Outlook
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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
August 27, 2024
Indonesia's Election Law Drama: Court Rulings and Political Fallout
August 27, 2024 6:57 AM UTC
In a dramatic turn of events, Indonesia's parliament abandoned its plan to amend electoral laws. The parliament had recently planned to amend the country's electoral laws, aiming to overturn pivotal decisions by the Constitutional Court. The proposed changes, which have sparked widespread controvers
August 20, 2024
Indonesia's 2025 Draft Budget: A High-Stakes Gamble on Growth and Subsidies
August 20, 2024 6:24 AM UTC
Indonesia's 2025 budget is a high-risk gamble, with potential for the fiscal deficit to breach the 3% of GDP legal threshold. The ambitious revenue targets and planned spending cuts pose significant challenges, particularly in a low commodity price environment. The reliance on optimistic tax revenue
June 26, 2024
June 25, 2024
Outlook Overview: Cyclical and Structural Forces
June 25, 2024 10:15 AM UTC
• The global economy is showing signs of healing, as inflation comes back towards targets and growth recovers momentum in some economies. Nevertheless, the cyclical headwind of lagged monetary tightening remains in DM countries, and will likely be one of the forces slowing the U.S. economy
EMFX Outlook: USD Strength to Ebb with Different EM Impact
June 25, 2024 8:05 AM UTC
We see Fed rate cuts from September starting to soften USD strength into year end and 2025. Beneficiaries will include currencies with inflation moving towards target and high real rates or, alternatively, undervalued currencies. This should benefit the Brazilian Real (BRL) and Indonesian Rupiah
Equities Outlook: Choppy U.S. and Outperformance Elsewhere
June 25, 2024 7:05 AM UTC
• U.S. equities are overvalued and waiting for earnings growth to catch-up, which leaves the market choppy, directionless and vulnerable to intermittent 5% corrections. Our forecast slowing of the U.S. economy before Fed rate cuts or nervousness about the post-election prospects are potenti
June 24, 2024
LatAm Outlook: Pausing the Cuts
June 24, 2024 6:00 PM UTC
· Brazil and Mexico growth will decelerate from the growth rates in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust Agricultural growth will not repeat in 2023 while Mexico is on the limit of growing due to a
EMEA Outlook: Stubborn Inflation Dominates
June 24, 2024 1:00 PM UTC
· In Turkiye, we expect Central Bank of Republic of Turkiye (CBRT) will likely halt the key rate at 50% until the end of 2024, which is our baseline scenario. We expect a fall in inflation likely after July due to favorable base effects, additional macro prudential measures, public savings
DM Rates Outlook: Rate Cuts Arrive Except Japan
June 24, 2024 8:45 AM UTC
• For U.S. Treasuries we see a steady easing process from the Fed from September, which can allow 2yr yields to fall consistently. However, the decline in H2 2024 will be slower at the long-end from traditional yield curve steepening pressures and then we see fiscal stress in H1 2025 unde
Western Europe Outlook: Easing Cycles Diverge?
June 24, 2024 7:48 AM UTC
· · In the UK, while downside economic risks may have dissipated, the real economy backdrop and outlook is still no better than mixed. This should accentuate a disinflation process hitherto driven mainly by friendlier supply conditions. The BoE will likely ease in Q3 and
DM FX Outlook: Politics rears its head
June 24, 2024 7:42 AM UTC
· Bottom Line: The USD strength in Q2 on the back of a less dovish view of the Fed is unlikely to extend over the rest of the year. The JPY remains exceptionally cheap and has potential to recover sharply if risk appetite weakens. A slower JPY recovery is likely if lower inflation leads
June 21, 2024
Asia/Pacific (ex-China/Japan) Outlook: Growth Momentum but Delayed Rate Cuts
June 21, 2024 9:45 AM UTC
• Economic activity in emerging Asian economies is forecast to remain strong. Despite several challenges, including a tight oil market, constrained liquidity conditions, and delayed rate cuts, the region's economic activity is expected to show resilience. Other potential obstacles include u
Japan Outlook: Slow but not Steady
June 21, 2024 12:15 AM UTC
• GDP growth for 2024 has been revised lower to +0.4% as private consumption contracted stronger in Q1 2024 from moderating but still persistent inflationary pressure. We forecast consumption to gradually recover throughout the rest of 2024 as real wage turned from negative to positive yet
June 20, 2024
U.S. Outlook: Economy Starting to Lose Momentum
June 20, 2024 6:17 PM UTC
• The U.S. economy is starting to lose momentum after a surprisingly strong second half of 2023, and we expect the loss of momentum to become more apparent in the second half of 2024, causing a slowing in employment growth from its current strong pace. We expect inflation to resume a gradua
Commodities Outlook: Fundamentals Kick In
June 20, 2024 10:00 AM UTC
West Texas Intermediate (WTI) is projected to end 2024 at USD82. We anticipate that the voluntary cuts introduced in November 2023 will likely be reversed during H1 2025 and not in Q4 2024, as initially communicated by OPEC+. The scenario is built on our expectation that demand will not increase suf
June 19, 2024
China Outlook: 2024 on Track, but 2025 Headwinds
June 19, 2024 9:35 AM UTC
Public investment and industrial production in high tech and renewables are helping to support growth and should get the economy close to 5% in 2024. However, underneath the surface, consumption is slowing, private sector investment and employment growth is sluggish, and residential property inves
April 03, 2024
March 27, 2024
March 26, 2024
March 25, 2024
EMEA Outlook: Elections Set the Scene in Q2
March 25, 2024 2:00 PM UTC
· Unlike South Africa and Russia, Turkiye continued with tightening monetary policy in Q1 due to stubborn inflation, pressure on FX and reserves. Meanwhile, Russia and South Africa halted their tightening cycles as of 2024 and will likely start cutting interest rates in Q3 depending on how
DM FX Outlook: JPY weakness to reverse
March 25, 2024 12:21 PM UTC
· Bottom Line: Q1 has seen a generally seen a rangebound USD against riskier currencies, but JPY weakness has resumed in spite of a BoJ rate hike and narrowing yield spreads. This reflects continued positive risk sentiment in developed market equities, but we still expect JPY strength t
Equities Outlook: Cyclical Recovery Versus Structural Headwinds
March 25, 2024 9:00 AM UTC
· In the U.S., a tug of war between momentum and U.S. exceptionalism on the one side versus valuations and any deviations from the U.S. goldilocks scenario now means volatility and a risk of a correction. We feel that the U.S. equity market recovery can push onto 5250 for the S&P5
Japan Outlook: Beginning of A New Era?
March 25, 2024 4:54 AM UTC
Bottom Line:
Forecast changes: We revised 2024 GDP lower to +0.8% from +0.9% because private consumption is now expected to contract in Q1 2024. 2024 CPI is revised higher to +2.1% from +1.7% to address the stronger wage hike Japanese unions secured.
March 22, 2024
LatAm Outlook: Getting Deeper in the Cutting Cycle
March 22, 2024 7:04 PM UTC
· Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh
Asia/Pacific (ex-China/Japan) Outlook: Election Spending to Drive Growth
March 22, 2024 12:18 PM UTC
· In 2024, growth trends across emerging Asia will exhibit a mixed pattern. Encouragingly, there will be a resurgence in demand for global electronics following a period of stagnation in 2022‑23, which will provide a boost to regional trade. Moreover, the initiation of monetary policy
Western Europe Outlook: Easing Cycle Underway?
March 22, 2024 11:26 AM UTC
· In the UK, downside economic risks may have dissipated but the tighter monetary stance has far from fully bitten. This accentuates and/or prolongs an already weak domestic backdrop into 2025 that will complement friendlier supply conditions in easing inflation. The BoE will likely e
U.S. Outlook: Fed to Ease as Economy Gradually Slows
March 22, 2024 10:00 AM UTC
• The U.S. economy has continued to see growth surprising to the upside supported in particular by consumer spending. While the momentum of the second half of 2023 will be difficult to sustain the economy now looks poised for a soft landing, with risk that continued resilience in the econom