View:
September 23, 2025
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 pharma tariffs are likely, the bulk of tariffs
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
Equities Outlook: Correction Then Up In 2026
September 23, 2025 7:15 AM UTC
• The U.S. equity market’s bullishness reflects good corporate earnings reality, buybacks and the AI story. However, we feel that the U.S. economy can deteriorate still further in the coming months, as the lagged effects of tariffs boost inflation and restrain spending/hurt corporate ea
September 22, 2025
U.S. Outlook: Fed Easing to Prevent Recession, but May Also Keep Inflation Above Target
September 22, 2025 10:15 AM UTC
• GDP growth, supported in particular by business investment, was resilient in Q2, but growth in employment is now minimal and that will weigh on consumer spending, particularly with tariff-supported inflation set to restrain real wage growth. Recession is a risk if we see a vicious circle
September 19, 2025
China Outlook: Headwinds into 2026?
September 19, 2025 9:30 AM UTC
• Overall, net exports contribution to GDP growth should be tempered in H2 2025, as 30% tariffs bite more progressively and other countries more closely monitor the redirection of China’s exports. A trade deal with the U.S. remains our baseline, which should reduce tariffs to around 20%
September 17, 2025
Fed: Signals 25bps October and December
September 17, 2025 7:39 PM UTC
The median Fed Funds is a strong hint that the Fed will deliver an extra 50bps most likely with 25bps in October and December. However, the split in the 2026 Fed Funds dots forecasts from FOMC members suggests that our forecast of just below trend growth and core PCE above target will likely mean
September 16, 2025
Preview: Due September 26 - U.S. August Personal Income and Spending - Core PCE Prices moving higher
September 16, 2025 3:36 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 due with the annual GDP revision scheduled for September 25.
U.S. August Retail Sales - Still Resilient
September 16, 2025 12:48 PM UTC
August retail sales with a 0.6% increase, with the ex-auto and ex auto and gasoline gains both at 0.7%, are stronger than expected and suggest continued consumer resilience despite a slowing in employment growth. The rise modestly exceeds a 0.5% rise in CPI commodity prices in August.
Succession and Strongmen Leaders
September 16, 2025 10:53 AM UTC
In the unexpected scenario of an early death, Putin and Xi have no clear successors, and any new Russia or China leader would have to spend time building domestic strength and compromising on external goals. Erdogan also has no clear successors, which could create political uncertainty. For Trump su
September 15, 2025
China: Broad Based Slowdown
September 15, 2025 7:55 AM UTC
• The latest monthly data from China show a broad based slowdown in the economy, due to the tariffs and structural weakness. Though we keep 2025 real GDP at 4.8%, the underlying trend suggest a slowdown to 4.0% for 2026. China authorities will start to announce fiscal measure
September 12, 2025
Taiwan: Grey Warfare or Naval Quarantine?
September 12, 2025 11:15 AM UTC
· The most likely option for China is to continue the air and naval grey warfare around Taiwan, combined with support for pro-China factions in Taiwan parliament to build pressure for reunification at some stage. With invasion being too high risk for President Xi (with the U.S. main
FOMC Preview for September 17: 25bps Easing on Increased Labor Market Risk
September 12, 2025 10:30 AM UTC
The FOMC meets on September 17 and we expect a 25bps easing to a 4.0-4.25% Fed Funds target range. The FOMC will continue to see similar upside risks to inflation but increased downside risks to the Labor Market. The dots are likely to continue to expect only one more move in 2025, but three moves i
September 11, 2025
ECB Council Meeting Review: Complacency Rules the Day!
September 11, 2025 2:08 PM UTC
A second successive stable policy decision was the almost inevitable outcome of this month’s ECB Council meeting resulting in the first consecutive pause in the current easing cycle, with the discount rate left at 2.0%. Also as expected, the ECB offered little in terms of policy guidance; after
U.S. August CPI, Weekly Initial Claims - Risks on both sides of Fed mandate but possible seasonal adjustment issues for Claims
September 11, 2025 1:07 PM UTC
August CPI is firmer than expected overall at 0.4% and while the core rate was as expected at 0.3% its rise before rounding at 0.346% is uncomfortably high emphasizing the upside risks to the Fed’s inflation mandate. Initial claims at 263k from 236k however point to downside risks to the Fed emplo
September 10, 2025
DM Rates: Steeper Yield Curves: More to Come?
September 10, 2025 10:55 AM UTC
Steeper yield curves are a function of monetary easing cycles, budget deficits, lower central bank holdings of government bonds, a move towards pre GFC real rates and shifting demand from pensions funds and life insurance companies. Scope exists for further steepening in the U.S., EZ and UK with m
September 09, 2025
France: Kicking the Fiscal Can (Again)
September 9, 2025 8:41 AM UTC
That France has seen the departure of yet another prime minister is no surprise, hence why financial markets took the confidence vote in its stride. Admittedly, French sovereign spreads and yields have risen in the last month, but even so the actual level of bond yields remains well below that of
September 08, 2025
September 05, 2025
U.S. August Employment - Trend now close to flat, backing case for easing
September 5, 2025 1:03 PM UTC
August’s non-farm payroll shows that job growth is now minimal, with a rise of 22k almost completely offset by a modest 21k in net downward revisions. Unemployment rose to 4.3% from 4.2% while average hourly earnings rose by 0.3%, both as expected, though the workweek was weaker than expected. The