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2024 Q4 Country Insights Scores to Download in Excel
February 25, 2025 1:00 PM UTC
The Country Insights Model is a comprehensive quantitative tool for assessing country and sovereign risk by measuring a country’s risk of external and domestic financial shocks and its ability to grow. The access to our full range of scores across 174 countries corresponding to the fourth quarter
Country Insights: Fiscal Policy in Emerging Markets
March 10, 2025 11:00 AM UTC
The latest update of our Country Insights model ranks the United Arab Emirates (UAE), Kuwait (KWT), and Taiwan (TWN) as the strongest performers in our Fiscal Policy’s sub-factors among selected emerging markets. Conversely, Egypt (EGY), Brazil (BRA), and China (CHN) rank among the weakest within
Trump Latest Thinking
March 5, 2025 11:07 AM UTC
Bottom line: President Donald Trump signaled that he is committed to tariffs to raise revenue; bring production back to the U.S. and get fairer trade relations. This three part approach will likely shape implementation of further product and reciprocal tariffs from April. However, reports sugges
Uncertainty Over Pace and Scale of Extra European Defense Spending
March 18, 2025 9:05 AM UTC
· The crucial date for more clarity is the June 24-26 NATO summit. Donald Trump might attend but will ask for more spending. NATO head Rutte’s desire is for above 3% of GDP for NATO countries, but the politics and budget suggest that a 2.5% minimum may only be agreed with Germany
Germany Attempts to Unlock Debt Brake
March 5, 2025 7:42 AM UTC
Germany’s likely new Chancellor Friedrich Merz has (and as has been flagged since his election win last week) announced plans to amend the country’s constitutional fiscal restraints, the so-called debt brake and within the confines of the current parliament. Merz said Tuesday evening the motto
Trump and Dollar Policies
March 10, 2025 6:04 AM UTC
The Trump administration could decide to more broadly talk the USD down or less likely try to reach a cooperative Mar A Lago accord with big DM and EM countries. A more cohesive alternative is a forced currency deal for countries to appreciate their currencies to avoid more tariffs and withdraw
ECB Preview (Mar 6): Gauging Restrictiveness as Policy to be Eased Further
February 27, 2025 1:55 PM UTC
As has been the case at most recent Council meetings, the ECB verdict is less important that the rhetoric. A sixth 25 bp discount rate is widely expected, to 2.5%, but how wide the door is left open for further cuts may be gleaned from any clear change in regard to how near(er) neutral policy the Co
2024 Q4 Shadow Credit Ratings to Download in Excel
February 26, 2025 1:00 PM UTC
The Country Insights Model is a comprehensive quantitative tool for assessing country and sovereign risk by measuring a country’s risk of external and domestic financial shocks and its ability to grow. We produce Shadow Credit Ratings for 162 countries, comparable to those from credit rating agenc
Negotiations to End Ukraine War Started: What is Next?
February 25, 2025 2:33 PM UTC
Bottom Line: Russia and the U.S. have started negotiations to end the war in Ukraine. We continue to foresee a Russia-friendly peace deal in Ukraine sealed in 6-12 months following a cease-fire. We envisage Russia will continue to annex areas in and around four Ukrainian oblasts that it occupied,
U.S. February CPI - Renewed progress, but threatened by tariffs
March 12, 2025 12:58 PM UTC
February CPI is softer than expected with gains of 0.2% both overall and ex food and energy, with the ex food and energy rate up by 0.227% before rounding. Coming after a strong January conclusions should be cautious, while upcoming months may be lifted by tariffs. However, the data will come as a r
BoE Preview (Mar 20): Being Careful the New Watchword
March 11, 2025 4:37 PM UTC
Having so far cut a modest 75 bp, the BoE rate cut last month was delivered with a clear(er) degree of action, by at least the MPC majority. But those implied MPC divisions probably reflected increased uncertainty enough for the BoE to have altered its rhetoric somewhat to stress the need for poli
ECB Review: Disinflation Still On Track But Policy now ‘Work in Progress’
March 6, 2025 3:01 PM UTC
Unsurprisingly, the ECB verdict was less important that the rhetoric. A sixth 25 bp discount rate was widely expected – and delivered - to 2.5%, but how wide the door is left open for further cuts may be more opaque. This both reflects gauging the extent of any lingering degree of policy restric
China: Only Moderate Fiscal Stimulus
March 6, 2025 7:55 AM UTC
China announced some fiscal stimulus to help meet the expected 5% GDP target for 2025. Overall, we have not been surprised by the fiscal stimulus measures announced so far from the March NPC, that have been towards the lower end of expectations. However, officials on Thursday have hinted that mo
Equities: Growth, Rates and Tariffs
February 26, 2025 8:30 AM UTC
· EZ equities still have further scope to outperform U.S. equities in the remainder of 2025 helped by further ECB easing/hopes of a Ukraine peace deal and U.S. equity market overvaluation restraining the U.S. However, this can be volatile with uncertainty over the scale of U.S. tari
Ukraine Peace, U.S. Troop Withdrawals and Trump NATO Threats
February 24, 2025 8:27 AM UTC
· Our baseline remains of a Russia-friendly peace deal in Ukraine, but this need not lead to a weaker European security situation. This is our baseline (Figure 1), but does require Europe to make concessions to the Trump administration on defence spending increases and trade. However,
Germany: Breakthrough in Attempt to Unlock Debt Brake?
March 14, 2025 12:08 PM UTC
It does seem as if effective German Chancellor-elect Merz now has enough parliamentary support to amend the so-called debt brake and unlock more spending and borrowing to be directed toward added defense and infrastructure. Thus, it does seem as if Germany and its economy are undergoing a sea-chan
FX Weekly Strategy: March 10th-14th
March 10, 2025 9:51 AM UTC
USD has reversed post-election gains
USD downside still favoured as tariff related concerns unlikely to disappear
EUR upside more limited as equity gains may stall
JPY continues to look to have the most upside potential
AUD can play some catch up
CAD may suffer from BoC rate cut
Trump Tariffs: Bad for The U.S. Worse For Canada
March 4, 2025 3:48 PM UTC
When Trump announced 25% tariffs on Canada and Mexico in February, we put up a piece outlining the likely economic consequences, which became dated by the end of the day as Mexico and Canada won a one month delay in return for some concessions at the border. We are now recycling that story, with som
Trump Tariffs and U.S. Business and Consumer Sentiment
March 3, 2025 9:02 AM UTC
• Mexico and Canada are trying to frantically find solutions to delay across the board tariffs again, though the U.S. is hinting that the rate could be less than 25%. China extra 10% tariff remains likely, as the U.S. increases trade pressure on China. More tariffs also remain highly
Trump’s Policies and U.S. Equities
March 13, 2025 8:35 AM UTC
Models would suggest that the current and prospective direct tariff impact should slow GDP growth to a 1.5% pace, which should see slow Fed easing in 2025 given the boost to inflation. However, the policy uncertainty means that business and consumer behaviour could see a large adverse hit that keeps
Sweden Riksbank Preview (Mar 20): Time to Pause?
March 11, 2025 10:33 AM UTC
Having delivered in January, the widely-expected sixth successive rate cut, the Riksbank adhered to the assessment made in December that the easing cycle has drawn to an end with the policy rate (down to 2.25%) having dropped 1.75 ppt in eight months. Especially given the recent upside CPI surpris
Eurozone: Gauging ECB Neutral Amid a Wandering R-Star
February 26, 2025 12:14 PM UTC
It is clear that, especially with another official rate cut due at the looming ECB Council meeting (Mar 6), the existing debate about how restrictive policy will be may only intensify. Indeed, the debate is already quite vocal, led by the hawks who are trying to argue for policy pause at least.
Germany: A New but Hampered Government
February 24, 2025 8:53 AM UTC
The German election delivered few surprises with the electorate swinging even more clearly away from the political middle ground. It clearly means that many difficult decisions lie ahead with questions over the effectiveness of the likely new government. The result is only likely to inflame US c
Bank Indonesia Policy Review: Rate Pause As BI Remains Watchful
March 17, 2025 6:45 AM UTC
Bank Indonesia's upcoming monetary policy decisions will hinge on a delicate balance of domestic economic indicators and global financial conditions. With a focus now tilted slightly more towards economic growth than in previous years, BI could surprise markets with its timing and decisions, dependi
FOMC Preview for March 19: No change and few clear signals given exceptional uncertainty
March 12, 2025 6:46 PM UTC
In the current exceptionally uncertain environment, the FOMC looks set to keep rates unchanged at 4.25-4.5% at its March 19 meeting, and give little away on future policy. The dots will be closely watched but we expect they will change little from January 29. Powell is likely to stress at the press
FX Daily Strategy: N America, March 12th
March 12, 2025 10:03 AM UTC
Weak equities keep the JPY on the front foot
Yield spreads already justify further JPY gains…
…but more equity weakness may be needed to break key JPY cross support levels
NOK/SEK rally on Monday may be the beginning of something bigger
Preview: Due March 17 - U.S. February Retail Sales - Only a partial reversal of January's drop
March 7, 2025 2:53 PM UTC
We expect US retail sales to rise by 0.5% in February in what would be only a partial reversal of a 0.9% decline in January. Ex autos we expect a 0.3% increase after a 0.4% January decline while ex autos and gasoline we expect a 0.4% increase after a 0.5% January decline.
Mexico: Uncertainty Mounts as Tariffs Are Imposed
March 5, 2025 2:43 PM UTC
Trump's administration has moved forward with 25% tariffs on Mexican imports, citing drug trafficking and migration issues. Mexico’s President Sheinbaum has stated retaliatory measures will be announced on March 9. The tariffs could push Mexico into recession in 2025, although we forecast growth a
SNB: 25 bp Cut Likely To Last
March 20, 2025 9:26 AM UTC
Bottom Line: With inflation forecasts stable, and given a reasonable economic outlook, it would be a good time to pause or stop the SNB easing cycle. However, if the U.S. trade tariffs have a bigger adverse effect than expected or the CHF surges, then the SNB may want the option to ease again later
China: Mixed Early 2025 Data and Policy Stimulus
March 17, 2025 9:17 AM UTC
Headline industrial production and retail sales were better than expected, but the breakdown of the data shows a mixed picture for consumption and residential investment remains a negative drag on GDP before the 20% U.S. tariffs hits. Meanwhile, though the weekend policy announcement on boosting d