Optimistic CBR Publishes Summary of Key Rate Decision on May 12

May 12, 2025 5:24 PM UTC

Bottom Line: Central Bank of Russia (CBR) published the summary of the key rate decision on May 12, showing CBR’s views on economic developments. CBR highlighted in its report that “The current inflationary pressures eased in Q1, whereas food and services prices were still rising at a fast pa

Norges Bank Review: Policy Easing Continues to be Deferred?

May 8, 2025 8:49 AM UTC

It was hardly a surprise that the Norges Bank again kept policy on hold when it gave its latest verdict as was the fact that it failed to be any more explicit about when the rate cut cycle may begin. Instead, while still suggesting rate cuts later this year, it cautions about premature easing.  Thi

Sweden – Riksbank Review: Fresh Easing Hints Confirmed?

May 8, 2025 8:03 AM UTC

The very much expected stable policy decision at this Riksbank verdict was the second in succession but where the Board veered away from its previous assertion that that, with the policy rate now at 2.25%, this may be the end of the easing path.  Instead, and amid the stronger currency and softer C

Switzerland: A Triple Disinflationary Threat?

May 7, 2025 1:30 PM UTC

A further 25 bp cut (to zero) in the SNB policy rate on June 19 now looks almost certain.  Weak(er) business surveys suggest that the tariff threat is both tangible and growing.  Meanwhile, there is the strong currency where FX intervention on aby major scale could provoke US retaliation against a

South Africa’s Automotive and Agricultural Sectors Will Be Tested Amid Trump’s Additional Tariffs

May 6, 2025 3:14 PM UTC

Bottom Line: Taking into account that the 31% U.S. additional tariffs on South African goods could still come into effect despite a 90-day reprieve from the U.S. president Trump, the threat is still alive as South African economy will be negatively impacted by tariffs partly nullifying the African G

Annual Inflation Slightly Decreased in April Despite MoM Hit 3.0% Due to High FX Pass Through

May 5, 2025 10:15 AM UTC

Bottom line: Turkish Statistical Institute (TUIK) announced on May 5 that the inflation softened to 37.9% y/y in April from 38.1% y/y in March. We think monetary tightening and suppressed wages helped relieve the price pressure despite hikes in electricity and natural gas prices in April, and curre

Norges Bank Preview (May 8): Policy Easing Flagged but Not Yet Materializing?

May 1, 2025 11:04 AM UTC

It does seem very likely that the Norges Bank will again keep policy on hold when it gives it next verdict on May 8, albeit with a risk that if it has access to what may be much friendlier CPI data officially due the day after, it could ease, or at least be more explicit about when the rate cut cycl

Turkiye Inflation Preview: CPI is Expected to Slightly Increase in April

April 30, 2025 4:47 PM UTC

Bottom line: After easing to 38.1% annually in March, we expect consumer price index (CPI) will slightly surge to 38.2%-38.3% YoY in April. Despite tight monetary policy and moderately falling demand helped relieving the price pressure in Q1, April inflation will likely stand at higher-than-expect

Sweden – Riksbank Preview (May 8): Fresh Easing Hints?

April 29, 2025 1:17 PM UTC

A very likely stable policy decision next month would be the second in succession and where the Riksbank has now underscored that, with the policy rate now at 2.25%, this may be the end of the easing path.  But amid the stronger currency, with real activity signs having largely disappointed even be

The Hope for A Peace Deal in Ukraine Seems No Close

April 28, 2025 12:55 PM UTC

Bottom Line: We have lowered a Russia-friendly peace deal following a cease-fire to 50% 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 co

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

April 25, 2025 1:56 PM UTC

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

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

April 23, 2025 1:50 PM UTC

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

Surprising Move: CBRT Increased the Key Rate to 46%

April 17, 2025 12:32 PM UTC

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

SARB's Monetary Policy Review Highlights Concerns over the Horizon

April 15, 2025 7:29 PM UTC

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

Soaring Inflation Hits Two-Year High in March with 10.3% YoY

April 12, 2025 10:16 AM UTC

Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation ticked up to 10.3% YoY in March after hitting 10.1% in February, 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,

Strong Consumption Continues to Drive Turkiye's GDP Growth

April 11, 2025 11:14 AM UTC

Bottom Line: Turkish economy expanded by 3.2% YoY in 2024 backed by strong private consumption and robust investments, despite the weight of high interest rates. After Q2 2023, Q4 2024 marked the highest quarterly reading with 1.7% QoQ surge, which stemmed from turnaround in private consumption that

EMEA Economies Will Be Tested Amid U.S. Tariff Heat

April 7, 2025 5:29 PM UTC

Bottom Line: The impacts of U.S. additional tariffs announced on April 2 could likely have multifaceted impacts over EMEA countries. Relatively-low 10% tariffs could open new doors for Turkiye to capture a higher global market share if it can act quickly on trade diversification. We foresee the coun

Russia GDP Growth Loses Steam in the First Two Months of 2025

April 4, 2025 9:14 AM UTC

Bottom Line: According to the figures announced by the Ministry of Economic Development on April 3, Russia's GDP expanded by 0.8% YoY in February following a 3% YoY increase in January driven by military spending, higher wages and fiscal stimulus. The softening of growth figures demonstrates monet

Turkiye’s Inflation Slightly Decreased in March

April 3, 2025 6:48 PM UTC

Bottom line: Turkish Statistical Institute (TUIK) announced on April 3 that the inflation softened to 38.1% y/y in March from 39.1% y/y in February. We think favourable base effect, lagged impacts of previous tightening, relative Turkish lira (TRY) stability until March 20 and suppressed wages cont

The Hope for A Peace Deal in Ukraine is Tested

April 1, 2025 9:55 AM UTC

Bottom Line: As negotiations to end the war in Ukraine continue, we foresee a Russia-friendly peace deal (70% probability) in Ukraine could be sealed in 9-12 months following a cease-fire under current circumstances. In this scenario, we envisage Russia will continue to annex areas in and around fo

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 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. 

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

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

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

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%

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

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

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

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

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

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

SA MPC Preview: 25 bps Rate Cut on March 20 is Likely, But a Very Close Call Due to Uncertainties

March 14, 2025 8:29 PM UTC

Bottom Line: Taking into account that annual inflation in January stood at 3.2% in January, which is below midpoint of target band of 3% - 6%, we think it is 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 remai

Inflation in Russia Hits Two-Year High in February: 10.1% YoY

March 13, 2025 10:10 AM UTC

Bottom Line: According to Russian Federal Statistics Service (Rosstat) data, inflation ticked up to 10.1% YoY in February after hitting 9.9% in January, 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,

SNB Preview (Mar 20): A Final Cut?

March 11, 2025 11:45 AM UTC

Having very much delivered relatively rapid easing worth some 125 bp in the last year, we see a further SNB rate cut of 25 bp at this month’s quarterly assessment taking the policy rate to 0.25%, the lowest since Sep 2022, ie when the Board moved away from negative rates.  A return to negative ra

Sweden Riksbank Preview (Mar 20): Time to Pause?

March 11, 2025 10:33 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

Third Straight Cut: CBRT Reduced the Key Rate to 42.5%

March 6, 2025 12:08 PM UTC

Bottom Line: After inflation softened more-than-expectations to 39.1% in February, the lowest in 20 months, the easing cycle continued on March 6 as Central Bank of Turkiye (CBRT) reduced the policy rate by 250 bps to 42.5%. The decision was supported by domestic demand remaining at disinflationary

South Africa’s Economy Expanded by a Moderate 0.6% in Q4

March 4, 2025 12:02 PM UTC

Bottom line: South African economy grew modestly by 0.6% YoY in Q4 2024 driven by strong performances by agricultural sector and finance. According to Department of Statistics of South Africa (Stats SA) announcement on March 4, demand side of the economy was lifted by household consumption expenditu

Turkiye’s Inflation Decelerated More Than Expectations in February, Now Below 40% YoY

March 3, 2025 11:14 AM UTC

Bottom line: Turkish Statistical Institute (TUIK) announced on March 3 that the inflation softened to 39.1% y/y in February from 42.1% y/y in January. We think lagged impacts of previous tightening, relative Turkish lira (TRY) stability, and less-than-expected hike in minimum wage in January contin

As Predicted, Turkiye's 2024 GDP Growth Hit 3.2% YoY

February 28, 2025 12:03 PM UTC

Bottom Line: Turkish Statistical Institute (TUIK) announced on February 28 that Turkish economy expanded by 3.0% in Q4 2024, and 3.2% YoY in full-year 2024, backed by accelerated private consumption and robust investments, despite the weight of high interest rates.

South Africa's Inflation Slightly Rose to 3.2% in January

February 26, 2025 12:09 PM UTC

Bottom Line: StatsSA announced on February 26 annual South Africa’s inflation slightly accelerated to 3.2% YoY in January from 3.0% YoY in December and the main contributors were housing and utilities, food and non-alcoholic drinks, fuel and restaurant. We feel unpredictable outlook of the global

Negotiations to End Ukraine War Started: What is Next?

February 25, 2025 2:33 PM UTC

Bottom Line: Russia and the U.S. have started negotiations to end the war in Ukraine. We continue to foresee a Russia-friendly peace deal in Ukraine sealed in 6-12 months following a cease-fire. We envisage Russia will continue to annex areas in and around four Ukrainian oblasts that it occupied,

Bunds and ECB Easing/Trump Tariffs

February 20, 2025 8:03 AM UTC

          It is highly likely in April that the U.S. will announce a 25% tariff on EU cars and pharmaceuticals (here) and also reciprocal tariffs against the EU. The majority could be implemented given Trump’s desire to raise revenue/dislike of the EU as well as negotiate trade deals. This

Stubborn Inflation Continues to Stay Elevated in the First Month of 2025

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,

CBR Held Key Rate Constant at 21% on February 14

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

Negotiations to End Ukraine War to Start Soon

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

CBRT Increased Its End-Year Inflation Forecast from 21% to 24%

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