Macro Strategy

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July 17, 2025

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Deal or Dilemma: What the US–Indonesia Trade Pact Really Means
Freemium Article

July 17, 2025 5:46 AM UTC

The US–Indonesia trade deal marks a significant geopolitical and economic pivot, reducing a threatened 32% tariff to 19% in exchange for USD 34bn in US imports and open market access. While the agreement offers Jakarta temporary relief, it locks the country into a transactional trade model amid ri

July 15, 2025

Tax Shortfalls and Slow Growth Complicate Indonesia’s Budget Plans
Paying Article

July 15, 2025 3:05 PM UTC

Indonesia’s fiscal position is coming under renewed strain, as weaker-than-expected revenue collection forces the government to widen its 2025 budget deficit to 2.78% of GDP—above initial targets but still below the legal threshold. Delays in VAT implementation, falling commodity prices, and mod

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U.S. June CPI - Tariff pass-through limited but not zero
Paying Article

July 15, 2025 12:58 PM UTC

June core CPI at 0.228% before rounding is on the low side of expectations and still shows a limited, though not zero, feed through from tariffs. Moderate gains in food and energy lifted overall CPI to a 0.3% increase, with the gain rounded up from 0.287%.  Trump will use this data to argue for Fed

July 14, 2025

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Preview: Due July 15 - U.S. June CPI - A little more from tariffs
Paying Article

July 14, 2025 2:15 PM UTC

We expect June CPI to increase by 0.3% overall and by 0.3% ex food and energy, with the overall pace close to 0.3% before rounding but the core rate rounded up from 0.27%. This would still be the strongest core rate since January and reflect tariffs starting to feed through, something expected by Fe

July 11, 2025

High Stakes and Heavy Metals: The Geopolitics of the US–Indonesia Tariff Deal
Freemium Article

July 11, 2025 7:37 AM UTC

As the U.S. sharpens its protectionist stance, Indonesia is scrambling to avert a 32% tariff by offering a USD 34bn investment-anchored trade package, including energy and agricultural imports, Boeing orders, and sovereign wealth fund commitments. This negotiation goes far beyond trade—it is a hig

July 10, 2025

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Preview: Due August 1 - U.S. July Employment (Non-Farm Payrolls) - Slower overall, but stronger in the private sector
Freemium Article

July 10, 2025 2:53 PM UTC

We expect a 125k increase in July’s non-farm payroll, slightly slower than in each month of Q2 but slightly stronger than in each month of Q1. We expect a 110k rise in private sector payrolls, up from 74k in June but slower than in April and May. An unchanged unemployment rate of 4.1% and a 0.3% r

July 03, 2025

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U.S. June Employment - Some signs of slowing activity, but lower unemployment suggests no urgency for Fed easing
Freemium Article

July 3, 2025 1:09 PM UTC

June’s non-farm payroll is surprisingly strong overall with a rise of 147k, with 16k in net upward revisions, but private payrolls at 75k are weaker than expected, with 16k in net negative revisions. Unemployment unexpectedly fell to 4.1% from 4.2%, but average hourly earnings are weaker than expe

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U.S. Assets and Valuation
Paying Article

July 3, 2025 9:30 AM UTC

    The U.S. equity market has returned to be clearly overvalued on equity and equity-bond valuations measures and is vulnerable to a new correction in H2 on any moderate bad news (e.g. further economic slowing and corporate earnings downgrades).   In contrast, U.S. Treasuries are at broadly fai

July 02, 2025

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Preview: Due July 3 - U.S. June Employment (Non-Farm Payrolls) - Increasing signs of slowing, but not a recession
Paying Article

July 2, 2025 1:01 PM UTC

We expect a 75k increase in June’s non-farm payroll, significantly slower than May’s 139k though consistent with a slowdown in growth rather than an economy entering recession. We expect an in line with trend 0.3% increase in average hourly earnings and an uptick in unemployment to 4.3% after th

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DM Central Banks: Overlooking Lagged 2021-23 Tightening and QT?
Paying Article

July 2, 2025 8:30 AM UTC

We are concerned that DM central banks are underestimating the lagged impact of 2021-23 tightening and ongoing QT, which impacts the transmission mechanism of monetary policy.  Central banks need to consider cyclical and structural issues, but also need a more rounded view of the stance and implica

July 01, 2025

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Preview: Due July 15 - U.S. June CPI - A little more from tariffs
Paying Article

July 1, 2025 6:42 PM UTC

We expect June CPI to increase by 0.3% overall and by 0.3% ex food and energy, with the overall pace close to 0.3% before rounding but the core rate rounded up from 0.27%. This would still be the strongest core rate since January and reflect tariffs starting to feed through, something expected by Fe

June 27, 2025

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U.S. Q2 GDP to see only a modest rebound from a decline in Q1
Paying Article

June 27, 2025 6:05 PM UTC

The release of advance May trade and inventory data, plus May consumer spending, provides us with clearer signals on Q2 GDP, even if we have not yet seen any data for June. We currently expect a modest annualized gain of 1.4%, following a 0.5% decline in Q1, leaving a subdued first half of the year.

June 25, 2025

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June Outlook: Trump’s Fluid Policies
Paying Article

June 25, 2025 10:00 AM UTC

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

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

June 25, 2025 8:05 AM UTC

·       The Chinese Yuan (CNY) will likely remain stable while trade negotiations with the U.S. continue.  We see a trade deal in our baseline (probably Q4) and then a small rise in CNY v USD due to general USD weakness. 
·       In terms of total returns for the remainder of 2025, th

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Outlook Overview: Trump’s Fluid Policies
Paying Article

June 25, 2025 7:20 AM UTC

·       President Donald Trump still wants to use the tariff tool, and we see the eventual average tariff rate being in the 13-15% area, lowered by deals but increased by more product tariffs. Any lasting legal block on reciprocal tariffs will likely see the administration pivoting towards ot

June 24, 2025

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Asia/Pacific (ex-China/Japan) Outlook: Slower Trade, Softer Inflation, and Looser Policy
Paying Article

June 24, 2025 9:24 AM UTC

·       Asia’s growth profile in 2025 reflects a region navigating structural transition amid external strain. Investment-led economies like India are benefitting from infrastructure spending, industrial policy momentum, and political continuity. In contrast, trade-reliant markets such as V

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Equities Outlook: Choppy Then 2026 Gains
Paying Article

June 24, 2025 8:15 AM UTC

       Though the U.S. equity market has rebounded, we still scope for a fresh dip H2 2025 to 5500 on the S&P500 as hard data softens further to feed into weaker corporate earnings forecasts and CPI picks up and delays Fed easing.  However, the AI story is still a positive, while share buybacks

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Charting Our Views: Technical Analysis for Q3 2025
Paying Article

June 24, 2025 7:30 AM UTC

Our latest quarterly technical analysis views on Bonds, Equities, Commodities and FX is now available.  

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DM FX Outlook: USD uncertainty increases as Trump changes the rules
Paying Article

June 24, 2025 7:05 AM UTC

·       Bottom Line: After making initial gains after the election, the USD has followed a similar path to the first Trump presidency, falling back steadily this year as optimism on the economy has faded, with the introduction of tariffs contributing to more negative sentiment. Much as in the

June 23, 2025

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Iran: Measured Next Steps?
Paying Article

June 23, 2025 3:17 PM UTC

  A measured or modest Iran retaliation could be used by the U.S. to seek a path back towards negotiation.  Israel would likely want to continue to degrade Iran nuclear and military facilities, but the U.S. could eventually pressure Israel to stop.  This is our baseline, though the military attac

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DM Rates Outlook: Yield Curve Steepening?
Paying Article

June 23, 2025 8:30 AM UTC

•    We see the U.S. yield curve steepening in the next 6-18 months. 2yr U.S. Treasury yields can step down with cautious Fed easing on a modest/moderate growth slowdown and also if the Fed keeps an easing bias in H2 2026. 10yr U.S. Treasury yields face a tug of war between lower short-dated y

June 20, 2025

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Preview: Due July 3 - U.S. June Employment (Non-Farm Payrolls) - Increasing signs of slowing, but not a recession
Freemium Article

June 20, 2025 4:29 PM UTC

We expect a 75k increase in June’s non-farm payroll, significantly slower than May’s 139k though consistent with a slowdown in growth rather than an economy entering recession. We expect an in line with trend 0.3% increase in average hourly earnings and an uptick in unemployment to 4.3% after th

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U.S. Outlook: Slowdown but not Recession, Cautious Fed Easing
Paying Article

June 20, 2025 2:14 PM UTC

•    Policy uncertainty remains high and final details of the tariffs will depend on the decisions of the courts as well as those of President Trump. However the magnitude of the tariffs is becoming easier to predict than the detail. Trump looks set to insist on a minimum average tariff of at

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Commodities Outlook: Policy Realignment
Paying Article

June 20, 2025 9:30 AM UTC

In Q2 2025, eight OPEC+ countries pledged a faster oil supply hike, motivated by market share losses, internal frictions, and geopolitical shifts. However, actual output has fallen short due to overproduction offsets, domestic consumption, and capacity limits. Further gradual increases are expected,

June 18, 2025

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Fed: Hold Then Cautious Easing
Paying Article

June 18, 2025 7:27 PM UTC

Though the SEP reduced growth forecasts and boosted inflation, the guidance from the Fed remains that policy is on hold in the coming meetings.  Though the FOMC median still has two 2025 cuts, the breakdown shows that this was a close call and a lot of members see no cut or only 25bps. We look for

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FOMC more pessimistic than March forecasts but not compared to May statement
Paying Article

June 18, 2025 6:23 PM UTC

The FOMC has left rates unchanged at 4.25-4.50% as expected. The median rate forecast is unchanged at 3.9% for end 2025 but the FOMC now sees only 25bps of easing in 2026 rather than 50bps, with 2027 still seeing 25bps, but the end 2027 rate is now seen at 3.4% from 3.1%, leaving a slightly hawkish

June 13, 2025

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BOE QT: Slowdown in September?
Paying Article

June 13, 2025 8:15 AM UTC

BOE QT is part of the reason behind both a steeper yield curve and subdued M4 and lending growth. The MPC in September will likely accept that to avoid impacting the monetary transmission mechanism that annual rundown of gilts needs to be slowed from GBP100bln pa to GBP75bln.  Internal differences

June 12, 2025

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Trump Tariffs: China and July 9 Reciprocal Deadline
Paying Article

June 12, 2025 7:17 AM UTC

 We attach a 65% probability to a U.S./China reaching a new trade deal that reduces the minimum overall tariff to 15-20% imposed by the U.S., most likely agreed in Q4 2025 and to be implemented in 2026.  However, a 35% probability exist of no deal and this could eventually mean higher tariffs (Fig

June 11, 2025

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U.S. May CPI - Little tariff pass-through, with inflationary pressures elsewhere fading
Paying Article

June 11, 2025 12:59 PM UTC

May CPI has surprised significantly to the downside, up only 0.1% both headline and core, with the respective gains before rounding being 0.08% and 0.13%. The data is subdued across the board, with commodities ex food and energy unchanged despite tariffs and services ex energy on the low side of tre

June 10, 2025

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Preview: Due June 11 - U.S. May CPI - Tariff impact still modest, but starting to build
Paying Article

June 10, 2025 1:03 PM UTC

We expect May CPI to increase by 0.2% overall and by 0.3% ex food and energy, the core rate still seeing a modest impact from tariffs given a Q1 inventory build up and uncertainty over low long tariffs will persist, though at 0.32% before rounding we expect the strongest rise in the core rate since

June 06, 2025

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U.S. May Employment - Resilient picture suggests no urgency for Fed easing
Paying Article

June 6, 2025 1:03 PM UTC

May’s non-farm payroll with a 139k increase, is on the firm side of expectations, particularly after the ADP report, and suggests the economy is not on the cusp of recession yet. Revisions were negative at 95k but leave a stable-looking picture, while average hourly earnings were above trend with

June 05, 2025

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Preview: Due June 6 - U.S. May Employment (Non-Farm Payrolls) - Some slowing, but not a recession signal
Freemium Article

June 5, 2025 2:04 PM UTC

We expect a 120k increase in May’s non-farm payroll, with 110k in the private sector, slower than seen in March and April but stronger than what may have been weather-restrained months in January and February. We expect a slightly stronger 0.3% rise in average hourly earnings and an unchanged unem

June 02, 2025

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Preview: Due June 11 - U.S. May CPI - Tariff impact still modest, but starting to build
Paying Article

June 2, 2025 5:50 PM UTC

We expect May CPI to increase by 0.2% overall and by 0.3% ex food and energy, the core rate still seeing a modest impact from tariffs given a Q1 inventory build up and uncertainty over low long tariffs will persist, though at 0.32% before rounding we expect the strongest rise in the core rate since

May 30, 2025

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Tax Foreigners Assets: How To Lose Friends
Paying Article

May 30, 2025 9:12 AM UTC

   Increasing taxes on dividends on U.S. equities and corporate bond coupons would alarm foreign investors and hurt the USD and U.S. equities, as it would amplifies foreign investors concerns that they are overweight U.S. assets and the USD.  Starting a capital war with investors into the U.S. is

May 28, 2025

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The U.S. Slowdown Question Key for Markets
Paying Article

May 28, 2025 7:35 AM UTC

•    Though financial markets are debating the effects of the U.S. budget deficit trajectory on yields and how much global investors will reduce overweight U.S. exposure long-term, the critical question remains the scale of the economic slowdown and what it means for tactical asset allocation

May 27, 2025

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Preview: Due June 6 - U.S. May Employment (Non-Farm Payrolls) - Some slowing, but not a recession signal
Paying Article

May 27, 2025 3:32 PM UTC

We expect a 120k increase in May’s non-farm payroll, with 110k in the private sector, slower than seen in March and April but stronger than what may have been weather-restrained months in January and February. We expect a slightly stronger 0.3% rise in average hourly earnings and an unchanged unem

May 14, 2025

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Europe Portfolio Leverage Over Trump
Freemium Article

May 14, 2025 9:05 AM UTC

The U.S. will likely introduce a 25% tariff on pharmaceuticals, which will increase pressure on the EU and other European countries (e.g. Switzerland) and also delay serious negotiations close to the 90 day reciprocal tariff deadline on July 9, adding to pressure on Europe by deliberately prolonging

May 13, 2025

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U.S. April CPI - Little tariff pass-through so far
Freemium Article

May 13, 2025 1:02 PM UTC

April CPI is on the low side of expectations at 0.2% both overall and ex food and energy, showing a loss of inflationary momentum since a strong start to the year in January, despite the imposition of tariffs. The core rate was up 0.24% before rounding, with the overall pace 0.22%, so the surprise i

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Markets: Less U.S. Recession Risk, But Trade Headwinds
Paying Article

May 13, 2025 9:38 AM UTC

Though we had expected a U.S./China trade truce, the terms are more favorable to U.S. growth than we anticipated.  Combined with the UK framework deal, we have revised down the probability of a U.S. recession from 35% to 20%.  In turn we have revised up the end 2025 and end 2026 S&P500 forecasts t

May 12, 2025

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Preview: Due May 13 - U.S. April CPI - Upside risk after a below trend March
Paying Article

May 12, 2025 12:02 PM UTC

We expect April CPI to increase by 0.3% overall and by 0.4% ex food and energy, the core rate reflecting a rebound from a below trend March as well as some impact from tariffs, though the extent of the tariff impact is highly uncertain. We see the core rate at 0.38% before rounding.

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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 08, 2025

Indonesia’s Q1 GDP Disappoints, Deepening Case for Rate Cut
Paying Article

May 8, 2025 8:05 AM UTC

Bottom line: Indonesia’s Q1 GDP growth slipped to 4.87% yr/yr, missing the 5% target as public spending declined. Household consumption edged down and fixed investment declined sharply. Looking ahead, Q2 may bring further softening. 

May 07, 2025

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FOMC Likely to Remain Cautious Unless Economy Falls into Recession
Paying Article

May 7, 2025 7:43 PM UTC

Fed’s Powell made clear that with high uncertainty the Fed is in no position to move rates at this point, though how long that will persist is unclear. We see no reason to adjust our existing Fed call of only one easing in 2025, by 25bps in December, and two more in 2026. This would take the Fed F

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FOMC leaves rates unchanged, sees increased risk on both sides of mandate
Paying Article

May 7, 2025 6:15 PM UTC

The FOMC has left rates unchanged at 4.25-4.5% as expected.  The main change in the statement is to note that the risks of higher unemployment and higher inflation have both risen, which gives little insight on any policy bias though suggests that the Fed could be responsive to data going forward.

May 06, 2025

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Preview: Due May 13 - U.S. April CPI - Upside risk after a below trend March
Paying Article

May 6, 2025 3:49 PM UTC

We expect April CPI to increase by 0.3% overall and by 0.4% ex food and energy, the core rate reflecting a rebound from a below trend March as well as some impact from tariffs, though the extent of the tariff impact is highly uncertain. We see the core rate at 0.38% before rounding.

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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

May 05, 2025

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Markets: China Truce Hopes and More Data
Paying Article

May 5, 2025 8:05 AM UTC

The direction of travel is towards a U.S./China truce followed by postponing/cancelling most reciprocal tariffs and then trade negotiations. While the markets could cheer this as good news, incoming economic data in May and June is the most critical issue.  We still see the U.S. imposing an average

May 02, 2025

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U.S. April Employment - Suggests economy where Fed wants it, but can it persist?
Paying Article

May 2, 2025 12:57 PM UTC

April’s non-farm payroll with a 177k increase is on the firm side of expectations and shows the labor market remained solid in early April, but the upside surprise is offset by 58k in net downward revisions. Unemployment was unchanged at 4.2% as expected but a below consensus 0.2% rise in average

May 01, 2025

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Preview: Due May 2 - U.S. April Employment (Non-Farm Payrolls) - Few clear signals for labor market weakness
Paying Article

May 1, 2025 12:57 PM UTC

We expect a 145k increase in April’s non-farm payroll, with 135k in the private sector, the latter equal to the Q1 average. Initial claims were showing no signs of labor market weakness in the payroll survey week, with a bounce in the latest week not yet a clear change in trend. We expect unemploy

April 30, 2025

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U.S. Q1 GDP dips, Imports surge goes into inventories and business investment
Freemium Article

April 30, 2025 1:07 PM UTC

The 0.3% decline in Q1 GDP is in line with expectations that were downgraded from a marginal increase after yesterday’s sharp rise in March’s advance goods trade deficit. A 3.5% rise in the core PCE price index is stronger than expected. While the Q1 data does not tell us very much about Q2, the