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June 10, 2025
ECB: Time to Reassess and Slow QT?
June 10, 2025 2:25 PM UTC
Further ECB easing is on the cards, the question being whether this should start to encompass toning down quantitative tightening (QT) plans too! Notably, the two ppt fall in the discount rate cuts has come against a backdrop where the ECB has continued unconventional tightening by scaling back its
Norges Bank Preview (Jun 19): Policy Easing Schedule Clearer?
June 10, 2025 1:49 PM UTC
It is very unlikely that the Norges Bank will do anything at this month’s Board meeting other than to suggest the easing cycle will start later in the year and that the policy rate will thus remain at 4.5% - for the time being. In fact, it will have to be more explicit about any such a timetable
Preview: Due June 11 - U.S. May CPI - Tariff impact still modest, but starting to build
June 10, 2025 1:03 PM UTC
We expect May CPI to increase by 0.2% overall and by 0.3% ex food and energy, the core rate still seeing a modest impact from tariffs given a Q1 inventory build up and uncertainty over low long tariffs will persist, though at 0.32% before rounding we expect the strongest rise in the core rate since
Sweden Preview (Jun 18): Riksbank to Cut and Reassess Policy Outlook?
June 10, 2025 10:05 AM UTC
We are even more convinced that the Riksbank will cut further and as soon as the next Board verdict on Jun 18. Moreover, the Board may even then suggest that further moves are possible. This may seem stretched given that the Riksbank has virtually called a halt to the easing cycle, albeit most r
U.S. Deficit and Government Debt Concerns
June 10, 2025 9:00 AM UTC
The large U.S. budget deficit has helped push up 10yr real yields to 2% in 2024/2025, but both the budget deficit (heavy issuance) and government debt trajectories (sustainability and rating concerns) are key going forward if the 10yr budget bill passed is similar to the House Bill. Foreign acco
UK Labor Market – Slack and Divergences Widen
June 10, 2025 7:07 AM UTC
Even the BoE has acknowledged that the UK economy is developing slack and the continued trend rise in activity rates will only serve to reinforce the impression of a labor market that is not so much less tight but decidedly getting looser. As a result, pay pressures seem to be receding (Figure 1) an
June 09, 2025
China Disinflation Rather than Deflation
June 9, 2025 7:27 AM UTC
May China CPI remains negative Yr/Yr, but the breakdown is consistent with disinflation rather deflation. Deflation could end up as a drag on the economy, but while growth remains close to the 5% target and CPI is regarded as disinflation rather than deflation, further policy easing will be slow.
June 06, 2025
Surprising Move: CBR Reduced Key Rate to 20% from 21%
June 6, 2025 1:10 PM UTC
Bottom Line: Despite predictions were centered around no change, Central Bank of Russia (CBR) cut policy rate on June 6 for the first time after September 2022 citing easing in inflationary pressures, including core inflation. CBR indicated in its written statement that CBR will maintain monetary co
U.S. May Employment - Resilient picture suggests no urgency for Fed easing
June 6, 2025 1:03 PM UTC
May’s non-farm payroll with a 139k increase, is on the firm side of expectations, particularly after the ADP report, and suggests the economy is not on the cusp of recession yet. Revisions were negative at 95k but leave a stable-looking picture, while average hourly earnings were above trend with
Eurozone: The Tail Wagging the Dog?
June 6, 2025 10:26 AM UTC
Given what now looks to have been an outstanding first quarter, the ECB’s assertion at this month’s Council press conference that it is a good position to navigate the uncertain conditions looks more tenable. After all, GDP jumped 0.6%, twice the previous estimate. But this is no indicator o
June 05, 2025
Preview: Due June 17 - U.S. May Retail Sales - Autos to correct lower, underlying momentum subdued
June 5, 2025 3:31 PM UTC
We expect a 0.7% decline in May retail sales as auto sales show a sharp reversal from recent strength. Ex autos we expect a subdued 0.1% increase, with a 0.2% rise ex autos and gasoline. Both of these outcomes would match those of April.
Preview: Due June 6 - U.S. May Employment (Non-Farm Payrolls) - Some slowing, but not a recession signal
June 5, 2025 2:04 PM UTC
We expect a 120k increase in May’s non-farm payroll, with 110k in the private sector, slower than seen in March and April but stronger than what may have been weather-restrained months in January and February. We expect a slightly stronger 0.3% rise in average hourly earnings and an unchanged unem
ECB Council Meeting Review: Easing Window Stays Open
June 5, 2025 1:58 PM UTC
This widely seen 25 bp deposit rate cut (to 2.0%) now means the previous degree of tightening has been effectively halved. Notably, it comes alongside an ECB policy and economic outlook/bias little changed from that of recent months. The door is thus left open for a move at the July 24 policy ve
June 04, 2025
U.S. Fed Beige Book Summary - Activity declined slightly
June 4, 2025 6:15 PM UTC
The latest Fed Beige Book shows activity declining slightly, after being little changed in April and increasing slightly in March. Prices are now rising at a moderate pace after being modest to moderate in April, but it is unclear how much tariff based cost increases will be passed on. Whatever pass
Bank of Canada - Consensus to hold in June, but we now expect easings in July and October
June 4, 2025 3:54 PM UTC
Governor Tiff Macklem stated that the Bank of Canada’s decision to leave rates unchanged at 2.75% was a clear consensus. There was more diversity of views on the path forward, though members thought there could be a need for easing, depending on data. We now expect two further easings in 2025, in
Canada: BoC's Macklem - Consensus to hold at this meeting but scope for future easing seen
June 4, 2025 2:04 PM UTC
The opening statement from BoC's Macklem suggests the decision to hold at this meeting was not the close call seen by many, but scope for future easing is seen, depending on how data evolves.
UK GDP Preview (Jun 12): GDP Still Overstating Activity?
June 4, 2025 10:20 AM UTC
After two successive monthly upside surprises, a correction back in GDP could be expected for the upcoming April data, especially as Q1 numbers may have been boosted by added production destined for the U.S in anticipation of tariffs. In addition, real estate activity seems to have slumped after t
Indonesia CPI Review: CPI Moderates Making Room For Rate Cut
June 4, 2025 9:55 AM UTC
Indonesia’s inflation slowed further in May, while the country’s trade surplus narrowed to its lowest level in five years, deepening expectations that Bank Indonesia (BI) could pursue additional rate cuts later this year to cushion slowing domestic growth.
China Banking Problems
June 4, 2025 8:32 AM UTC
China is suffering a credit demand problem from households overexposed to property and private businesses that are cautious. Meanwhile, the latest IMF banking stress tests shows sections of the banking system remain weak and this is restraining lending. We remain watchful of money and credit tre
June 03, 2025
Moderate GDP Growth for South Africa in Q1: 0.1% QoQ, 0.8% YoY
June 3, 2025 11:02 AM UTC
Bottom line: South African economy grew moderately by 0.1% QoQ and 0.8% on a year-on-year basis in Q1 2025. According to Department of Statistics of South Africa (Stats SA) announcement on June 3, despite growth in agriculture, transport and finance, a strain on the mining and manufacturing industri
Nato Summit 5% Target and Trump
June 3, 2025 10:48 AM UTC
Trump’s natural instincts will likely see extra pressure applied on Europe in the coming weeks to commit to 5%, but we do not see existential threats from Trump. In the end, our baseline is that NATO will agree a “soft” aim of 5% (3.5% hard military spending and 1.5% infrastructure/cybersecu