DM Central Banks: Wider-Ranging Conditions More Than Neutral Rates

October 2, 2025 6:55 AM UTC

·        Neutral policy rate estimates and forward guidance provide some help at the start of easing cycles, but less so at mid to mature stages.  For the Fed, ECB and BOE we look at a wider array of economic and financial conditions, alongside our own projections over the next 2 years to m

Preview: Due October 15 (dependent on shutdown ending) - U.S. September CPI - Firm but a little less so in core rate

October 1, 2025 6:29 PM UTC

We expect September CPI to increase by 0.4% overall and by 0.3% ex food and energy, matching August’s outcomes after rounding, though before rounding we expect overall CPI to be rounded down from 0.425%, and the core rate to be rounded up from 0.28%, contrasting August data when headline CPI was r

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

DM Government Bond Saints v U.S.

September 29, 2025 7:35 AM UTC

·       Overall, although the fiscal saints (Australia/Canada/Germany/Sweden) have merits over the U.S. in the scenario where Fed independence is undermined and more Fed rate cuts occur than warranted by the economics, the 10yr area of other government bond markets may not outperform. 10yr go

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.  

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.  

Preview: Due October 3 - U.S. September Employment (Non-Farm Payrolls) - Still subdued, but slightly stronger than in August

September 24, 2025 3:28 PM UTC

We expect September’s non-farm payroll to show another subdued rise,  of 45k, with 50k in the private sector, but marginally stronger than July’s respective gains of 22k and 38k. We expect unemployment to slip to 4.2% from 4.3% on a fall in the labor force, while average hourly earnings maintai

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

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

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

Charting Our Views: Technical Analysis for Q4 2025

September 19, 2025 8:10 AM UTC

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

Fed: Signals 25bps October and December

September 17, 2025 7:39 PM UTC

The median Fed Funds is a strong hint that the Fed will deliver an extra 50bps most likely with 25bps in October and December.  However, the split in the 2026 Fed Funds dots forecasts from FOMC members suggests that our forecast of just below trend growth and core PCE above target will likely mean

FOMC eases by 25bps, dots see two more 25bps moves this year

September 17, 2025 6:23 PM UTC

The FOMC has eased rates by 25bps to 4.0% to 4.75% with only one dissenting vote, the incoming Miran voting for 50bps. The main story in the dots is that the median sees two further 25bps moves this year rather than the expected one before seeing only one move in both 2026 and 2027, with no further

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

U.S. August CPI, Weekly Initial Claims - Risks on both sides of Fed mandate but possible seasonal adjustment issues for Claims

September 11, 2025 1:07 PM UTC

August CPI is firmer than expected overall at 0.4% and while the core rate was as expected at 0.3% its rise before rounding at 0.346% is uncomfortably high emphasizing the upside risks to the Fed’s inflation mandate. Initial claims at 263k from 236k however point to downside risks to the Fed emplo

Preview: Due September 11 - U.S. August CPI - Tariff impact slowly building

September 10, 2025 1:15 PM UTC

We expect August CPI to increase by 0.4% overall and by 0.3% ex food and energy, with the respective gains before rounding being 0.37% and 0.31%. This would be the second straight gains slightly above 0.3% in the core rate with the impact of tariffs starting to escalate.

September 10, 2025 10:55 AM UTC

Steeper yield curves are a function of monetary easing cycles, budget deficits, lower central bank holdings of government bonds, a move towards pre GFC real rates and shifting demand from pensions funds and life insurance companies.  Scope exists for further steepening in the U.S., EZ and UK with m

U.S. March 2025 Non-Farm Payroll Benchmark Revised Down by a Preliminary 911k

September 9, 2025 2:32 PM UTC

The preliminary estimate for the downward revision to the March 2025 non-farm payroll benchmark at -911k is steeper than generally than expected and exceeds even the unusually sharp 818k negative revision reported a year ago for the March 2024 benchmark. The data will be incorporated into the Januar

Expecting a Negative Non-Farm Payroll Benchmark Revision

September 8, 2025 3:25 PM UTC

Tuesday sees the release of the preliminary Labor Dep’t estimate for the March 2025 non-farm payroll benchmark, with expectations for a significant negative, possibly as large as the -818k preliminary estimate for the March 2024 benchmark delivered a year ago. The eventual revision to March 2024 p

U.S. August Employment - Trend now close to flat, backing case for easing

September 5, 2025 1:03 PM UTC

August’s non-farm payroll shows that job growth is now minimal, with a rise of 22k almost completely offset by a modest 21k in net downward revisions. Unemployment rose to 4.3% from 4.2% while average hourly earnings rose by 0.3%, both as expected, though the workweek was weaker than expected. The

Preview: Due September 5 - U.S. August Employment (Non-Farm Payrolls) - Similar to July's, still not recessionary

September 4, 2025 2:45 PM UTC

We expect August’s non-farm payroll to look similar to July’s, with a rise of 65k versus 73k in July, above the 14k rise of June and the 19k rise of May but well below the trend that was running above 100k through April. We also expect unemployment to remain at July’s 4.2% rate and a second st

Protests Return to Jakarta—No Threat to Regime, But Signal to Watch

September 2, 2025 12:41 PM UTC

Indonesia’s recent protests are not just about housing allowances—they reflect deeper disillusionment with elite politics. The government may contain unrest in the short term, but the structural issues driving dissent will persist. For businesses and investors, expect periodic social volatility,

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

Preview: Due September 11 - U.S. August CPI - Tariff impact slowly building

August 28, 2025 5:19 PM UTC

We expect August CPI to increase by 0.4% overall and by 0.3% ex food and energy, with the respective gains before rounding being 0.37% and 0.31%. This would be the second straight gains slightly above 0.3% in the core rate with the impact of tariffs starting to escalate.

Preview: Due September 5 - U.S. August Employment (Non-Farm Payrolls) - Similar to July's, still not recessionary

August 27, 2025 2:20 PM UTC

We expect August’s non-farm payroll to look similar to July’s, with a rise of 65k versus 73k in July, above the 14k rise of June and the 19k rise of May but well below the trend that was running above 100k through April. We also expect unemployment to remain at July’s 4.2% rate and a second st

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

U.S. July CPI - Core rate, particularly services, a marginal disappointment

August 12, 2025 1:02 PM UTC

July’s CPI is in line with consensus at 0.2% overall, 0.3% ex food and energy, but the core rate of 0.322% before rounding is a little high for comfort. The detail shows the acceleration from June was more in services than goods, so the story is not a simple one of tariffs. 

Preview: Due August 12 - U.S. July CPI - Tariff impact slowly building

August 11, 2025 1:10 PM UTC

We expect July CPI to increase by 0.2% overall and by 0.3% ex food and energy, with the overall pace close to 0.2% even before rounding but the core rate rounded up from 0.26%. This would still be the strongest core rate since January and reflect a further feed through of tariffs, something that is

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

Preview: Due August 12 - U.S. July CPI - Tariff impact slowly building

August 4, 2025 12:47 PM UTC

We expect July CPI to increase by 0.2% overall and by 0.3% ex food and energy, with the overall pace close to 0.2% even before rounding but the core rate rounded up from 0.26%. This would still be the strongest core rate since January and reflect a further feed through of tariffs, something that is

U.S. July Employment - Revisions to May and June mean trend has slowed significantly

August 1, 2025 1:06 PM UTC

July’s non-farm payroll is weaker than expected not only with the 73k headline and 83k rise in the private sector, but also with large downward revisions totaling 258k for May and June. Unemployment remains low but edged up to 4.2% from 4.1% while average hourly earnings were on consensus at 0.3%,

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

July 31, 2025 1:26 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

Fed's Powell Remains Cautious Over Tariff Risk

July 30, 2025 7:34 PM UTC

The FOMC left rates unchanged at 4.25-4.5% as expected, though there were two dissenting votes for easing, from Governors Waller and Bowman, who had already given signals in that direction. The statement made a concession to the doves stating that growth moderated in the first half of the year, but

FOMC leaves rates unchanged, two dissents for easing, language more dovish on growth

July 30, 2025 6:16 PM UTC

The FOMC left rates unchanged at 4.25-4.5% as expected, though there were two dissenting votes for easing, from Governors Waller and Bowman, who had already given signals in that direction. The wording of the statement also contains a dovish shift, stating that growth moderated in the first half of

U.S. Q2 GDP - Subdued underlying growth, but with persistent price pressures

July 30, 2025 1:12 PM UTC

The advance estimate of Q2 GDP at 3.0% is stronger than expected though an above consensus outcome had looked likely after yesterday’s decline in June’s trade deficit. Given extreme volatility in net exports the Q2 data should be seen alongside Q1’s 0.5% decline, giving an average of an unimpr

DM Household Sluggish Borrowing

July 30, 2025 10:45 AM UTC

·        Overall, restrained credit supply from banks; abundant employment/income or wealth for most households but restrained financial conditions for low income households could have restrained household lending growth to GDP.  However, the surge in government debt and ensuing fear of fut

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

Indonesia’s 2026 Blueprint: Growth Goals Amid a Shaky Global Backdrop

July 28, 2025 5:54 AM UTC

Indonesia’s newly approved 2026 macroeconomic framework targets robust growth, fiscal discipline, and poverty eradication. However, external headwinds—including unresolved US tariff risks—and tepid domestic consumption pose serious execution risks. Without sharper prioritisation and institutio

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

Preview: Due July 30 - U.S. Q2 GDP - Rebounding from a negative Q1, but a subdued first half of the year

July 17, 2025 5:54 PM UTC

We expect a 2.4% annualized increase in Q2 GDP, which after a 0.5% decline in Q1 would leave the first half of the year rising at a pace close to 1.0%. A similar pace may be seen in the second half of the year if tariffs persist. Our Q2 forecast has been lifted from 1.4% on a generally improved tone

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

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

Tax Shortfalls and Slow Growth Complicate Indonesia’s Budget Plans

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

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

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

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

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

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

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