EZ HICP Review: Services Inflation Problematic?

October 31, 2025 10:39 AM UTC

With what were previously unfavourable energy-related base effects reversing, EZ inflation edged down 0.1 ppt to 2.1% in October, largely in line with consensus thinking, but with the main core rate stable at 2.4%.  The latter reflected a slight pick-up in services (up 0.2 ppt to a six-mth high of

Japan: Not Abenomics 2

November 5, 2025 10:30 AM UTC

·       While some fiscal stimulus into 2026 is likely from the new PM Takaichi, this is unlikely to be aggressive given the JGB supply pressures and the need for support from other parties in passing fiscal measures.  A return to QE (2nd arrow of Abenomics) is highly unlikely, with the BOJ

ECB Review: Hedging its Bets, Hoping to Stay in a Good Place

October 30, 2025 3:23 PM UTC

There ie nothing tangible in the ECB update today to suggest that a further easing is likely at the next meeting on Dec 17-18.  However, amid a hint of what we think is a complacent upgrade about the EZ’s resilience alongside a perceived reduction in global risks, the easing window has not been c

Preview: U.S. October CPI - An important number that may never be seen

November 4, 2025 3:59 PM UTC

October US CPI, while scheduled on November 13, may never be released even if the government  shutdown is resolved, given lack of data collection during the month of October. However what the number would have been does matter. Our forecast is for a 0.2% increase overall, with a 0.3% rise ex food a

UK Labor Market: Continued Private Sector Job Losses Weighing Even More Clearly on Wages

November 11, 2025 8:01 AM UTC

Previous signs that the labor market is haemorrhaging jobs less clearly have evaporated, with fresh and deeper falls in the more authoritative payrolls.  Indeed, private sector payrolls are still falling, down almost a full ppt in y/y terms and more steeply so (Figure 1).  Regardless, the latest l

U.S. Supreme Court Threat to Trump Tariffs

November 12, 2025 1:44 PM UTC

Hearings at the U.S. Supreme Court over the legality of Trump’s reciprocal tariffs suggests that at least a partial ruling against the tariffs is likely, probably before the end of the year, though there is no date set for the decision.  Over half of Trump’s tariffs are threatened by the case b

UK CPI Preview (Nov 19): Falling Back Broadly From Likely Peak?

November 10, 2025 10:49 AM UTC

After the upside (and broad) June CPI surprise, CPI inflation rose further, up another 0.2 ppt to 3.8% in July and stayed there for the two following months, with the September outcome having been lower-than-expected outcome in what we (and the BoE) think will be the inflation peak.  Indeed, we see

ECB – In a Good Place or Just Complacent?

November 14, 2025 11:55 AM UTC

The ECB is of the view that downside growth risks have dissipated somewhat, this possibly helped by its recent actions which it suggests leave its current policy stance in a good place.  However, amid a hint of what we think is a complacent upgrade about the EZ’s alleged resilience, we think, the

October 29, 2025 10:35 AM UTC

Having delivered what was described as a final rate cut last time around (ie Sep 23), the Riksbank Board will be pleased with the data flow since.  GDP indicators suggest a strong Q3 showing of over 1% q/q while previously troublesome CPI data have softened appreciably thereby confirming suspicions

Bank of Canada - Hawkish Ease with Current Rate Level Seen as Appropriate

October 29, 2025 3:40 PM UTC

The Bank of Canada delivered a hawkish easing, cutting rates for the second straight meeting by 25bps, to 2.25%, but stating that if inflation and activity evolve in line with its projection, the current rate is seen as about the right level to keep inflation close to 2% while helping the economy th

Japan: Money Begins to Pour

November 17, 2025 3:00 AM UTC

Japan Pm Takaichi began her stimulus plan

October 30, 2025 5:31 AM UTC

The BoJ has kept rates unchanged at 0.5% in the Oct 30th meeting with a 7-2 vote

Canada October Employment - Second straight strong rise reinforces expectations for steady BoC policy

November 7, 2025 2:11 PM UTC

Canada’s October employment report provides a second straight strong increase, by 66.6k, and while the series is volatile and the two strong months follow two weak months, the data suggests underlying trend has not turned negative and that the Canadian economy may be regaining momentum. Unemployme

Sweden Riksbank Review: Board Sticks to it Plans

November 5, 2025 9:44 AM UTC

As we anticipated in our preview, the Riksbank Board is pleased with the data flow since its last and very probably final rate cut on Sep 23 (to 1.75%).  GDP indicators suggest a strong Q3 showing of over 1% q/q while previously troublesome CPI data have softened appreciably thereby confirming (bot

U.S./China Trade Framework: Avoiding Escalation

October 31, 2025 7:48 AM UTC

·         The U.S./China framework deal avoids renewed escalation of trade tension, but is unlikely to be followed by a comprehensive trade deal in 2026 as China does not want major import and bilateral trade commitments.  The economic effects will likely be small and the deal main aim app

UK GDP Review: Underlying Economy Listless - At Best

November 13, 2025 8:10 AM UTC

As we have underlined, GDP has hardly moved since March and, again, the latest update undershot consensus thinking.  Indeed, GDP has fallen in two of the last three months (Figure 1), albeit where some recovery should be in store for the current quarter as these September numbers were hit (temporar

UK Budget Outlook (Nov 26): The Fiscal Blame Game – Yet Again!

November 18, 2025 3:09 PM UTC

If not the most keenly awaited Budget for some years, Chancellor Reeve’s updates on Nov 26 is certainly the one that has attracted the most speculation and from all sides.  What is clear is that amid several factors, a marked fiscal tightening is in store.  This though now seems as if it will be

U.S. Equities: Smaller Correction But Still Overvalued

November 6, 2025 10:25 AM UTC

·       We are revising up our end 2025 S&P500 forecast from 6000 to 6500 for a number of reasons. Private sector data shows the risk of a U.S. hard landing is lower than a couple of months ago, with economic data more consistent with a soft landing.  Additionally, the tech/AI optimism has n

U.S. Treasuries: Waiting for Data and Yield Curve Steepening

November 4, 2025 1:57 PM UTC

•    Multi quarter we still look for 75bps of further Fed easing by end 2026, which will likely initially bring 2yr yields down to 3.4%.  However, once the Fed Funds rate get closer to 3.0-3.25% and the slowdown turns into a soft landing, the 2yr will likely move to a premium versus Fed Funds

UK GDP Preview (Nov 13): Cyber Crime Shock but Underlying Economy Listless

November 3, 2025 4:01 PM UTC

Notably, the level of UK GDP has hardly moved since March but we think there will be distinct setback in the September numbers where the cyber-attack of JLR vehicle manufacturing may be sizeable – car reduction may have fallen some 25% m/m-plus in the month alone.  As a result, we see September G

October 30, 2025 10:25 AM UTC

 It continues to be the case that, for an economy that has seen repeated upside surprises and apparently above trend growth, now some 1.3% in the year to Q3, GDP data do not seem to have had much impact is shaping, let alone dominating, ECB policy thinking save to encourage a Council view of EZ eco

FOMC - Strong Differences of Opinion Leave December Decision Dependent on Incoming Information

October 29, 2025 7:58 PM UTC

After a statement that contained no major surprises, the highlight of FOMC Chairman Jerome Powell’s press conference was his comment that there were strong differences on policy going forward, and that a December ease was far from assured. While we still feel that on balance easing in December is

October 29, 2025 4:14 AM UTC

The BoJ will keep rates unchanged at 0.5% in the Oct 30th meeting 

UK Food Inflation; Not Just a Domestic Issue, Despite Industry Claims

October 28, 2025 8:45 AM UTC

Food price inflation is becoming an increasing issue for both policy makers and households as well as companies that are generating and selling the produce. Particularly in the UK, rising food price inflation is helping shore up well-above target CPI inflation and thereby deterring the BoE from what