FOMC Preview for June 17: Dropping the easing bias

June 10, 2026 4:55 PM UTC

The FOMC meets on June 17 and while a change in the Fed Funds target range from the current 3.5-3.75% is unlikely, the statement is likely to drop the easing bias. The median dots are likely to get a little more hawkish with a hawkish skew in the detail, with inflation forecasts, even ex food and en

U.S. May CPI - Surprising fall in transport services despite continued gains in air fares

June 10, 2026 1:08 PM UTC

May CPI is in line with expectations at 0.5% overall but the core rate ex food and energy was softer than expected at 0.2%, with the rise before rousing being 0.208%.  The most surprising restraint on the data was a 0.6% fall in transportation services, despite continued gains in air fares.

Financial Markets/Policymakers and the Strait of Hormuz Question

June 10, 2026 8:05 AM UTC

·      Though the U.S. and Iran have attacked each other June 10, talks to reopen the straits of hormuz still continue. An Iran/U.S. agreement to reopen the Straits of Hormuz could cure the risk of a demand/supply oil market imbalance and produce some psychological relief that could knock USD

June 8, 2026 2:10 PM UTC

·        Our baseline is for DM government bond yields ex Japan to remain elevated, but controlled.  Japan extra risk premium is driven by BOJ QT at 6% of GDP, more than long-term debt fears. Major catalysts could drive a regime change to higher risk premia and steeper yield curves, but non

Country Risk in MENA

June 8, 2026 10:00 AM UTC

Country risk in Middle East and North Africa countries including Egypt, Saudi Arabia, Iran and Qatar.

U.S. May Employment - Surprise came from local government and leisure and hospitality

June 5, 2026 1:19 PM UTC

May’s non-farm payroll is significantly stronger than expected with a rise of 172k though the private sector was less impressive at 120k, if still healthy. Upward revisions to March and April add to the positive message.  In addition to government, leisure and hospitality with a 70k increase was

More Yuan Appreciation, but Controlled

June 4, 2026 9:55 AM UTC

•    The Yuan has been appreciating driven by a large trade surplus; the ongoing trade truce with the U.S. after Trump May visit and official acceptance of Yuan gains. Even so, we feel that China’s authorities will pause appreciation at times via FX intervention to stop the move becoming too

U.S. May ISM Services - Economy remains resilient

June 3, 2026 2:18 PM UTC

May’s ISM services index of 54.5 is up from 53.6 in April and a 3-month high. While we suspect seasonal adjustments flattered the data it provides further evidence of US economic resilience in the face of the energy shock.

ECB Preview (Jun 11): Words Not Deeds the Focus

June 3, 2026 10:23 AM UTC

Aware of repeating ourselves (again), it is the case that the next ECB Council meeting will be more important for what is said than what is done.  In fact, a 25 bp official rate hike is virtually nailed on irrespective of how events in the Middle East may fare in coming days.  But the ECB comments

EZ HICP Review: Headline Rise Capped by Food & Energy, Services Jump Seasonal?

June 2, 2026 9:50 AM UTC

Even given what seem to be a series of reassuring aspects, the May flash HICP data is unlikely to have a material impact on ECB thinking.  As expected, and helped by German fuel subsides which kept the energy rise to around zero, headline HICP rose just 0.2 ppt to 3.2%, still a 32-mth high, but whe

AI Labs IPO Fever

June 1, 2026 12:58 PM UTC

·       Space X could get an initial good reception, but then go flat waiting for the Open AI and Anthropic IPO’s.  Space X is an AI enterprise play rather than space and xAI is lagging. This could mean a modest correction in the U.S. equity market at some stage in the summer, but then the

2026 Q1 Country Insights Scores to Download in Excel

May 29, 2026 11:52 AM UTC

The Country Insights (CI) Model is a comprehensive quantitative tool for assessing country and sovereign risk, measuring a country’s exposure to external and domestic financial shocks and its capacity to grow. Our full range of scores across 174 countries for the first quarter of 2026 is now avail

Taiwan: Low Invasion Risk Post Trump Visit

May 29, 2026 11:05 AM UTC

·       The most likely option for China is to continue the air and naval grey zone warfare around Taiwan, combined with support for pro-China factions in Taiwan’s parliament to build pressure for reunification at some stage.  This stick and carrot approach is our baseline (Figure 1).  Wi

U.S. Personal Income and Spending, Durable Goods Orders, GDP and Initial Claims - Consumers look vulnerable

May 28, 2026 1:39 PM UTC

The latest US data can be seen as on balance softer than expected, with a falling savings ratio in April suggesting downside risks to consumers, with consumer spending with inventories bringing a downward revision to Q1 GDP.  Core PCE prices were softer than expected in April but revised up in Q1.

ECB April 30 Account: Not Willing to Look Through Energy Shock?

May 28, 2026 12:40 PM UTC

The Account of the April 30 ECB meeting offers few added clues with comments from Council member since more directly suggesting a precautionary if not pre-emptive 25 bp rate hike on June 11.  As was case back then, markets are seeing two such moves by September and a strong probability of a third b

DM Government Bond Markets in Limbo

May 27, 2026 12:22 PM UTC

·       DM central bank meetings in June will be crucial, with a high risk of a 25bps ECB hike to warn against 2nd round effects from higher oil prices and a BOJ 25bps hike as part of the ongoing normalisation.  However, the tone that the Fed’s Warsh will set will also be key.  The bigges

Preview: Due May 28 - U.S. April Personal Income and Spending - PCE Prices to underperform CPI

May 27, 2026 12:16 PM UTC

We expect April’s core PCE price index to rise by 0.3%, with overall PCE prices up by 0.5%, both slightly below respective CPI outcomes of 0.4% and 0.6%. We expect a 0.3% rise in personal income to underperform a 0.5% rise in spending, but due to lower taxes disposable personal income may outperfo

EZ HICP Preview (Jun 2): Headline To Surge Again as Core Starts To Rise?

May 27, 2026 9:23 AM UTC

While somewhat important, the May flash HICP data is unlikely to have a material impact on ECB thinking, irrespective of whichever way it may surprise.  Most likely the data will show a further and still largely energy driven rise of 0.4 ppt, matching the April gain, but now to a 32-mth high of 3.4

Europe: Anti-Immigration Vs More Negative Demographics

May 22, 2026 8:12 AM UTC

 A significant demographic tremor is gaining speed and breadth - globally. Just as politics – certainly in the west - is framed around ending or at least reducing and controlling immigration, it seems that the populists at the helm of such thinking are not considering the ramifications of such a

Eurozone: PMI Slump Shows Energy Surge Constraining Activity, Not Just Hitting Costs

May 21, 2026 8:36 AM UTC

Once again surprising on the downside flash Eurozone Composite PMI fell to 47.5 in May from 48.8 in April and below the 50.0 no-change mark for the second successive month. The latest reading thereby signalled a further and steeper m/m reduction in business activity, was the sharpest since October 2

FOMC Minutes from April 29: Hawkish concerns appear broadly felt

May 20, 2026 6:54 PM UTC

FOMC minutes from April 29 show a hawkish leaning, confirming market perceptions that there was more interest in removing an easing bias from the language than revealed by the three hawkish dissents at the meeting. Should inflation remain persistent, tightening could come onto the agenda, though sho

ECB: Not the Only Game in Town – But A Time for Hair Shirts?

May 19, 2026 11:22 AM UTC

When hearing ECB Council policy thinking one can get the impression that it sees only a direct link from changes in its policy rate to inflation rather than the latter succumbing to a range of factors, this being the transmission mechanism.  Most important of course is the economic damage that chan

Middle East Conflict: U.S. Helping Chinese Whispers?

May 15, 2026 11:26 AM UTC

 In hosting President Trump this week, China feels it is vying, if not achieving, parity with the U.S. as the world’s superpowers; from China’s perspective, it regards Russia similarly.  It does seem as if China’s goal at this summit was to get more effective flexibility in shaping Taiwan’