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March 31, 2025
U.S. Trade Surplus Countries: No Special Treatment?
March 31, 2025 9:04 AM UTC
Quick dilutions of tariffs or exemption will likely be slow in coming for countries that the U.S. has trade surpluses with, as the Trump administration are currently more focused on tariffs for tax revenue and trying to switch production back to the U.S. than trade deals. Trade policy uncertainty
March 29, 2025
Banxico Review: Lowering Rates Amid Tariffs
March 29, 2025 9:29 PM UTC
Mexico’s Central Bank (Banxico) has cut the policy rate by 50 bps to 9%, in line with market expectations. The tone of the communiqué suggests a more dovish stance, with the board moving towards a neutral rate. Inflation has reached its lowest level since 2021, while economic growth has slowed. B
March 28, 2025
U.S. February Core PCE Prices firm, Income outpaces Spending again
March 28, 2025 12:58 PM UTC
February’s core PCE price data at 0.4%, 0.365% before rounding) has come in considerably stronger than the 0.2% core CPI though the 2.8% yr/yr pace, with January revised up to 2.7% from 2.6%, is in line with a forecast from Fed’s Powell. Personal income was surprisingly strong with a 0.8% increa
Turkish Economy Remains under Pressure after Mayor of Istanbul Arrest
March 28, 2025 11:06 AM UTC
Bottom Line: After mayor of Istanbul, Ekrem Imamoglu, arrested on March 23 due to fraud allegations, nationwide protests continue in Turkiye and Turkish economy remains under pressure despite a recent recovery after Treasury and Finance Minister Simsek vowed to restore stability, and Central Bank of
March 27, 2025
Norges Review (Mar 27): Policy Easing Delayed but Far From Abandoned?
March 27, 2025 10:01 AM UTC
As was perhaps just the more likely case, the Norges Bank did not deliver on the rate cut it had been flagging very clearly until recently. Instead, it kept the policy rate at 4.5% on the back of inflation having been markedly higher than expected and where wage growth in 2024 turned out higher th
Car Tariffs Then Lenient Reciprocal Tariffs?
March 27, 2025 8:59 AM UTC
The 25% tariffs on cars underlines that tariffs are not just about getting better trade deals, but in Trump’s view raising (tax) revenue and trying to shift production back to the U.S. Combined with other tariffs being implemented, plus policy uncertainty, we see a moderate overall hit from t
March 26, 2025
LatAm Outlook: Navigating the Uncertainty
March 26, 2025 9:56 PM UTC
· Brazil and Mexico economy are likely to decelerate in terms of growth in 2025, although we see this being stronger in Mexico. Mexico institutional reforms and its close ties with U.S. increases uncertainty for 2025, especially after Trump victory, and the menaces of Trump imposing tar
Bank of Canada Minutes from March 12 - Debate over the 25bps easing, agreement to proceed carefully
March 26, 2025 6:19 PM UTC
The Bank of Canada has released minutes from its March 12 meeting, and these show some debate about the meeting’s decision to ease by 25bps to 2.75% and agreement to proceed carefully with further changes to policy. A lot can happen before the BoC next meets on April 16, but these minutes suggest
UK Spring Fiscal Statement – A Patch-up Not a Repair Job?
March 26, 2025 1:39 PM UTC
Chancellor Reeves never wanted a fiscal event at this juncture. But market pressure and economic weakness have forced her into a series of government spending cuts designed to shore up her recently revised fiscal goals via this so-call spring statement. The problem here is twofold. Firstly, the
Outlook Overview: Navigating the Turbulence
March 26, 2025 9:30 AM UTC
· More tariffs will arrive from the U.S. from April with product (car, pharma, semiconductors and lumber) and reciprocal tariffs. President Trump has a 3-part approach to tariffs to raise (tax) revenue; bring production back to the U.S. and get fairer trade deals. This means some of t
EMFX Outlook: Divergence versus the USD
March 26, 2025 9:16 AM UTC
EM currencies will be helped by the ongoing USD downtrend against DM currencies, but prospects also depend on relative inflation differentials versus the USD and starting point in terms of valuations. The Brazilian Real (BRL), Mexican Peso (MXN) and Indonesian Rupiah (IDR) should all make modest s
Equities Outlook: Turbulence Ahead
March 26, 2025 9:05 AM UTC
· U.S. trade wars will likely hurt U.S. growth and raise inflation, with only small to modest Fed easing and a 10yr budget bill that will likely be neutral to negative for the economy. With valuations still very high (Figure 1), we see scope for a correction to extend into mid-year th
UK CPI Review: Inflation Slips Even as Services Fail to Soften?
March 26, 2025 7:48 AM UTC
Not surprisingly, February’s CPI data provided mixed signals. They may have undershot expectations, but actually tallied with our and BoE thinking, at least in terms of a 0.2 ppt drop for both the headline to 2.8% and for the core to 3.5%. This came in spite of higher alcohol duties and no dro
March 25, 2025
BCB Minutes: Caution Rather than Optimism
March 25, 2025 10:51 PM UTC
The Brazilian Central Bank (BCB) raised the policy rate by 100bps to 14.25% amid signs of economic deceleration, including slower growth, job creation, and consumption. The BCB highlighted external uncertainties, such as U.S. trade policy, and domestic challenges with rising inflation. It emphasized
German & EZ HICP Preview (Mar 31/Apr 1): Headline Edges Lower Again With Friendlier Services Messages?
March 25, 2025 1:43 PM UTC
February HICP inflation numbers did deliver better news and broadly and less marginally so after revisions with the headline dropping 0.2 ppt to an as-expected 2.3%. This ended a run of three successive rises and came about despite a rise in food inflation. Regardless, the core also eased 0.1 pp
Western Europe Outlook: Price Pressures - Puzzling or Possibly Persistent!
March 25, 2025 10:47 AM UTC
· In the UK, we continue to retain our below-consensus GDP picture for this year, with growth actually downgraded and with downside risks that may actually be both increasing and materializing. The BoE will likely ease further through 2025 by at least 75 bp and maybe faster and into 202
Asia/Pacific (ex-China/Japan) Outlook: Resilience Through Realignment
March 25, 2025 10:44 AM UTC
· In 2025, growth across emerging Asia will remain steady but uneven, with investment-driven economies such as India and Malaysia outperforming on the back of infrastructure and industrial policy momentum. While global demand is set to recover modestly, geopolitical friction and tariff
Japan Outlook: Inflation Sustainably Above 2%?
March 25, 2025 10:00 AM UTC
· Private consumption will have a modest growth in 2025 along the gradual change in business price/wage setting behavior before slowing to average in 2026. Wage hike in 2025 looks to be at least on par with 2024 after early result of the spring wage negotiation. SMEs are going to be
DM Rates Outlook: Policy Divergence
March 25, 2025 9:30 AM UTC
• 2yr U.S. Treasury yields can step down with cautious Fed easing on a modest/moderate growth slowdown and also if the Fed keeps an easing bias. 10yr U.S. Treasury yields can be helped by this easing and see a move down through 2025. However, the budget deficit will likely be 6.5-7.0%
DM FX Outlook: USD under pressure as Trump policies disappoint
March 25, 2025 8:51 AM UTC
· Bottom Line: The market had expected the Trump presidency to see further fiscal expansion and consequent tight Fed policy and high US yields. But the combination of less tax cuts than previously expected and more aggressive tariff increases have led to reduced expectations for US grow
EMEA Outlook: Mixed Prospects Due to Global Uncertainties and Domestic Dynamics
March 25, 2025 7:00 AM UTC
· In South Africa, we foresee average headline inflation will stand at 4.1% and 4.5% in 2025 and 2026, respectively, despite there are upside risks to inflation such as remaining power cuts (loadshedding), tariff hikes by Eskom, spike in food and housing prices, and global uncertainties. We
March 24, 2025
Preview: Due April 4 - U.S. March Employment (Non-Farm Payrolls) - Stronger than January, but slower than November and December
March 24, 2025 5:39 PM UTC
We expect a 165k increase in March’s non-farm payroll, both overall and in the private sector, to show the labor market remains healthy despite growing downside economic risks. We expect the unemployment rate to slip to 4.0% from 4.1%, and an in line with trend 0.3% increase in average hourly earn
U.S. Outlook: How Much Damage Will a Trade War Do?
March 24, 2025 3:45 PM UTC
• The U.S. economy, consumer spending in particular, ended 2024 looking healthy, but with inflation still above its 2.0% target if well off its highs. The Trump administration’s more aggressive than expected trade war has made a return to the inflation target more difficult and raised dow
Commodities Outlook: Shifting Dynamics
March 24, 2025 11:00 AM UTC
The oil market faces mixed forces, including geopolitical pressures, demand concerns, and supply shifts. OPEC+ plans production hikes, driven by stricter U.S. sanctions on Iran and Russia and President Trump’s push for more supply. However, global demand prospects, especially in the U.S. and China
Eurozone Outlook: At A Crossroads?
March 24, 2025 10:45 AM UTC
· For once in a long while, we have upgraded the EZ activity forecast and for 2026 actually to a notch above consensus thinking. However, the current backdrop still suggests that while the economy has been growing afresh it is doing so timidly, with downside risks persisting more clearl
China Outlook: Construction and Trade Headwinds v Policy Stimulus
March 24, 2025 9:00 AM UTC
We look for 4.5% GDP growth in 2025. Though residential property investment will subtract less from GDP growth, net exports will also be a drag on the economy in 2025 due to the trade war with the U.S. Further fiscal stimulus beyond March’s NPC measures will be required to achieve a 5% GD
March 21, 2025
As Expected, CBR Kept Key Rate Constant at 21% on March 21
March 21, 2025 3:40 PM UTC
Bottom Line: As we predicted, Central Bank of Russia (CBR) kept the policy rate constant on March 21 for the third consecutive time to combat price pressures. CBR signaled that it is unlikely that further tightening is needed for disinflation, and stated that current inflationary pressures have decr
Trump Product and Reciprocal Tariffs
March 21, 2025 9:00 AM UTC
It appears that we will get bad news from April 2 on extra tariffs before any good news. Firstly, the announcement effect of tariffs for many countries and extra products will hurt U.S. business and consumer sentiment. Secondly, part of the reason for tariffs is extra tax revenue and to try to s
March 20, 2025
Norges Bank Preview (Mar 27): No Change but a Close Call?
March 20, 2025 3:56 PM UTC
Norway sees the widely awaited Norges Bank decision later this month where recent inflation data have questioned whether the well flagged rate cut will now be delivered – we think the decision may be more finely balances that many are suggesting not least as economic activity signs are mixed even
SARB Kept Key Rate Steady at 7.5% Due to Global and Domestic Uncertainties
March 20, 2025 2:01 PM UTC
Bottom Line: Despite we thought it was likely that South African Reserve Bank (SARB) will cut the key rate from 7.5% to 7.25% during the MPC scheduled on March 20 as inflation remained below SARB’s target of 4.5% and core inflation continued to decelerate in February, SARB decided to keep the poli
BoE Review: Being Careful Amid Data Conflicts
March 20, 2025 12:45 PM UTC
Even amid a BoE rate cut last month that was delivered with a clear(er) degree of action, all MPC members opting for easier policy. Even so, it was clear there were still MPC divisions that probably reflected increased uncertainty enough for the BoE to have altered its rhetoric somewhat to stress
SNB: 25 bp Cut Likely To Last
March 20, 2025 9:26 AM UTC
Bottom Line: With inflation forecasts stable, and given a reasonable economic outlook, it would be a good time to pause or stop the SNB easing cycle. However, if the U.S. trade tariffs have a bigger adverse effect than expected or the CHF surges, then the SNB may want the option to ease again later
Sweden Riksbank Review: Everything Unchanged?
March 20, 2025 9:16 AM UTC
Having delivered in January, the widely-expected sixth successive rate cut, the Riksbank adhered to the assessment made in December that the easing cycle has drawn to an end with the policy rate (down to 2.25%) having dropped 1.75 ppt in eight months. Especially given the recent upside CPI surpris
UK Labor Market – Private Payrolls Stay Soft Amid Cost Pressures?
March 20, 2025 7:57 AM UTC
To suggest that the UK labor market is merely getting less tight misses the point entirely even given more signs of higher participation. Amid continued reservations about the accuracy of official labor market data produced by the ONS, alternative and very clearly more authoritative data on payrol
Bank Indonesia Holds Steady Amid Fiscal Fears and Rupiah Rout
March 20, 2025 7:49 AM UTC
Bank Indonesia has decided 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
March 19, 2025
BCB Review: Confirming More Hikes
March 19, 2025 10:38 PM UTC
The Brazilian Central Bank (BCB) raised the policy rate by 100 bps to 14.25% and signaled further hikes, likely reaching 15.0% by May, potentially ending the current tightening cycle. The BCB emphasized inflation concerns and strong economic activity, suggesting a hawkish stance. Fiscal policy was n
Fed: Cautious Policy Due To Uncertainty
March 19, 2025 7:26 PM UTC
The Fed do not appear to be in a hurry to cut interest rates, both as economic momentum remains reasonable and as the Fed waits to see how Trump administration policy feedthrough – especially tariffs to inflation. This suggests that the Fed will need to see a weaker economy and we pencil in one 25
FOMC leaves rates unchanged, dots unchanged but skew more hawkish
March 19, 2025 6:24 PM UTC
The FOMC has left rates unchanged at 4.25-4.5% as expected. The median dots are unchanged but economic activity forecasts are weaker and the inflation forecast for 2025 is significantly stronger showing concern over the impact of tariffs. The statement notes increased uncertainty and announced a s
South Africa’s Inflation Held Steady at 3.2% in February
March 19, 2025 3:40 PM UTC
Bottom Line: StatsSA announced on March 19 that annual South Africa’s inflation remained unchanged at 3.2% YoY in February while the main contributors were housing and utilities, food and non-alcoholic drinks, as well as services related to restaurants and accommodation. Taking into account that t
UK CPI Preview (Mar 26): Inflation Slips as Services Soften?
March 19, 2025 7:31 AM UTC
January’s CPI numbers showed a marked bounce back up, and with the 0.5 ppt rise taking it to a 10-month high of 3.0%, this being above consensus and BoE thinking. Notably services jumped from 4.4% to 5.0%, actually below expectations, having been driven higher by a swing in airfares and the rise