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February 18, 2025 7:56 AM UTC
There is little in the latest UK labor market numbers that will ease any concerns of the BoE policy hawks. Admittedly, inactivity and vacancies fell, both suggesting some easing in the labor market, although the former is as suspect as the (still apparently rising) ONS employment numbers due to qu
February 17, 2025 10:28 AM UTC
· President Trump’s executive order on reciprocal tariffs has not produced much market reaction, both as the proposals will not be delivered to the president until April 1 and the process of Commerce/U.S. Treasury and Homeland Security input is seen reducing the odds of penal tariffs.
February 17, 2025 9:33 AM UTC
Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation ticked up to 9.9% YoY in January after hitting 9.5% in December, 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,
February 14, 2025 7:05 PM UTC
Argentina’s CPI rose 2.2% in January, slightly below forecasts, with Y/Y inflation dropping to 84% from 116%. Core CPI increased by 2.4%, accumulating 75% annual inflation. Inflation is expected to decline as devaluation effects fade, though inertia may keep it above 2% in the first half. Services
February 14, 2025 1:57 PM UTC
January retail sales at -0.9% saw a significant downside surprise, though we believe the main reason for weakness was bad weather, with a correction from strength in Q4 also likely to be a factor. The core rates were also weak, ex auto at -0.4%, ex auto and gas at -0.5%, and the control group that c
February 14, 2025 12:24 PM UTC
Bottom Line: As we predicted, Central Bank of Russia (CBR) kept the policy rate constant on February 14 for the second consecutive time supported by the recent RUB strengthening while the inflation remains elevated. CBR said in its statement on February 14 that current inflationary pressures remain
February 14, 2025 10:45 AM UTC
Overall, we maintain the view that parts of China’s household sector are showing signs of a balance sheet debt consolidation, due to the excess buildup of debt in the past 20 years relative to disposable income. The non-financial corporate sector is more difficult to interpret, due to strengt
February 14, 2025 7:06 AM UTC
The BJP ended its 27-year drought in Delhi, winning 47 seats and breaking AAP’s dominance. The victory was driven by a united party front, strong RSS ground support, success in key voter blocs, including Sikh, Punjabi, and Dalit communities and the promise of freebies. AAP’s vote share fell to 4
February 13, 2025 3:03 PM UTC
Bottom Line: As we envisaged, U.S. president Trump and Russian president Putin talked over the phone on February 12 to discuss the war in Ukraine. According to sources, Trump and Putin agreed to have their teams start negotiations immediately. Under current circumstances, we foresee a Russia-friendl
February 13, 2025 2:33 PM UTC
We expect US retail sales to fall by 1.0% in January with declines of 0.2% both ex autos and ex autos and gasoline. The monthly weakness is likely to be largely due to bad weather with potential for a correction from Q4 strength adding to downside risk.
February 13, 2025 12:46 PM UTC
Strength in January CPI does in part reflect residual seasonality, but continued stalling of progress in yr/yr growth is of concern. This revives concerns that the economy may need to slow to return inflation to the 2.0% target, something tariffs are likely to make more difficult. Uncertainty is exc
February 13, 2025 12:33 PM UTC
European politicians are surprised and angry at the U.S. stance on a peace deal for Ukraine and less military support for Europe, but eventually they will have to accept the new reality. Europe is too divided to provide security guarantees to Ukraine on its own. A further increase and acceleration
February 13, 2025 7:58 AM UTC
GDP data for the end of 2024 very much surprised on the upside albeit still failing to convey an impression of UK’s economy displaying solidity, if not strength. Admittedly GDP rose by 0.4% m/m in December, the largest such gain in 11 months (Figure 1) and enough to have allowed Q4 see growth of
February 13, 2025 4:55 AM UTC
Bank Indonesia is expected to keep rates steady at 5.75% in its February 18-19 meeting after last month’s surprise cut. While inflation remains low and growth is steady, the weakening rupiah and external uncertainties may delay further easing. The central bank is likely to assess the impact of its
February 13, 2025 4:12 AM UTC
India’s inflation cooled to 4.31% in January, clearing the way for more rate cuts as food prices dipped. The RBI is shifting focus to growth. But risks remain—rupee weakness and global commodity prices could still stir inflationary trouble.
February 12, 2025 7:09 PM UTC
The Bank of Canada has released minutes from its January 29 meeting, which show no signs that the decision to ease by 25bps saw much debate. Uncertainty due to tariff risks was seen as supporting the decision. However, should a trade war with the US be seen, the minutes show a more balanced view, co
February 12, 2025 4:56 PM UTC
India's FY26 budget is a strategic attempt to sustain economic expansion while maintaining fiscal consolidation, with the government targeting a nominal GDP growth of 10.1% and a real GDP expansion of 6.3%-6.8%. The budget continues its capex-led growth approach, increasing infrastructure investment
February 12, 2025 2:05 PM UTC
January CPI is a clear disappointment rising by 0.5% overall and 0.4% ex food and energy (0.446% before rounding). While there is a problem of residual seasonality bringing strength in Q1 data, that yr/yr rates accelerated, overall to 3.0% from 2.9%, and ex food and energy to 3.3% from 3.2%, will be
February 12, 2025 10:27 AM UTC
After the surprisingly soft December data, we think January’s CPI numbers will show some bounce back up, albeit the 0.2 ppt rise we envisage to 2.7% being notch below BoE thinking. This will largely reflect more ‘noise’ in volatile services and higher energy inflation both due to fuel price
February 12, 2025 6:11 AM UTC
As Donald Trump pressure other countries with his tariff tactics, every country, even U.S. allies, are trying to figure out whether they should retaliate or comply. Japan, as a long term U.S. ally, is of no exception but they seem to have taken a different path than Canada when dealing with Trump. I
February 12, 2025 12:33 AM UTC
Brazil’s CPI rose 0.16% in January, lowering Y/Y inflation to 4.5% from 4.8%. A temporary electricity discount drove the decline, while Food (+1%) and Transport (+1.3%) showed worrying increases. Core inflation rose 0.7%, with Services CPI jumping to 5.4%, partly due to seasonal healthcare costs.
February 11, 2025 1:23 PM UTC
The 25% Steel and Aluminum tariff could have small to modest adverse inflation and GDP growth impacts on the U.S., but the prospect of reciprocal and more product and country tariffs create trade policy uncertainty/supply chain disruption and paperwork problems. This could amplify the impact of
February 11, 2025 1:19 PM UTC
We expect January’s CPI to increase by 0.3% both overall and ex food and energy, with the overall figure close to 0.3% even before rounding, but the core rate rising by 0.33%, which would be the strongest monthly gain since the three months of Q1 2024 each showed monthly core rates of 0.4% (each a
February 11, 2025 8:30 AM UTC
The ECB staff forecasts on March 6 will be revised upwards for 2025 and 2026, due to the surge in wholesale gas prices. However, the ECB will likely take the view that 2 round effects from higher gas prices on balance are unlikely to boost core inflation (especially given wage tracker softness) an
February 10, 2025 7:14 PM UTC
Mexico’s CPI rose 0.3% in January, below its 0.6% historical average but in line with expectations. Y/Y inflation fell to 3.6%, the lowest since Jan/2021. Core CPI rose 0.4%, with core goods up 0.7% and services up 0.2%. Non-core CPI fell 0.13%, led by a 1.5% drop in agricultural goods. The econom
February 10, 2025 3:08 PM UTC
Bottom Line: Central Bank of Turkiye (CBRT) released its first quarterly inflation report of the year on February 7, and revised its inflation forecast for 2025. CBRT now projects that inflation will stand at 24% at the end of 2025, 12% next year and 8% in 2027. CBRT governor Karahan said the revisi
February 10, 2025 7:55 AM UTC
The early days of the new Trump administration has seen lots of volatility around the on-off tariffs with Canada and Mexico, but the more stable U.S. Treasury market has helped provide an anchor. U.S. Treasuries have shift towards the view that the 10yr budget bill will be delayed until H2 and
February 8, 2025 9:39 PM UTC
Banxico cut the policy rate by 50bps to 10.5%, with a cautious stance and a split vote. Inflation has fallen but remains above target, expected to converge to 3.0% by Q3 2026. Global risks, including Trump’s tariff threats, add uncertainty. Despite economic weakness, some monetary tightening may s
February 7, 2025 7:22 PM UTC
Bottom Line: According to the figures announced by the Russian State Statistics Service (Rosstat) on February 7, Russia's GDP expanded by 4.1% YoY in 2024 driven by strong military spending, higher wages and fiscal stimulus. We envisage growth to hit 1.6% in 2025, which is significantly less than
February 7, 2025 4:57 PM UTC
The RBI has cut the repo rate by 25 basis points to 6.25%, marking its first reduction in five years. While aimed at supporting growth, the central bank maintains a neutral stance, signaling caution amid global uncertainties. Inflation is projected to ease, but risks from trade disruptions and finan
February 7, 2025 2:09 PM UTC
January’s non-farm payroll with a 143k increase is on the low side of expectations, though we suspect January data was restrained by bad weather. A dip in the workweek is also probably weather-induced and may be behind an above trend 0.5% rise in earnings per hour. Unemployment slipped to 4.0% fro
February 7, 2025 1:14 PM UTC
A well-advertised research paper from the ECB suggests that the real neutral rate of interest for the EZ has not changed very much in the last few years but with a likely range of between -0.5% and +0.5%, but still well below estimates for what is so-called r* prior to the pandemic (Figure 1). The
February 6, 2025 6:16 PM UTC
The Argentine Central Bank cut rates to 29%, citing improved inflation expectations. Rather than using a contractionary policy, it aims to curb monetary base growth through fiscal consolidation. Inflation is below 3%, with a 2% target feasible by mid-year. However, the 1% crawling peg risks eroding
February 6, 2025 2:47 PM UTC
We expect a below trend 125k increase in January’s non-farm payroll, with a 95k rise in the private sector. The data is likely to be restrained by bad weather and a possible correction from an above trend December. The workweek is likely to fall on bad weather but we expect unemployment to be unch
February 6, 2025 2:30 PM UTC
New U.S. trade deals will likely make slow progress in reducing bilateral trade deficits as the underlying drivers behind the U.S. trade deficit are macro forces. While the U.S. economy outperforms other major trading partners; the value of the USD remains overvalued and as long as tariffs are
February 6, 2025 1:57 PM UTC
The latest set of BoE forecasts are notable for one major thing – an assumption that underlying growth has fallen, possible to under 1%. This does not explain all of the higher inflation profile (Figure 1) which now only delivers a below target outcome into 2028 – the higher rates projected th
February 6, 2025 10:05 AM UTC
Bottom Line: After Central Bank of Russia (CBR) held the key rate stable at 21% on December 20 despite expectations were centered around a rate hike, we now foresee that the rate will be kept constant on February 14 taking into account that January will likely bring a little inflation relief support
February 6, 2025 7:50 AM UTC
With the RBI’s policy review around the corner, all eyes are on how the central bank will tackle India’s slowing growth momentum and the increased currency volatility. The RBI is likely to cut rate by 25bps to 6.25% on February 8. Imported inflation will remain a key concern.
February 5, 2025 2:48 PM UTC
The House is struggling to reach consensus on the beautiful huge 10yr budget bill, as GOP budget hawks want to see multi trillion expenditure cuts, though eventually the 10yr expenditure cuts will likely compromise around USD 0.5-1.0trn. Tax cuts are also unlikely to match President Trump campaign
February 5, 2025 9:06 AM UTC
President Trump has made it clear that the EU is going to face US tariffs in the not too distant future. Admittedly, tariff threats have been used as the basis for negotiation elsewhere, this may be the case for the EU too – as was the case during Trump’s first term. As for the EU, it does h
February 4, 2025 6:29 PM UTC
The BCB raised rates by 100bps to 13.25%, signaling another hike in March. External uncertainty remains, but domestic risks worsened, with inflation expectations rising. The BCB stressed fiscal-monetary coordination and warned about policy distortions. Despite markets pricing a 15% rate, we expect s