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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
July 18, 2025 9:34 AM UTC
• Trump goal of substantially lower short-term rates could be achieved with a recession, but otherwise is unlikely even when Fed chair Powell is replaced. The majority of voting FOMC members will make decisions based on economics not politics. However, Trump fixation with lower rates an
July 17, 2025 5:54 PM UTC
We expect a 2.4% annualized increase in Q2 GDP, which after a 0.5% decline in Q1 would leave the first half of the year rising at a pace close to 1.0%. A similar pace may be seen in the second half of the year if tariffs persist. Our Q2 forecast has been lifted from 1.4% on a generally improved tone
July 17, 2025 1:06 PM UTC
The latest US data presents a picture of an economy regaining some momentum as tariff fears fade, at least temporarily. June retail sales with gains of 0.6% overall and ex auto and gas, with ex autos and the control group which contributes to GDP both up 0.5%, ended Q2 on a firm note. July’s Phill
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
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
July 17, 2025 5:46 AM UTC
The US–Indonesia trade deal marks a significant geopolitical and economic pivot, reducing a threatened 32% tariff to 19% in exchange for USD 34bn in US imports and open market access. While the agreement offers Jakarta temporary relief, it locks the country into a transactional trade model amid ri
July 16, 2025 4:32 PM UTC
Bottom Line: After Central Bank of Russia (CBR) reduced its key interest rate by 100 basis points to 20% on June 6, citing continued easing in inflationary pressures, including core inflation, we foresee that the rate will be further reduced to 19% on July 25 taking into account that inflation slowe
July 16, 2025 1:07 PM UTC
The next ECB Council meeting decision on Jul 24 looms but (as we noted in the part one preview) markets (understandably) sees no further cut, at least at that juncture. However, we think that the ECB will ultimately still have to ease further - two more 25 bp cuts in H2 - and would not even rule o
July 16, 2025 12:08 PM UTC
We expect a 0.1% increase in June retail sales to follow two straight declines, with a 0.3% incase ex autos that will reverse a 0.3% May decline. Ex autos and gasoline, we also expect a 0.3% increase, after a 0.1% May decline that followed a 0.1% April increase.
July 16, 2025 6:42 AM UTC
Calendar effects have been accentuating swings in UK CPI data of late and these may have reoccurred in the June numbers partly explaining June numbers which surprised on the upside. Indeed, June saw the headline and core rise a further 0.2 ppt – the former to an 18-mth high of 3.6%. Moreover, se
July 15, 2025 6:15 PM UTC
The FOMC meets on July 30 and recent data suggests no reason to move rates from the current 4.25-4.50% level, though Q2 GDP data due on the morning on the decision will impact the wording of the statement. This meeting will not see an update to the dots leaving focus on Chairman Powell’s press con
July 15, 2025 3:30 PM UTC
The Bank of Canada meets on July 30 and what had been seen as a close call between a 25bps easing and unchanged now looks likely to leave rates unchanged at 2.75%. Continued above target core CPI data and a strong employment report for June argue against easing, though uncertainty remains high with
July 15, 2025 3:05 PM UTC
Indonesia’s fiscal position is coming under renewed strain, as weaker-than-expected revenue collection forces the government to widen its 2025 budget deficit to 2.78% of GDP—above initial targets but still below the legal threshold. Delays in VAT implementation, falling commodity prices, and mod
July 15, 2025 12:58 PM UTC
June core CPI at 0.228% before rounding is on the low side of expectations and still shows a limited, though not zero, feed through from tariffs. Moderate gains in food and energy lifted overall CPI to a 0.3% increase, with the gain rounded up from 0.287%. Trump will use this data to argue for Fed
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
July 15, 2025 12:00 PM UTC
India’s fiscal metrics for FY26 show strong early gains, with a sharply lower deficit and robust revenue support from RBI dividends and capital spending. Externally, the country’s debt levels have risen but remain manageable, backed by healthy reserves and a low debt-to-GDP ratio. However, short
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