SARB Reduced Key Rate to 6.75% Following Favorable Inflation Outlook

November 20, 2025 3:21 PM UTC

Bottom Line: South African Reserve Bank (SARB) cut the policy rate by 25 bps to 6.75% during the MPC on November 20 owing to moderate inflation, stronger ZAR, few power cuts (loadshedding) in Q3, balanced growth risks, and lower oil prices. The MPC decision was unanimous. SARB governor Kganyago ment

Markets 2026

November 18, 2025 10:30 AM UTC

·        The Fed, ECB and BOE will likely drive further 10-2yr government bond yield curve steepening, with 10yr Bund yields rising due to ECB QT and German fiscal expansion. 10yr JGB yields are set to surge through 2%, as BOJ QT remains excessive and underestimated.  The BOJ could partiall

China: Unbalanced Growth

November 14, 2025 8:15 AM UTC

·       The slowdown in China retail sales continues, with excess production still evident.  Nevertheless, the slowdown in industrial production and private sector business investment suggests that companies are becoming less upbeat about domestic demand.  Underlying growth is 4.0%, though

China: CPI Rises Helped By Government Pressure

November 10, 2025 8:24 AM UTC

•    Less food price decline, plus government pressure to curtail price wars, helped headline and core CPI move higher. However, the September industrial production and retail sales figure shows that the imbalance between supply and domestic demand remains in place.  The imbalance of supply a

China’s 2nd Tier Banking Problems

November 7, 2025 2:45 PM UTC

China’s residential property bust continues to feedthrough to some bank’s non-performing loans and financial stability. Even so, the latest PBOC financial stability report shows the percentage of high risk rated banks has not increased over the last 12 months, while China authorities early warni

Banxico: December In Doubt and Pause Closer

November 7, 2025 9:56 AM UTC

The December Banxico meeting is not guaranteed to see a further 25bps cut, with the November Banxico statement showing more caution over persistent core inflation pressures and given the cumulative easing already seen. Combined with the risk of a Fed pause in December, plus Banxico’s Mexican Peso

Indonesia CPI Review: Sticky Food Prices Lift CPI

November 7, 2025 6:53 AM UTC

Indonesia’s October CPI inflation print of 2.86%—the highest since April—reinforces that price pressures, while still within target, are gradually building. The uptick limits Bank Indonesia’s room to ease policy further in the near term and suggests a more cautious monetary stance ahead.

China: Fiscal Stimulus Modest Rather than Large?

November 3, 2025 9:07 AM UTC

•    Overall, we see around a Yuan2.0-2.5trn fiscal stimulus for 2026 and some of this could be announced in December but the majority in March 2026.  This reflects the fiscal constraints on China authorities; the targeted focus in the 2026-31 five year plan and reluctance to spending on hous

U.S./China Trade Framework: Avoiding Escalation

October 31, 2025 7:48 AM UTC

·         The U.S./China framework deal avoids renewed escalation of trade tension, but is unlikely to be followed by a comprehensive trade deal in 2026 as China does not want major import and bilateral trade commitments.  The economic effects will likely be small and the deal main aim app

Indonesia CPI Preview: CPI to edge up in October

October 29, 2025 1:18 PM UTC

Indonesia’s inflation rate is set to edge up in October, but the uptick should remain well within the central bank’s comfort zone. For now, BI is expected to stay on hold in its next policy meeting, focusing instead on growth stability and external risks.

Bank Indonesia Holds Rates at 4.75% Amid Global Uncertainty:

October 27, 2025 11:54 AM UTC

BI opted to hold its interest rate steady at 4.75% after trimming it in a surprise in September. BI will now wait to see the transmission of earlier rate cuts before proceeding with further action. We expect a steady policy rate going into 2026. 

Unexpectedly, CBR Reduced Key Rate to 16.5% on October 24

October 24, 2025 4:53 PM UTC

Bottom Line: Despite we expected Central Bank of Russia (CBR) to hold the policy rate constant at 17% during the next MPC on October 24 since the pace of the fall in inflation decelerated in September due to heightened gasoline prices after Ukraine stepped up hitting oil refineries in Russia; CBR de

Turkiye MPC Review: Cautious CBRT Reduced Key Rate by 100 bps to 39.5%

October 23, 2025 2:18 PM UTC

Bottom Line: As we expected, Central Bank of Turkiye (CBRT) cut the policy rate by 100 bps to 39.5% during the MPC meeting on October 23 citing slowdown in disinflationary process due to renewed inflationary risks. Our end year key rate prediction remains at 37.0% for 2025 despite the fact that it w

Turkiye MPC Preview: CBRT will Likely Continue its Easing Cycle on October 23

October 20, 2025 7:00 AM UTC

Bottom Line: We think Central Bank of Turkiye (CBRT) will likely reduce the policy rate to 39%-39.5% during the MPC meeting scheduled for October 23 taking deceleration trend in inflation and relative TRY stability into account. We think CBRT will have to proceed carefully on interest-rate adjustmen

Preview: CBR will Likely Hold the Key Rate Stable at 17% on October 24

October 16, 2025 1:09 PM UTC

Bottom Line: We expect Central Bank of Russia (CBR) to hold the policy rate constant at 17% during the next MPC on October 24 since the pace of the fall in inflation decelerated in September due to heightened gasoline prices after Ukraine stepped up hitting oil refineries in Russia; which could also

Indonesia’s 2026 Budget: Populist Spending Meets Fiscal Strain

October 16, 2025 6:17 AM UTC

Indonesia’s 2026 budget marks President Prabowo Subianto’s first full fiscal blueprint—anchored in expansive social spending and a sharp 30% rise in defence outlays, while sidelining his predecessor’s infrastructure push. With revenue targets based on optimistic assumptions and growth foreca

CBRT’s Inflation Target for end-2025 will Likely Be Missed as Actual Inflation Deviates from the Targets

October 7, 2025 5:45 PM UTC

Bottom line: After inflation slightly increased to 33.3% y/y in September from 32.9% y/y in August driven by higher education, housing and food prices, Central Bank of Turkiye (CBRT) governor Karahan announced on October 7 that CBRT will ensure that inflation remains consistent with interim targets

RBI Holds Rates, Balances Growth Optimism with Global Risks

October 2, 2025 6:09 AM UTC

The RBI held the repo rate at 5.5% in its October review, keeping policy neutral after 100 bps of cuts earlier this year. Inflation was sharply revised down to 2.6% in FY26, while growth was upgraded to 6.8%, reflecting resilient domestic demand. The decision reflects a strategy of stability—pausi

Trump Tariffs: China, Mexico and Semiconductors

September 30, 2025 8:00 AM UTC

  ·       Our baseline (60% probability) remains that a U.S./China trade deal will be agreed in Q4/Q1 2026 and it is possible though unlikely that this could be announced at the Trump/Xi meeting at the October 31 APEC summit – China requests that the U.S. changes policy on Taiwan could slo

RBI Likely to Hold Rates, Watchful of Tariffs and Festive Demand

September 29, 2025 6:57 AM UTC

The RBI is expected to keep the repo rate unchanged at 5.5% in its October review, pausing after three consecutive cuts earlier this year. With inflation undershooting and GST rationalisation set to push CPI lower, policymakers see little need for immediate action. The central bank will instead wait

September Outlook: Into 2026 -- Market Implications

September 26, 2025 9:00 AM UTC

Our September Outlook is now published and please see all our markets chapters below.  

Banxico Review: Slower Pace for 25bps Cuts

September 26, 2025 6:39 AM UTC

Banxico cut by 25bps to 7.5%. However, Banxico pushed up the near term inflation forecasts, which could mean that the November 6 meeting does not see a rate cut but rather Banxico waits until the December 18 meeting.  This is our view and we look for 25bps to 7.25%.  We then see two further 25bps

September Outlook: Into 2026

September 25, 2025 6:20 AM UTC

Our September Outlook is now published and please see all our economic and policy chapters below.  

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

September 24, 2025 10:44 AM UTC

Asia/Pacific (ex-China/Japan) Outlook: Balancing Moderation with Resilience

September 23, 2025 11:22 AM UTC

·       Asia’s growth trajectory in 2026 reflects regional resilience under strain. Investment-led economies like India and Malaysia are sustaining momentum via infrastructure push, public capex, and digital industrial policy, while Indonesia’s outlook is clouded by fiscal recalibration a

Outlook Overview: Into 2026

September 23, 2025 8:25 AM UTC

·       The critical question is how much the U.S. economy is slowing down with the feedthrough of President Donald Trump’s tariffs to boost inflation and restrain GDP growth, with the effective rate currently around 17% on U.S. imports. Though semiconductor tariffs are likely, the bulk of

EMEA Outlooks Stay Mixed into 2026: Domestic and Global Uncertainties

September 22, 2025 6:58 AM UTC

·     In South Africa, we foresee average headline inflation will stand at 3.4% and 4.2% in 2025 and 2026, respectively, despite upside risks to inflation such as swings in food prices, supply chain destructions including energy shortages and port inefficiencies and global uncertainties. We see

China Outlook: Headwinds into 2026?

September 19, 2025 9:30 AM UTC

•    Overall, net exports contribution to GDP growth should be tempered in H2 2025, as 30% tariffs bite more progressively and other countries more closely monitor the redirection of China’s exports.  A trade deal with the U.S. remains our baseline, which should reduce tariffs to around 20%

SARB Holds Rate Stable at 7.0% to Bring the Inflation Down to New 3% Anchor and Assess Impacts of Earlier Cuts

September 18, 2025 6:36 PM UTC

Bottom Line: South African Reserve Bank (SARB) held the policy rate at 7.0% during the MPC on September 18 as annual inflation hit 3.3% YoY in August which is above new inflation anchor coupled with surged core inflation. SARB governor Kganyago said on September 18 that MPC expects headline inflatio

Brazil: 15% Well Into 2026

September 18, 2025 6:29 AM UTC

The BCB statement was clear that the deanchored inflation picture still requires interest rates to be kept at current levels for a very prolonged period of time.  The consensus for economists is that this will change in Q1 2026 with a 50bps cut, though ideas of December are fading.  We suspect it

China: Broad Based Slowdown

September 15, 2025 7:55 AM UTC

       •    The latest monthly data from China show a broad based slowdown in the economy, due to the tariffs and structural weakness.  Though we keep 2025 real GDP at 4.8%, the underlying trend suggest a slowdown to 4.0% for 2026.  China authorities will start to announce fiscal measure

CBR Reduced its Key Rate to 17% as Inflation Softened, but Warned Inflation is Still High

September 12, 2025 3:48 PM UTC

Bottom Line: As we expected, Central Bank of Russia (CBR) reduced policy rate by 100 bps to 17% on September 12 taking into account that inflation continued to slow down in Q3 but still warned inflation remains high. CBR stated in its written statement it will maintain monetary conditions as tight

Easing Cycle Continues: CBRT Reduced the Key Rate to 40.5% on September 11

September 11, 2025 5:17 PM UTC

Bottom Line: As we expected, Central Bank of Republic of Turkiye (CBRT) reduced the policy rate by 250 bps to 40.5% during the MPC meeting on September 11 taking moderate fall in inflation and relative TRY stability into account. CBRT highlighted in its written statement that recent data indicate de

Indonesia’s August CPI Eases

September 2, 2025 6:27 AM UTC

Inflation is well behaved, food remains a wildcard, and core pressures are easing—giving Bank Indonesia continued policy flexibility as it weighs growth support against global uncertainty.

Aging: Slow Growth for Some in 2020’s

September 1, 2025 8:35 AM UTC

   Population aging always seems to be beyond the market horizon, but the 2020’s are already seeing population aging in some countries.  What is the economic impact? Aging is already causing a peak in labor force in China and the EU. Meanwhile, the population pyramid also means less consumptio

Bank Indonesia Delivers Surprise Second Rate Cut to Shield Growth

August 21, 2025 5:10 AM UTC

BI is opting for early stimulus while macro buffers remain strong—stable rupiah, low inflation, and manageable deficits. However, this window may close quickly if external risks materialise. Business leaders should expect a monetary pause in Q3, but prepare for moderate volatility if inflation or

U.S./China Trade Deal: Slow Progress

August 20, 2025 10:25 AM UTC

·        Overall, we would attach a 50% probability to a trade framework deal being announced in Q4, though this is unlikely to be comprehensive and could merely be a collection of measures. Even so, the risk also exists of trade negotiations dragging onto 2026 and then reaching a deal or fa

China Slow Diversification: Gold And Others

August 19, 2025 8:05 AM UTC

 China’s diversification from U.S. Treasuries appears to be at a slow pace.  Gold is the obvious alternative if geopolitical tensions were to rise or skyrocket in the scenario of a China invasion of Taiwan.  However, Gold holdings are merely creeping higher and suggesting no urgency from China

Rate Hold Expected as Bank Indonesia Eyes H2 Trade Risks

August 19, 2025 6:26 AM UTC

With headline inflation still well-contained, core pressures softening, and the economy showing signs of resilience, Bank Indonesia is expected to keep rates on hold. Further easing may come later in H2—but only if external risks re-intensify or domestic growth falters.

China Slowdown In July

August 15, 2025 7:03 AM UTC

 •    Retail sales sluggishness reflects households cautious due to the hit to housing wealth and uncertainty over jobs and wage growth.  Investment softness reflects not only residential property weakness, but also a slowdown in government infrastructure. This weakness could see a top up fi

China: Echoes of Japan?

August 13, 2025 8:05 AM UTC

     Overall, some of China’s private businesses and households are suffering from Japan’s style balance sheet recession.  Combined with slowing productivity and a shrinking workforce, this points to slower trend growth in the coming years.  However, fiscal stimulus and the clean-up of Loca

Mexico: Further 25bps Cuts Ahead

August 8, 2025 6:44 AM UTC

Banxico forward guidance, plus trade policy risks with the U.S. now see us forecasting an end 2025 policy rate at 7.25% with two 25bps cuts in September and December. We now feel that the risks to 2026 growth will encourage Banxico to move the policy rate down to 6.5% by spring 2026 by two 25bps rat

EM Rates: Domestic Fundamentals Dominate

August 7, 2025 9:30 AM UTC

Once trade is agreed with the U.S., the good fundamentals actually argue for a 10yr Mexico-U.S. spread close to 400bps and this is our favored strategic risk reward for big EM government bonds. In Brazil a case can be made for a 12.75% policy rate end 2026 and 10% in 2027, but this could only mean 1

No Rush to Ease: RBI Flags External Risks, Holds Policy Steady

August 6, 2025 4:39 PM UTC

The RBI held the policy rate at 5.5% in its August 2025 meeting, opting for a strategic pause after front-loading 100bps of cuts earlier this year. While inflation has dropped sharply, global trade risks and sticky core prices argue against further easing for now. The central bank’s neutral stance

Indonesia Q2 GDP Beats Expectations

August 5, 2025 9:45 AM UTC

Q2’s outperformance gives Indonesia’s economic planners breathing space. Investment recovery is a strong positive signal, but sustaining growth in H2 will depend on policy agility, export resilience, and keeping domestic consumption robust.

Trump Tougher Posture with Russia

August 4, 2025 8:31 AM UTC

      We suspect that Trump will not follow-through with an across the board secondary sanction on importers of Russia oil, as it would freeze U.S./China trade again and could boost U.S. gasoline prices – high inflation is one main reason for Trump’s softer approval rating.  Trump could agre

Indonesia’s Trade Surplus Widens Sharply in H1 2025 Despite Tariff Headwinds

August 3, 2025 4:43 PM UTC

Indonesia’s June trade numbers reflect a strong first-half export performance, bolstered by frontloading ahead of US tariffs. The 62-month surplus streak highlights ongoing resilience, but softer trade momentum in H2 is anticipated as the tariff impact begins to filter through.

Indonesia’s July CPI Rises on Food Prices, But BI Still Has Room to Ease

August 3, 2025 3:27 PM UTC

Despite a food-driven uptick in July CPI, Indonesia’s inflation remains comfortably within Bank Indonesia’s target range. BI retains room to cut rates further in H2—though global uncertainty, particularly around US trade policy and Fed moves, may temper the pace of easing.

Reciprocal Tariffs: Some Hikes, Deals and Delays

August 1, 2025 8:40 AM UTC

 Though high reciprocal tariffs with some countries catches the headline, five of the top 10 countries with large bilateral deficits have reached framework trade deals, two have delays and three have higher tariffs imposed.  With exemptions on some USMCA Canada/Mexico goods, plus phones/ semicondu