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May 20, 2025

RBA Review: Recognize Inflation Moderates and Upside Risk
Paying Article

May 20, 2025 5:32 AM UTC

The RBA meeting on May 20th cut rates to 3.85% and stated cautious in forward guidance

May 19, 2025

U.S. Fed's Williams - Waiting for clearer outlook
Paying Article

May 19, 2025 1:19 PM UTC

Fed's Williams is in no hurry to ease, and will take his time as he watches incoming data.

U.S. Fed's Bostic - Sees one rate cut this year, worried about inflation
Paying Article

May 19, 2025 12:48 PM UTC

Fed's Bostic is sounding quite hawkish, but is no longer a voter this year.

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Eurozone: The European Commission Diverges From the ECB on Inflation
Freemium Article

May 19, 2025 10:07 AM UTC

The European Commission (EC) Spring Forecast projects real EZ GDP growth in 2025 at 0.9%, some 0.4 ppt below its previous (autumn) view.   There is also a downgrade to the 2026 growth picture by 0.2 ppt to 1.4%, projections that carry downside risks and where we think they are still too optimistic

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UK-EU: Getting Back on the (Political) Fence
Paying Article

May 19, 2025 8:54 AM UTC

That the UK has seemingly cobbled together a third trade deal in just over a fortnight is of course more of political importance than economic.  The deal to be detailed later today with the EU will help both sides economy wise but only at the margin – the main factor for the UK being an open-ende

May 16, 2025

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Moody's downgrades US debt as long-standing fiscal concerns mount
Paying Article

May 16, 2025 11:42 PM UTC

Moody’s downgraded US debt to AA1 from AAA after Friday’s close. The decision appears due to continued lack of action on the budget deficit rather that being triggered by any specific event, and brings Moody’s into line with S and P and Fitch. However the timing is awkward for markets, with th

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Sticky Inflation in Russia Hits 10.2% YoY in April
Paying Article

May 16, 2025 8:36 PM UTC

Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation stood at 10.2% YoY in April after hitting 10.3% in March, remaining well above the Central Bank of Russia’s (CBR) midterm target of 4%, due to surges in services and food prices, huge military spending, and lab

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Big EM’s: Cyclical Tariff Hit V Structural Drivers
Freemium Article

May 16, 2025 10:00 AM UTC

China, India and Brazil are all seeing cyclical slowdown for varying reasons, with China likely to be hardest hit by adverse net exports due to Trump’s tariff wars. Though financial repression in China can allow further fiscal stimulus, the household sector and residential property investment are

May 15, 2025

U.S. Fed's Powell - Signals change in Fed policy framework
Paying Article

May 15, 2025 3:18 PM UTC

The Fed after 5 years is due for a review of its policy framework. Powell is signalling that the existing framework is no longer appropriate in the post-pandemic environment. 

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U.S. April PPI - Weak month, strong revisions, strong core goods, weak services
Paying Article

May 15, 2025 2:25 PM UTC

April’s PPI, even more so than April’s CPI, was surprisingly soft, falling by 0.5% overall, 0.4% ex food and energy and by 0.1% ex food, energy and trade.  However March PPI saw sharp upward revisions, overall to unchanged from -0.4%, ex food and energy to a 0.4% rise from -0.1%, and ex food, e

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U.S. April Retail Sales, Weekly Initial Claims - Only limited signs of slowing
Freemium Article

May 15, 2025 12:57 PM UTC

April retail sales and weekly initial claims are in line with expectations, and consistent with a moderate slowing in the economy, but with no recessionary signals. It is however too early for the full impact of tariffs to be seen, particularly with the impact of tariffs on prices so far limited.

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UK GDP Review: Q1 GDP Jumps But Erratic and Overstating Activity
Paying Article

May 15, 2025 7:17 AM UTC

National account data delivered yet another upside surprise both in terms of the latest monthly figure and also the associated Q1 update.  Indeed, February GDP, rather than consolidating in the March GDP release with a flat m/m reading, instead grew by 0.2% (Figure 1), a fifth successive non-negati

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U.S./China Trade Truce Reduce Downside and Extra Stimulus Prospects
Paying Article

May 15, 2025 7:15 AM UTC

The alternative hard landing scenario in China has been reduced significantly with the trade truce with the U.S.  However, China will still have to cope with a minimum 30% overall tariff, with only around a 10% reduction in the fentanyl tariff likely to be agreed in the coming months.  Our baselin

May 14, 2025

U.S. Fed's Jefferson - Still seeing risks on both sides
Paying Article

May 14, 2025 1:28 PM UTC

The trade truce with China does not appear to have changed the views of Fed's Jefferson much.

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Extreme U.S. Economic Uncertainty Starting to Fade
Paying Article

May 14, 2025 1:14 PM UTC

Now that we have seen April’s non-farm payroll and CPI data, the underlying economic picture still looks quite healthy. Activity still seems to have respectable momentum despite a marginal decline in Q1 GDP, while inflation appears to be losing momentum with little pass through of tariffs yet. Unc

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Preview: Due May 15 - U.S. April Retail Sales - Autos to correct lower, but underlying momentum to persist
Paying Article

May 14, 2025 12:20 PM UTC

After a strong 1.5% increase in March, we expect retail sales to rise by only 0.1% in April, though gains of 0.4% ex autos and 0.5% ex autos and gasoline should show that the consumer still has some underlying momentum, despite plunging consumer confidence.

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SA Inflation Preview: Inflation Will Likely Slightly Rise in April
Paying Article

May 14, 2025 9:21 AM UTC

Bottom Line: Despite inflation stood at 2.7% YoY in March, the lowest reading since June 2020, we foresee annual inflation will slightly accelerate to 2.8-2.9% in April, which will be announced on May 21. We feel unpredictable outlook for the global economy, return of power cuts (loadshedding), and

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Europe Portfolio Leverage Over Trump
Freemium Article

May 14, 2025 9:05 AM UTC

The U.S. will likely introduce a 25% tariff on pharmaceuticals, which will increase pressure on the EU and other European countries (e.g. Switzerland) and also delay serious negotiations close to the 90 day reciprocal tariff deadline on July 9, adding to pressure on Europe by deliberately prolonging

May 13, 2025

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U.S. April CPI - Little tariff pass-through so far
Freemium Article

May 13, 2025 1:02 PM UTC

April CPI is on the low side of expectations at 0.2% both overall and ex food and energy, showing a loss of inflationary momentum since a strong start to the year in January, despite the imposition of tariffs. The core rate was up 0.24% before rounding, with the overall pace 0.22%, so the surprise i

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UK Labor Market – How Much Slack?
Paying Article

May 13, 2025 9:57 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

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Markets: Less U.S. Recession Risk, But Trade Headwinds
Paying Article

May 13, 2025 9:38 AM UTC

Though we had expected a U.S./China trade truce, the terms are more favorable to U.S. growth than we anticipated.  Combined with the UK framework deal, we have revised down the probability of a U.S. recession from 35% to 20%.  In turn we have revised up the end 2025 and end 2026 S&P500 forecasts t

May 12, 2025

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Optimistic CBR Publishes Summary of Key Rate Decision on May 12
Paying Article

May 12, 2025 5:24 PM UTC

Bottom Line: Central Bank of Russia (CBR) published the summary of the key rate decision on May 12, showing CBR’s views on economic developments. CBR highlighted in its report that “The current inflationary pressures eased in Q1, whereas food and services prices were still rising at a fast pa

U.S. Fed's Kugler - Tariffs still likely to have significant economic effects
Paying Article

May 12, 2025 4:22 PM UTC

Fed Governor Adriana Kugler still sounds hawkish despite the somewhat reduced tariff risks.

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UK CPI Preview (May 21): How Big and Durable a Surge?
Paying Article

May 12, 2025 2:32 PM UTC

The UK and the rest of the DM world are about to decouple, at least in terms of inflation, where the UK faces a surge, (largely home-grown) just as W European sees their respective inflation fall back to, if not below, targets.  Although relegated by current market ructions and tariff threats, the

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Preview: Due May 13 - U.S. April CPI - Upside risk after a below trend March
Paying Article

May 12, 2025 12:02 PM UTC

We expect April CPI to increase by 0.3% overall and by 0.4% ex food and energy, the core rate reflecting a rebound from a below trend March as well as some impact from tariffs, though the extent of the tariff impact is highly uncertain. We see the core rate at 0.38% before rounding.