 AM UTC

The RBI is expected to keep the repo rate unchanged at 5.5% in its October review, pausing after three consecutive cuts earlier this year. With inflation undershooting and GST rationalisation set to push CPI lower, policymakers see little need for immediate action. The central bank will instead wait

U.S. August Personal Income and Spending - Core PCE Prices maintaining trend, still above target

September 26, 2025 1:09 PM UTC

August personal income at 0.4% and spending at 0.6% are both a little stronger than expected while price indices are in line, 0.3% for overall PCE and 0.2% for the core rate, with the latter 0.227% before rounding. Each price index underperformed the August CPI counterpart by 0.1% (August PPI was so

September Outlook: Into 2026 -- Market Implications

September 26, 2025 9:00 AM UTC

Our September Outlook is now published and please see all our markets chapters below.  

Preview: Due September 26 - U.S. August Personal Income and Spending - Savings higher after GDP revisions

September 25, 2025 3:04 PM UTC

We expect August data to show 0.3% gains in both overall and core PCE prices, with personal income also up by 0.3% and personal spending slightly stronger at 0.4%. The data will incorporate historical revisions through Q2 seen with the GDP revisions.

September Outlook: Into 2026

September 25, 2025 6:20 AM UTC

Our September Outlook is now published and please see all our economic and policy chapters below.  

EZ HICP Preview (Oct 1): Headline Inflation to Edges Higher as Services Slows to Fresh Cycle-low

September 24, 2025 10:54 AM UTC

As we have underlined of late, HICP inflation – at target for the last three months – is very much a side issue for the ECB at present, offset instead by moderate concerns whether the apparent resilience of the real economy may yet falter.  This mindset will not be altered by the flash HICP dat

EM FX Outlook: USD Less in Favor, but EM Mixed

September 24, 2025 10:44 AM UTC

DM FX Outlook: USD steadies but vulnerable to equity correction

September 23, 2025 2:48 PM UTC

·       Bottom Line: The USD has continued to edge lower against the EUR in the last quarter as market expectations of Fed easing have increased following clear weakening in U.S. employment growth. But at this stage the data doesn’t indicate we are heading for recession, and this suggests w

Outlook Overview: Into 2026

September 23, 2025 8:25 AM UTC

·       The critical question is how much the U.S. economy is slowing down with the feedthrough of President Donald Trump’s tariffs to boost inflation and restrain GDP growth, with the effective rate currently around 17% on U.S. imports. Though semiconductor tariffs are likely, the bulk of

DM Rates Outlook: Steepening Yield Curve The Old Normal?

September 23, 2025 7:53 AM UTC

•    We continue to forecast further yield curve steepening across the U.S./EZ and UK, driven by cumulative easing.  For the U.S. this can see a modest further decline in 2yr yields, but the prospect is for a move to a premium of 2yr to Fed Funds (unless a hard landing is seen).  10yr yields