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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
DM Government Bonds: Risks of Higher Long End Premia?
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
U.S./Iran Interim Deal and Reopening Strait of Hormuz
June 15, 2026 12:32 PM UTC
· Our baseline (80%) is that the Strait of Hormuz will reopen in H2 2026 and remains open through 2027. However, logistics dislocation plus a switch from commercial inventory rundown to rebuilding will likely slow the decline in oil prices back towards normal levels (Figure 1). O
China: Divided Economy
June 16, 2026 7:22 AM UTC
· Overall, growth remains unbalanced. Momentum in AI/automation leads economic growth, with support from net exports still. However, consumption is not consistent with a 5% growth pace, as adverse wealth effects and a soft labor market mean only modest consumption. While the stimu
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
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 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
Equities Outlook: AI Optimism, But Caution Elsewhere in DM economies
June 22, 2026 7:05 AM UTC
· In terms of the S&P500, we remain less concerned about high valuations in the tech sector provided AI labs growth remains fast. 12mth fwd information technology are mid-range in the 2020-26 experience rather than at the highs. Even so, heavy equity issuance by tech companies and a s
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.
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
A Strong U.S. Q2 Report Now Looks Unlikely
June 29, 2026 1:18 PM UTC
After a sharp deterioration in May’s trade deficit, previously positive forecasts for Q2 GDP need to be trimmed significantly, though there is still uncertainty over June data. We now expect a Q2 GDP increase of only 0.9%, down from a previous estimate of 2.3%. After an upward revision to Q1 our
Bank of Canada - On hold with balanced tone
June 10, 2026 3:21 PM UTC
While recognizing that oil is around $10 per barrel higher than was assumed in its April Monetary Policy Report, the Bank of Canada left rates unchanged at 2.25% with a balanced tone to the statement. As long as core inflation does not start showing feed through from energy the BoC looks likely to a
Sweden Riksbank Preview (Jun 17): Mild Tightening Bias to Persist But Not Exercised?
June 10, 2026 8:51 AM UTC
Not only at the meeting next week, we still see stable policy though to end-2027 rather than the small hikes markets are now pricing for late 2026. A similar profile has been offered by the Riksbank since last autumn (Figure 1) and it may decide to bring forward its first hike hint a touch when it p
UK CPI Preview (Jun 17): Inflation Peaking?
June 9, 2026 9:37 AM UTC
What have been energy induced price rises are now very evident, even more so in some aspects of the latest PPI data. Regardless, actual CPI have offered a more benign picture both in terms fo headline and underlying trends. Indeed, having seen headline CPI jump to 3.3% in March and where service
Outlook Overview: Cyclical and Structural Forces
June 24, 2026 7:00 AM UTC
· The difference between 2nd round inflation effects from higher energy prices and 1st round effects that central banks can look through swings on whether the Straits of Hormuz will remain open in the coming months after the U.S./Iran interim agreement (here). Despite some tensions, we
DM Rates Outlook: Tightening or Easing?
June 23, 2026 8:15 AM UTC
· With the U.S./Iran interim agreement likely to hold and energy prices softening, our projected consumer slowdown will likely tilt the Fed not to hike in H2 2026 and to actually ease by 50bps in 2027, with 25bps moves in both Q2 and Q3. With 2yr yields consistent with a hike, the tra
DM ex U.S. EZ Outlook (Japan and Western Europe): Navigating the Post Iran War Period?
June 23, 2026 7:43 AM UTC
· We have revised 2026 Japan GDP only slightly lower to 0.8% as wage growth is solidly above 3%, which will support consumption for the rest of 2026/27. The extension of energy stimulus will cap headline inflation for Q2/Q3 2026. For the BOJ, despite hawkish forward guidance, the 1% r
Brazil: Slowing Pace of Cuts and BRL Strength
June 19, 2026 6:55 AM UTC
· Brazil cut the SELIC by 25bps to 14.25%, but received critiques from the market by raising end 2027 CPI inflation from 3.5% to 3.7% and talking about Q1 2028 in the relevant policy horizon. We feel that BCB still wants to leave the door open to further cuts in 2026, given how restrict
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
DM and EM FX Outlook: Cross-Currents for H2 and 2027
June 23, 2026 8:00 AM UTC
· Our baseline for the coming quarters is that global FX is moving through a period of dollar bounce and cross-current positioning adjustment, rather than a clean return to the dollar downtrend. The near-term driver is the market's (over) hawkish reading of the June FOMC/Summary of Econ
Eurozone Outlook: Has Inflation Peaked Already?
June 22, 2026 11:35 AM UTC
· Under our only slightly updated view of no further fighting in the Middle East, we see oil and gas prices largely consolidating recent falls before falling afresh from mid-2027.The current situation is very different from that of 2022 and the Ukraine War in which the EZ lost access to