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May 12, 2025

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Trump Tariffs: China and UK Precedents
Paying Article

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

May 07, 2025

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China Moderate Triple Monetary Easing
Paying Article

May 7, 2025 6:31 AM UTC

•    China has announced a 10bps cut in the 7 day reverse repo rate to 1.4%; large than expected 50bps cut in the RRR rate and credit easing via Yuan1.1trn balance sheet quota expansion to counter the slowdown in growth.  Combined with the extra equity capital for state banks this will help c

May 06, 2025

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Tariff Man
Paying Article

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

Indonesia’s April Inflation Hits 7-Month High on Utility Price Rebound
Paying Article

May 6, 2025 3:19 AM UTC

Headline inflation rose to 1.95% y/y in April 2025, driven mainly by higher utility costs. Food and personal care items also remained key contributors to price pressures.

April 30, 2025

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Mexico’s GDP Review: Saved from the Technical Recession, but Growth Slows
Paying Article

April 30, 2025 2:52 PM UTC

Mexico narrowly avoided a technical recession in Q1 2025 with 0.2% GDP growth, driven by a volatile rebound in agriculture. However, industrial output contracted and services stagnated, highlighting a broader economic slowdown. Uncertainty over potential U.S. tariffs and tight monetary and fiscal po

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China South China Sea Tensions
Paying Article

April 30, 2025 10:30 AM UTC

We see recent China activity as part of the normal grey warfare for long-term influence in the South China sea.  It has involved the use of China coastguard and militia fishing boats rather than China PLA Navy, though the risk of escalation between the Philippines and China remains. China likely wa

April 28, 2025

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Argentina: Activity Continues Growing
Paying Article

April 28, 2025 1:15 PM UTC

Argentina’s economy grew 2.3% in February and 6% year-on-year, showing continued short-term recovery driven by financial and mining sectors. However, rising imports and an overvalued exchange rate are straining reserves, despite IMF support. While agricultural exports may ease pressure mid-year, s

April 25, 2025

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

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

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U.S/China Trade Standoff: Odds Remain Towards Truce
Paying Article

April 25, 2025 7:09 AM UTC

  On balance, our baseline still remains a U.S./China trade deal (55-60%) being reached, given Trump deal instincts; China desire for a deal and the economic disadvantage of an economic cold war to the U.S. when it is trying to reset trade with all countries.  Timeline is Q4 2025 or H1 2026. An al

April 24, 2025

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USD Rebalancing: Some to EM?
Paying Article

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

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BI Holds Rates as Rupiah Takes Centre Stage
Paying Article

April 24, 2025 5:34 AM UTC

Bank Indonesia kept its policy rate unchanged at 5.75% in April, prioritising currency stability over immediate growth support. Despite subdued inflation and earlier indications of easing, the central bank is holding off on rate cuts amid heightened global uncertainty and rupiah weakness following U

April 23, 2025

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Trump Under Pressure
Paying Article

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

April 22, 2025

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

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

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Bank Indonesia to Hold Rates as Currency Pressures Mount
Paying Article

April 22, 2025 6:12 AM UTC

Bank Indonesia is expected 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

April 17, 2025

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Banxico Minutes: Comfortable about the Cuts Amid the Volatility
Paying Article

April 17, 2025 2:26 PM UTC

Banxico’s latest minutes confirm a cautious but steady path toward policy normalization, with the policy rate expected to reach neutral levels (7.00–8.00%) in 2025. While the economy shows signs of deceleration and a negative output gap, inflation continues to ease, nearing historical averages.

April 16, 2025

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China GDP: Good Q1 Start, but 2025 Could Be 4.2% or 3.3%
Paying Article

April 16, 2025 8:24 AM UTC

•    The March data releases from China alongside the Q1 GDP figures show a good start for 2025.  However, underlying domestic demand is soft and Q2 will see a big hit from the U.S. tariffs already introduced.  Our baseline (here) remains for a truce in the coming weeks and a scale back of 1

April 15, 2025

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Argentina: Moving to Phase 3, Bands Flotation
Paying Article

April 15, 2025 8:33 PM UTC

Argentina launched Phase 3 of its macro plan, ending currency restrictions for individuals and securing a USD 20B IMF deal to stabilize falling reserves. The Central Bank shifted from a crawling peg to a target band exchange rate regime, allowing for a 1% monthly devaluation within ARS 1,000–1,400

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Nervous U.S. Long Term Asset Holders
Paying Article

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

April 14, 2025

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U.S./China High Stakes Poker
Paying Article

April 14, 2025 7:30 AM UTC

The economic hit from a hard stop in U.S. imports/exports is too damaging for both sides and our baseline is still for a truce and de-escalation, in the coming weeks. This could be negotiations on a new trade deal with a more moderate reciprocal tariff on both sides and the extra reciprocal tariffs

April 10, 2025

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Mexico CPI Review: Moving as Expected
Paying Article

April 10, 2025 2:20 PM UTC

Mexico’s March CPI rose 0.31%, matching expectations but below the historical average. Annual inflation edged up to 3.80%, driven by core components like food and services. Non-core inflation fell due to lower energy prices. Food saw strong gains, while transport costs declined. The narrowing gap

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RBI Unveils New Rate Cut, Shifts Stance to Accommodative
Paying Article

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

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Indonesia CPI Review: CPI Returns To Positive Territory
Paying Article

April 10, 2025 7:21 AM UTC

Indonesia's inflation reached a three-month high and returned to positive territory in March, recording 1.03% yr/yr. The rebound was driven by the expiry of a government electricity discount program and seasonal demand during Ramadan. The housing and utilities category saw the highest price increase

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

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

April 09, 2025

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U.S China Trade War: Deal or No Deal Prospects?
Paying Article

April 9, 2025 9:00 AM UTC

The prospect of a trade deal between the U.S. and China are less and likely delayed into 2026, due to the hardline stance of Trump 2.0 due to the extra focus on tariff tax revenue and shifting production back to the U.S. It is still our baseline that a deal will be agreed though we would now see a d

April 08, 2025

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Reciprocal Tariffs: The Hit To Other Countries
Paying Article

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

April 07, 2025

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U.S. Equities: Hoping for Tariff Negotiations but Fearing Q2 Data
Paying Article

April 7, 2025 9:08 AM UTC

•    The U.S. equity market still remains under pressure from the announcement effect of large reciprocal tariffs, though hopes of trade deals could start to soon produce a stabilization of the market later this week.  Multi month the U.S. equity market outlook depends on whether a recession

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From Neutral to Accommodative? RBI Gears Up for Fresh Easing
Paying Article

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

April 04, 2025

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Argentina: Reserves Depleting, New Devaluation?
Paying Article

April 4, 2025 6:28 PM UTC

Argentina's foreign reserves have recently fallen to USD 26 billion, the lowest since February 2024, largely due to Central Bank bond payments and difficulties acquiring USD. While internal demand recovers, imports are outpacing exports, complicating reserve accumulation. Additionally, maturing Cent

April 03, 2025

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Mexico: Saved from Tariffs?
Paying Article

April 3, 2025 7:56 PM UTC

Mexico has avoided reciprocal tariffs but still faces steel, aluminum, and auto tariffs. Authorities are negotiating to exempt goods, though retaliatory tariffs on U.S. imports seem unlikely. Mexico's economy is slowing, with growing recession fears and diminishing nearshoring prospects. The industr

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Tariffs: Inflation may be the biggest worry for the U.S.
Paying Article

April 3, 2025 4:12 PM UTC

While surprising the market in their intensity, Trump’s “reciprocal” tariffs were in line with previous threats on most countries, and with Canada and Mexico being treated less harshly that feared, the net surprise is modest to us. However we do feel that inflationary risks have increased furt

April 02, 2025

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Taiwan: Grey Warfare or More?
Paying Article

April 2, 2025 7:05 AM UTC

   China grey warfare against Taiwan will continue, but we would only see a 5% probability of China invading Taiwan in 2025 and 2026.  The U.S. is pivoting towards Asia and China, while President Trump is not China friendly. A war with the U.S. over Taiwan would be very costly in military and eco

March 31, 2025

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U.S. Trade Surplus Countries: No Special Treatment?
Paying Article

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

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Banxico Review: Lowering Rates Amid Tariffs
Freemium Article

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 27, 2025

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March Outlook: Navigating the Turbulence
Paying Article

March 27, 2025 10:30 AM UTC

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

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Car Tariffs Then Lenient Reciprocal Tariffs?
Freemium Article

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

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LatAm Outlook: Navigating the Uncertainty
Paying Article

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

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Outlook Overview: Navigating the Turbulence
Paying Article

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

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EMFX Outlook: Divergence versus the USD
Paying Article

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

March 25, 2025

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Asia/Pacific (ex-China/Japan) Outlook: Resilience Through Realignment
Paying Article

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

March 21, 2025

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Trump Product and Reciprocal Tariffs
Paying Article

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

Bank Indonesia Holds Steady Amid Fiscal Fears and Rupiah Rout
Paying Article

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 17, 2025

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China: Mixed Early 2025 Data and Policy Stimulus
Paying Article

March 17, 2025 9:17 AM UTC

Headline industrial production and retail sales were better than expected, but the breakdown of the data shows a mixed picture for consumption and residential investment remains a negative drag on GDP before the 20% U.S. tariffs hits.  Meanwhile, though the weekend policy announcement on boosting d

Bank Indonesia Policy Review: Rate Pause As BI Remains Watchful
Freemium Article

March 17, 2025 6:45 AM UTC

Bank Indonesia's upcoming monetary policy decisions will hinge on a delicate balance of domestic economic indicators and global financial conditions. With a focus now tilted slightly more towards economic growth than in previous years, BI could surprise markets with its timing and decisions, dependi

March 13, 2025

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Trump’s Policies and U.S. Equities
Paying Article

March 13, 2025 8:35 AM UTC

Models would suggest that the current and prospective direct tariff impact should slow GDP growth to a 1.5% pace, which should see slow Fed easing in 2025 given the boost to inflation. However, the policy uncertainty means that business and consumer behaviour could see a large adverse hit that keeps

March 12, 2025

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Argentina: Fresh IMF Deal on the Pipeline
Paying Article

March 12, 2025 12:00 AM UTC

The Argentine government has issued an emergency decree to authorize a new IMF deal, potentially worth USD 20 billion, to pay off Treasury debt to the Central Bank. This deal includes a 4-year grace period and 10-year repayment terms. The government aims to stabilize reserves, delay debt amortizatio

March 10, 2025

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Trump and Dollar Policies
Paying Article

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

March 05, 2025

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Mexico: Uncertainty Mounts as Tariffs Are Imposed
Paying Article

March 5, 2025 2:43 PM UTC

Trump's administration has moved forward with 25% tariffs on Mexican imports, citing drug trafficking and migration issues. Mexico’s President Sheinbaum has stated retaliatory measures will be announced on March 9. The tariffs could push Mexico into recession in 2025, although we forecast growth a

March 03, 2025

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Trump Tariffs and U.S. Business and Consumer Sentiment
Paying Article

March 3, 2025 9:02 AM UTC

 •    Mexico and Canada are trying to frantically find solutions to delay across the board tariffs again, though the U.S. is hinting that the rate could be less than 25%.  China extra 10% tariff remains likely, as the U.S. increases trade pressure on China.  More tariffs also remain highly

February 28, 2025

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Mexico: Labour Market Decelerating as Expected
Paying Article

February 28, 2025 5:53 PM UTC

Mexico's labor market remains strong with an unemployment rate of 2.7%, but signs of deceleration are emerging. Worker affiliation to the pension system and wage growth are slowing, and some job creation stagnation is expected, potentially pushing the unemployment rate above 3%. A technical recessio

February 27, 2025

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Argentina: Recovery Complete?
Paying Article

February 27, 2025 2:32 PM UTC

Argentina’s economy showed signs of recovery in December, growing 0.5% m/m and 1.2% q/q in Q4, with a 4.7% annual increase. The banking and trade sectors saw strong growth, but construction and industry stagnated. Despite progress, challenges remain, including inflation above 2%, a current account