South Africa MPC Preview: Close Call on May 28

May 21, 2026 1:15 PM UTC

Bottom Line: Taking into account that annual inflation increased to 4.0% y/y in April due to higher energy and transportation prices, we think South African Reserve Bank (SARB) will likely consider hiking the rate by 25 bps to 7.0% during the next MPC scheduled on May 28 given plenty of upside risks

Middle East Conflict: U.S. Helping Chinese Whispers?

May 15, 2026 11:26 AM UTC

 In hosting President Trump this week, China feels it is vying, if not achieving, parity with the U.S. as the world’s superpowers; from China’s perspective, it regards Russia similarly.  It does seem as if China’s goal at this summit was to get more effective flexibility in shaping Taiwan’

CBRT Hiked its End-Year Inflation Forecast to 26% Amid Economic Pressures

May 14, 2026 12:21 PM UTC

Bottom Line: Central Bank of Turkiye (CBRT) released its second quarterly inflation report of the year on May 14, and hiked its end-year inflation target to 26% for 2026, 15% for 2027 and 9% for 2028 citing the impact of the war in the region, higher energy prices and increased uncertainty over the

Straits of Hormuz Scenarios

May 7, 2026 6:25 AM UTC

·       Our new baseline (70% probability) is for the Straits of Hormuz to start to partially reopen by June/July based on a framework deal between Iran and the U.S.  This means more elevated oil prices in Q2, but then a gradual reduction in WTI to USD85 end-2026 and USD75 end 2027.  The al

Big EM: Diverging Fiscal Trends

April 28, 2026 12:35 PM UTC

·       EM government bond spreads are controlled as 2nd round inflation effects are likely to be less than 2022, due to less buoyant domestic demand/slacker labour markets and less global supply chain pressure ex oil/oil products.  Brazil is expected to cut rates and others will likely not

Straits of Hormuz Standoff and Mixed Markets

April 27, 2026 9:02 AM UTC

•    Equities longer time horizon means that they are hoping for a reopening of the Straits of Hormuz (though also being helped by renewed AI optimism), whereas government bond markets actually want to see tangible progress and an associated tempering of DM central banks posturing.  This dive

8th Consecutive Cut: CBR Reduced the Rate to 14.5% Despite Risks

April 24, 2026 5:02 PM UTC

Bottom Line: Following the Central Bank of Russia’s (CBR) 50 bps cut on March 20—driven by the disinflationary trend in Q1—the CBR continued its easing cycle on April 24 reducing the rate from 15.0% to 14.5% despite inflationary risks. CBR maintained a cautious tone on inflation and future pol

CBRT Kept Key Rate Constant at 37% Due to Inflationary Risks

April 23, 2026 9:46 AM UTC

Bottom Line: Central Bank of Turkiye (CBRT) held the policy rate constant at 37% during the MPC meeting on April 22 due to inflationary risks as the economy remains under pressure from Iran war, which sparked a surge in energy, transportation and agricultural input costs. We think fragile cease-fire

Iran Conflict – Who Has the ‘Trump’ Card

April 22, 2026 9:17 AM UTC

When Trump aspires to reaching a deal, he thinks in either black or white.  But whether it be political, economic or military the reality is that the world is always various shades of grey.  This is very much evident in the way the Iran conflict was planned by the U.S. – the expected clear and r

CBR Will Likely Cut the Rate to 14.5% on April 24 Despite Risks

April 16, 2026 1:45 PM UTC

Bottom Line: Following the Central Bank of Russia’s (CBR) 50 bps cut on March 20—driven by the disinflationary trend in Q1—we expect the CBR to continue its easing cycle on April 24 reducing the rate from 15.0% to 14.5% despite inflationary risks. Our year-end key rate forecast is 13% for 2026

China: GDP Beat, But Domestic Demand Weak

April 16, 2026 6:39 AM UTC

•    Q1 GDP beat expectations helped by Industrial production, but the domestic demand picture remains weak with soft consumption and the ongoing negative drag from the residential property sector. We still feel that the economy remains too dependent on high tech manufacturing and modest consu

Turkiye MPC Preview: Key Rate Will Likely Be Held Constant on April 22 MPC

April 15, 2026 3:40 PM UTC

Bottom Line: We think Central Bank of Turkiye (CBRT) will likely hold the policy rate stable at 37% during the MPC meeting scheduled for April 22 due to inflationary risks as both geopolitical uncertainties and domestic dynamics remain significant risk factors for the inflation outlook. Our end-year

DM Central Bank Signals Awaited

April 15, 2026 12:12 PM UTC

·       Fed/ECB and BOE meetings will likely see concern over the potential 2nd round inflation effects from the Iran war, but forecasts seeing inflation coming down in 2027 and no imminent signals of tightening from the ECB/BOE – our baseline remains for easing later in the year, as energy

Iran Blockade and What Next?

April 13, 2026 9:58 AM UTC

·       Though the U.S. is introducing a blockade on Iran oil exports, we think the U.S. and Iran remain reluctant to restart the war.  How Iran responds to the U.S. blockade is important.  It could choose to respond by attacking Gulf energy installations before or after the 2-week ceasefir

China: Oil boosts PPI but CPI Less

April 10, 2026 7:37 AM UTC

•    Given lags and the still elevated oil prices for Q2/Q3 delivery it is likely that PPI will be further boosted in the coming months. This could boost 2026 China CPI by around 0.3-0.4% and we changed our 2026 forecast to 1.4% in the March Outlook (here) -- the higher price of Fertilizers wi

2-Week Ceasefire, Then?

April 8, 2026 10:09 AM UTC

·       The ceasefire will likely involve a new normal of shipping companies paying Iran a toll.  While this is adding a cost to Gulf crude oil/products and LNG, the premium will be a lot lower than the cost of an ongoing war.  The U.S. and Iran will now likely be reluctant to restart the w

CBRT Outlook: Geopolitical Risks, Rising Inflation Targets, and the Credibility Gap

March 31, 2026 12:16 PM UTC

Bottom Line: Persistent structural domestic headwinds and geopolitical volatility make the Central Bank of Turkiye’s (CBRT) inflation targets increasingly unattainable, risking a further erosion of institutional credibility. While the CBRT has recently revised its 2026 midpoint target upward (now

Iran War: Invasion Risks

March 31, 2026 10:55 AM UTC

·       Any ground-based invasion would likely result in a long war and Iran would likely counter with attacks on energy or other key facilities around the Gulf.  Sea and air based invasions are also difficult, while any victory would likely be followed by occupation.  WTI oil prices would

Markets: Short vs Long Iran War

March 30, 2026 8:00 AM UTC

·       For a 4-8 week war and 3-4 quarters of energy price normalisation, we see a 10% U.S. equity market correction in H1 2026 driven by the current Iran war and/or consumption slowing due to lower (real) wage growth, alongside still stretched valuations in equity and equity-bond terms.  T

Mexico: March 25bps Cut, Then September?

March 27, 2026 8:01 AM UTC

Banxico decided to cut the policy rate by 25bps from 6.75% due to concerns over the economy, which could be hurt additionally by the Iran war.  However, Banxico inflation forecasts are yet to reflect the shift in oil prices and the prospect of further upward revisions argue against a May or June cu

SARB Kept the Key Rate Stable at 6.75% Due to Inflationary Risks

March 26, 2026 3:13 PM UTC

Bottom Line: South African Reserve Bank (SARB) kept the policy rate unchanged at 6.75% during the MPC on March 26 due to inflationary risks. We anticipate that a weakening rand, driven by higher oil prices and surging food costs to the war in Iran, will likely push inflation over 4% in Q2/Q3, and SA

March Outlook: Iran War and AI Challenges

March 26, 2026 7:17 AM UTC

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

Asia/Pacific (ex-China/Japan) Outlook: The Iran War Shock

March 26, 2026 7:10 AM UTC

·       The Iran war macro impact on Asia depends on length of the conflict and impact on energy flows. Our baseline is for a 4-8 week Iran war, with WTI down to USD80-85 by June; USD65-70 end 2026 and USD60 by Q3 2027 (here).  
·       India GDP growth has been revised down slightly

EM FX Outlook: Weathering the Storm

March 25, 2026 8:45 AM UTC

·       EM currencies have seen a correction against the USD since the risk off prompted by the Iran war, but our baseline remains for a 4-8 week war (here) followed by energy prices only returning to pre-war levels by 2027 -- with WTI down to USD80-85 by June; USD65-70 end 2026 and USD60 by

EMEA Outlook: Adverse Global Developments and Domestic Uncertainties Dominate

March 25, 2026 7:00 AM UTC

·     In South Africa, we foresee average headline inflation will stand at 3.8% and 3.5% in 2026 and 2027, respectively based on our baseline of a 4-8-week war in Iran and energy prices easing from Q2. Upside risks to inflation remain such as 2nd round effects of oil price hikes, utility costs,

China Outlook: Cyclical and Structural Headwinds

March 24, 2026 7:30 AM UTC

·       Our baseline scenario of a 4-8 week war (here) is not a problem, aside from higher prices.  We have pushed up our 2026 CPI forecast to 1.4% from 0.5% (higher food prices are also an issue), but as oil/gas prices come down, this suggests very subdued 2027 inflation, which we have cut

Outlook Overview: Iran War and AI Challenges

March 23, 2026 4:39 PM UTC

·       The Iran war macro impact depends on length of the conflict and impact on energy flows. Our baseline is for a 4-8 week Iran war, with WTI down to USD80-85 by June; USD65-70 end December and USD60 by Q3 2027 (here).  The jump in oil and gas prices mean at least a temporary increase in

Iran War Scenarios Updated

March 23, 2026 3:04 PM UTC

·       Our central scenario remains a 4-8 week war in Iran. Trump’s loathing of long wars and high gasoline prices will likely prompts the U.S. to declare victory.  A formal ceasefire is unlikely, but the end of hostilities could see an informal understanding of the Straits of Hormuz for

CBR Cuts Key Rate by 50 Bps to 15% Despite Risks

March 20, 2026 6:16 PM UTC

Bottom Line: Despite adverse global developments and proinflationary risks, the Central Bank of Russia (CBR) reduced the policy rate by 50 bps to 15% on March 20 likely to stimulate the economy as it comes under increasing strain from high borrowing costs. CBR noted in its written statement that it

China: Modest Bounce at Start of 2026, But

March 16, 2026 8:49 AM UTC

·       Though the January-February data was better than expected, we expect high oil prices and an adverse effect from the Iran war to hurt China’s export growth.  We still feel that the economy remains too dependent on high tech manufacturing and modest consumption will act as a drag on

CBRT Pauses Easing Cycle; Policy Rate Held at 37% Due to Surges in Oil Prices and CPI Increase in February

March 12, 2026 8:20 PM UTC

Bottom Line: The Central Bank of Turkiye (CBRT) kept its policy rate constant at 37% during the MPC meeting on March 12. This decision effectively pauses the bank’s easing cycle in response to heightened market volatility and rising energy costs driven by the ongoing war in Iran. While February's

China: 4.5-5.0% GDP Growth for 2026

March 5, 2026 9:16 AM UTC

•    China announced a central government budget deficit at 4% of GDP, which is the same as last year and points to only modest fiscal stimulus.  Though investment was supported, consumption trade in programs were cut from Y300bln to Yuan250 and no new structural safety net for households hav

China: Yuan Appreciation; U.S. 301 Threat and 4.5-5.0% GDP Growth for 2026?

March 3, 2026 6:35 AM UTC

•    The Yuan has continued to appreciate with no resistance from China authorities. Part of this is a willingness to allow a modest Yuan appreciation in the face of the huge China trade surplus and pressure from U.S./Europe/IMF and others over an undervalued Yuan, but appreciation is also des

India GDP preview: India’s Economic Momentum to Ease in Q3 FY26

February 26, 2026 1:07 PM UTC

India’s Q3 FY26 GDP growth is expected to moderate to around 7%, down from over 8% in the previous quarter, reflecting base effects and softer services momentum. The bigger story may lie in the new GDP series revisions, which could reshape the recent growth narrative more than the headline quarter

China: Housing Not Bottomed Yet

February 25, 2026 10:55 AM UTC

•    We do not feel that China residential property market has bottomed, as it faces two cyclical and two structural headwinds.  Cyclically outstanding inventory of complete houses remains high, while households are also suffering from low income and employment growth.  Structurally populati

Taiwan: Trade Deal with U.S. and China Grey Warfare

February 18, 2026 11:55 AM UTC

·        The most likely option for China is to continue the air and naval grey zone warfare around Taiwan, combined with support for pro-China factions in Taiwan’s parliament to build pressure for reunification at some stage before 2049 (the 100th anniversary of the communist party).  Wi

China: Boosting Consumption In March?

February 17, 2026 2:05 PM UTC

·       China’s consumption medium term could be boosted by higher structural safety nets (social spending/health/pensions) and revisions to the Hukou system (shifting 200mln urban workers from lower rural to higher urban benefits). However, March NPC will likely see only further small to m

Surprising Move by the CBR: 50 Bps Interest Rate Cut Despite Inflationary Risks

February 13, 2026 12:48 PM UTC

Bottom Line: Despite we expected the Central Bank of Russia (CBR) to hold the policy rate at 16% during the MPC on February 13 and anticipated a cautious stance as the Bank monitors inflationary risks, including the VAT hike in 2026, utility tariff increases, and elevated inflation expectations; the

Mexico: March Pause Rather Than Cut?

February 6, 2026 7:52 AM UTC

Banxico paused as expected, but revised the peak in inflation to 4% from 3.7% and pushed back the forecast of when inflation is expected to hit the target. Though the economy is still expected to be below trend in 2026, the inflation/growth tradeoff is causing Banxico members to debate whether furth

CBR will Likely Keep the Key Rate Stable on February 13

February 5, 2026 9:07 AM UTC

Bottom Line: Following the Central Bank of Russia’s (CBR) 50 bps cut to 16% on December 19—driven by an accelerated disinflationary trend in Q4—we expect the CBR to hold the policy rate at 16% on February 13. This cautious stance is anticipated as the Bank monitors inflationary risks, includin

U.S. Inflows: Portfolio Dominates

February 4, 2026 12:05 PM UTC

·        Portfolio flows have dominated U.S. C/A financing looking at the breakdown of the balance of payment data (BOP), with no material slowdown in 2025 from foreign investors. U.S. investors did accelerate buying of overseas equities but this was counterbalanced by slower U.S. buying of

Indonesia CPI Review: Inflation Peaks on Base Effects, Not Demand

February 3, 2026 6:52 AM UTC

The January inflation spike is more noise than signal, driven by base effects, not a demand surge. With core pressures steady and the rupiah in focus, BI remains on a measured path. Easing remains likely in H1.

Markets: Profit-Taking or More?

February 2, 2026 9:22 AM UTC

•    For now we see some further profit-taking on risky positions in gold/silver/copper/equities and short USD positions.  However, a bigger macro catalyst is required to produce a deep correction in equities and major risk off.  The nomination of Kevin Warsh for Fed chair is unlikely to be

Rate Hold Masks Deeper Questions on BI’s Policy Independence

January 26, 2026 4:35 PM UTC

Bank Indonesia held rates in November as expected, prioritising rupiah and inflation stability over premature easing. While a December cut remains likely—especially if the Fed turns dovish—BI has made clear it will move only under the right conditions.

Rupee Volatility Tests RBI, But Buffers Remain Strong

January 16, 2026 1:12 PM UTC

India’s forex reserves are under pressure from capital outflows and rupee weakness, but the system remains resilient. The RBI has room to manage volatility, backed by strong reserve buffers. 

China: 2026 Modest Rather Aggressive Policy Support

January 15, 2026 10:55 AM UTC

•    On January 15, PBOC cut the 1yr structural lending rate from 1.5% to 1.25% in a targeted move to benefit some borrowers from banks.  Monetary policy will likely remain targeted rather than broad and we see only one 10bps cut in the 7 day reverse repo rate in 2026, as policymakers are con

Taiwan: Worst Case Consequences

January 13, 2026 3:26 PM UTC

·        The most likely option for China is to continue the air and naval grey zone warfare around Taiwan, combined with support for pro-China factions in Taiwan’s parliament to build pressure for reunification at some stage before 2049 (the 100th anniversary of the communist party).  Wi

Turkiye MPC Preview: Easing Cycle Will Continue on January 22

January 12, 2026 1:02 PM UTC

Bottom Line: We think Central Bank of Turkiye (CBRT) will likely reduce the policy rate to 36.5%-37% during the MPC meeting scheduled for January 22 supported by continued deceleration trend in inflation in December and relative TRY stability. CBRT will have to proceed carefully on interest-rate adj

Indonesia CPI Review: Festive demand drives CPI in December

January 8, 2026 6:50 PM UTC

December’s inflation uptick looks more festive than fundamental. With core pressures muted, Bank Indonesia has room to hold rates, but little appetite to loosen them just yet.