Argentina: Activity Continues Growing

28 April 2025 - 13:15

Argentina’s economy grew 2.3% in February and 6% year-on-year, showing continued short-term recovery driven by financial and mining sectors. However, rising imports and an overvalued exchange rate are straining reserves, despite IMF support. While agricultural exports may ease pressure mid-year, s

The Hope for A Peace Deal in Ukraine Seems No Close

28 April 2025 - 12:55

Bottom Line: We have lowered a Russia-friendly peace deal following a cease-fire to50% probability but have increased the alternative scenario of war continues to 50% probability in Ukraine as negotiations to end the war in Ukraine continue slowly. In the former scenario, we envisage Russia will con

Continuum Economics Calendar May 2025

28 April 2025 - 10:03

Data and Events Calendar May 2025.

US Exit: Lessons From Brexit?

28 April 2025 - 08:05

Overall, the U.S. attempt to reshape global trade is unlikely to significantly improve its trade position, but the size and influence of the U.S. may mean it does not get hit in net exports volumes like the UK.  Even so, U.S. business investment could be restrained by ongoing uncertainty from the T

From Tariffs to Technology: JD Vance’s Four-Day Engagement in India

28 April 2025 - 06:24

US Vice President JD Vance’s visit to India marked a shift toward a more pragmatic and parity-driven partnership. While reinforcing trade, defence, and energy cooperation, the trip also highlighted the difficult negotiations ahead. 

Canada Election: Liberal Victory Likely, Stable Policy Expected

25 April 2025 - 16:21

Canada’s election takes place on Monday. A victory for the ruling Liberals looks likely, but polls are close enough to mean that a hung parliament or even a majority for the opposition Conservatives, while unlikely, is not to be ruled out. Should the Conservatives spring a surprise, a more concili

CBR Continues to Keep Key Rate Constant at 21% Despite Surging Inflation

25 April 2025 - 13:56

Bottom Line: As we predicted, Central Bank of Russia (CBR) held the policy rate stable on April 25 for the fourth consecutive time to combat price pressures. CBR indicated in its written statement that CBR will maintain monetary conditions as tight as necessary to return inflation to the target

U.S/China Trade Standoff: Odds Remain Towards Truce

25 April 2025 - 07:09

  On balance, our baseline still remains a U.S./China trade deal (55-60%) being reached, given Trump deal instincts; China desire for a deal and the economic disadvantage of an economic cold war to the U.S. when it is trying to reset trade with all countries.  Timeline is Q4 2025 or H1 2026. An al

India Redraws Its Red Lines with Pakistan

24 April 2025 - 10:24

In one of the deadliest attacks in Kashmir in years, 26 Hindu tourists were killed by Pakistan-backed militants in Pahalgam. India has responded by suspending the Indus Waters Treaty, expelling Pakistani nationals, and downgrading diplomatic ties — signalling a hard shift in its Pakistan policy. T

EZ HICP Preview (May 2): Headline Lower Again But Mainly Energy?

24 April 2025 - 08:39

EZ HICP inflation is likely to fall back to the 2% target in flash April data, this six-month low would largely reflect a fall in fuel prices, but with services largely consolidating the clear fall seen last time around (Figure 1).  All of which would mean a stable core reading of 2.4% but where th

USD Rebalancing: Some to EM?

24 April 2025 - 08:30

Some portfolios rotations towards EM assets will likely be evident, as we see the USD decline is now extending and broadening.  However, flows will likely be selective, both given underwhelming EM performance in the last 5-10 years and the uncertainty over how much Trump will reduce reciprocal tari

BI Holds Rates as Rupiah Takes Centre Stage

24 April 2025 - 05:34

Bank Indonesia kept its policy rate unchanged at 5.75% in April, prioritising currency stability over immediate growth support. Despite subdued inflation and earlier indications of easing, the central bank is holding off on rate cuts amid heightened global uncertainty and rupiah weakness following U

U.S. Fed Beige Book Summary - Some signs of slowing on policy uncertainty

23 April 2025 - 18:29

The latest Fed Beige Book shows activity little changed rather than increasing slightly while the labor market appears to have lost momentum. Inflationary pressures however persist. 

Brazil: Fiscal Result Improves but Structural Changes Remains in Doubt

23 April 2025 - 17:57

Brazil’s fiscal data shows slight improvement, with a 0.1% primary deficit by February and a 2024 deficit in line with targets, excluding flood aid. The 2025 goal is a 0% deficit, but structural issues remain. Recent gains stem from reduced court-ordered payments and delayed hiring. However, risin

Preview: Due May 2 - U.S. April Employment (Non-Farm Payrolls) - Few signals for labor market weakness

23 April 2025 - 15:31

We expect a 145k increase in April’s non-farm payroll, with 135k in the private sector, the latter equal to the Q1 average, with initial claims showing no signs of labor market weakness. We expect unemployment to correct lower to 4.1% after a March rise to 4.2%, and an in line with trend 0.3% incr

South Africa’s Inflation Softened to a Five-Year Low with 2.7% YoY in March

23 April 2025 - 13:50

Bottom Line: StatsSA announced on April 23 that annual South Africa’s inflation softened to a five-year low with 2.7% YoY in March, due to a drop in fuel, education and housing costs. Taking into account that the inflation rate is now below the lower band of South African Reserve Bank's (SARB) tar

BoE vs the (Weaker) Data

23 April 2025 - 09:56

Amid what are now an ever broader array if indicators suggesting that the economy is stagnating, if not contracting the BoE has the opportunity to address this risks with three separate MPC speeches due later today.  Chief Economist Pill, Governor Bailey and Deputy Breeden can address the extent to

Eurozone Flash GDP Preview (Apr 30): The Calm Before the Storm that Surveys May Be Flagging?

23 April 2025 - 09:18

Continuing a series of upside surprises, EZ GDP overshot both consensus and ECB expectations in Q4), albeit only after what was a cumulative 0.2 ppt upward revisions compared to the flash. We see a further rise in Q1 data (Figure 1), partly reflecting recent m/m increases in both manufacturing and s

Trump Under Pressure

23 April 2025 - 07:15

A deteriorating economic; volatile financial markets and weakening approval ratings are all putting pressure on the Trump administration to do trade deals.  However, Trump instincts means he still likes tariffs, while negotiations will not be quick with China restraints and non-tariffs list desired

Preview: Due April 30 - U.S. Q1 GDP - A modest decline, but less steep than trade data implies

22 April 2025 - 16:32

Q1 US GDP is subject to exceptional uncertainty with calculations based on the components suggesting a significant decline. The Atlanta Fed nowcast shows an annualized fall of 2.2% largely due to a surge in imports. However with non-farm payrolls showing a 0.5% rise in aggregate hours worked such a

German Data Preview (Apr 30): Lower Headline Amid Stable Services Inflation?

22 April 2025 - 13:16

Germany’s disinflation process continues, but there had been signs that the downtrend was flattening out but this changed somewhat in February and again in the March. Indeed, HICP inflation fell back from 2.6% to 2.3% in March, this despite a pick-up in food inflation in both months.  Notably the

Foreign Official U.S. Treasury Holders: The Kindness of Strangers

22 April 2025 - 07:30

Official holdings of U.S. Treasuries show a mixed picture with China, Brazil and Saudi Arabia well off peak holdings. Two drivers of some of these country flows are the peak in global central bank FX reserve holdings in 2021 and an increased holdings of other currencies in the last decade.  Neverth

Bank Indonesia to Hold Rates as Currency Pressures Mount

22 April 2025 - 06:12

Bank Indonesia is expected to maintain its benchmark interest rate at 5.75%, reflecting a cautious stance amid the rupiah's depreciation and mixed economic signals. With the rupiah near five-year lows and influenced by external uncertainties, the central bank is balancing the need to support economi

Banxico Minutes: Comfortable about the Cuts Amid the Volatility

17 April 2025 - 14:26

Banxico’s latest minutes confirm a cautious but steady path toward policy normalization, with the policy rate expected to reach neutral levels (7.00–8.00%) in 2025. While the economy shows signs of deceleration and a negative output gap, inflation continues to ease, nearing historical averages.

ECB Review: Discussing Policy Restriction No Longer Appropriate

17 April 2025 - 13:48

A seventh and widely expected 25 bp deposit rate cut was overshadowed by the ECB’s communication shift about the outlook hereafter, no longer talking about how restrictive policy may be.  This shift is entirely appropriate not least given the manner in which financial conditions are now tightenin

India's Industrial Chill: 2.9 % Growth Signals Cooling Engines

17 April 2025 - 13:05

India’s factory growth hit the brakes in February, with industrial production rising just 2.9 %, half January’s pace and the slowest since August 2024. Manufacturing and mining lost traction, while a small pickup in electricity output provided limited relief. Stalling consumer‑goods output an

Surprising Move: CBRT Increased the Key Rate to 46%

17 April 2025 - 12:32

Bottom Line: Central Bank of Turkiye (CBRT) surprisingly hiked the policy rate from 42.5% to 46% during the MPC on April 17 after three consecutive interest rate cuts, mainly due to global uncertainties and domestic inflationary risks. CBRT highlighted in its written statement that the possibility o

Safe Havens Other Than the USD

17 April 2025 - 08:30

The USD and U.S. Treasuries are currently not acting like safe havens, as the crisis is U.S. centric with the tariff debacle. 10yr Treasuries can regain safe haven status if a U.S. recession occurs, but U.S. equities are still clearly overvalued versus equity and equity-bond metrics.  We prefer Ind

U.S. Fed's Powell - May find dual mandate goals in tension

16 April 2025 - 17:45

Fed's Powell continues to give a message of keeping policy steady near term.

Bank of Canada - Proceeding carefully, but risks still lean towards further easing

16 April 2025 - 16:28

The Bank of Canada left rates unchanged at 2.75% as expected. The statement concluded that the BoC will proceed carefully, noting that monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war, but it can and must maintain price stability in Canada. While this shows cauti

Canada: BoC's Macklem - Less forward looking but prepared to act decisively

16 April 2025 - 14:09

The BoC left rates unchanged as expected. They will proceed carefully but are prepared to act decisively, meaning their options are kept open.

U.S. March Retail Sales - Autos lead bounce ahead of tariffs

16 April 2025 - 12:48

March retail sales with a gain of 1.4% is in line with expectations, led by a pre-tariff surge in auto sales. Gains of 0.5% ex auto and 0.8% ex auto and gasoline are on the firm side of expectations, though the control group, which contributes to GDP, was less impressive with a moderate rise of 0.4%

China GDP: Good Q1 Start, but 2025 Could Be 4.2% or 3.3%

16 April 2025 - 08:24

•    The March data releases from China alongside the Q1 GDP figures show a good start for 2025.  However, underlying domestic demand is soft and Q2 will see a big hit from the U.S. tariffs already introduced.  Our baseline (here) remains for a truce in the coming weeks and a scale back of 1

UK CPI Review: Inflation Respite Ahead of Likely Key April Surge?

16 April 2025 - 06:28

Although relegated by current market ructions and tariff threats, the main near-term inflation story was (and remains) what happens in the April data when a series of energy, utility, post office and some other regulated and service price rises are due, albeit now possibly offset somewhat by a fall

Argentina: Moving to Phase 3, Bands Flotation

15 April 2025 - 20:33

Argentina launched Phase 3 of its macro plan, ending currency restrictions for individuals and securing a USD 20B IMF deal to stabilize falling reserves. The Central Bank shifted from a crawling peg to a target band exchange rate regime, allowing for a 1% monthly devaluation within ARS 1,000–1,400

SARB's Monetary Policy Review Highlights Concerns over the Horizon

15 April 2025 - 19:29

Bottom line: According to the Monetary Policy Review Report by the South African Reserve Bank (SARB) on April 15, uncertainties about the global economy, trade tensions and blurry domestic outlook have caused the scope for monetary policy easing had narrowed. In its biannual review of its monetary p

Preview: Due April 16 - U.S. March Retail Sales - Strong end to a subdued quarter

15 April 2025 - 14:06

We expect US retail sales to rise by 1.3%, led by autos, in what will be a strong end to a subdued quarter. Ex autos we expect a moderate rise of 0.5% but ex autos and gasoline the rise we expect sales to rise by 0.8%.

Eurozone Banks Offer ECB More Cause for Concern

15 April 2025 - 11:14

The ECB can draw comfort from signs that credit demand and supply for EZ households continues to improve.  But the ECB’s latest bank lending survey (BLS) also offers worrying signs in regard to firms as well as questioning the alleged neutrality of the QT program.  It shows a further (admittedly

UK Labor Market – A Tale of Two Labor Markets?

15 April 2025 - 09:45

Policy-making is fraught with difficult decision making at the best of times.  But at present in the UK, such decisions are made all the more problematic given inconsistencies, if not conflicts, in the data backdrop, thereby making any reading of the economy all the more subjective.  Is employment

Nervous U.S. Long Term Asset Holders

15 April 2025 - 08:30

   Overall, foreign equity investors can no longer count on U.S. exceptionalism and could face lower long-term corporate earnings growth, which at a minimum will likely slow net inflows.  Bond investors also face ongoing policy volatility, which likely means a need for an extra risk premium – t

U.S. Fed's Waller - Would back a dovish approach if tariffs stay high

14 April 2025 - 17:43

Fed's Waller suggest he would be more dovish if high tariffs persist, despite a likely inflation spike. 

U.S./China High Stakes Poker

14 April 2025 - 07:30

The economic hit from a hard stop in U.S. imports/exports is too damaging for both sides and our baseline is still for a truce and de-escalation, in the coming weeks. This could be negotiations on a new trade deal with a more moderate reciprocal tariff on both sides and the extra reciprocal tariffs