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June 18, 2025
Fed: Hold Then Cautious Easing
June 18, 2025 7:27 PM UTC
Though the SEP reduced growth forecasts and boosted inflation, the guidance from the Fed remains that policy is on hold in the coming meetings. Though the FOMC median still has two 2025 cuts, the breakdown shows that this was a close call and a lot of members see no cut or only 25bps. We look for
June 17, 2025
Preview: Due June 27 - U.S. May Personal Income and Spending - Core PCE Prices to match Core CPI
June 17, 2025 3:02 PM UTC
We expect a 0.1% rise in May’s core PCE price index, matching to core CPI, continuing to show limited tariff pass-through. Subdued data are also likely from personal income, which we expect to be unchanged, and personal spending, where we expect a 0.1% decline.
U.S. May Retail Sales - Two straight declines as confidence slides
June 17, 2025 12:50 PM UTC
May retail sales with a 0.9% decline are slightly weaker than expected. The ex auto data at -0.3% and ex auto and gas at -0.1% are negative too, though the control group which contributes to GDP was resilient with a 0.4% rise.
BOJ QT And Steeper Yield Curve
June 17, 2025 8:41 AM UTC
Despite the slowdown in the pick-up in BOJ QT, monthly bond purchases are set to slow from Yen4.1trn pm to Yen2.1trn pm by Q1 2027. With bond maturities BOJ QT is getting bigger and will mean that supply pressures continue to drive yield curve steepening. We see 1.85% 10yr JGB yields by end 2025
June 16, 2025
China: Retail Sales Reasonable
June 16, 2025 7:25 AM UTC
• Retail sales in May was helped by government trade in programs, but the overall retail sales momentum is reasonable. The industrial production slowdown looks to have been driven by the U.S. tariff chaos in April/May, which has become less adverse after the Geneva trade truce with the U.
BI Likely to Keep Rates Unchanged Amid Global Volatility
June 16, 2025 5:41 AM UTC
Bank Indonesia is expected to hold rates at 5.50% in June after two cuts earlier this year, opting for a pause amid global uncertainty. Subdued inflation and a stable rupiah provide policy space, but the central bank is likely to wait for clearer signals from the Fed. A fresh rate cut remains likely
June 13, 2025
BOE QT: Slowdown in September?
June 13, 2025 8:15 AM UTC
BOE QT is part of the reason behind both a steeper yield curve and subdued M4 and lending growth. The MPC in September will likely accept that to avoid impacting the monetary transmission mechanism that annual rundown of gilts needs to be slowed from GBP100bln pa to GBP75bln. Internal differences
India CPI Review: CPI at 2.82%: Disinflation Deepens, But Risks Linger
June 13, 2025 7:18 AM UTC
India’s retail inflation dropped to a six-year low of 2.82% in May, driven by easing food prices and supported by favourable base effects. While disinflation continues to create monetary space, RBI's next rate cut will be data driven.
June 12, 2025
Trump Tariffs: China and July 9 Reciprocal Deadline
June 12, 2025 7:17 AM UTC
We attach a 65% probability to a U.S./China reaching a new trade deal that reduces the minimum overall tariff to 15-20% imposed by the U.S., most likely agreed in Q4 2025 and to be implemented in 2026. However, a 35% probability exist of no deal and this could eventually mean higher tariffs (Fig
June 11, 2025
FOMC Preview for June 18: No change in rates or dots, only marginal changes to statement and forecasts
June 11, 2025 4:01 PM UTC
The June 18 FOMC meeting looks highly likely to leave rates unchanged at 4.25-4.5%. We expect only marginal changes to May’s statement and the Fed’s median forecasts from March, with no change at all in the median dots on rates. Chairman Powell at the press conference may welcome recent signal
U.S. May CPI - Little tariff pass-through, with inflationary pressures elsewhere fading
June 11, 2025 12:59 PM UTC
May CPI has surprised significantly to the downside, up only 0.1% both headline and core, with the respective gains before rounding being 0.08% and 0.13%. The data is subdued across the board, with commodities ex food and energy unchanged despite tariffs and services ex energy on the low side of tre
June 10, 2025
ECB: Time to Reassess and Slow QT?
June 10, 2025 2:25 PM UTC
Further ECB easing is on the cards, the question being whether this should start to encompass toning down quantitative tightening (QT) plans too! Notably, the two ppt fall in the discount rate cuts has come against a backdrop where the ECB has continued unconventional tightening by scaling back its
U.S. Deficit and Government Debt Concerns
June 10, 2025 9:00 AM UTC
The large U.S. budget deficit has helped push up 10yr real yields to 2% in 2024/2025, but both the budget deficit (heavy issuance) and government debt trajectories (sustainability and rating concerns) are key going forward if the 10yr budget bill passed is similar to the House Bill. Foreign acco
June 09, 2025
China Disinflation Rather than Deflation
June 9, 2025 7:27 AM UTC
May China CPI remains negative Yr/Yr, but the breakdown is consistent with disinflation rather deflation. Deflation could end up as a drag on the economy, but while growth remains close to the 5% target and CPI is regarded as disinflation rather than deflation, further policy easing will be slow.
June 06, 2025
U.S. May Employment - Resilient picture suggests no urgency for Fed easing
June 6, 2025 1:03 PM UTC
May’s non-farm payroll with a 139k increase, is on the firm side of expectations, particularly after the ADP report, and suggests the economy is not on the cusp of recession yet. Revisions were negative at 95k but leave a stable-looking picture, while average hourly earnings were above trend with
Eurozone: The Tail Wagging the Dog?
June 6, 2025 10:26 AM UTC
Given what now looks to have been an outstanding first quarter, the ECB’s assertion at this month’s Council press conference that it is a good position to navigate the uncertain conditions looks more tenable. After all, GDP jumped 0.6%, twice the previous estimate. But this is no indicator o
June 05, 2025
ECB Council Meeting Review: Easing Window Stays Open
June 5, 2025 1:58 PM UTC
This widely seen 25 bp deposit rate cut (to 2.0%) now means the previous degree of tightening has been effectively halved. Notably, it comes alongside an ECB policy and economic outlook/bias little changed from that of recent months. The door is thus left open for a move at the July 24 policy ve
U.S. April Trade Deficit plunges as Canada's deficit surges, US Q1 Productivity revised lower
June 5, 2025 1:26 PM UTC
April’s deficit of $61.6bn from $138.3bn in March was even narrower than expected. Goods data was consistent with advance data already seen but the services surplus added to the improvement with an unexpected increase. An unexpected downward revision to Q1 non-farm productivity and an upward revis
June 04, 2025
U.S. May ISM Services - Marginally below neutral
June 4, 2025 2:30 PM UTC
May’s ISM services index of 49.9 from 50.8 unexpectedly weakened, moving marginally below neutral for the first time since a far from distant June 2024. This contrasted a rise in the S and P services PMI to an upwardly revised 53.7, from a 52.3 preliminary and 50.8 in April. Most regional service
China Banking Problems
June 4, 2025 8:32 AM UTC
China is suffering a credit demand problem from households overexposed to property and private businesses that are cautious. Meanwhile, the latest IMF banking stress tests shows sections of the banking system remain weak and this is restraining lending. We remain watchful of money and credit tre