Outlook
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March 27, 2025
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
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
March 25, 2025
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
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
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
December 30, 2024
December 24, 2024
December Outlook Webinar on Jan 7: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
December 24, 2024 8:30 AM UTC
The U.S. economy’s momentum remains reasonable before the impact of President-elect Trump’s policies in 2025 and 2026. While high uncertainty exists on the scale and timing of policy, the strategic bias is clear – sizeable tax cuts that will boost the budget deficit; tariffs (threats
December 20, 2024
EMFX Outlook: Hit From Tariffs, Before Divergence
December 20, 2024 10:00 AM UTC
· EM currencies on a spot basis will remain on the defensive in H1 2025, as we see the U.S. threatening and then introducing tariffs on China imports – 30% against the current average of 20%. China’s response will likely include a Yuan (CNY) depreciation to the 7.65 area on USD/CN
DM FX Outlook: USD to edge lower despite high yields
December 20, 2024 8:28 AM UTC
· Bottom Line: Recent strong US data has bolstered the USD, with the Trump election victory also supportive due to expectations of tax cuts and tariffs which are seen leading to less Fed easing than previously expected. While we still see the USD weakening through 2025 as Fed easing red
Japan Outlook: Lukewarm Japan and BoJ
December 20, 2024 12:00 AM UTC
· Due to the slow recovery in consumption, 2024 GDP has been revised lower to -0.5%. Private consumption will continue to grow throughout 2025/26 gradually as business price/wage setting behavior gently shift and Japanese consumers adapting to higher inflation. Wage growth in 2025 wil
December 19, 2024
Western Europe Outlook: Divergent Policy Thinking
December 19, 2024 2:12 PM UTC
· In the UK, perhaps the main story in our outlook is that we retain our below-consensus GDP picture for next year, with growth of 1.0% and with downside risks. The BoE will likely ease further through 2025 by at least 100 bp and maybe faster and beyond.
· As for Sweden, d
DM Rates Outlook: Policy and Spread Divergence
December 19, 2024 12:07 PM UTC
• 2yr U.S. Treasury yields can decline initially as the Fed finishes easing (Figure 1), but as the sense grows that the rate cut cycle is stopping, we see the 2yr swinging to a small premium versus the Fed Funds rate – as the market debates the risks of a future tightening cycle. For 10y
Asia/Pacific (ex-China/Japan) Outlook: Trump Tariffs, China +1 and Growth
December 19, 2024 10:57 AM UTC
Emerging Asian economies are projected to lead global growth in 2025, with India and Southeast Asia at the forefront. These regions will anchor resilience in Asia, even as China's economic growth remains moderate.
Inflation trajectories will vary across Asia, with India experiencing sticky prices
Outlook Overview: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
December 19, 2024 9:25 AM UTC
· The U.S. economy momentum remains reasonable before President elect Trump’s policies impact in 2025 and 2026. While high uncertainty exists on the scale and timing of policies, the strategic bias is clear – sizeable tax cuts that will boost the budget deficit; tariffs (threats
U.S. Outlook: Healthy Economy Facing Policy Risks
December 19, 2024 8:01 AM UTC
• The U.S. economy, consumer spending in particular, has continued to show surprising resilience, and is growing at a pace probably in excess of long-run potential near 2.0%. Inflation has fallen significantly from its highs, with core PCE inflation now running slightly below 3.0%, but rema
December 18, 2024
LatAm Outlook: Economic Shifts
December 18, 2024 5:21 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 legal reforms and its close ties with U.S. increases uncertainty for 2025, especially after Trump elections, although we see tariffs in 2025 as unlikely
Jan 7 Outlook Webinar: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
December 18, 2024 1:23 PM UTC
The U.S. economy’s momentum remains reasonable before the impact of President-elect Trump’s policies in 2025 and 2026. While high uncertainty exists on the scale and timing of policy, the strategic bias is clear – sizeable tax cuts that will boost the budget deficit; tariffs (threats
Commodities Outlook: Strategic Caution
December 18, 2024 11:00 AM UTC
The oil supply outlook depends on OPEC+ policies, with the reversal of the voluntary 2.2 million b/d cuts being officially delayed until April 2025. However, we expect the progressive rollover of these barrels into the market to be further postponed at least until the third quarter of 2025, as the c
Equities Outlook: U.S. Exceptionalism v Valuations
December 18, 2024 10:05 AM UTC
· The glory days of exceptionalism for U.S. equities will likely extend in Q1 2025 to bring the S&P500 to 6200-6300. The problem is that valuations have now become stretched with S&P500 ex magnificent 7 on a forward P/E of 19 and valuations out of line with real bond yields (Figure 1)
December 17, 2024
China Outlook: Construction and Trade Headwinds v Policy Stimulus
December 17, 2024 11:00 AM UTC
We do see a package of stimulative fiscal policy measures for 2025 including Yuan1-3trn infrastructure spending; Yuan1trn funds to buy completed homes for affordable housing and Yuan1trn capital injection to the big six state banks. Some modest measures for low-income households and to boost soci
EMEA Outlook: Rate Cuts in 2025 Despite Global Uncertainties
December 17, 2024 8:00 AM UTC
· In South Africa, our end-year policy rate prediction remains at 7.0% for 2025 and 6.5% for 2026. We foresee headline inflation will fall to 4.2% and 4.6% in 2025 and 2026, respectively, considering power cuts (loadshedding) are relieved and the domestic fiscal outlook is moderately stab
September 27, 2024
September 26, 2024
Western Europe Outlook: Gradualism vs Reality
September 26, 2024 10:45 AM UTC
· In the UK, while headline GDP numbers look firmer, the real economy backdrop and outlook remains no better than mixed. This should improve a disinflation process driven mainly by friendlier supply conditions. The BoE will likely ease in Q4 and continue doing so through 2025 (we look
EM FX Outlook: Fed Easing Helps but Divergent Trends
September 26, 2024 8:00 AM UTC
USD strength is ebbing across the board, which provides a positive force for most EM currencies on a spot basis. However, where inflation differentials are large, the downward pressure will remain in 2025 e.g. Turkish Lira (TRY). Where inflation differentials are modest against the U.S., but
September 25, 2024
Asia/Pacific (ex-China/Japan) Outlook: Shifting Gears for Growth
September 25, 2024 7:57 AM UTC
Emerging Asian economies are poised to remain the fastest growing globally. India and Southeast Asia will drive regional resilience amid China’s cooling growth engine in 2025. For India, while the external environment remains challenging due to weaker global demand and geopolitical tensions, domes
Outlook Overview: Rate Cuts But How Far?
September 25, 2024 7:30 AM UTC
· The U.S. economy is slowing, with the critical question being whether this is a soft or harder landing. Our broad analysis leaves us inclined to the soft landing view into 2025, though we shall watch real sector data closely over the next 3-6 months to check the trajectory. Else
DM FX Outlook: USD Set for 2025 Decline
September 25, 2024 7:11 AM UTC
· Bottom Line: The USD has reached the end of year targets of 1.12 for EUR/USD and 140 for USD/JPY that we forecast in June, when it was trading at 1.07 and 159 respectively. From here, we still favour the USD downside through both the rest of the year and 2025, as the Fed continues to
EMEA Outlook: Rate Cuts Loading in 2025
September 25, 2024 7:00 AM UTC
· In Turkiye, we still foresee upside risks emanating from buoyant domestic demand, the stickiness of services inflation, and adverse geopolitical impacts leading average inflation to stand at 58.8% and 35.3% in 2024 and 2025, respectively. We think Central Bank of Republic of Turkiye (CBRT
September 24, 2024
LatAm Outlook: Diverging Patterns
September 24, 2024 12:54 PM UTC
· Brazil and Mexico started to diverge in terms of growth. While we see Brazil GDP growing above 3.0% in 2024 (pushed by the internal demand), we see Mexico’s growth decelerating to 1.3%, due to weaker demand from U.S. and contractionary monetary policy. In 2025, we see Brazil growing
DM Rates Outlook: Rate Cuts Arrive Except Japan
September 24, 2024 9:00 AM UTC
• For U.S. Treasuries, we see 2yr yields coming down further on our baseline soft landing view, as the Fed moves consistently to a 3.00-3.25% Fed Funds rate. However, with considerable Fed easing already discounted, 2yr yield decline should be modest and 2yr yields should bottom mid-2025. 1
China Outlook: Unbalanced Growth and Slowing
September 24, 2024 8:54 AM UTC
Growth is benefitting from momentum in public investment/exports and high tech production. However, domestic demand is slower and this is a drag on H2 2024 and 2025 growth prospects. Aside from the ongoing negative drag from the residential construction crisis, consumption is also softe
Equities Outlook: Choppy U.S. and Outperformance Elsewhere
September 24, 2024 8:30 AM UTC
• We now forecast 5450 for the S&P500 for end 2024, but could see a move to 5200/5000 in the next 3-6 months as volatile data keeps the soft v hard landing debate alive. On our baseline of a U.S. soft landing, we would see the S&P500 at 5600 by end 2025. The tech sector is still really i
Japan Outlook: A Hawkish Take
September 24, 2024 5:30 AM UTC
· GDP growth for 2024 has been revised lower to +0.2% after the consumption contraction in Q1 2024 and the subsequent sluggish recovery in Q2. Private consumption is expected to pick up along improving real wages but its magnitude will be limited by the unwillingness to consume at high
September 23, 2024
U.S. Outlook: Fed Focus Turning To Downside Risks
September 23, 2024 2:16 PM UTC
• The U.S. economy is showing clear signs of labor market slowing which poses downside risks to the still impressive resilience of consumer spending, which has sustained healthy GDP growth through Q2 2024. We expect GDP growth below potential in the second half of 2024 and the first half of
Commodities Outlook: Fragile Foundations
September 23, 2024 9:30 AM UTC
Oil prices in the short to medium term will be shaped by demand in China and the U.S. In particular, we expect weak data in China to continue weighting on oil prices in Q4 2024, with limited upside risks from supply-side developments. In 2025, demand growth will likely remain slow in the first half,
September 15, 2024
Sep 27 Outlook Webinar: Rate Cuts But How Far?
September 15, 2024 10:30 AM UTC
Uncertainty about whether the U.S. economy will have a soft or hard landing is growing as the market approaches Q4. This is shaping the debate regarding the scale of easing through the remainder of 2024 and 2025 by the Fed. European easing is underway, but how much further will central ba