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ECB Preview (Jul 24, Part One): Labor Market Looking Softer than Council Thinking
July 15, 2025 8:45 AM UTC
The next ECB Council meeting decision on Jul 24 looms but where market (understandably) sees no further cut, at least at that juncture. Indeed, the ECB may signal signs of economic resilience albeit noting that the added uncertainty emanating from the latest U.S. tariff threat warrants more circum
FOMC Minutes from June 18 - Doves in the minority
July 9, 2025 6:48 PM UTC
FOMC minutes from June 18 show agreement to leave policy at 4.25-4.50%, and general agreement that the FOMC was well positioned to wait for more clarity. While there was some debate over the future outlook, doves appear to be in the minority. A couple were open to easing at the next meeting in July,
New Probes into Turkiye’s Opposition Party
July 7, 2025 10:34 AM UTC
Bottom Line: After mayor of Istanbul Ekrem Imamoglu got arrested on March 23, political tension remains high in Turkiye, particularly after the Republican People’s Party (CHP) Adana mayor Zeydan Karalar, Antalya mayor Muhittin Bocek and Adiyaman mayor Abdurrahman Tutdere were detained on July 5 fo
Trump Tariffs: Poker Face?
July 1, 2025 12:55 PM UTC
Our central scenario (but less than 50%) is towards a scenario of compromise, with some agreements in principle or trade framework deals, delays for most other negotiating in good faith but with one or two countries seeing a reciprocal tariff rise e.g. Spain and/or Vietnam. This could still be fol
Tariffs: Seeking a Trigger for the TACO Trade
July 14, 2025 4:28 PM UTC
It has been fairly clear for some time that 10% represented a likely floor for the eventual Trump tariff regime. However, expectations that Trump would not be willing to go dramatically above that are being tested. A rate in the mid-teens still looks the most likely outcome, as the economic damage t
EZ HICP and ECB Strategy Review: Headline Up to Target as Services Inflation Rises Back?
July 1, 2025 9:32 AM UTC
Despite its updated its monetary policy strategy detailed yesterday, inflation – now at target – is very much a side issue for the ECB at present, albeit with oil prices possibly accentuating Council divides. Admittedly, the flash June HICP rose a notch to 2.0% matching the -consensus, but up
Eurozone: Damage Limitations on Tariffs, Uncertainty to add to Banks' Caution??
July 9, 2025 9:37 AM UTC
It remains unclear just how much of a movable feast the new U.S. tariff deadline of Aug 1 actually is. Trade deals with the US were supposed to be agreed by today, or face the reciprocal tariffs as outlined in April. But that has now been deferred to, with US Treasury Secretary Bessent, hinting ac
Putting Names to the FOMC Dots
July 7, 2025 5:35 PM UTC
There are nineteen FOMC dots. Seven hawks expect no easing this year, and two expect only one 25bps move. Eight are on the median seeing two 25bps moves, while two doves are looking for three. While only two have clearly signaled what their personal dot is, reasonable estimates can be made to identi
China: Housing Still A Headwind
July 4, 2025 9:00 AM UTC
Last October, China’s government support package has helped turn residential property less negative and our baseline is that residential property will likely deduct around 0.75% from 2025 growth and 0.5% from 2026. However, the risks for the economy could turnout worse than our baseline view on
Preview: Due July 15 - U.S. June CPI - A little more from tariffs
July 1, 2025 6:42 PM UTC
We expect June CPI to increase by 0.3% overall and by 0.3% ex food and energy, with the overall pace close to 0.3% before rounding but the core rate rounded up from 0.27%. This would still be the strongest core rate since January and reflect tariffs starting to feed through, something expected by Fe
Equities Outlook: Choppy Then 2026 Gains
June 24, 2025 8:15 AM UTC
Though the U.S. equity market has rebounded, we still scope for a fresh dip H2 2025 to 5500 on the S&P500 as hard data softens further to feed into weaker corporate earnings forecasts and CPI picks up and delays Fed easing. However, the AI story is still a positive, while share buybacks
2yr Germany and ECB Expectations
July 21, 2025 10:07 AM UTC
· Money markets are putting too much weight on ECB communications and we feel that a softening labour market/financial conditions and more tariffs from the U.S. will be enough to shift the ECB to deliver two final 25bps cuts in H2 2025. Though the 2yr Germany to ECB depo rate spread w
Turkiye MPC Preview: CBRT will Likely Restart its Easing Cycle on July 24
July 15, 2025 12:09 PM UTC
Bottom Line: After Central Bank of Turkiye (CBRT) held its key policy rate stable at 46% on June 19, we believe CBRT will likely reduce the policy rate by 150-250 bps during the MPC meeting scheduled for July 24 considering the deceleration trend in inflation in June beat forecasts and reinforced ex
Deceleration in Inflation, Albeit Gradual, Continued in June: 9.4% YoY
July 11, 2025 4:48 PM UTC
Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation stood at 9.4% YoY in June after hitting 9.9% YoY in May, partly due to favorable base impacts, recent RUB strengthening and falling oil prices. We think the recent tariffs hike for electricity, gas, heating and w
Trump’s Tariffs and Markets
July 17, 2025 12:00 PM UTC
The assumption in financial markets is that some trade framework deals will be done by August 1; some countries will make enough progress to be given an extra 30 days and some countries could have higher tariffs implemented. This would be broadly consistent with the average 15% tariff that is widely
UK Labor Market – No Lack of Slack
July 17, 2025 6:58 AM UTC
Even the BoE has acknowledged that the UK economy is developing slack in its labor market that we suggest is now not so much less tight but decidedly loose. Indeed, just days after BoE Governor Bailey suggested that signs of increasing labor market slack might prompt faster rate cuts, more such evid
EU Blindsided by Latest Tariff Threat
July 14, 2025 6:56 AM UTC
Having announced over the weekend a 30% “reciprocal” tariff from August 1 on EU exports to the U.S., the EU seems to be a state of somewhat shock, wary that months of negotiations have failed, let alone succeeded in reducing the tariff threat from the original 20%. In response, European Commis
UK GDP Review: Another Downside Surprise
July 11, 2025 6:28 AM UTC
After two successive upside surprises, a correction back in monthly GDP was not entirely a wholesale surprise for April GDP. But that 0.3% m/m drop was almost repeated in the May numbers (Figure 1), where a further albeit smaller (ie 0.1%) fall occurred, but very much below consensus. Admittedly
UK CPI Preview (Jul 16): Services Inflation to Fall Further?
July 9, 2025 2:05 PM UTC
Calendar effects have been accentuating swings in UK CPI data of late. Indeed, the timing of Easter may have been a partial factor in the May CPI, where a distinct drop back in services and core rates failed to make the headline drop, which instead stayed at 3.4% in line with BoE thinking due to hig
U.S. June Employment - Some signs of slowing activity, but lower unemployment suggests no urgency for Fed easing
July 3, 2025 1:09 PM UTC
June’s non-farm payroll is surprisingly strong overall with a rise of 147k, with 16k in net upward revisions, but private payrolls at 75k are weaker than expected, with 16k in net negative revisions. Unemployment unexpectedly fell to 4.1% from 4.2%, but average hourly earnings are weaker than expe
