Outlook
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March 30, 2026
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
March 26, 2026
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
March 25, 2026
DM FX Outlook: The Rest of 2026
March 25, 2026 7:55 AM UTC
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. This should see the USD return to a weaker profile later in the year. In our December Outlook, our favorites were the AUD and NOK based on yield spreads, but it is also worth noting th
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,
March 24, 2026
Commodities Outlook: The War in Action
March 24, 2026 2:30 PM UTC
Oil markets in 2026 have been extremely volatile due to the conflict in Iran and disruptions in the Strait of Hormuz. Under our baseline scenario of a 4-8 week war (here), we project WTI to average between USD 65 and 70 by year-end. In an alternative scenario of a prolonged multi-month conflict, pri
U.S. Outlook: Investment to Lead Growth, Underlying Inflation Set to Slow
March 24, 2026 12:15 PM UTC
• The crisis in the Middle East poses upside risks to headline inflation and downside risks to activity and our baseline assumes a 4-8 week war with a partial reversal of energy prices by end Q2 (here). Our forecasts (below) include a soft patch in H2 2026. Entering 2026 however, the U.S. e
DM Rates Outlook: Mixed Policy Rate and Yield Paths
March 24, 2026 8:46 AM UTC
· The multi quarter outlook for DM rates depends on the length of the Iran war Our baseline is that it will be a 4-8 week war (here) and a 3-4 quarter retracement of oil prices back to pre-war levels – longer from Europe and Asian gas prices. We forecast WTI down to USD80-85 by June
Western Europe Outlook: Economies Slip on Oil
March 24, 2026 8:00 AM UTC
· In the UK, even without the Middle East impact we were suggesting a sub-consensus 2026 GDP picture which now has even greater downside risks attached. Our baseline is for 4-8 week war and a reversal of oil prices over 3 quarters. The BoE has a symmetric stance between 2nd round effe
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
Japan Outlook: A Perfect Window
March 24, 2026 3:59 AM UTC
• Private consumption is supported by real wage turning positive in 2026. The trend is solidified by early spring wage negotiation results, which major firms agree to hike stronger than 2025 levels. We revised 2026/27 GDP to +1% as wage gains likely to accelerate. We expect 2026 CPI to be s
March 23, 2026
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
Equities Outlook: Navigating Cyclical and Structural Forces
March 23, 2026 4:15 PM UTC
· For global equities, our baseline (here) is for a 4-8 week Iran war, with WTI down to USD80-85 by June; USD65-70 end 2026 by June and USD60 by Q3 2027. A fragile situation will mean it will take until 2027 for energy prices to return to pre-war levels. On a multi-quarter basis thi
February 10, 2026
EUR/USD: Europe’s Counter Threats to Trump
February 10, 2026 11:05 AM UTC
· Europe is highly unlikely to weaponize its existing portfolio holdings or new flows into the U.S., as Europe is dependent on the U.S. nuclear umbrella and as EZ/EU decision making is slow and modest in action. Such a move would be strongly opposed by EZ/European investors. Even so,
January 06, 2026
Markets 2026
January 6, 2026 9:58 AM UTC
• For financial markets, the muddle through for global economics and policy provides support for risk assets, combined with solid earnings prospects from some of the magnificent 7. However, U.S. equities are once again significantly overvalued and we look for a 5-10% correction in 2026, b
January 05, 2026
AI and U.S. Productivity
January 5, 2026 8:04 AM UTC
· Structural labor and overall productivity will be boosted if current AI adoption is sustained at a pace quicker than the adoption of the internet. However, not all areas of the U.S. economy are exposed to AI benefits, as manual work can only be replaced by humanoid robots with maj
December 19, 2025
Western Europe Outlook: Underlying Price Pressures Ebbing
December 19, 2025 9:34 AM UTC
· In the UK, we have upgraded 2025 GDP growth by 0.1 ppt to 1.3%, but pared back that for next year by a two notches to a very sub-par 0.6%. We think the weak(er) labor market will accentuate somewhat refreshed disinflation allowing the BoE to ease further in 2026 by around 75 bp to 3.0
Japan Outlook: Putting One Foot in Front
December 19, 2025 7:15 AM UTC
· Private consumption growth is hindered by negative real wage in Q3 2025 yet Japan continues to demonstrate the structural change in both higher business price/wage setting and consumer behavior. Early signs for 2026 spring wage negotiation are upbeat and should see wage growth at
December 18, 2025
DM FX Outlook: Scope for USD decline against JPY, AUD and NOK
December 18, 2025 2:31 PM UTC
· Bottom Line: We expect some modest USD losses across the board over the next couple of years, but there is much more scope for losses against the JPY, AUD and NOK than the other G10 currencies, as yield spreads have moved dramatically in favour of these currencies, and the currencies
December 17, 2025
DM Rates Outlook: 2026 Yield Curve Steepening Before 2027 Flattening
December 17, 2025 9:21 AM UTC
· Multi quarter, we still look for 50bps of further Fed easing by end 2026, which will likely initially bring 2yr yields down to 3.35%. However, once the Fed Funds rate get closer to 3.0-3.25% and the assumed slowdown turns into a soft landing, the 2yr will likely move to a premium ve
Outlook Overview: Turbulent Times
December 17, 2025 7:44 AM UTC
· The U.S. slowdown remains in focus as the lagged effects of President Trump’s tariff increases continues to feedthrough, though our baseline is for a 2026 soft-landing. The Supreme court will likely rule against part of Trump’s reciprocal tariffs, which will create short-term
December 16, 2025
Asia/Pacific (ex-China/Japan) Outlook: Managing Slower Growth Without Losing the Cycle
December 16, 2025 2:43 PM UTC
· Asia’s 2026 growth is normalizing, not weakening, though the growth outlook reflects resilience under mounting strain rather than acceleration. Larger investment-led economies such as India and Malaysia are sustaining momentum through public capex, infrastructure pipelines, and indu
Commodities Outlook: A Balancing Act
December 16, 2025 10:15 AM UTC
Global oil demand is expected to be modest, with weak consumption in the U.S. and China, while India will support demand in 2026 and 2027. Non-OPEC supply is expected to expand moderately in 2026, whereas OPEC’s policy will respond to demand but remains puzzling. Supply trends in 2027 are likely t
December 12, 2025
U.S. Outlook: Consumers Vulnerable, but Recession Unlikely
December 12, 2025 4:38 PM UTC
• US GDP growth is likely to look solid in Q3 2025 supported by resilient consumer spending, but with slowing employment growth and resilient inflation weighing on real disposable income that will be difficult to sustain. However, while consumers look vulnerable, business investment looks h
Equities Outlook: Choppy Up For 2026 and Down for 2027?
December 12, 2025 8:05 AM UTC
· The U.S. equity market is underpinned by the bullish AI/tech story and a soft economic landing into 2026. However, overvaluation is clear and this leaves the market vulnerable to a 5-10% correction on moderate bad news e.g. economic data. We see the S&P500 having a choppy year a
December 11, 2025
China Outlook: Headwinds Get Stronger
December 11, 2025 10:30 AM UTC
· Private domestic demand remains modest, with consumption ranging from modest to moderate (slowed by the housing wealth hit and soft jobs/wage growth) and investment further impacted by the ongoing adverse drag of the residential property bust. China’s authorities prefer a long and
December 08, 2025
AI and U.S. Equities
December 8, 2025 8:50 AM UTC
· The AI story has driven broad momentum in the U.S. equity market, but will likely become narrower driver in 2026 and 2027, as not all big AI/tech companies will generate clear explosive revenue from areas outside cloud computing and semiconductor chips. Companies that are also depende
November 06, 2025
U.S. Equities: Smaller Correction But Still Overvalued
November 6, 2025 10:25 AM UTC
· We are revising up our end 2025 S&P500 forecast from 6000 to 6500 for a number of reasons. Private sector data shows the risk of a U.S. hard landing is lower than a couple of months ago, with economic data more consistent with a soft landing. Additionally, the tech/AI optimism has n
October 01, 2025
AI/Humanoid Robots and Disinflation?
October 1, 2025 9:40 AM UTC
· Overall, a number of forces from the AI wave will impact inflation. Power demand could push up power prices, but productivity enhancements and product innovation could be disinflationary like Information and Communications technology (ICT). One other key uncertainty on a 1-5 year
September 24, 2025
September 23, 2025
DM FX Outlook: USD steadies but vulnerable to equity correction
September 23, 2025 2:48 PM UTC
· Bottom Line: The USD has continued to edge lower against the EUR in the last quarter as market expectations of Fed easing have increased following clear weakening in U.S. employment growth. But at this stage the data doesn’t indicate we are heading for recession, and this suggests w
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
Western Europe Outlook: Policy Divergences
September 23, 2025 9:54 AM UTC
· In the UK, we have upgraded 2025 growth by 0.2 ppt back to 1.0%, but pared back that for next year by a notch to a sub-par 0.8%. We think this will refresh somewhat stalled disinflation allowing the BoE to ease further into H1 by around 75 bp.
· Sweden has seen a clear e
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
DM Rates Outlook: Steepening Yield Curve The Old Normal?
September 23, 2025 7:53 AM UTC
• We continue to forecast further yield curve steepening across the U.S./EZ and UK, driven by cumulative easing. For the U.S. this can see a modest further decline in 2yr yields, but the prospect is for a move to a premium of 2yr to Fed Funds (unless a hard landing is seen). 10yr yields
Equities Outlook: Correction Then Up In 2026
September 23, 2025 7:15 AM UTC
• The U.S. equity market’s bullishness reflects good corporate earnings reality, buybacks and the AI story. However, we feel that the U.S. economy can deteriorate still further in the coming months, as the lagged effects of tariffs boost inflation and restrain spending/hurt corporate ea
September 22, 2025
Commodities Outlook: Markets in Motion
September 22, 2025 10:30 AM UTC
OPEC+ has entered a new supply cycle, gradually reversing a second layer of voluntary cuts. The latest 1.65 mln b/d tranche is being phased out at 137,000 b/d monthly, likely completed by September 2026, while 2 mln b/d of group-wide cuts remain until the end of 2026. Non-OPEC supply growth will lik
U.S. Outlook: Fed Easing to Prevent Recession, but May Also Keep Inflation Above Target
September 22, 2025 10:15 AM UTC
• GDP growth, supported in particular by business investment, was resilient in Q2, but growth in employment is now minimal and that will weigh on consumer spending, particularly with tariff-supported inflation set to restrain real wage growth. Recession is a risk if we see a vicious circle
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
Japan Outlook: Ready for Another Step
September 22, 2025 1:30 AM UTC
• The recovery in private consumption surprised to the upside is Q2 2025 because wage growth regained traction after clarity on the U.S.-Japan trade front. The gradual transition of business price/wage setting behavior will continue to support consumption in 2025/26. Trade balance in 2025 h
September 19, 2025
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%
September 16, 2025
Succession and Strongmen Leaders
September 16, 2025 10:53 AM UTC
In the unexpected scenario of an early death, Putin and Xi have no clear successors, and any new Russia or China leader would have to spend time building domestic strength and compromising on external goals. Erdogan also has no clear successors, which could create political uncertainty. For Trump su
September 01, 2025
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
August 26, 2025
France and Italy: Deficit, ECB QT and Foreign Debt Holders Stories
August 26, 2025 7:35 AM UTC
A large budget deficit in France, looking persistent given the current political impasse, combined with ECB QT means that the market has to absorb a very large 8.5% of GDP of extra bonds. Our central scenario is that persistent French supply causes a further rise in 5yr plus French government yields
July 28, 2025
Food Glorious Food
July 28, 2025 10:15 AM UTC
· Global food prices should see small increases in the future, as production continues to rise broadly in line with increasing demand driven by population and a rising consumption per person in EM countries. However, China will remain dependent on food imports given it has limited roo
July 24, 2025
EM Currencies with a USD Downtrend
July 24, 2025 10:15 AM UTC
· BRL, ZAR and MXN have been helped by FX carry trades and bond inflows on still wide interest rate differentials. However, actual reciprocal tariff risks are high for all three countries and a wave of profit-taking could be seen. Elsewhere, though we see a U.S./China trade deal by