Trump Tariffs: Poker Face?

July 1, 2025 12:55 PM UTC

Our central scenario (but less than 50%) is towards a scenario of compromise, with some agreements in principle or trade framework deals, delays for most other negotiating in good faith but with one or two countries seeing a reciprocal tariff rise e.g. Spain and/or Vietnam.  This could still be fol

June Outlook: Trump’s Fluid Policies

June 25, 2025 10:00 AM UTC

All chapters of the June Outlook are now available and simply click the link below. 

EM FX Outlook: USD Less in Favor, but EM Mixed

June 25, 2025 8:05 AM UTC

·       The Chinese Yuan (CNY) will likely remain stable while trade negotiations with the U.S. continue.  We see a trade deal in our baseline (probably Q4) and then a small rise in CNY v USD due to general USD weakness. 
·       In terms of total returns for the remainder of 2025, th

Outlook Overview: Trump’s Fluid Policies

June 25, 2025 7:20 AM UTC

·       President Donald Trump still wants to use the tariff tool, and we see the eventual average tariff rate being in the 13-15% area, lowered by deals but increased by more product tariffs. Any lasting legal block on reciprocal tariffs will likely see the administration pivoting towards ot

Asia/Pacific (ex-China/Japan) Outlook: Slower Trade, Softer Inflation, and Looser Policy

June 24, 2025 9:24 AM UTC

·       Asia’s growth profile in 2025 reflects a region navigating structural transition amid external strain. Investment-led economies like India are benefitting from infrastructure spending, industrial policy momentum, and political continuity. In contrast, trade-reliant markets such as V

Equities Outlook: Choppy Then 2026 Gains

June 24, 2025 8:15 AM UTC

       Though the U.S. equity market has rebounded, we still scope for a fresh dip H2 2025 to 5500 on the S&P500 as hard data softens further to feed into weaker corporate earnings forecasts and CPI picks up and delays Fed easing.  However, the AI story is still a positive, while share buybacks

Iran: Measured Next Steps?

June 23, 2025 3:17 PM UTC

  A measured or modest Iran retaliation could be used by the U.S. to seek a path back towards negotiation.  Israel would likely want to continue to degrade Iran nuclear and military facilities, but the U.S. could eventually pressure Israel to stop.  This is our baseline, though the military attac

India CPI Review: CPI at 2.82%: Disinflation Deepens, But Risks Linger

June 13, 2025 7:18 AM UTC

India’s retail inflation dropped to a six-year low of 2.82% in May, driven by easing food prices and supported by favourable base effects. While disinflation continues to create monetary space, RBI's next rate cut will be data driven. 

Trump Tariffs: China and July 9 Reciprocal Deadline

June 12, 2025 7:17 AM UTC

 We attach a 65% probability to a U.S./China reaching a new trade deal that reduces the minimum overall tariff to 15-20% imposed by the U.S., most likely agreed in Q4 2025 and to be implemented in 2026.  However, a 35% probability exist of no deal and this could eventually mean higher tariffs (Fig

Asia Country Risk Ratings

June 5, 2025 10:00 AM UTC

We provide country risk reviews for Asia countries including China, India, Indonesia, Taiwan and Thailand.  

India GDP Review: Growth Outpaces Expectations as Q4 GDP Hits Four-Quarter High

June 2, 2025 11:56 AM UTC

India’s economy grew 7.4% y/y in Q4 FY25, beating expectations and capping full-year growth at 6.5%. Strong gains in construction, services, and agriculture underpinned the recovery, while private consumption and investment strengthened. However, sustaining momentum in FY26 will hinge on broad-bas

Trump’s 50% Steel And Aluminum: Negotiating Leverage?

June 2, 2025 7:42 AM UTC

•    President Donald Trump increase in steel and aluminum tariffs from 25% to 50% is not just about boosting the steel and aluminum industry.  It also a demonstration that Trump remains in control of tariffs and can aggressively change tariffs to increase negotiating leverage.  It is a mess

Court Stops Trump Reciprocal and Fentanyl Tariff

May 29, 2025 7:18 AM UTC

•    The Trump administration will likely follow a multi-track response by appealing the judgement but also fast-tracking section 232 product tariffs for pharmaceuticals and semiconductors.  The administration could also consider section 301 or 122 tariffs (the latter 15% for 150 days against c

Big EM’s: Cyclical Tariff Hit V Structural Drivers

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

Trump Tariffs: China and UK Precedents

May 12, 2025 8:02 AM UTC

 The U.S./China have announced major reductions in reciprocal tariffs to 10% with other measures postponed for 90 days.  Though the U.S. is still imposing an extra 20% due to fentanyl, China will likely make some moves that could also help to reduce this.  This is in line with our previous thinki

Ceasefire or Reset? India Redraws the Rules

May 12, 2025 6:05 AM UTC

India and Pakistan have entered a fragile ceasefire after a week of precision strikes, drone warfare, and missile exchanges. But New Delhi’s clear message—that future terror attacks will be treated as acts of war—marks a strategic shift. Deterrence in South Asia has a new author, and India is

A Windfall with Caveats: RBI’s Likely Record Dividend

May 9, 2025 2:00 PM UTC

India is set to receive a record INR 3–3.5tn dividend from the RBI, offering a fiscal cushion amid softening tax revenues and rising geopolitical tensions with Pakistan. While this windfall may help the government stick to its 4.4% fiscal deficit target for FY26, it also highlights India’s growi

India CPI Preview: Cooling Prices, Warming Room for Rate Cuts

May 9, 2025 9:48 AM UTC

India’s retail inflation likely fell to 3.2% in April, its lowest since 2019, driven by a sharp decline in food prices. The benign inflation print strengthens the case for another RBI rate cut as growth momentum softens. 

Deterrence on a Deadline: India, Pakistan, and the New Escalation Paradigm

May 9, 2025 6:29 AM UTC

India and Pakistan are now embroiled in their most serious military confrontation in years, with hostilities expanding across air, land, and unmanned domains. Following the May 7 cross-border strikes under Operation Sindoor, India launched a calibrated military offensive on Thursday targeting Pakist

Tariff Man

May 6, 2025 8:45 AM UTC

  With the U.S. equity market having rebounded, President Donald Trump instinct on tariffs have seen threats of pharma tariffs and a 100% tariff on non U.S. films. Slow progress is also reported on bilateral deals, despite White House PR spin.  However, Trump will see pressure rising from three so

Transit Revoked, Ties Recalibrated: What Bangladesh's Pivot Signals

May 6, 2025 5:32 AM UTC

India’s revocation of transhipment access to Bangladesh marks a broader shift in bilateral ties, driven by Dhaka’s strategic pivot towards China and Pakistan. The move reflects India’s growing unease over regional security and the erosion of mutual trust post-regime change in Dhaka. For India,

Standoff Renewed: India and Pakistan Edge Closer to the Brink

May 6, 2025 3:33 AM UTC

India–Pakistan tensions have sharply escalated following a deadly terror attack in Kashmir, prompting sweeping diplomatic, military, and economic measures on both sides. New Delhi has ordered mock civilian defence drills and restricted the flow of river Chenab. Additionally, ceasefire violations a

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

April 28, 2025 6:24 AM UTC

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. 

India Redraws Its Red Lines with Pakistan

April 24, 2025 10:24 AM UTC

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

USD Rebalancing: Some to EM?

April 24, 2025 8:30 AM UTC

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

Trump Under Pressure

April 23, 2025 7:15 AM UTC

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

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

April 22, 2025 7:30 AM UTC

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

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

April 17, 2025 1:05 PM UTC

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

Nervous U.S. Long Term Asset Holders

April 15, 2025 8:30 AM UTC

   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

RBI Unveils New Rate Cut, Shifts Stance to Accommodative

April 10, 2025 7:29 AM UTC

In a bid to reignite momentum, the Reserve Bank of India trimmed its key policy rate to 6% and adopted an “accommodative” stance, signalling more support could follow. With inflation now forecast at 4.0% and GDP growth projected at 6.5%, Governor Sanjay Malhotra’s forward-looking policy aims t

Trade Deals with the U.S.: Pressures and Obstacles

April 10, 2025 7:17 AM UTC

Pressures to do trade deals include the weaker U.S. economy and higher inflation when it arrives/foreigners becoming nervous of their USD30trn plus holdings of U.S. securities and more crucially risks to Trump and GOP approval ratings from Republican voters. Obstacles to quick trade deals include Tr

Reciprocal Tariffs: The Hit To Other Countries

April 8, 2025 9:30 AM UTC

 Overall, we are still assessing the effects on non U.S. countries from the tariffs being imposed by the U.S. via direct trade/business investment/currency and financial & monetary conditions swings.  The impact will be adverse to GDP, but for some major countries could be less than the U.S.  How

Duty Bound: India’s Growth Test Amid US Tariff Heat

April 7, 2025 6:59 AM UTC

The new 26% US tariff on Indian imports poses near-term challenges for India’s export sectors and small businesses, potentially shaving up to 0.5% off GDP growth. But it also opens doors for India to capture global market share as rivals like China and Vietnam face even steeper duties. With sector

From Neutral to Accommodative? RBI Gears Up for Fresh Easing

April 7, 2025 3:31 AM UTC

The Reserve Bank of India (RBI) is scheduled to announce its monetary policy decision on April 9, 2025, following a three-day meeting of its MPC. We anticipate a reduction of 25 basis points in the benchmark repo rate, bringing it down from 6.25% to 6%. This prospective cut would constitute the seco

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 Outlook: Navigating the Turbulence

March 27, 2025 10:30 AM UTC

All chapters of the March Outlook are now available and simply click the link below. 

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

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

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

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

Trump and Dollar Policies

March 10, 2025 6:04 AM UTC

   The Trump administration could decide to more broadly talk the USD down or less likely try to reach a cooperative Mar A Lago accord with big DM and EM countries. A more cohesive alternative is a forced currency deal for countries to appreciate their currencies to avoid more tariffs and withdraw

Asia Country Risk Ratings

March 4, 2025 11:00 AM UTC

We provide country risk reviews for Asia countries including China, India, Indonesia, Taiwan, Singapore and Thailand.  

India GDP Preview: Q3FY25 Growth - A Tepid Rebound

February 26, 2025 4:50 AM UTC

India's GDP saw a slight recovery in the last quarter of 2024, growing at 6.3% due to increased government spending. This rebound, however, still falls short of previous highs, reflecting the economy's reliance on state intervention amid weak private sector and consumer activity. Despite fiscal effo

Reciprocal Risks: The Stakes of U.S. Tariffs for India's Export Sectors

February 24, 2025 5:58 AM UTC

As U.S. President Donald Trump proposes reciprocal tariffs targeting nations like India, which impose higher duties on American goods, the trade relations between the U.S. and India face new tensions. This policy pivot coincides with efforts by Indian Prime Minister Narendra Modi to strengthen bilat

Rate Cuts on the Horizon: RBI Signals Confidence in Inflation Outlook

February 24, 2025 1:50 AM UTC

The Reserve Bank of India (RBI) is tilting toward additional interest rate cuts to stimulate economic growth, rather than exclusively focusing on controlling inflation. The Monetary Policy Committee (MPC) lowered the benchmark repo rate by 25 basis points to 6.25%, citing headline inflation convergi